How much of CarGurus (CARG) cash generation is being returned to shareholders?

Sonal Goyal

28 October 2026 04:59 PM AEDT

How much of CarGurus (CARG) cash generation is being returned to shareholders?

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Key Highlights

Second-quarter 2026 Revenue was US$251.0 million, up 13 per cent year on year, with GAAP Net Income from continuing operations of US$49.2 million.
The company repurchased US$29.2 million of shares in the quarter against non-GAAP free Cash Flow of US$87.7 million.
Third-quarter guidance calls for revenue of US$253.5 million to US$258.5 million, with results due on 5 November 2026.

Second-quarter results

CarGurus, Inc. (NASDAQ:CARG), the online automotive marketplace, reported second-quarter 2026 results on 6 August 2026. Revenue was US$251.0 million, up 13 per cent year on year, with US$226.3 million from the United States and US$24.7 million from international markets.

Gross profit was US$231.1 million, a 92 per cent margin. Operating expenses rose 15 per cent to US$168.1 million. GAAP net income from continuing operations was US$49.2 million, flat year on year, or US$0.54 per diluted share. On a non-GAAP basis, net income was US$60.4 million, or US$0.66 per diluted share, and adjusted EBITDA was US$84.7 million, up 7 per cent, a 34 per cent margin.

Cash returns

Operating expenses grew faster than revenue, 15 per cent against 13 per cent, which is consistent with flat GAAP net income. The US$11.2 million gap between non-GAAP and GAAP net income from continuing operations shows how much non-cash and other adjustments matter when comparing the two measures.

Cash flow from operations was US$94.6 million and non-GAAP free cash flow was US$87.7 million. Cash and cash equivalents were US$122.1 million at 30 June 2026.

The company repurchased US$29.2 million of shares in the quarter. It said total repurchases since December 2022 now exceed 30 per cent of shares outstanding. The quarter's Buybacks absorbed roughly a third of free cash flow, though buyback pace can vary from quarter to quarter.

Free cash flow of US$87.7 million exceeded adjusted EBITDA of US$84.7 million, helped by Operating Cash Flow well above GAAP net income. Such conversion can move with Working Capital timing, so a single quarter should not be treated as a trend. Paying dealers numbered 34,629, up 5 per cent year on year.

Guidance, not results

Management guided to third-quarter revenue of US$253.5 million to US$258.5 million, adjusted EBITDA of US$82.0 million to US$90.0 million, and non-GAAP Earnings Per Share of US$0.63 to US$0.69 on 90.0 million diluted shares. These are forecasts, not reported figures.

For full-year 2026, it expects revenue growth of 10 per cent to 13 per cent and a change in adjusted EBITDA Margin of minus 0.5 to minus 1.5 percentage points. Margin compression alongside double-digit growth points to ongoing investment, and chief executive Jason Trevisan highlighted the launch of Guru, a consumer-facing artificial intelligence layer, and momentum in the International business.

What to watch

CarGurus will release third-quarter results after the market closes on Thursday 5 November 2026, with a webcast at 5:00 pm Eastern Time, according to an announcement dated 19 October.

Points of comparison will include actual revenue and adjusted EBITDA against the guided ranges, paying-dealer growth, international momentum and the level of repurchases. Commentary on the Guru launch, and on whether the full-year margin guidance holds as Investment continues, will also be of interest. The cash balance, US$122.1 million at the end of June, will show how repurchases and operating cash generation interact over the three months to September.

FAQs

Q: What were CarGurus' second-quarter 2026 revenue and profit?

A: Revenue was US$251.0 million, up 13 per cent year on year. GAAP net income from continuing operations was US$49.2 million, or US$0.54 per diluted share.

Q: How much did CarGurus repurchase in the quarter?

A: It repurchased US$29.2 million of shares and said total repurchases since December 2022 exceed 30 per cent of shares outstanding. Non-GAAP free cash flow was US$87.7 million.

Q: When does CarGurus report third-quarter results?

A: The company will report after the market closes on 5 November 2026, with a webcast at 5:00 pm Eastern Time.

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