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What changed in CarGurus, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CarGurus, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+441 added−485 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in CarGurus, Inc.'s 2025 10-K

441 paragraphs added · 485 removed · 269 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

57 edited+48 added−68 removed22 unchanged
Biggest changeIn addition, dealers using our free service (Restricted) have access to capped anonymous leads and connections. 5 Table of Contents Dealer Data Dashboard and Merchandising Tools Dealers with an applicable Listings and Data Insights subscription have access to the following Dealer Dashboard features and merchandising tools that provide dealers with data insights and information to facilitate efficient and effective management, pricing, and advertising of inventory. • Performance Summary : Real‑time and historical data enabling dealers to analyze connections, SRP, and VDP views at a granular level to inform a dealer’s sales and merchandising efforts. • Dealer Data Insights : Pricing analysis of the dealer’s inventory, including better access to automated data that fits into a dealer’s workflow and a summary of a vehicle’s missing information such as price, photos, or trim, helping dealers better merchandise their vehicles and allowing them to react more quickly to the market and turn units. o Acquisition Insights Report : Automated email and dashboard tool that uses CarGurus data to help dealers identify the in-market inventory that is turning at their desired rate. o Next Best Deal Rating : Insights tool that provides dealers with the blueprint for the smallest price reduction needed to achieve the next best deal rating on that vehicle’s listing.
Biggest changeDealers with an applicable Listings subscription have access to the following Dealer Dashboard features that provide dealers with insights and information to facilitate efficient and effective management, pricing, and advertising of inventory. • Acquisition Insights : Automated email and dashboard tool that uses CarGurus data to help dealers identify the in-market inventory that is turning at their desired rate and they may be interested in acquiring. • Next Best Deal Rating : Insights tool that provides dealers with the blueprint for the smallest price reduction needed to achieve the next best deal rating on a particular vehicle’s listing.
Our investor relations website is located at http://investors.cargurus.com. We webcast our earnings calls and certain events that we participate in or host with members of the investment community on our investor relations website. Additionally, we provide news and announcements regarding our financial performance, including SEC filings, investor events, and press and earnings releases, on our investor relations website.
Our investor relations website is located at investors.cargurus.com . We webcast our earnings calls and certain events that we participate in or host with members of the investment community on our investor relations website. Additionally, we provide news and announcements regarding our financial performance, including SEC filings, investor events, and press and earnings releases, on our investor relations website.
Our registered trademarks remain enforceable in the countries in which they are registered for as long as we continue to use the marks, and pay the fees to maintain the registrations, in those countries. We are the registered holder of several domestic and international domain names that include “CarGurus”, “CarOffer”, “Pistonheads”, and “Autolist” and other variations of our trade names.
Our registered trademarks remain enforceable in the countries in which they are registered for as long as we continue to use the marks and pay the fees to maintain the registrations in those countries. We are the registered holder of several domestic and international domain names that include “CarGurus”, “PistonHeads”, and “Autolist” and other variations of our trade names.
We enter into confidentiality and proprietary rights agreements with our employees and relevant consultants, contractors, and business partners. We control the use of our proprietary technology and intellectual property through provisions in contracts with our customers and partners and our general and product-specific terms of use on our websites.
We enter into confidentiality and proprietary rights agreements with our employees and relevant consultants, contractors, and business partners. We control the use of our proprietary technology and intellectual property through provisions in contracts with our dealer customers and partners and our general and product-specific terms of use on our websites.
Outside of the U.S., we tailor marketing efforts to local markets. Dealer Marketing Our dealer marketing team is primarily focused on building marketing assets that best educate dealer customers and prospects about our products.
Outside of the U.S., we tailor marketing efforts to local markets. Dealer Marketing Our dealer marketing team is primarily focused on building marketing assets and events that best educate dealer customers and prospects about our products.
Corporate governance information, including our policies concerning business conduct and ethics, is also available on our investor relations website under the heading “Governance.” No content from any of our websites is incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any reference to our websites is intended to be an inactive textual reference only. 17 Table of Contents
Corporate governance information, including our policies concerning business conduct and ethics, is also available on our investor relations website under the heading “Governance.” No content from any of our websites is incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any reference to our websites is intended to be an inactive textual reference only. 18 Table of Contents
It supports localization with multi-language and country-specific settings, leverages native device features like the camera, and offers customizable app settings. Technology and Product Development We are a technology and data company focused on utilizing our background as a trusted marketplace for consumers and dealers to provide our customers with innovative and actionable data analysis.
It supports localization with multi-language and country-specific settings, leverages native device features like the camera, and offers customizable application settings. Technology and Product Development We are a technology and data company focused on utilizing our background as a trusted marketplace for consumers and dealers to provide our customers with innovative and actionable data analysis.
Auto Manufacturer and Other Advertiser Products Our platform enables auto manufacturers and others to purchase targeted advertising on our sites and third-party platforms, including social media: • Brand Reinforcement : Manufacturers can advertise to consumers based on the make, model, and location of vehicles they are searching for, increasing exposure to interested buyers. • Category Sponsorship : Sponsors can secure exclusive spots on high-traffic pages, such as the New Car front page, Used Car front page, or Research Center. • Automobile Segment Exclusivity : Manufacturers can target specific segments (e.g., SUV, sedan, hybrid, luxury) to support new or existing model launches. • Consumer Segment Exposure : Targeted advertising based on parameters like budget, vehicle preferences, and location can reach relevant audiences on CarGurus and third-party websites.
Auto Manufacturer and Other Advertiser Products Our platform enables auto manufacturers and others to purchase targeted advertising and sponsored content on our sites and third-party platforms, including social media: • Brand Reinforcement : Manufacturers can advertise to consumers based on the make, model, and location of vehicles they are searching for, increasing exposure to interested shoppers. • Category Sponsorship : Sponsors can secure exclusive spots on high-traffic pages, such as the New Car front page, Used Car front page, or Research Center. • Automobile Segment Exclusivity : Manufacturers can target specific segments (e.g., SUV, sedan, hybrid, luxury) to support new or existing model launches. • Consumer Segment Exposure : Targeted advertising based on parameters like budget, vehicle preferences, and location can reach relevant audiences on CarGurus and third-party websites.
Our culture and commitment to building a workplace where we can all thrive has been recognized externally – we have received numerous awards acknowledging our efforts in creating a desirable workplace. 11 Table of Contents Intellectual Property We protect our intellectual property through a combination of patents, copyrights, trademarks, service marks, domain names, trade secret protections, confidentiality procedures, and contractual restrictions.
Our culture and commitment to building a workplace where we can all thrive has been recognized externally – we have received numerous awards acknowledging our efforts in creating a desirable workplace. Intellectual Property We protect our intellectual property through a combination of patents, copyrights, trademarks, service marks, domain names, trade secret protections, confidentiality procedures, and contractual restrictions.
We advertise through online and offline channels including linear, cable, and connected television, video, social media, display, search, content marketing, partnerships, sponsorships, influencers, and affiliate relationships. We continually test into emerging and new channels with the goal of optimizing our customer acquisition cost and driving awareness of our brand.
We advertise through online and offline channels including linear, cable, and connected television, video, social media, display, search, content marketing, partnerships, sponsorships, influencers, audio, out-of-home, and affiliate relationships. We continually test into emerging and new channels with the goal of optimizing our customer acquisition cost and driving awareness of our brand.
People and Talent Our investment in our greatest asset – our people – is integral to our core values, evidenced by our inclusion of employee development as components of our 2024 strategic and organizational initiatives.
People and Talent Our investment in our greatest asset – our people – is integral to our core values, evidenced by our inclusion of employee development as components of our 2025 strategic and organizational initiatives.
We continually invest in employee career growth and a wide range of development opportunities, including compliance training, mentoring, coaching, and hybrid learning formats. Compensation and Benefits The success of our business is fundamentally connected to the well-being of our people.
We continually invest in employee career growth and a wide range of development opportunities, including compliance training, mentoring, coaching, and hybrid learning formats. 12 Table of Contents Compensation and Benefits The success of our business is fundamentally connected to the well-being of our people.
