CarGurus, Inc. (NASDAQ: CARG) reported fourth‑quarter and full‑year 2025 results that exceeded expectations. Revenue grew 14% year‑over‑year to $907 million, net income rose 53% to $196.7 million, and non‑GAAP adjusted EBITDA reached $319 million, up 25% from the prior year.
Quarterly revenue of $241.1 million represented a 15% increase from $228.5 million in Q4 2024. The lift was driven by higher subscription‑based listings revenue, stronger advertising performance, and a 32% year‑over‑year rise in international business.
Gross margin for the year was 93%, a slight improvement over the 87% margin reported in Q4 2024, reflecting pricing power and efficient cost management. Net income growth was supported by disciplined operating expenses and a favorable mix shift toward higher‑margin subscription products.
Non‑GAAP earnings per share were $0.63, a beat of $0.02 against the consensus range of $0.61 to $0.63. GAAP EPS of $0.51 fell short of the $0.527 estimate, largely due to higher interest expense and a one‑time charge related to the CarOffer wind‑down.
CarGurus completed a $350 million share‑repurchase program in 2025 and has authorized a new $250 million program for 2026, underscoring management’s confidence in cash‑flow generation and commitment to shareholder returns.
For Q1 2026, management guided revenue of $240.5 million to $245.5 million, with non‑GAAP EPS of $0.52 to $0.58. Full‑year 2026 revenue is expected to grow 10% to 13% year‑over‑year, while non‑GAAP adjusted EBITDA margin is projected to decline 1.5% to 2.5% as the company invests in AI‑driven products and international expansion.
CEO Jason Trevisan said, "Full‑year revenue grew 14% for the second consecutive year, driven by expanding wallet share with accelerating product adoption, improving retention, and adding new dealers." He added, "Fourth quarter revenue grew 15% year‑over‑year to $241 million at the high end of our guidance range, driven by strength in our subscription‑based listings revenue as well as overperformance in advertising and strength in our international business."
Investors noted the revenue beat and strong profitability but were cautious about the GAAP EPS miss and the forecasted margin compression, which tempered enthusiasm for the earnings release.
With a robust pipeline of AI products, a growing dealer base of 34,409 paying dealers, and a focus on international markets, CarGurus is positioned to sustain revenue growth and deliver shareholder value through continued investment and share repurchases.
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