CarGurus Inc - Class A
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.36%.
Did CARG Beat Earnings? Q2 2025 Results
CarGurus delivered a solid second quarter, posting adjusted EPS of $0.57 against a consensus estimate of $0.55, a beat of 4.40%, while revenue climbed 7.0% year-over-year to $234.03 million, edging past the $232.25 million Wall Street expected. The headline story, however, was the company's decision to wind down its CarOffer transactions business, a strategic pivot away from volatile digital wholesale markets that had weighed on results, with Wholesale revenue falling 52% in the quarter. The core Marketplace segment proved the real engine, growing 14% year-over-year to $202.65 million and helping lift non-GAAP Adjusted EBITDA 39% to $77.30 million with margins expanding 762 basis points to 33%. Total paying dealers grew 6% to 33,095, while consolidated QARSD rose 9% to $6,349, signaling steady monetization strength. <a href="https://247wallst.com/investing/2025/07/30/live-will-carvanas-nyse-cvna-q2-earnings-continue-its-epic-rally/">Elsewhere in the auto sector</a>, digital used-car platforms have faced similar pricing headwinds. Looking ahead, CarGurus guided Q3 Marketplace revenue of $228.00 million to $233.00 million and non-GAAP EPS of $0.50 to $0.58.
- Marketplace revenue growth of 14% YoY driven by dealer acquisition, expansion, and QARSD growth of 9%
- U.S. paying dealers grew 4% to 25,478; international paying dealers grew 10% to 7,617
- Non-GAAP Adjusted EBITDA margin expanded 762 basis points YoY to 33%
- GAAP gross profit margin improved 391 basis points to 87%
- U.S. Marketplace segment operating income grew 40% YoY
“Our Marketplace business had another strong quarter, with year-over-year revenue growth of 14%. We remain committed to expanding our suite of data-driven solutions across dealers' workflows and powering a more seamless car-shopping journey for consumers. Within transaction-enablement, we are sharpening our focus on technology and analytics that enable smarter sourcing decisions rather than facilitating the transactions themselves. Accordingly, we have made the decision to wind down the CarOffer transactions business over the balance of the year. This decision was not taken lightly, especially as it impacts colleagues who have contributed meaningfully to our efforts. We're grateful for their work and are committed to supporting them through the transition.”
CarGurus CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2025, CarGurus guided Marketplace revenue of $228.0 million to $233.0 million, Non-GAAP Marketplace Adjusted EBITDA of $76.5 million to $84.5 million, and Non-GAAP EPS of $0.50 to $0.58 (assuming 101.0 million diluted weighted-average shares). The company expects to substantially complete the CarOffer wind-down in H2 2025, incurring total expenditures of approximately $14.0 million to $19.0 million. Guidance excludes macro-level industry disruptions and foreign currency impacts. Digital Wholesale transactions are expected to decrease and cease over time as CarOffer winds down.
CARG YoY Financials
CARG Revenue by Segment
CARG Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.