We compete for dealers’ marketing spend with offline customer acquisition channels, other online automotive marketplaces, dealers’ own customer acquisition efforts on search engines, social media marketplaces, and other internet sites, online dealerships, and vehicle auction companies that attract consumers and dealers searching for vehicles, as applicable.
We compete for dealers’ marketing spend with offline customer acquisition channels, other online automotive marketplaces, dealers’ own customer acquisition efforts on search engines, social media marketplaces, and other internet sites, online dealerships, and vehicle auction companies that attract consumers searching for vehicles.
While the scope of these laws and regulations is changing and remains subject to differing interpretations, we seek to comply 12 Table of Contents with industry standards and all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy and data protection.
While the scope of these laws and regulations is changing and remains subject to differing interpretations, we seek to comply with industry standards and all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy and data protection.
Marketing and Brand Consumer Marketing Through our consumer marketing program we engage consumers at all points of the consumers’ journey to communicate our brand values and value propositions as well as to drive consumer leads and transactions for our dealers and partners.
Marketing and Brand Consumer Marketing Through our consumer marketing program, we engage consumers at all points of the consumer journey to communicate our brand values and value propositions as well as to drive consumer leads and sales for our dealers and partners.
These targeted placements on third party sites help dealers build their brand presence and drive additional traffic directly to the dealers website. Advertisements can be targeted by the user’s geography, search history, CarGurus website activity, and a number of other 6 Table of Contents factors.
These targeted placements on third party sites help dealers build their brand presence and drive additional traffic directly to the dealer’s website. Advertisements can be targeted by the user’s geography, search history, CarGurus website activity, and a number of other factors.
We intend to pursue additional patent protection to the extent we believe it would be beneficial to our competitive position. We have a number of registered and unregistered trademarks in the U.S. and certain other jurisdictions. We pursue additional trademark registrations to the extent we believe doing so would be beneficial to our competitive position.
We have a number of registered and unregistered trademarks in the U.S. and certain other jurisdictions. We pursue additional trademark registrations to the extent we believe doing so would be beneficial to our competitive position.
The platform allows consumers to search across a broad range of dealer and private seller listings and stay informed about automotive news through editorial articles and expert reviews. Paying U.K. dealers who list on the CarGurus platform automatically have their inventory added to the PistonHeads site for greater consumer reach.
PistonHeads is accessible via mobile application and a website. The platform allows consumers to search across a broad range of dealer and private seller listings and stay informed about automotive news through editorial articles and expert reviews. Paying U.K. dealers who list on the CarGurus platform automatically have their inventory added to the PistonHeads site for greater consumer reach.
We use our owned channels, including email, text 8 Table of Contents messages, and on-site and in-app messaging, to deepen our relationships with existing customers. Leveraging our proprietary data and content, we also engage in press outreach to deliver our messages through organic media and articles. We largely drive our consumer marketing efforts internally, but engage agency partners when appropriate.
We use our owned channels, including email, text messages, and on-site and in-application messaging, to deepen our relationships with existing consumer customers. Leveraging our proprietary data and content, we also engage in press outreach to deliver our messages through organic media and articles. We largely drive our consumer marketing efforts internally but engage agency partners when appropriate.
Listings and Data Insights subscriptions are priced monthly, quarterly, semiannually, or annually based on a dealer’s inventory size and region and our assessment of the return on investment, or ROI, we expect to deliver through our lead quantity and quality and our innovation. Dealers may be renewed at higher rates commensurate with growth and updated performance expectations.
Listings subscriptions are priced monthly, quarterly, 6 Table of Contents semiannually, or annually based on a dealer’s inventory size and region and our assessment of the ROI we expect to deliver through our lead quantity and quality and our innovation. Dealers may be renewed at higher rates commensurate with growth and updated performance expectations.
We endeavor to design our website content in a manner that would comply with relevant advertising regulations and consumer protection laws if the content were to be considered vehicle sales advertising.
We consider applicable advertising and consumer protection laws and regulations in designing our products and services. We endeavor to design our website content in a manner that would comply with relevant advertising regulations and consumer protection laws if the content were to be considered vehicle sales advertising.
Our Board of Directors oversees our people and talent efforts and views building our culture – from employee development and retention to diversity, equity, inclusion, and belonging initiatives – as key to driving long-term value for our business and helping mitigate risks. As of December 31, 2024, we had 1,282 full-time employees, 72 of whom were based outside the U.S.
Our Board of Directors oversees our people and talent efforts and views building our culture – from employee development and retention to inclusion initiatives – as key to driving long-term value for our business and helping mitigate risks. As of December 31, 2025, we had 1,218 full-time employees, 82 of whom were based outside the U.S.
Key features include an IMV scan for quick vehicle identification number scanning or manual input, inventory management for adding, updating, or removing vehicles, and lead management for tracking and responding to inquiries. The app provides pricing tools to set competitive prices, dealer insights for performance and market analysis, and push notifications for timely updates.
Key features include an IMV scan for quick VIN scanning or manual input, inventory management for adding, updating, or removing vehicles, and lead management for tracking and responding to inquiries. The application provides pricing assistance to set competitive prices, dealer insights for performance and market analysis, and push notifications for timely updates.
See Note 14 to our consolidated financial statements included elsewhere in this Annual Report for further segment reporting and geographical information. 3 Table of Contents Our Products and Services U.S. Marketplace and Other The product offerings described below are available through our U.S. marketplace; availability on our other marketplaces varies.
For further segment reporting and geographic information, refer to Note 14 to our consolidated financial statements included elsewhere in this Annual Report. Our Products and Services The product offerings described below are available through our U.S. marketplace; availability on our other marketplaces varies.
Additionally, we offer a 401(k) plan that includes a company matching program. Employee Engagement Each year we conduct an employee engagement survey to help our management team gain insight into and gauge employees’ feelings, attitudes, and behaviors around working at CarGurus.
Additionally, we offer a 401(k) plan that includes a company matching program. Employee Engagement We take employee feedback seriously and we regularly conduct employee engagement surveys to help our management team gain insight into and gauge employees’ feelings, attitudes, and behaviors around working at CarGurus.
We compete primarily on the basis of the ROI that our marketplace offers and the synergies provided by the combination of our foundational Listings business with digital wholesale and digital retail offerings complemented by the leveraging our marketplace standing into insightful data analysis.
We compete primarily based on the ROI that our marketplace offers as well as the synergies provided by the combination of our foundational listings business with digital retailing offerings and by leveraging our marketplace standing into insightful data analysis.
In order to operate in this regulated environment, we develop our products and services with a view toward appropriately managing the risk that our regulatory compliance, or the regulatory compliance of the dealers whose inventory is listed on our websites, could be challenged. We consider applicable advertising and consumer protection laws and regulations in designing our products and services.
In order to operate in this regulated environment, we develop our products and services with a view toward appropriately managing the risk that our regulatory compliance, or the regulatory compliance of the dealers whose inventory is listed on 13 Table of Contents our websites, could be challenged.
Instead, we analyze data on manufacturers’ suggested retail prices and recent sales of similar new vehicles, accounting for trade-ins, incentives, and other factors that can affect the price of a new car, to provide users with comparative price information. • Search Results Page and Vehicle Detail Page : Our Search Results Page, or SRP, provides users with vehicle-specific details such as Deal Ratings as well as in-depth search filters, which we believe deliver the most comprehensive search capability among major U.S. online automotive marketplaces.
We calculate IMV by analyzing tens of millions of data points, including make, model, trim, year, features, condition, history, geographic location, and mileage. o New Car Price Information : For new cars, we analyze data on suggested retail prices (manufacturers or total) and recent sales of similar new vehicles, accounting for trade-ins, incentives, and other factors that can affect the price of a new car, to provide users with comparative price information. o Search Results Page and Vehicle Detail Page : Our Search Results Page, or SRP, provides users with vehicle-specific details such as Deal Ratings as well as in-depth search filters, which we believe deliver the most comprehensive search capability among major U.S. online automotive marketplaces.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. 10 Table of Contents Culture, Values, and Standards OUR CORE VALUES WE ARE PIONEERING WE ARE TRANSPARENT WE ARE DATA-DRIVEN WE MOVE QUICKLY WE ARE COLLABORATIVE WE HAVE INTEGRITY Our company culture is rooted in a data-driven, innovative approach to the automotive market, fostering thought leadership, collaboration, and continuous improvement to serve our consumers, dealers, and partners.
