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- **Revenue Growth**: Marketplace revenue up 14% YoY to $232 million, with 27% international expansion driven by Canada and U.K.
- **AI Success**: PriceVantage beta dealers saw 5x faster turn times; CG Discover VDP-to-lead conversion 60x higher than standard leads.
- **Dealer Engagement**: 1,989 net new dealers added globally, 807 in international markets; 25% of U.S. dealers now use only CarGurus.
- **Financial Strength**: Non-GAAP EPS $0.57 (30% YoY), adjusted EBITDA $79 million (21% YoY), gross margin 90%.
- **AI Efficiency**: 80% of leads handled by AI, 91% employee AI adoption, 25% engineering productivity gain.
- **Future Leverage**: $4 billion TAM in dealer software/data products, with PriceVantage and Digital Deal driving wallet share expansion.

**【CEO Summary Section】**
- **Marketplace Revenue Growth**: 14% year-over-year to $232 million, driven by dealer upgrades, add-on product adoption, and lead quality improvements. International revenue grew 27% YoY, with Canada and U.K. leading expansion.
- **AI-Driven Product Launches**: PriceVantage (pricing tool) achieved 5x faster turn times for beta dealers, and CG Discover (AI shopping assistant) saw VDP-to-lead conversion rates 60x higher than standard leads.
- **Dealer Engagement**: 1,989 net new dealers added globally, with 807 in international markets. U.S. dealers upgraded to higher tiers, contributing to 8% YoY [CarSID] growth.
- **New Initiatives**: Dealership Mode (in-app dealership experience) achieved 56% user engagement, and Digital Deal adoption reached 12,500 dealers, with 45% YoY growth in high-value actions like financing applications.

**【CFO Financial Commentary】**
- **Non-GAAP Financials**: Q3 non-GAAP EPS of $0.57 (30% YoY increase), adjusted EBITDA of $79 million (21% YoY growth), and gross margin of 90% (up 650 bps YoY).
- **Expense Management**: Operating expenses grew 7% YoY to $142 million, with disciplined investment in AI and product innovation. Restructuring charges totaled $3.8 million, with $2 million expected in Q4.
- **Free Cash Flow**: Generated $179 million in cash, with $111 million used for share buybacks, leaving $55 million remaining in the program.

**【Q&A Highlights】**
- **Dealer Consolidation**: 25% of U.S. dealers now use only CarGurus, up from 18% a year ago, reflecting improved ROI from integrated software solutions.
- **International Momentum**: Canada and U.K. dealers are adopting U.S.-tested pricing models, with [CarSID] growing 15% YoY. Dealers in these markets are upgrading to premium tiers faster than U.S. counterparts.
- **AI Efficiency**: 80% of managed leads in October were handled by AI, reducing outsourced teams by 40%. Internally, AI adoption among employees reached 91%, boosting engineering productivity by 25%.
- **Digital Deal Pricing Power**: Dealers paying for Digital Deal tier saw 77% of price recommendations meet or exceed predicted sales velocity, enabling potential future pricing adjustments.


CarGurus, Inc. (CARG) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CARG

CARG fundamentals

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