CarGurus (CARG) Q1 2025 Earnings
How Did CARG Stock React to Q1 2025 Earnings?
S&P 500 over the same 30 days: +6.56%.
Did CARG Beat Earnings? Q1 2025 Results
Yes. CarGurus reported Q1 2025 earnings of $0.46 a share on May 8, 2025, beating the $0.44 consensus estimate by 5.5%. Revenue was $225.2M against a $226.6M estimate.
CarGurus posted a mixed but fundamentally encouraging first quarter for 2025, beating on the bottom line while falling just short on the top line, as non-GAAP EPS of $0.46 cleared the $0.44 consensus by 5.50% even as revenue of $225.16 million came in 0.63% below estimates, rising 4.3% year-over-year. The clearest driver of the earnings strength was a dramatic shift in business mix: the company's winding down of its lower-margin CarOffer wholesale operation, where segment revenue collapsed 55% to $12.92 million, allowed gross margin to expand to 89% from 81% a year ago, lifting non-GAAP adjusted EBITDA 32% to $66.30 million and pushing the EBITDA margin to 29%. The core Marketplace business carried its weight, growing 13% to $212.24 million, with U.S. paying dealers up 3% to 25,153 and U.S. QARSD climbing 10% to $7,369. Looking ahead, CarGurus guided Q2 2025 total revenue of $222.00 million to $242.00 million and non-GAAP EPS of $0.52 to $0.58, though management noted the outlook excludes potential disruption from tariff-related shifts in dealer and consumer behavior.
- Marketplace revenue grew 13% YoY driven by deeper consumer and dealer engagement
- U.S. QARSD increased 10% YoY to $7,369 reflecting successful upselling and cross-selling
- Total paying dealers grew 4% YoY to 32,372
- Gross margin expanded to 89% from 81% YoY
- Non-GAAP Adjusted EBITDA margin expanded to 29% from 23% YoY
- Reduced cost of revenue driven by lower wholesale and product costs
“Our strong momentum in our Marketplace business continued into 2025, which grew 13% year-over-year. Across the company, we advanced our 2025 core drivers of value creation: expanding data-driven solutions that help dealers drive more profitable businesses, meeting the evolving needs of car shoppers with a more intelligent and seamless experience, and enabling customers to do more of the transaction online. As a result, this focused execution has translated into deeper consumer and dealer engagement and has expanded our market share.”
CarGurus CEO, on the earnings call
What Was CarGurus's Outlook in Q1 2025?
For Q2 2025, CarGurus guided total revenue of $222.0 million to $242.0 million, marketplace revenue of $219.5 million to $224.5 million, non-GAAP adjusted EBITDA of $71.5 million to $79.5 million, and non-GAAP EPS of $0.52 to $0.58 (assuming 100.0 million diluted weighted-average shares outstanding). Guidance is based on recent market trends and industry conditions and excludes macro-level industry disruptions that could materially change dealer and consumer behavior, including tariff impacts and foreign currency exchange gains or losses.
CARG YoY Financials
| Metric | Q1 2025 | Q1 2024 | Year over year |
|---|---|---|---|
| Revenue | $225.2M | $215.8M | +4.3% |
| Gross Profit | $199.7M | $172.2M | +16.0% |
| Operating Income | $45.8M | $26.3M | +74.1% |
| Net Income | $39.0M | $21.3M | +83.3% |
CARG Revenue by Segment
CARG Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.