Financial Data and Key Metrics Changes - Revenue from continuing operations grew 14% year-over-year for the full year 2025, marking the second consecutive year of mid-teens growth [4][21] - Adjusted EBITDA from continuing operations increased by 25% year-over-year [4][23] - Fourth quarter revenue grew 15% year-over-year to $241 million, driven by strength in subscription-based listings revenue and international business [21] - Full-year non-GAAP net income per diluted share attributable to common stockholders was $2.28, up 31% year-over-year [25] Business Line Data and Key Metrics Changes - Consolidated QARSD grew 8% year-over-year, with global paying dealer count increasing by 2,399 [7][21] - Add-on product adoption rose nearly 25% year-over-year, indicating strong engagement and platform usage [7] - International revenue grew 27% year-over-year, with fourth quarter revenue up 32% year-over-year [22] Market Data and Key Metrics Changes - U.S. QARSD grew 8% year-over-year in the fourth quarter [21] - International QARSD grew 16% year-over-year in the fourth quarter [22] - The dealer count in international markets surged 14% year-over-year to 8,360 dealers [22] Company Strategy and Development Direction - The company aims to expand its suite of data-driven solutions across dealer workflows, enhancing profitability for dealers [7] - Focus on product innovation, with more new products launched in 2025 than in any prior year, embedding data and intelligence into dealer workflows [5][19] - The strategy includes moving into software and data across dealer workflow verticals, effectively doubling the total addressable market [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth rates due to strong visibility and no customer concentration [32] - The company anticipates continued investment in AI-driven innovation and product development, with expectations for new products to significantly contribute to revenue growth [19][35] - The outlook for 2026 includes revenue growth expectations of 10%-13% year-over-year, with a focus on long-term growth and healthy margins [28] Other Important Information - The company completed the wind down of CarOffer, presenting its financial results as discontinued operations [20] - A new $250 million share repurchase program has been authorized, reflecting the company's commitment to returning value to shareholders [26] Q&A Session Summary Question: Visibility of growth rate and new products' contribution - Management highlighted that strong growth is driven by QARSD and new dealer additions, with new products expected to enhance long-term growth [32][34] Question: Inclusion of Price Vantage in revenue guidance - Price Vantage and New Car Exposure are included in the revenue guidance, with significant potential in non-marketing verticals [39][40] Question: Margin outlook for 2026 - The company aims to optimize for long-term growth while maintaining healthy margins, with investments focused on product development and international expansion [41][49] Question: Contribution of dealer count and QARSD to revenue outlook - Management noted that while they do not break out revenue contributions, there is a relationship between dealer count growth and QARSD [55] Question: Factors driving improved dealer satisfaction and retention - Enhanced ROI for dealers, lead growth, and new software tools have contributed to record retention rates [57][59] Question: Traffic growth and consumer experience improvements - Investments in AI and brand campaigns have driven traffic growth, with a focus on enhancing the consumer experience [68]

Financial Data and Key Metrics Changes - Revenue from continuing operations grew 14% year-over-year for the full year 2025, marking the second consecutive year of mid-teens growth [4][21] - Adjusted EBITDA from continuing operations increased by 25% year-over-year [4][23] - Fourth quarter revenue grew 15% year-over-year to $241 million, driven by strength in subscription-based listings revenue and international business [21] - Full-year non-GAAP net income per diluted share attributable to common stockholders was $2.28, up 31% year-over-year [25] Business Line Data and Key Metrics Changes - Consolidated CarSid grew 8% year-over-year, with global paying dealer count increasing by 2,399 [7][21] - Add-on product adoption rose nearly 25% year-over-year, indicating strong engagement and platform usage [7] - International revenue grew 27% year-over-year, with fourth quarter revenue up 32% year-over-year [22] Market Data and Key Metrics Changes - U.S. CarSid grew 8% year-over-year, with 1,357 new paying U.S. dealers added [21] - International dealer count growth surged 14% year-over-year to 8,360 dealers [22] - CarGurus influenced 55% of all attributed vehicle sales in 2025, reinforcing its market position [10] Company Strategy and Development Direction - The company aims to expand its suite of data-driven solutions across dealer workflows, enhancing profitability for dealers [7] - Focus on product innovation, with more new products launched in 2025 than in any prior year, including Price Vantage and CG Discover [5][19] - The strategy includes leveraging AI-driven innovation to enhance product velocity and differentiation [4][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth rates due to strong visibility and no customer concentration [32] - The company anticipates revenue growth of 10%-13% year-over-year for 2026, with continued investment in product and technology [28] - Management highlighted the importance of trust and clarity in consumer decision-making, especially in the evolving AI landscape [18] Other Important Information - The company completed the wind down of CarOffer, presenting its financial results as discontinued operations [20] - A new $250 million share repurchase program was authorized, reflecting the company's commitment to returning value to shareholders [26] Q&A Session Summary Question: Visibility of growth rate and new products' contribution - Management indicated strong growth visibility due to effective execution on growth levers and new product introductions, which are expected to enhance long-term growth [32][34] Question: Inclusion of Price Vantage in revenue guidance - Price Vantage and New Car Exposure are included in the revenue guidance as they have been launched and are part of the operating plan [39] Question: Margin outlook and investment strategy - Management emphasized a focus on long-term growth and healthy margins, indicating that the 2026 margin guidance is not a new normal but rather a strategic investment phase [41][42] Question: Contribution of dealer count and CarSid to revenue - Management did not break out revenue outlook between CarSid and dealer count but noted the relationship between the two metrics [54] Question: Factors driving improved dealer satisfaction and retention - Improved dealer satisfaction is attributed to clear ROI, lead growth, and the introduction of new software and data tools that enhance profitability [57][59] Question: Traffic growth and consumer engagement - Traffic growth is driven by enhanced consumer experience and broader reach through marketing campaigns, including the Big Deal campaign [68]

