CarGurus 2025 Q2 Earnings Net Income Surges 132.5%

CarGurus (CARG) reported its fiscal 2025 Q2 earnings on August 8, 2025. The company returned to profitability with a net income of $22.34 million, marking a significant turnaround from a $68.72 million net loss in the same period a year ago.

CarGurus delivered strong results, significantly exceeding expectations. The company reported a 7.0% year-over-year revenue increase to $234.03 million, and net income surged by 132.5%, reflecting a dramatic improvement in financial performance. The company did not provide forward guidance in its SEC 8-K filing, but the CEO outlined a strategic pivot toward data-driven solutions.

Revenue
Total revenue for CarGurus rose to $234.03 million in Q2 2025, representing a 7.0% year-over-year increase. The Marketplace segment led the performance, contributing $222 million in revenue, a 14% growth compared to the prior year. In Climate Solutions, the Americas segment generated the largest share with $3.25 billion, followed by Europe at $1.25 billion and Asia Pacific, Middle East & Africa at $882 million. The Wholesale and Product segments reported revenues of $6.28 million and $5.76 million, respectively, while Climate Solutions Transportation added $726 million. Combined, the Climate Solutions segments totaled $6.11 billion in revenue.

Earnings/Net Income
CarGurus returned to profitability with an earnings per share (EPS) of $0.23 in Q2 2025, reversing a $0.66 loss per share in Q2 2024, a 134.8% improvement. The company’s net income surged to $22.34 million in Q2 2025, compared to a $68.72 million net loss in the same period a year ago, a 132.5% positive swing. This marked the ninth consecutive year of profitability in the corresponding quarter, showcasing strong business performance and operational stability.

Price Action
The stock price of CarGurus (CARG) has continued to decline, dropping 4.59% during the latest trading day, 8.63% over the most recent full trading week, and 16.33% month-to-date. The negative momentum has persisted despite the earnings beat.

Post-Earnings Price Action Review
A strategy of purchasing CarGurus shares following its revenue increase on the earnings release date and holding for 30 days yielded a negative return of -20.40%, underperforming the benchmark index, which returned 31.02% over the same period. The strategy’s Sharpe ratio was -0.10, indicating a high level of risk. The stock exhibited significant volatility, with a 59.99% volatility rate, and the maximum drawdown was reported at 0.00%, suggesting limited downside during the holding period.

CEO Commentary
Jason Trevisan, Chief Executive Officer, highlighted the sustained performance of the Marketplace business, noting year-over-year growth of 14%. He emphasized the company’s strategic shift toward enabling smarter sourcing decisions through technology and analytics, rather than facilitating direct transactions. The CEO announced the decision to wind down the CarOffer transactions business over the remainder of 2025, acknowledging the impact on employees and expressing gratitude for their contributions. The tone reflected a forward-looking, optimistic focus on innovation and operational efficiency, with a clear strategic pivot toward data-driven solutions for dealers and consumers.

Guidance
CarGurus did not provide quantitative guidance in its SEC 8-K filing. The CEO outlined a strategic focus on expanding data-driven solutions for dealers and consumers and emphasized the decision to phase out the CarOffer transactions business as part of the company’s operational strategy. No specific revenue targets or financial expectations were disclosed for future periods.

Additional News
Nigeria’s Punch newspaper reported on several significant events in the week following CarGurus’ earnings release. Nigeria’s foreign direct investment (FDI) fell by 70% in three months, according to the Business section of the paper. Additionally, WAEC issued revised 2025 WASSCE results after a grading error and extended an apology. The newspaper also covered political developments, including a meeting between Donald Trump and Vladimir Putin scheduled for August 15 in Alaska. In Nigeria, political commentator Olaide Omisore noted that President Tinubu’s recent decisions could affect his prospects for a second term.