Culture, Values, and Standards OUR CORE VALUES WE ARE PIONEERING WE ARE TRANSPARENT WE ARE DATA-DRIVEN WE MOVE QUICKLY WE ARE COLLABORATIVE WE HAVE INTEGRITY Our company culture is rooted in a data-driven, innovative approach to the automotive market, fostering thought leadership, collaboration, and continuous improvement to serve our consumers, dealers, and partners.
PistonHeads also runs PistonHeads Auctions, a platform that allows individuals and dealers to list their vehicles for auction and buyers to either bid at auction, make an offer before the auction starts, or commit to buy a vehicle at a set price before the auction starts.
PistonHeads also runs PistonHeads Auctions, a platform that allows individuals and dealers to list their vehicles for auction and shoppers to either bid at auction, make an offer before the auction starts, or commit to buy a vehicle at a set price before the auction starts. Autolist Autolist is a U.S. automotive marketplace accessible via mobile application and website.
We execute dealer campaigns through a number of channels including email, direct mail, and social media with the aim to both drive leads to our sales teams and to increase product adoption and usage with new and existing customers.
We execute dealer campaigns through a number of channels including email, direct mail, and social media with the aim to both drive leads to our sales teams and to increase product adoption and usage with new and existing customers. We run a dealer award program, recognizing top performing dealers on various dimensions such as top rated and top value.
Deal Ratings are based on Instant Market Value, or IMV (our proprietary algorithm that assesses the market value of a used vehicle in a local market), and Dealer Ratings (ratings derived from our users’ experiences with the dealers they have connected with).
Deal Ratings are based on Instant Market Value, or IMV (our proprietary algorithm that assesses the market value of a used vehicle in a local market).
Some of these competitors include: • major U.S. online automotive marketplaces, such as AutoTrader.com, Carfax.com, Cars.com, and TrueCar.com; • other U.S. automotive websites, such as Edmunds.com and KBB.com; • online automotive marketplaces and websites in our international markets; • online dealerships, such as Carvana.com; • sites operated by individual automobile dealers; • internet search engines, including aggregation sites and AI-generated search engines; • social media marketplaces; • peer-to-peer marketplaces, such as Craigslist.com; • vehicle auction companies, including digital wholesale platforms, such as ACV Auctions, OPENLANE, and E INC; and • e-commerce sites, such as the partnership between Amazon.com, Inc., or Amazon, and Hyundai to sell cars on Amazon.com. 9 Table of Contents Competition for Consumers and Dealers We compete for consumer visits with other online automotive marketplaces, free listing services, general search engines, online dealerships, and dealers’ websites.
Some of these competitors include: 10 Table of Contents • major U.S. online automotive marketplaces, such as AutoTrader.com, CARFAX.com, Cars.com, and TrueCar.com; • other U.S. automotive websites, such as Edmunds.com and KBB.com; • online automotive marketplaces and websites in our international markets; • online dealerships, such as Carvana.com; • sites operated by individual automobile dealers; • internet search engines, including aggregation sites and AI-generated search engines; • social media marketplaces; • peer-to-peer marketplaces, such as Craigslist.com; and • e-commerce sites, such as the partnership between Amazon.com, or Amazon, and select original equipment manufacturers to sell cars on Amazon.
Regulators or other third parties could take, and on some occasions have taken, the position that our marketplace or related products violate applicable brokering, bird-dog, consumer protection, or advertising laws or regulations. Our wholesale operations through CarOffer are regulated by the states in which we operate and by the U.S. federal government.
Regulators or other third parties could take, and on some occasions have taken, the position that our marketplace or related products violate applicable brokering, bird-dog, consumer protection, or advertising laws or regulations.
Top Dealer Offers allows dealers to make tailored trade-in offers on CarGurus consumer vehicles, generating valuable 4 Table of Contents trade-in leads for their business. CarGurus dealers have control over their bidding and direct access to consumers actively looking to sell their vehicles.
Inventory Our inventory products help dealers source and price vehicles more effectively. • Sell My Car allows consumers to sell their cars and dealers to make tailored trade-in offers on CarGurus consumer vehicles, generating valuable trade-in leads for their business. CarGurus dealers have control over their bidding and direct access to consumers actively looking to sell their vehicles.
Infrastructure Our development servers and U.S. and Canadian websites are hosted through third-party cloud services in the U.S. and at third-party data centers in the U.S. near Dallas, Texas. Our European websites are hosted on third-party cloud computing services near each of London, England; Dublin, Ireland; and Frankfurt, Germany.
Our software is built using a combination of internally developed software, third-party software and services, and open-source software. 9 Table of Contents Infrastructure Our development servers and U.S. and Canadian websites are hosted through third-party cloud services in the U.S. Our European websites are hosted on third-party cloud computing services near each of London, England; Dublin, Ireland; and Frankfurt, Germany.
Macroeconomic conditions, such as slower growth or recession, higher interest rates, unemployment, inflation, consumer confidence in the economy, consumer debt levels, labor disruptions, work stoppages, or strikes, geopolitical conflicts, foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences, can also impact the volume of wholesale vehicle sales, as was evidenced by the global semiconductor chip shortage and other supply-related shortages.
Historically, our operating results have been more influenced by macroeconomic conditions that impact the volume of vehicle sales, such as slower growth or recession, higher interest rates, unemployment, inflation, consumer confidence in the economy, consumer debt levels, labor disruptions, work stoppages, or strikes, geopolitical conflicts, foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences, than by consistent 11 Table of Contents seasonal patterns.
In the U.K., we provide one of the largest inventories of used vehicles and expert reviews, complemented by privately listed vehicles and expert review content on our PistonHeads website, as discussed below. Autolist Autolist provides consumers an online automotive marketplace through mobile applications and a website.
In the U.K., we provide one of the largest inventories of used vehicles and expert reviews, complemented by privately listed vehicles and expert review content on our PistonHeads website, as discussed below. 8 Table of Contents PistonHeads PistonHeads is a U.K. automotive marketplace, auction platform, and editorial content hub, all geared towards automotive enthusiasts.
Dealers can specify price reduction thresholds on their specific inventory and receive an automated weekly report to inform price changes that will optimize dealer volume and margin. o Maximize Margin Report : Report that shows available price increases on vehicles while retaining deal rating or dropping one deal rating (minimum Fair Deal). o Merchandising Health Report : Sends alerts when a dealer is missing vehicle photos and details that can improve a listing’s performance. • User Review Management : Ability for dealers to track and manage – but not edit or manipulate – reviews about them from our users, including responding to users, reporting potentially fraudulent reviews, and publishing positive reviews to social media platforms for broader exposure.
Dealers can specify price reduction thresholds on their specific inventory and receive an automated report to inform price changes that will optimize dealer volume and margin. • Maximize Margin : Report that shows available price increases on vehicles while retaining deal rating or dropping one deal rating (minimum Fair Deal). • Merchandising Insights : Sends alerts when a dealer is missing vehicle photos and details that can improve a listing’s performance.
We believe in rapid development, release frequent updates, and have internal tools and automation that allow us to efficiently evolve our products. Our software is built using a combination of internally developed software, third-party software and services, and open-source software.
We believe in rapid development, release frequent updates, and have internal tools and automation that allow us to efficiently evolve our products.
Segments During the year ended December 31, 2024, we managed our business and reported earnings through two reportable segments: • U.S. Marketplace: Derives revenue from marketplace services for customers within the U.S. • Digital Wholesale: Primarily derives revenue from our Dealer-to-Dealer and Instant Max Cash Offer services sold on our CarOffer platform.
Marketplace: Derived revenue from marketplace services for our dealer customers within the U.S. • Digital Wholesale: Primarily derived revenue from our Dealer-to-Dealer and Instant Max Cash Offer services sold on our CarOffer platform.
Consumers can save searches, set alerts for new listings, and get an offer to sell their car through Top Dealer Offers. The app supports personalized accounts, push notifications for updates, and secure authentication for smooth access. Dealer Mobile Application CarGurus’ dealer mobile application enables dealership operations with a suite of tools designed for efficiency and effectiveness.