Financial Data and Key Metrics Changes - Revenue from continuing operations grew 14% year-over-year for the full year 2025, marking the second consecutive year of mid-teens growth [3][19] - Adjusted EBITDA from continuing operations increased by 25% year-over-year [3][22] - Fourth quarter revenue grew 15% year-over-year to $241 million, driven by strength in subscription-based listings revenue and international business [19][20] - Full-year 2025 non-GAAP net income per diluted share attributable to common stockholders was $2.28, up 31% year-over-year [24] Business Line Data and Key Metrics Changes - Consolidated CarSid grew 8% year-over-year, with global paying dealer count increasing by 2,399 [5][19] - Add-on product adoption rose nearly 25% year-over-year, indicating strong engagement and platform usage [5] - Digital Deal leads with high-value actions increased 78% year-over-year, reflecting deeper shopper progression into transactions [12] Market Data and Key Metrics Changes - International revenue grew 27% year-over-year, with fourth quarter revenue up 32% year-over-year [20] - International dealer count grew 14% year-over-year to 8,360 dealers [20] Company Strategy and Development Direction - The company aims to expand its suite of data-driven solutions across dealer workflows, enhancing profitability for dealers [5][6] - Focus on product innovation, with more new products launched in 2025 than in any prior year, embedding data and intelligence into dealer workflows [4][17] - The strategy includes leveraging AI-driven innovation to enhance consumer engagement and streamline transactions [3][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth rates due to strong visibility and a diversified dealer base [31] - The company anticipates continued investment in product and technology to support long-term growth, with a focus on maintaining healthy margins [39][40] - Management highlighted the importance of trust and confidence in the consumer journey, which shapes their investment strategy [76] Other Important Information - The company completed the wind down of CarOffer, presenting its financial results as discontinued operations [18] - A new $250 million share repurchase program was authorized, emphasizing the commitment to return value to shareholders [25] Q&A Session Summary Question: Visibility of growth rate and new products' contribution - Management indicated strong growth visibility due to effective execution on growth levers and new product introductions, which are expected to enhance long-term growth [31][34] Question: Inclusion of Price Vantage in revenue guidance - Price Vantage and New Car Exposure are included in the revenue guidance as they have been launched and are expected to contribute to growth [37] Question: Margin outlook and investment strategy - Management clarified that the margin outlook reflects a balance between investing for growth and maintaining healthy margins, with a focus on long-term sustainability [39][40] Question: Factors driving improved dealer satisfaction and retention - Improved dealer satisfaction is attributed to clear ROI from lead growth and the introduction of new software and data tools that enhance profitability [56] Question: Traffic growth and consumer engagement - Traffic growth is driven by enhanced consumer experience and broader reach through marketing campaigns, leading to increased app downloads and active users [66]

Q4 and Full Year 2025 Earnings Presentation February 19, 2026 Cautionary Note Regarding Forward - Looking Statements This presentation includes forward - looking statements . Other than statements of historical facts, all statements contained in this presentation, including statements regarding our future financial and operating results; our first quarter and full year 2026 financial and business performance, including guidance ; our plans to focus on technology and analytics that will enable smarter sourci ...

