CarGurus (CARG) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 15% year-over-year to $244 million, driven by dealer subscription growth, premium tier adoption, AI-powered products, and international expansion.

• Adjusted EBITDA from continuing operations rose 17% to $80.2 million, with a 33% margin, aided by product innovation and a retroactive Canadian tax law change.

• Net income from continuing operations was $32.2 million, down from $42.1 million year-over-year, primarily due to a $19.2 million lease impairment.

• The wind-down of CarOffer was completed in Q4 2025, with all results now reported as a single segment.

• $175 million in share repurchases were completed in Q1 2026, totaling 29% of shares outstanding since December 2022.

Financial highlights

• Q1 2026 revenue reached $244 million, up 15% year-over-year, exceeding guidance midpoint.

• Gross profit rose 14% to $224.6 million, with a 92% margin; non-GAAP gross profit was $225 million.

• Adjusted EBITDA was $80.2 million, with a 33% margin, up from $68.7 million year-over-year.

• Non-GAAP net income per diluted share was $0.58, up 21% year-over-year; non-GAAP net income was $55.6 million.

• Ended Q1 with $72 million in cash, down $118 million from Q4, mainly due to share repurchases.

Outlook and guidance

• Q2 2026 revenue expected between $247 million and $252 million; non-GAAP adjusted EBITDA guidance: $77.5 million–$85.5 million.

• Full-year 2026 revenue growth expected at 10%–13% year-over-year.

• Full-year non-GAAP adjusted EBITDA margin expected to compress by 1.5–2.5 percentage points versus 2025.

• Guidance excludes potential impacts from significant macro-level industry disruptions or foreign currency fluctuations.

• Management expects existing liquidity and access to a $390.6 million revolver to be sufficient for at least the next 12 months.