The application supports personalized accounts, push notifications for updates, and secure authentication for smooth access. Dealer Mobile Application Our dealer mobile application enables dealership operations with a suite of tools designed for efficiency and effectiveness.
Active communication with dealers strengthens relationships and fosters success on our platform. CarOffer’s sales and service team focuses on supporting dealer satisfaction and retention, facilitating transactions, and onboarding new dealers to its platform. Competition We face competition to attract consumers and paying dealers to our marketplaces and services and to attract advertisers to purchase our advertising products and services.
Active communication with dealers strengthens relationships and fosters success on our platform. Competition We face competition to attract consumers and paying dealers to our marketplaces and services and to attract advertisers to purchase our advertising products and services. Our competitors offer various marketplaces, products, and services that compete with us.
Revenue is generated through fees charged to the dealership to enable listings beyond the default geographical radius. This program provides additional vehicle options to car shoppers open to home delivery services while promoting participating dealers’ delivery capabilities and increasing non-local VDP views.
This program provides additional vehicle options to consumers open to home delivery services while promoting participating dealers’ delivery capabilities and increasing non-local VDP views. We generate revenue from Geo Expansion through a recurring subscription-based model that enable listings beyond the default geographical radius. Marketing is also supported by our Merchandising Insights feature described under “Data” below.
We compete for consumers primarily on the basis of the quality of the consumer experience and the breadth of offerings that we are able to provide.
Competition for Consumers and Dealers We compete for consumer visits with other online automotive marketplaces, free listing services, general search engines, AI-generated search engines, online dealerships, and dealers’ websites. We compete for consumers primarily on the basis of the quality of the consumer experience and the breadth of offerings that we are able to provide.
We also provide our users with additional features to aid their search, including similar vehicle recommendations, side-by-side vehicle comparisons, expert reviews, and user rankings.
We also provide our users with additional features to aid their search, including similar vehicle recommendations, side-by-side vehicle comparisons, expert reviews, and user rankings. Vehicle Detail Pages, or VDPs, include comprehensive information about the vehicle, including dealership information, dealer reviews and ratings, payment calculators, vehicle history, price history, and time on site as well as numerous photos.
We primarily generate revenue from these partnerships based on the number of funded loans from consumers who pre-qualify with our lending partners through our site. We believe this program provides more transparency to car-shoppers about actual payments to be offered at the dealership specific to participating lenders and delivers highly qualified car-shopper leads to participating dealers.
We believe this program provides more transparency to car shoppers about actual payments to be offered at the dealership specific to participating lenders and delivers highly qualified car shopper leads to participating dealers. • LeadAI : Scores and labels leads based on shopper behavior, helping dealers prioritize follow-up activity.
We offer the following Listings and Data Insights subscriptions to dealers through tiered sets of packages providing: (1) leads and connections; (2) sponsored placements; (3) branding; and (4) tools and insights. We also offer Featured and Featured Priority subscriptions, comparable to Featured+ and Featured Priority+, respectively, but without access to Digital Deal leads.
Marketing We offer Listings subscription packages in tiered solutions, providing various combinations of visibility, leads, and tools: We also continue to maintain legacy Featured and Featured Priority subscriptions, comparable to Featured+ and Featured Priority+, respectively, but without access to Digital Deal leads.
CarGurus has one issued U.S. patent with an expiration date of May 2034, one pending U.S. patent application, and one pending international patent application. CarOffer has one pending U.S. patent application. These applications cover proprietary technology that relates to various functionalities on our platform, generally in connection with pricing, ranking, and detecting fraud in online listings.
CarGurus has one issued U.S. patent with an expiration date of May 2034. From time to time, we file U.S. provisional and non-provisional patent applications that may cover proprietary technology relating to various functionalities on our platform to the extent we believe they would be beneficial to our competitive position.
Through our evolution, our ultimate goal remains the same: to empower our customers by giving them all the tools and information they need to buy or sell any car, anywhere, at the right price, and in the right way for them. At CarGurus, we give people the power to reach their destination .
U.K. 1 Similarweb: Traffic Insights (Cars.com, Autotrader.com, TrueCar.com, CARFAX.com Listings (defined as CARFAX.com Total Visits minus Vehicle History Reports)), Q4 2025, U.S. 2 Compared to Autotrader.com, Cars.com, TrueCar.com, and CARFAX.com (Joreca as of December 31, 2025) Through our platform’s evolution, our ultimate goal remains the same: to empower our customers by giving them all the technology and information they need to buy or sell any car, anywhere, at the right price, and in the right way for them.
We are also subject to the terms of our privacy policies and privacy-related obligations to third parties. 13 Table of Contents Information about Our Executive Officers (as of February 20, 2025) Jason Trevisan, Chief Executive Officer and Director (Age 50) . Mr.
We are also subject to the terms of our privacy policies and privacy-related obligations to third parties. 14 Table of Contents Information about Our Executive Officers (as of February 19, 2026) Jason Trevisan, Chief Executive Officer and Director (Age 51) Business Experience • Chief Executive Officer and member of the Board, CarGurus (since January 2021); interim Principal Financial Officer, Principal Accounting Officer, and Treasurer (since March 2025 and October 2022 to December 2023) • Chief Financial Officer, CarGurus (September 2015 to January 2021); Treasurer, CarGurus (September 2015 to January 2021); President, International, CarGurus (January 2020 to January 2021) • General Partner, Polaris Partners, a venture capital firm (September 2003 to August 2015); while at Polaris, Mr.
Digital Deal generates revenue by charging subscription fees to dealerships to enroll in this program and through our Finance in Advance product, as described below. Finance in Advance Through partnerships with automotive lending companies, eligible consumers can pre-qualify for financing on cars from dealerships that offer financing from these partners.
We generate revenue from Digital Deal through dealer Listings subscription packages or as à la carte purchases. • Pre-Qualified Leads : Dealers that offer financing from our automotive lending partners can enroll to allow eligible consumers to pre-qualify for financing on cars as a part of their Listings.
We believe we compare favorably due to our large user audience, high user engagement, and the effectiveness and relevance of our advertising products.
We believe we compare favorably due to our large user audience, high user engagement, and the effectiveness and relevance of our advertising products. Seasonality Across the retail automotive industry, consumer activity tends to be highest in the spring and summer months, aligning with tax refund season and increased discretionary spending, as well as the rollout of new vehicle models.
Marketplace Our online automotive marketplace allows consumers to search for new and used car listings from our dealers based on our proprietary search algorithm.
Our marketplace allows consumers to search with confidence for new and used car listings from our dealers with a conversational search experience or through filter-based search built on our proprietary deal ratings. It provides consumers with a seamless online-to-offline experience, offering the ability to complete the transaction in the way that works best for them.
An independent editorial staff produces content to keep consumers informed on the latest vehicles and trends in the automotive market. PistonHeads PistonHeads is a U.K. automotive marketplace, auction platform, and editorial site geared towards automotive enthusiasts.
An independent editorial staff produces content to keep consumers informed on the latest vehicles and trends in the automotive market. Mobile Applications Consumer Mobile Application Our consumer mobile application offers a seamless experience for buying and selling cars, anchored by AI-powered features like Discover and Dealership Mode.
Our marketplace is the trusted source for consumers based on the key algorithms that make up the major elements of our marketplace product: • Deal Rating : Eligible used car listings in our marketplace are assigned one of five Deal Ratings: Great Deal, Good Deal, Fair Deal, High Priced, or Overpriced.
Discover complements the robust suite of proprietary algorithms our marketplace applies that help shoppers evaluate vehicle listings and provides them with pricing context, both capabilities core to the consideration stage of the consumer journey. 4 Table of Contents • Proprietary Algorithms : o Deal Rating : Eligible used car listings in our marketplace are assigned one of five Deal Ratings: Great Deal, Good Deal, Fair Deal, High Priced, or Overpriced.