Core Insights - CarGurus reported Q3 CY2025 results that exceeded market revenue expectations, with sales increasing by 3.2% year-on-year to $238.7 million, and non-GAAP profit of $0.57 per share, which was 3.7% above analysts' consensus estimates [1][3][5] Financial Performance - Revenue for Q3 CY2025 was $238.7 million, surpassing analyst estimates of $235 million, reflecting a 3.2% year-on-year growth and a 1.6% beat [5] - Adjusted EPS was $0.57, exceeding analyst estimates of $0.55 by 3.7% [5] - Adjusted EBITDA reached $78.67 million, with a margin of 33%, beating analyst estimates of $76.39 million [5] - Operating margin improved to 22.9%, up from 11.9% in the same quarter last year [5] - The number of paying dealers increased to 33,673, up by 1,989 year-on-year [5] - Market capitalization stands at $3.18 billion [5] Future Outlook - Guidance for Q4 CY2025 includes revenue of $238.5 million at the midpoint, which aligns with analyst expectations, and adjusted EPS guidance of $0.64, above analyst estimates of $0.61 [5] - EBITDA guidance for Q4 CY2025 is set at $87 million at the midpoint, exceeding analyst estimates of $84.27 million [5] - Management emphasized ongoing investments in AI-driven product innovation and deeper integration of software across dealer workflows as key to future performance [4] - The company aims to capture greater dealer wallet share and drive more efficient transactions through new offerings like PriceVantage and CG Discover [4] - While management is optimistic about sustaining double-digit growth rates, they acknowledged potential macroeconomic headwinds and changing consumer sentiment [4]

Core Insights - CarGurus aims to double its total addressable market by introducing AI-powered products beyond its current automotive shopping platform [1][2] - The company is expanding its addressable market to include $3.5 billion spent by U.S. dealers on marketplaces and an additional $4 billion on software and data products [2] Product Development - CarGurus has launched PriceVantage, a machine learning-based pricing solution for dealers that utilizes real-time consumer demand data [3][4] - PriceVantage helps dealers enhance pricing strategies, improve turn times, and increase profitability by providing data-driven recommendations [4] Performance Metrics - Early beta results for PriceVantage show that engaged dealers experienced a 5X improvement in turn-time compared to competitors, with price-drop recommendations leading to a 68% median increase in daily vehicle detail page views [5] - 77% of the recommendations from PriceVantage met or exceeded predicted sales velocity outcomes [5] Consumer-Focused Innovations - CarGurus introduced CG Discover, a generative AI-powered shopping assistant that personalizes vehicle recommendations based on consumer needs, with traffic to this tool tripling quarter over quarter [6] - Another tool, Dealership Mode, provides real-time support to consumers at dealerships, enhancing their experience by offering vehicle pricing, ratings, and financing calculators [6][7] Market Opportunity - Research indicates that 80% of consumers are open to using AI in their car-buying journey, highlighting significant growth potential for CarGurus' AI initiatives [6]

Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $239 million, up 3% year-over-year [28] - Marketplace revenue was $232 million, reflecting a 14% year-over-year increase, driven by subscription-based listings revenue [29] - Non-GAAP gross profit was $214 million, an 11% increase year-over-year, with a non-GAAP gross margin of 90%, up about 650 basis points [30] - Adjusted EBITDA was approximately $79 million, up 21% year-over-year, with an adjusted EBITDA margin of 33%, up about 490 basis points [31] - Non-GAAP diluted earnings per share was $0.57, a 30% increase year-over-year [34] Business Line Data and Key Metrics Changes - U.S. CarSID grew 8% year-over-year, with 1,182 new paying U.S. dealers added [29] - International operations saw revenue growth of 27% year-over-year, with international CarSID up 15% year-over-year [29] - Digital Deal adoption surpassed 12,500 dealers, with significant growth in high-value actions such as financing applications and appointment scheduling [21] Market Data and Key Metrics Changes - The international market is showing strong growth, with CarGurus adding over 800 customers in Canada and the U.K. [54] - The company is maintaining lower pricing in international markets to build market share before increasing prices over time [54] Company Strategy and Development Direction - The company is focused on expanding its suite of data-driven solutions across dealer workflows to enhance profitability [11] - CarGurus aims to deepen monetization through scalable software and data solutions, expanding its addressable market significantly [9][10] - The strategy includes enhancing consumer engagement through innovations like CG Discover and Dealership Mode, which aim to streamline the car buying journey [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and growth of the marketplace, with expectations for continued investment in AI-centric innovations [37] - The company anticipates fourth-quarter marketplace revenue to be between $236 million and $241 million, representing a year-over-year increase of 12% to 15% [35] - Management highlighted the importance of maintaining a balance between innovation and disciplined execution to ensure sustainable growth [80] Other Important Information - The company is winding down the CarOffer transactions business, which will be accounted for as a discontinued operation in Q4 [30] - Total wind-down-related charges are expected to be in the range of $13 million to $15 million, lower than previously estimated [33] Q&A Session Summary Question: What is the trend regarding dealers using CarGurus? - Management noted that dealers are using fewer marketplace partners, with the average dropping from three to under two, indicating consolidation towards those offering the best ROI [41] Question: How is the ROI for Digital Deal perceived by dealers? - Management indicated that more consumers are engaging in high-value actions, which drives higher quality leads and further ROI for dealers, suggesting potential for future pricing power [45] Question: What are the growth prospects in international markets? - Management expressed pride in international growth, emphasizing the strategy of maintaining lower prices to build market share before increasing them over time [54] Question: How does CarSID growth relate to dealer rooftops? - Management explained that CarSID growth is mathematically related to the number of rooftops, with recent growth in rooftops acting as a headwind to CarSID growth [67] Question: What insights are generated from Dealership Mode? - Management highlighted that Dealership Mode provides valuable insights into consumer behavior at dealerships, enhancing the understanding of customer engagement [82]

Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $239 million, up 3% year-over-year [28] - Marketplace revenue was $232 million, reflecting a 14% year-over-year increase, driven by subscription-based listings revenue [29] - Non-GAAP gross profit was $214 million, up 11% year-over-year, with a non-GAAP gross margin of 90% [30] - Adjusted EBITDA was approximately $79 million, up 21% year-over-year, with an Adjusted EBITDA margin of 33% [31] - Non-GAAP diluted earnings per share was $0.57, reflecting a 30% year-over-year increase [34] Business Line Data and Key Metrics Changes - U.S. CarSID grew 8% year-over-year, with 1,182 new paying U.S. dealers added [29] - International operations saw revenue growth of 27% year-over-year, with international CarSID up 15% year-over-year [29] - Digital Deal adoption surpassed 12,500 dealers, with significant growth in high-value actions such as financing applications and deposits [21] Market Data and Key Metrics Changes - The international market is showing strong growth, with CarGurus adding over 800 customers in Canada and the UK [53] - The company is maintaining lower pricing in international markets to build market share before increasing prices [52] Company Strategy and Development Direction - The company is focused on expanding its suite of data-driven solutions across dealer workflows to enhance profitability [11] - CarGurus aims to deepen monetization through scalable software and data solutions, expanding its addressable market significantly [9][10] - The strategy includes leveraging AI capabilities to enhance dealer performance and consumer experience [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the marketplace and the early results of new product investments [36] - The company anticipates continued growth in both U.S. and international markets, with a focus on innovation and AI-driven solutions [37] - Management highlighted the importance of building trust and transparency in the consumer journey to enhance engagement [10][17] Other Important Information - The company is winding down the CarOffer transactions business, which is expected to impact revenue from digital wholesale going forward [30] - Cash and cash equivalents at the end of the quarter were $179 million, down from the previous quarter due to share repurchases [34] Q&A Session Summary Question: What is the trend regarding dealers using CarGurus? - Management noted that dealers are using fewer marketplace partners, with the average dropping from three to under two, indicating consolidation towards those offering better ROI [41] Question: How is the ROI for Digital Deal perceived by dealers? - Management indicated that more consumers are engaging in high-value actions, which drives higher quality leads and further ROI for dealers, presenting an opportunity for future pricing power [44][45] Question: What is the growth potential in international markets? - Management expressed pride in international growth and indicated that they are strategically keeping prices lower to build market share before increasing them [52][54] Question: How does CarSID growth relate to dealer rooftops? - Management explained that CarSID growth is influenced by the number of rooftops, with a natural headwind when rooftops grow faster than CarSID [66] Question: What insights are gained from CG Discover? - Management highlighted that CG Discover provides a conversational experience that enhances user engagement and leads to higher conversion rates [72][75]

Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $239 million, up 3% year-over-year [27] - Marketplace revenue was $232 million, reflecting a 14% year-over-year increase, driven by subscription-based listings revenue [28] - Non-GAAP gross profit was $214 million, up 11% year-over-year, with a non-GAAP gross margin of 90%, an increase of about 650 basis points [29] - Adjusted EBITDA was approximately $79 million, up 21% year-over-year, with an adjusted EBITDA margin of 33%, up about 490 basis points [30] - Non-GAAP diluted earnings per share was $0.57, reflecting a 30% year-over-year increase [32] Business Line Data and Key Metrics Changes - U.S. CarSID grew 8% year-over-year, with 1,182 new paying U.S. dealers added, marking the seventh consecutive quarter of positive net dealer adds [28] - International operations saw revenue growth of 27% year-over-year, with international CarSID up 15% year-over-year [28] - Wholesale revenue was approximately $2 million, and product revenue was roughly $5 million, as the company ceased facilitating transactions in the CarOffer business [29] Market Data and Key Metrics Changes - The international market is showing strong growth, with a focus on building market share while maintaining competitive pricing [42][44] - The company is experiencing a trend of dealers using fewer marketplace partners, indicating consolidation in the market [37] Company Strategy and Development Direction - The company is expanding its suite of data-driven solutions across dealer workflows to enhance profitability [10] - New product innovations include Price Vantage, a machine learning-based pricing tool, and CG Discover, a GenAI-powered shopping assistant [10][16] - The strategy focuses on deepening monetization across four key pillars: inventory, marketing, conversion, and data [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and growth of the marketplace, with expectations for continued investment in AI-centric innovations [35] - The company anticipates capturing more dealer wallet share and deepening consumer engagement to support long-term growth [27][35] - Management noted that the combination of proprietary data and machine learning positions the company for new levels of intelligence and efficiency [26] Other Important Information - The company is winding down the CarOffer transactions business, which is expected to be accounted for as a discontinued operation in Q4 [29] - The company has approximately $55 million remaining on its share repurchase authorization [32] Q&A Session Summary Question: What is the trend regarding dealers using CarGurus? - Management noted that dealers are using fewer marketplace partners, with the average dropping from three to under two, indicating consolidation [37] Question: How is the ROI for Digital Deal perceived by dealers? - Management highlighted that 80% of consumers want to engage more online, and the Digital Deal program is packaged into premium tiers, driving higher quality leads and ROI for dealers [39] Question: What are the growth prospects in international markets? - Management expressed pride in international growth, emphasizing the importance of lead quality and competitive pricing to attract dealers [42][44] Question: How does CarSID growth relate to dealer rooftops? - Management explained that CarSID growth is influenced by the number of rooftops, with a natural headwind when rooftops grow faster than CarSID [50] Question: What insights are generated from Dealership Mode? - Management indicated that Dealership Mode provides valuable consumer insights, helping dealers understand customer interests and financing needs [58][59]

Core Insights - CarGurus reported a 14% year-over-year growth in Marketplace revenue, reaching $232 million, which exceeded the midpoint of guidance [1] - The company achieved a GAAP operating income of $64.1 million and a Non-GAAP Adjusted EBITDA of $82.4 million, reflecting an 18% increase year-over-year [1] - The firm has repurchased $111 million worth of shares since initiating its buyback program in December 2022, representing 23% of shares outstanding [1] Financial Performance - Marketplace Revenue for Q3 2025 was $231.7 million, a 14% increase from the previous year, while total revenue increased by 3% to $238.7 million [4] - Gross profit rose to $213.5 million, marking a 17% increase, with a gross margin of 89%, up 1,055 basis points year-over-year [4] - GAAP Net Income for Q3 2025 was $44.7 million, a 99% increase compared to the same quarter last year, with a net income margin of 19% [4] Key Performance Indicators - The number of U.S. paying dealers increased by 5% to 25,743, while international paying dealers grew by 11% to 7,930, resulting in a total of 33,673 paying dealers, a 6% increase [9] - The U.S. QARSD (Quarterly Average Revenue per Selling Dealer) was $7,742, an 8% increase, while international QARSD was $2,375, a 15% increase [9] - The U.S. Marketplace Segment Revenue was $210.4 million, a 12% increase, with operating income of $61.0 million, reflecting a 21% increase year-over-year [9] Shareholder Returns - The company repurchased $111 million in shares during Q3 2025, contributing to a total of 23% of shares outstanding repurchased since the buyback program began [1] - Non-GAAP earnings per share guidance for Q4 2025 is projected to be between $0.61 and $0.67 [12] Future Guidance - For Q4 2025, CarGurus expects Marketplace Revenue to be between $236 million and $241 million, with Non-GAAP Adjusted EBITDA projected between $83 million and $91 million [12] - Full-year 2025 guidance estimates Marketplace Revenue between $902 million and $907 million, with Non-GAAP Adjusted EBITDA expected to be between $313 million and $321 million [14]