CarGurus Q3 2026 Revenue Rises 12% as Adjusted EBITDA Reaches $89.7 Million

CarGurus Inc. (Nasdaq: CARG) reported a 12% year-over-year increase in third-quarter 2026 revenue from continuing operations, while adjusted profitability rose and dealer adoption of add-on products supported higher monetization. The automotive marketplace also issued updated full-year guidance calling for revenue growth of 11.5% to 12.1%.

Revenue for the quarter ended September 30 reached $258.4 million, up from $231.7 million a year earlier. GAAP net income from continuing operations increased to $52.8 million from $51.9 million, though the corresponding margin narrowed to 20% from 22%.

Non-GAAP adjusted EBITDA from continuing operations rose to $89.7 million from $82.4 million. The adjusted EBITDA margin was 35%, compared with 36% in the prior-year period. Non-GAAP gross profit increased to $237.1 million from $214.8 million, while non-GAAP gross margin declined to 92% from 93%.

CarGurus generated $74 million of free cash flow during the quarter, equivalent to 82% of adjusted EBITDA.

Dealer Products Drive Higher Monetization

The number of paying dealers increased to 34,701 from 33,673 a year earlier. The U.S. dealer base rose 2.6% to 26,402, while international paying dealers increased 4.7% to 8,299.

Quarterly average revenue per subscribing dealer, or QARSD, grew faster than the dealer count. U.S. QARSD increased 7.3% year over year to $8,308, and international QARSD rose 14.3% to $2,715. CarGurus said adoption of add-on products was the largest contributor to the year-over-year increase in the metric, alongside subscription upgrades and expansion of its dealer footprint.

The company has introduced six dealer products since late 2025. During the quarter, it launched StockVantage, which uses data and analytics to help dealers source inventory. CarGurus also reported that dealers using PriceVantage reduced per-vehicle discounting by nearly 10% while maintaining inventory turn times, based on the company’s analysis of eligible dealers before and after adoption.

VINMax recorded one of the company’s fastest early product adoption rates. CarGurus said boosted VINMax listings were 85% more likely to sell without a price reduction than a group of comparable non-boosted sold listings. About 70% of eligible dealers used the Shopper Signals product during the 30 days referenced in the presentation.

AI Tools and Consumer Engagement

CarGurus is also extending data and artificial intelligence tools into the consumer shopping process. Usage of Guru, its AI-led shopping feature, reached a record in the third quarter, with unique usage up 24% sequentially. Dealership Mode usage increased 105% from the previous quarter, and the company introduced a CarGurus Claude Connector.

The presentation identified CarGurus as the most visited U.S. vehicle-listings site and the listings platform with the most AI-driven sessions, based on third-party traffic data. It also said the company had the largest U.S. vehicle inventory among the listed competitors. CarGurus noted that the traffic comparison excluded mobile apps, which it described as its fastest-growing channel.

2026 Guidance and Capital Allocation

For the fourth quarter, CarGurus expects total revenue of $258.5 million to $263.5 million. Non-GAAP adjusted EBITDA from continuing operations is projected at $93 million to $101 million, with non-GAAP earnings per share from continuing operations of $0.73 to $0.79.

Full-year revenue is expected to range from $1.0115 billion to $1.0165 billion, representing growth of 11.5% to 12.1%. The company forecasts full-year non-GAAP adjusted EBITDA from continuing operations of $347.5 million to $355.5 million and non-GAAP earnings per share of $2.66 to $2.72. Adjusted EBITDA margin is expected to decline by 0.8 to 0.2 percentage points year over year.

The guidance assumes 90 million diluted weighted-average shares for the fourth quarter and 92 million for the full year. CarGurus did not provide GAAP reconciliations for the forward-looking non-GAAP measures because it said certain reconciling items could not be predicted without unreasonable effort.

CarGurus authorized a new $250 million share-repurchase program. Since 2022, the company has repurchased $946 million of shares, representing roughly 30% of shares outstanding. Through the third quarter of 2026, it repurchased 6.9 million shares for $225 million at a weighted average price of $32.70.

The results reflect CarGurus as a single reportable segment following the wind-down of CarOffer. That business was classified as discontinued operations after the wind-down was completed at the end of 2025.

The company’s outlook assumes recent dealer acquisition, churn and expansion trends continue. It excludes material changes in dealer or consumer behavior caused by broader industry conditions, measures CarGurus might take to assist dealers, and future foreign-exchange gains or losses. Other risks identified in the presentation include inventory and supply-chain constraints, tariff and trade-policy changes, inflation, interest rates, economic volatility, competition, regulation and the effect of emerging technologies such as artificial intelligence.