Dealer Listings and Data Insights Subscription Add-Ons In addition to Listings and Data Insights subscriptions, dealers can purchase value add-on products à la carte to further the exposure of their vehicles. • Highlight : Allows dealers to showcase inventory in additional featured slots that are not currently available to dealers in existing products. • Real Time Performance Marketing, or RPM : Allows dealers to leverage the engaged CarGurus audience to reach high-intent car buyers on other websites and social media platforms across the internet.
In addition to Listings subscriptions, dealers can purchase add-on products à la carte to further inventory exposure and lead access. • Highlight : Allows dealers to showcase inventory in featured slots that are not currently available to dealers in existing products providing dealers with more granular control over managing inventory and customizable strategies leading to increased visibility.
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Item 1. Bu siness. Who We Are CarGurus is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with both digital retail solutions and the CarOffer online wholesale platform, each powered by data-driven insights.
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Item 1. Bu siness. Who We Are CarGurus is a multinational automotive platform helping consumers and dealers confidently buy and sell vehicles.
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The CarGurus platform gives consumers the confidence to purchase and/or sell a vehicle either online or in person, and it gives dealerships the power to accurately price, effectively market, instantly acquire, and quickly sell vehicles, all with a nationwide reach.
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Founded in 2006 with a mission to bring more trust and transparency to car shopping, CarGurus is the No. 1 visited automotive shopping site in the U.S. 1 with the largest selection of inventory and network of dealers 2 .
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We use proprietary technology, search algorithms, and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience. We operate the following marketplaces: U.S., U.K., and Canada U.S. U.K. CarOffer is a subsidiary of CarGurus and operates as an independent brand. Autolist and PistonHeads operate as independent brands.
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CarGurus’ selection, trusted automotive insights, and data-driven products and solutions support each shopper’s journey — from online research and shopping to in-dealership decisions — to empower them at every step.
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CarGurus is the most visited online automotive marketplace in the U.S. (Similarweb, Traffic Report (Cars.com, Autotrader, CARFAX Listings (defined as CARFAX total visits minus Vehicle History Reports traffic), TrueCar, Q4 2024). Founded in 2006 by Langley Steinert, our intelligence-driven platform provides easily accessible vehicle prices and transparent dealer ratings, information imperative to a consumer’s vehicle purchase.
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CarGurus provides dealers a personalized, predictive intelligence platform with software solutions that helps them run their businesses more efficiently and profitably at all stages of inventory acquisition and pricing, marketing, and conversion to sale. We operate the following marketplaces: U.S., U.K., and Canada U.S.
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By providing car-shoppers with the tools and insights necessary for their car-shopping journey, we have garnered a high-intent, ready-to-purchase consumer audience. As of December 31, 2024, we had 29.3 million average monthly visitors in the U.S., which, in turn, has attracted over 30,000 dealers (including 24,692 paying dealers) to list on our U.S. marketplace platform.
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At CarGurus, we give people the power to reach their destination. Discontinued Operations and Reportable Segments During the first three quarters of the year ended December 31, 2025, we managed our business and reported earnings through two reportable segments: • U.S.
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As a result, we have the largest inventory selection among listings sites in the U.S. (compared to Autotrader.com, Cars.com, TrueCar.com (YipitData as of 12/31/2024), and CARFAX (Joreca as of 12/31/2024)).
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On August 6, 2025, our Board of Directors determined, after considering all reasonably available options and a broader strategic reassessment, that it is in the best interests of our stockholders to wind down CarOffer, LLC, or CarOffer, including the CarOffer Dealer-to-Dealer and Instant Max Cash Offer products, or the CarOffer Transactions Business.
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Our platform supports consumers and dealers alike across the full cycle of their buying and selling needs: allowing consumers to shop, finance, buy, and sell and allowing dealers to source, price, market, and sell vehicles.
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Following the broader strategic reassessment, we concluded that the CarOffer Transactions Business has proven less effective in today’s more volatile and unpredictable pricing environment, where dealers require more flexibility and broader automation to streamline fulfillment than the model could provide.
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We calculate IMV by applying more than 20 ranking signals and more than 100 normalization rules to tens of millions of data points, including the make, model, trim, year, features, condition, history, geographic location, and mileage of the car. • New Car Price Information : Deal Rating is not applicable to listings of new cars because it utilizes data not relevant to new cars.
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Following the wind-down, we will continue to deliver AI-powered inventory intelligence through our insights platform and enable consumer vehicle sourcing at scale through Sell My Car (formerly Sell My Car - Top Dealer Offers) and will focus on technology and analytics that will enable smarter sourcing and pricing decisions rather than facilitating the transactions themselves.
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Vehicle Detail Pages, or VDPs, include comprehensive information about the vehicle, including details such as dealership information, dealer reviews and ratings, payment calculators, vehicle history, price history, and time on site as well as numerous photos. • Artificial Intelligence, or AI, Features : Rapid advancements in consumer-facing AI have transformed the way that consumers search for and gather information, and we have introduced functionality based on generative AI to improve the user experience on our website, such as features assisting consumer research and reviews.
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The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025.
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Digital Deal We offer consumers the ability to transact additional elements of their car-buying experience through our websites as they seek to complete more of this process online.
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We have presented the financial results of CarOffer as discontinued operations in our consolidated financial statements for all periods presented, except for the consolidated statements of comprehensive income, the 3 Table of Contents consolidated statements of redeemable noncontrolling interest and stockholders’ equity, and the consolidated statements of cash flows.
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Our Digital Deal offering allows shoppers to “start purchase” from a VDP on eligible listings, providing them with purchase options, including estimating a car’s trade-in value, deciding on payment options, selecting finance and insurance products, making an appointment, placing a reservation deposit, and/or taking delivery of the vehicle (through our Geo Expansion tool), all while undergoing a seamless online-to-in-store experience.
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These statements have not been separately reclassified and discontinued operations are included within each for all periods presented. For further information, refer to Note 3 to our consolidated financial statements included elsewhere in this Annual Report.
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Sell My Car – Top Dealer Offers We have two products that allow consumers to sell their cars: (1) Sell My Car – Top Dealer Offers and (2) Sell My Car – Instant Max Cash Offer.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to generate sufficient cash flows or if capital is not available to us, our business, operating results, financial condition, and prospects could be adversely affected. • Our international operations involve risks that may differ from, or are in addition to, our domestic operational risks. • Our goodwill, intangible assets, and other assets have been subject to impairment in the past and may be subject to further impairment in the future, which could have a material adverse effect on our results of operations, financial condition, or future operating results. • We depend on key personnel to operate our business, and if we are unable to retain, attract, and integrate highly qualified personnel, or if we experience turnover of our key personnel, our ability to develop and successfully grow our business could be materially and adversely affected. 18 Table of Contents • We may be subject to disputes regarding the accuracy of IMV, Deal Ratings, Dealer Ratings, New Car Price Information, and other features of our marketplaces. • We are subject to a complex framework of laws and regulations, many of which are unsettled, still developing, and contradictory, which have in the past, and could in the future, subject us to claims, challenge our business model or otherwise harm our business. • A significant disruption in service on our websites or mobile applications could damage our reputation and result in a loss of consumers, which could harm our business, brands, operating results, and financial condition. • We and our third-party service providers collect, process, store, transfer, share, disclose, and use consumer information and other data, and the actual or perceived failure of us or our third-party service providers to protect such information and data or respect users’ privacy could expose us to liability and adversely affect our reputation, brands, business, and operating results. • Our ability to attract consumers to our websites and to provide certain services to our customers depends on the collection of consumer data from various sources, which may be restricted by consumer choice, privacy restrictions, and developments in laws, regulations, and industry standards. • Failure to adequately protect our intellectual property could harm our business and operating results. • We may be unable to halt the operations of websites that aggregate or misappropriate our data. • Seasonality and other factors may cause fluctuations in our operating results and our marketing spend. • Failure to deal effectively with fraud or other illegal activity could harm our business.
