CarGurus revenue growth slows as margins compress
The online automotive marketplace reported second-quarter revenue of $251.0 million, reflecting a 13% increase year-over-year.
CarGurus (CARG), the online automotive marketplace, reported second-quarter revenue of $251.0 million. The result represented a 13% increase year-over-year, a slight deceleration from the 15% growth reported in the first quarter.
The company faced a contraction in profitability during the period. Non-GAAP Adjusted EBITDA margin fell to 34%, a decline of 199 basis points year-over-year. This continued a downward trajectory from the 37% margin reported in the fourth quarter of 2025. Gross margin also dipped 86 basis points year-over-year to 92%.
Growth in the company's dealer network slowed across both domestic and foreign markets. U.S. paying dealers rose 3% year-over-year to 26,151, down from a 4% growth rate in the prior quarter. International paying dealers grew 11% year-over-year to 8,478, a deceleration from the 17% growth seen in the first quarter.
Average revenue per dealer, or QARSD, rose 7% year-over-year to $6,771. This growth rate was slightly lower than the 8% increase reported in the first quarter.
CarGurus introduced "Guru," a new consumer-facing AI layer, during the second quarter.
The company narrowed its full-year 2026 guidance for the year-over-year change in Non-GAAP Adjusted EBITDA margin to a range of (0.5)% to (1.5)%. The previous range provided in the first quarter was (1.5)% to (2.5)%.
CarGurus repurchased $29.2 million of shares in the second quarter. Total repurchases since December 2022 now exceed 30% of shares outstanding, up from 29% at the end of the first quarter. Cash and cash equivalents decreased 36% to $122.1 million as of June 30, 2026, compared to December 31, 2025.