Biggest changeRisks Related to Our Operations • We may be unable to halt the operations of websites that aggregate or misappropriate our data. 19 Table of Contents • Certain of our key business metrics are subject to inherent challenges in measurement and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. • Our ability to attract consumers to our websites and to provide certain services to our customers depends on the collection of consumer data from various sources, which may be restricted by consumer choice, privacy restrictions, and developments in laws, regulations, and industry standards. • We and our third-party service providers collect, process, store, transfer, share, disclose, and use consumer information and other data, and the actual or perceived failure of us or our third-party service providers to protect such information and data or respect users’ privacy could expose us to liability and adversely affect our reputation, brands, business, and operating results. • A significant disruption in service on our websites or mobile applications could damage our reputation and result in a loss of consumers, which could harm our business, brands, operating results, and financial condition. • Our international operations involve risks that may differ from, or are in addition to, our domestic operational risks. • We depend on key personnel to operate our business, and if we are unable to retain, attract, and integrate highly qualified personnel, or if we experience turnover of our key personnel, our ability to develop and successfully grow our business could be materially and adversely affected. • We are subject to a complex framework of laws and regulations, many of which are unsettled, still developing, and contradictory, which have in the past, and could in the future, subject us to claims, challenge our business model, or otherwise harm our business. • We may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances.
If we fail to maintain or increase the number of paying dealers or fail to maintain or increase the level of fees that we receive from them, our business and financial results would be materially and adversely affected. We allow dealers to list their inventory in our marketplaces for free; however, we impose certain limitations on such free listings.
If we fail to maintain or increase the number of paying dealers or fail to maintain or increase the level of fees that we receive from them, our business and financial results would be materially and adversely affected. We allow dealers to list their inventory in our marketplaces for free; however, we impose certain limitations on such listings.
Operating internationally may subject us to different risks or increase our exposure in connection with current risks, including: • adapting our websites, mobile applications, and services to conform to local consumer behavior; • increased competition from local providers and potential preferences by local populations for local providers; • compliance with applicable foreign laws and regulations, including different privacy, consumer, financial, censorship, and liability standards and regulations and different intellectual property laws; • the enforceability of our intellectual property rights; • credit risk and higher levels of payment fraud; • compliance with anti-bribery laws, including compliance with currency exchange rate fluctuations; • adverse changes in trade relationships among foreign countries and/or between the U.S. and such countries (which could result in the potential implementation of more restrictive trade policies, higher tariffs, or the renegotiation of existing trade agreements in the U.S. or countries that could adversely affect our supply chain and our business); • double taxation of our international earnings and potentially adverse tax consequences arising from the tax laws of the U.S. or the foreign jurisdictions in which we operate; and 26 Table of Contents • higher costs of doing business internationally.
Operating internationally may subject us to different risks or increase our exposure in connection with current risks, including: • adapting our websites, mobile applications, and services to conform to local consumer behavior; • increased competition from local providers and potential preferences by local populations for local providers; • compliance with applicable foreign laws and regulations, including different privacy, consumer, financial, censorship, and liability standards and regulations and different intellectual property laws; • the enforceability of our intellectual property rights; • credit risk and higher levels of payment fraud; • compliance with anti-bribery laws, including compliance with currency exchange rate fluctuations; • adverse changes in trade relationships among foreign countries and/or between the U.S. and such countries (which could result in the potential implementation of more restrictive trade policies, higher tariffs, or the renegotiation of existing trade agreements in the U.S. or countries that could adversely affect our supply chain and our business); • double taxation of our international earnings and potentially adverse tax consequences arising from the tax laws of the U.S. or the foreign jurisdictions in which we operate; and • higher costs of doing business internationally.
Our ability to successfully leverage such data depends on our continued ability to access and use such data, which could be restricted by a number of factors, including: • increasing consumer adoption of browser preference signals as a result of legislation; • privacy restrictions imposed by web browser developers, advertising partners, or other software developers that impair our ability to understand the preferences of consumers by limiting the use of third-party cookies or other tracking technologies or data indicating or predicting consumer preferences; and • new developments in, or new interpretations of, privacy laws, regulations, and industry standards.
Our ability to successfully leverage such data depends on our continued ability to access and use such data, which could be restricted by a number of factors, including: • increasing consumer adoption of browser preference signals as a result of legislation; • privacy restrictions imposed by web browser developers, advertising partners, or other software developers that impair our ability to understand the preferences of consumers by limiting the use of third-party cookies or other tracking technologies or data indicating or predicting consumer preferences; and • new developments in, jurisdictional differences in, or new interpretations of privacy laws, regulations, and industry standards.
We face significant competition from companies that provide listings, car-shopping information, lead generation, marketing, wholesale, and digital car-buying and -selling services designed to help consumers and dealers shop for cars and to enable dealers to reach these consumers.
We face significant competition from companies that provide listings, car-shopping information, lead generation, marketing, and digital car-buying and -selling services designed to help consumers and dealers shop for cars and to enable dealers to reach these consumers.
Repurchases under the 2025 Share Repurchase Program will diminish our cash reserves, which could impact our ability to further develop our business and service our indebtedness. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our Class A common stock may decline below the levels at which we repurchased such shares.
Repurchases under the 2026 Share Repurchase Program will diminish our cash reserves, which could impact our ability to further develop our business and service our indebtedness. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our Class A common stock may decline below the levels at which we repurchased such shares.
We have previously identified a material weakness in our internal control over financial reporting, which was subsequently remediated during the year ended December 31, 2024.
We previously identified a material weakness in our internal control over financial reporting, which was subsequently remediated during the year ended December 31, 2024.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our Class A common stock price. Although the 2025 Share Repurchase Program is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our Class A common stock price. Although the 2026 Share Repurchase Program is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.
We host third-party images on our website and mobile application and may be subject to third-party claims of those images infringing on intellectual property rights of third parties. Many potential litigants, including patent holding companies, have the ability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
We host third-party images on our website and mobile applications and may be subject to third-party claims of those images infringing on intellectual property rights of third parties. Many potential litigants, including patent holding companies, have the ability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on environmental, social, and governance, or ESG, considerations relating to our business, including climate change and greenhouse gas emissions, human capital, and diversity, equity, inclusion, and belonging. We make statements about our ESG goals and initiatives through information provided on our website.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on environmental, social, and governance, or ESG, considerations relating to our business, including climate change and greenhouse gas emissions, human capital, and equity and inclusion. We make statements about our ESG goals and initiatives through information provided on our website.
From time to time, third parties may misappropriate our data through website crawling, website scraping, or other means and aggregate this data with data from other sources.
From time to time, third parties may misappropriate our data through website crawling, website scraping, robots, or other means and aggregate this data with data from other sources.
Like all information systems and technology, our websites, mobile applications, and information systems, and those of our third-party service providers, are subject to computer viruses, break-ins, phishing attacks, attempts to overload the systems with denial-of-service or other attacks, ransomware, and similar incidents or disruptions from unauthorized use of our or our third-party service providers’ 30 Table of Contents systems, any of which could lead to interruptions, delays, or website shutdowns, and could cause loss of critical data and the unauthorized disclosure, access, acquisition, alteration, or use of personal or other confidential information.
Like all information systems and technology, our websites, mobile applications, and information systems, and those of our third-party service providers, are subject to computer viruses, break-ins, phishing attacks, attempts to overload the systems with denial-of-service or other attacks, ransomware, and similar incidents or disruptions from unauthorized use of our or our third-party service providers’ systems, any of which could lead to interruptions, delays, or website shutdowns, and could cause loss of critical data and the unauthorized disclosure, access, acquisition, alteration, or use of personal or other confidential information.
In addition, these types of events could negatively impact consumer spending in the impacted regions. To the extent any of these events occur, our operations and financial results could be adversely affected. In addition, the impacts of climate change could result in changes in regulations, which could, in turn, affect our business, operating results, and financial condition. Item 1B.
In addition, these types of events could negatively impact consumer spending in the impacted regions. To the extent any of these events occur, our operations and financial results could be adversely affected. In addition, the impacts of climate change could result in changes in regulations, which could, in turn, affect our business, operating results, and financial condition.
The 2025 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares, and may be suspended or discontinued by our Board of Directors at any time, which may result in a decrease in the price of our Class A common stock.
The 2026 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares, and may be suspended or discontinued by our Board of Directors at any time, which may result in a decrease in the price of our Class A common stock.
The Privacy Regulations include the EU’s General Data Protection Regulation, the California Consumer Protection Act, and an additional 18 separate U.S. state consumer privacy laws that are currently in effect or will be going into effect over the next year (Colorado, Connecticut, Delaware, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia).
The Privacy Regulations include the EU’s General Data Protection Regulation, the California Consumer Protection Act, and an additional 19 separate U.S. state consumer privacy laws that are currently in effect or will be going into effect over the next year (Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia).
Without innovative marketplaces and related products, we may be unable to attract additional, unique consumers or retain current consumers, which could affect the number of dealers that become paying dealers and the number of advertisers that want to 23 Table of Contents advertise in our marketplaces as well as the amounts that they are willing to pay for our products, which could, in turn, negatively impact our business and financial results.
Without innovative marketplaces and related products, we may be unable to attract additional, unique consumers or retain current consumers, which could affect the number of dealers that become paying dealers and the number of advertisers that want to advertise in our marketplaces as well as the amounts that they are willing to pay for our products, which could, in turn, negatively impact our business and financial results.
A failure by us to capture the benefits that we expect from these product investments could negatively impact our business and financial results. We also anticipate that over time our investments in our current products may become less productive and the growth of our revenue will require more focus on developing new products.
A failure by us to capture the benefits that we expect from these product investments could negatively impact our business and financial results. 21 Table of Contents We also anticipate that over time our investments in our current products may become less productive and the growth of our revenue will require more focus on developing new products.
Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver associated with our leases.
Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. As of December 31, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver associated with our leases.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our platform’s features, software, and functionality or obtain and use information that we consider proprietary. Competitors may adopt trademarks or trade names similar to ours, thereby harming our ability to build brand identity and possibly leading to user confusion.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our platform’s features, software, and functionality or obtain and use information that we consider proprietary. 27 Table of Contents Competitors may adopt trademarks or trade names similar to ours, thereby harming our ability to build brand identity and possibly leading to user confusion.
If consumers believe that we are not focused on providing them with a better automobile shopping 24 Table of Contents experience, or if we fail to overcome brand marketing competition and maintain a differentiated value proposition in consumers’ minds, our reputation and the strength of our brands may be adversely affected.
If consumers believe that we are not focused on providing them with a better automobile shopping experience, or if we fail to overcome brand marketing competition and maintain a differentiated value proposition in consumers’ minds, our reputation and the strength of our brands may be adversely affected.
In addition, because the techniques used to obtain unauthorized access, disable, or degrade service or sabotage systems constantly evolve, often are not recognized until after having been launched against a target, and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate measures for prevention and detection.
In addition, because the techniques used to obtain unauthorized access, disable, or degrade service or sabotage systems constantly evolve, often are not recognized until after having been launched against a target, and may originate from less regulated and remote areas around the world, we may be unable to proactively address these 30 Table of Contents techniques or to implement adequate measures for prevention and detection.
Steinert retains a significant portion of his holdings of Class B common stock, he could continue to control a majority of the combined voting power of our outstanding capital stock. 35 Table of Contents Our status as a “controlled company” could make our Class A common stock less attractive to some investors or otherwise harm the trading price of our Class A common stock.
Steinert retains a significant portion of his holdings of Class B common stock, he could continue to control a majority of the combined voting power of our outstanding capital stock. Our status as a “controlled company” could make our Class A common stock less attractive to some investors or otherwise harm the trading price of our Class A common stock.
Repurchases under the 2025 Share Repurchase Program will decrease the number of outstanding shares of our Class A common stock and, therefore, could affect the price of our Class A common stock and increase its volatility.
Repurchases under the 2026 Share Repurchase Program will decrease the number of outstanding shares of our Class A common stock and, therefore, could affect the price of our Class A common stock and increase its volatility.
These claims could also result in litigation, require us to purchase a costly license, or require us to devote additional product, technology, and development 32 Table of Contents resources to change our platforms or services, any of which would have a negative effect on our business and operating results.
These claims could also result in litigation, require us to purchase a costly license, or require us to devote additional product, technology, and development resources to change our platforms or services, any of which would have a negative effect on our business and operating results.
Decreases in consumer demand could adversely affect the market for automobile purchases and, in turn, reduce the number of consumers using our platform. Consumer purchases of new and used automobiles generally decline during recessionary periods and other periods in which disposable income is adversely affected.
Decreases in consumer demand could adversely affect the market for automobile purchases and, in turn, reduce the 23 Table of Contents number of consumers using our platform. Consumer purchases of new and used automobiles generally decline during recessionary periods and other periods in which disposable income is adversely affected.
Using cookies and non-cookie technologies, such as mobile advertising identifiers, we collect information about the interactions of users with our customers’ and publishers’ digital properties (including, for example, information about the placement of advertisements and users’ shopping or other interactions with our customers’ websites or advertisements).
Using cookies and non-cookie technologies, such as mobile advertising identifiers, we collect information about the interactions of users with our customers’ and publishers’ digital properties (including, for example, information about the placement of advertisements and users’ shopping or other 29 Table of Contents interactions with our customers’ websites or advertisements).
Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price. The trading price of our Class A common stock has been and may continue to be volatile and the value of our stockholders’ investment in our stock could decline.
Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price. 39 Table of Contents The trading price of our Class A common stock has been and may continue to be volatile and the value of our stockholders’ investment in our stock could decline.
Some of this information may be sensitive, and any cybersecurity attack, data breach, or other security incident impacting such information, including the unauthorized acquisition or access, compromise, or loss of such information, against us or our third-party service providers could expose us to a risk of loss or exposure of this information, which could result in potential liability, litigation (including class action litigation) or regulatory action, and remediation costs.
Any cybersecurity attack, data breach, or other security incident impacting such information, including the unauthorized acquisition or access, compromise, or loss of such information, against us or our third-party service providers could expose us to a risk of loss or exposure of this information, which could result in potential liability, litigation (including class action litigation) or regulatory action, and remediation costs.
In addition, our business has been and may continue to be negatively affected by challenges to the larger automotive industry ecosystem, including: 20 Table of Contents • global supply chain challenges; • labor disruptions, work stoppages, or strikes; • economic instability; • changes in tax laws and regulations; • export controls; • changes to trade policies, including higher tariff rates and customs duties; • economic sanctions and trade restrictions; • geopolitical tensions and military conflicts; and • other macroeconomic issues, including increased interest rates and inflation.
In addition, our business has been and may continue to be negatively affected by challenges to the larger automotive industry ecosystem, including: • global supply chain challenges; • labor disruptions, work stoppages, or strikes; • economic instability; • changes in tax laws and regulations; • import or export controls; • changes to trade policies, including higher tariff rates and customs duties; • economic sanctions and trade restrictions; • geopolitical tensions and military conflicts; and • other macroeconomic issues, including increased interest rates and inflation.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this 38 Table of Contents concentrated control could result in the consummation of such a transaction that our other stockholders do not support.
The content, analyses, or recommendations generated by AI products or services, if deficient, inaccurate, or biased, could adversely impact our business, financial condition, and operational results as well as our reputation. Moreover, ethical concerns 37 Table of Contents associated with AI could lead to brand damage, competitive disadvantages, or legal repercussions.
The content, analyses, or recommendations generated by AI products or services, if deficient, inaccurate, or biased, could adversely impact our business, financial condition, and operational results as well as our reputation. Moreover, ethical concerns associated with AI could lead to brand damage, competitive disadvantages, or legal repercussions.
We have incurred losses in prior periods in the U.K. and Canada and may incur losses there again in the future. We also face various other challenges in those jurisdictions. Our competitors may be more established or otherwise better positioned than we are to succeed in the U.K. and Canada.
We have incurred losses in prior periods in the U.K. and Canada and may incur losses there again in the future. We also face various other challenges in those jurisdictions. Our 34 Table of Contents competitors may be more established or otherwise better positioned than we are to succeed in the U.K. and Canada.
If a significant number of dealers terminate their subscription agreements with us and/or dealer closures or consolidations occur that reduce demand for our products, our business and financial results would be materially and adversely affected. A significant source of our revenue consists of subscription fees paid to us by dealers for access to enhanced features on our automotive marketplaces.
If a significant number of dealers terminate their subscriptions with us and/or dealer closures or consolidations occur that reduce demand for our products, our business and financial results would be materially and adversely affected. A significant source of our revenue consists of subscription fees paid to us by dealers for access to enhanced features on our platform.
Despite all of our efforts designed to protect this information, none of our security measures or those of our third-party service providers provide absolute security, and they may not be effective in preventing a future failure of our systems.
Despite all of our efforts designed to protect this information, none of our security measures or those of our third-party service providers provide absolute security and are susceptible to human error, and they may not be effective in preventing a future failure of our systems.
We also use third-party hosting services to back up some data but do not maintain redundant systems or facilities for some of the services.
We also use third-party hosting services to back up some 33 Table of Contents data but do not maintain redundant systems or facilities for some of the services.
Purchases of new and used automobiles are typically discretionary for consumers and have been, and may continue to be, affected by negative trends, including: • energy costs; • the availability and cost of credit; • increased interest rates; • inflation; • reductions in business and consumer confidence; • stock market volatility; • unemployment levels; • government shutdowns, political unrest, or uncertainty; and • other global economic conditions.
Purchases of new and used automobiles are typically discretionary for consumers and have been, and may continue to be, affected by negative trends, including: • energy costs; • the availability and cost of credit; • increased interest rates; • inflation; • reductions in business and consumer confidence; • stock market volatility; • unemployment levels; • changes to trade policies, including higher tariff rates and customs duties; • government shutdowns, political unrest, or uncertainty; and • other global economic conditions.
We have been, and may in the future be, subject to claims and litigation alleging that we or content on our websites infringe others’ intellectual property rights, including the trademarks, copyrights, patents, and other intellectual property rights of third parties, including from our competitors or non-practicing entities.
We have been, and may again be, subject to claims and litigation alleging that we, content on our websites, or technology used in our products infringe others’ intellectual property rights, including the trademarks, copyrights, patents, and other intellectual property rights of third parties, including from our competitors or non-practicing entities.
These events could disrupt our operations and those of our third-party service providers or dealers whether occurring in the U.S. or internationally.
These events could disrupt our operations and those of our 42 Table of Contents third-party service providers or dealers whether occurring in the U.S. or internationally.
Repurchases 36 Table of Contents under the 2025 Share Repurchase Program may be made through a variety of methods and are subject to market and business conditions, levels of available liquidity, cash requirements for other purposes, and regulatory and other relevant factors.
Repurchases under the 2026 Share Repurchase Program may be made through a variety of methods and are subject to market and business conditions, levels of available liquidity, cash requirements for other purposes, and regulatory and other relevant factors.
Our valuation models depend on the inventory listed on our websites as well as information regarding automotive sales. If the inventory on our websites declines significantly, if the number of automotive sales declines significantly, or if used car sales prices become volatile, whether as a result of macroeconomic effects or otherwise, our valuation models may not perform as expected.
If the inventory on our websites declines significantly, if the number of automotive sales declines significantly, or if used car sales prices become volatile, whether as a result of macroeconomic effects or otherwise, our valuation models may not perform as expected.
The existence of the 2025 Share Repurchase Program could also cause the price of our Class A common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our Class A common stock.
The existence 40 Table of Contents of the 2026 Share Repurchase Program could also cause the price of our Class A common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our Class A common stock.
Although we have completed our remediation of the material weakness, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain misstatements and we could be required to restate our financial results.
If additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain misstatements and we could be required to restate our financial results.
General Risk Factors • We participate in a highly competitive market, and pressure from existing and new companies may adversely affect our business and operating results. • We expect our results of operations to fluctuate on a quarterly and annual basis. Risks Related to Our Business and Industry Our business is substantially dependent on our relationships with dealers.
General Risk Factors • We participate in a highly competitive market, and pressure from existing and new companies may adversely affect our business and operating results. • We expect our results of operations to fluctuate on a quarterly and annual basis. • Litigation and other legal proceedings may adversely affect our business, financial condition, and results of operations. 20 Table of Contents Risks Related to Our Business and Industry Our business is substantially dependent on our relationships with dealers.
Additionally, competing products from internet search engine providers, such as those that provide dealer and vehicle pricing and other information directly in search results or decreases in consumer use of search engines, for example, as a result of the continued development of AI technology, could also adversely impact traffic to our websites and the number of leads that we are able to send to our dealers.
Additionally, competing products from internet search engine providers, such as those that provide dealer and vehicle 22 Table of Contents pricing and other information directly in search results or decreases in consumer use of search engines could also adversely impact traffic to our websites and the number of leads that we are able to send to our dealers.
In addition, any unplanned turnover, reduced involvement, or our failure to develop an adequate succession plan for any of our executive officers or key employees, or the reduction in their involvement in the management of our business, could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all.
Any of these restrictions could have a material adverse effect on our business, results of operations, and financial conditions. 35 Table of Contents In addition, any unplanned turnover, reduced involvement, or our failure to develop an adequate succession plan for any of our executive officers or key employees, or the reduction in their involvement in the management of our business, could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all.
Our future revenue is uncertain and could potentially be impacted by macroeconomic issues, including: • declining wholesale vehicle prices; • reductions in business and consumer confidence; • labor disruptions, work stoppages, or strikes; • unemployment levels; • consumer debt levels; • financial market volatility and disruption; • inflationary concerns; • changes in tax laws and regulations; • interest and currency exchange rates; • uncertain economic conditions in the U.S. and abroad; • additional tariffs, including as a result of on the recent U.S. presidential election; • export controls; • geopolitical events; • economic sanctions and trade restrictions; and • other matters that influence consumer spending and preferences as well as changes to the regulatory landscape.
Our future revenue is uncertain and could potentially be impacted by macroeconomic issues, including: • reductions in business and consumer confidence; • labor disruptions, work stoppages, or strikes; • unemployment levels; • consumer debt levels; 25 Table of Contents • financial market volatility and disruption; • inflationary concerns; • changes in tax laws and regulations; • interest and currency exchange rates; • uncertain economic conditions in the U.S. and abroad; • the imposition of new or increased tariffs by the U.S. or foreign governments; • import or export controls; • geopolitical events; • economic sanctions and trade restrictions; and • other matters that influence consumer spending and preferences as well as changes to the regulatory landscape.
Additionally, meeting evolving and varied stakeholder expectations and standards may require management time and expense and may result in a significant increase in costs, which may negatively impact our business and financial results.
Additionally, meeting evolving and varied stakeholder expectations and standards may require management time and expense and may result in a significant increase in costs, which may negatively impact our business and financial results. Item 1B. Unresolve d Staff Comments. Not applicable.
We also process and store personal and confidential information of our vendors, partners, and employees, and we employ third-party service providers, such as payment processing providers, who also regularly have access to customer and consumer data.
We also process and store personal and confidential information of our vendors, partners, and employees, and we employ third-party service providers, such as payment processing providers, who also regularly have access to customer and consumer data. We have experienced in the past, and may in the future experience, cyber threats and incidents.
Changes in applicable tax laws or regulations may be proposed or enacted that could materially and adversely affect our effective tax rate, tax payments, results of operations, financial condition, and cash flows. In addition, tax laws and regulations are complex and subject to varying interpretations. There is also uncertainty over sales tax liability as a result of recent U.S.
Changes in applicable tax laws or regulations may be proposed or enacted that could materially and adversely affect our effective tax rate, tax payments, results of operations, financial condition, and cash flows. In addition, tax laws and regulations are complex and subject to varying interpretations.
Our competitors include online automotive marketplaces and websites; internet search engines; peer-to-peer marketplaces; social media marketplaces; sites operated by automobile dealers and original equipment manufacturers; online dealerships; and vehicle auction companies.
Our competitors include online automotive marketplaces and websites; online dealerships; internet search engines (including aggregation sites and AI-generated search engines); social media marketplaces; peer-to-peer marketplaces; sites operated by automobile dealers and original equipment manufacturers; and e-commerce sites.
Additionally, any change to applicable laws or their interpretations that further restricts the way consumers and dealers interact through our platforms, or any governmental or private enforcement actions related thereto, could adversely affect our ability to attract customers and could harm our business, financial condition, results of operations, and cash flows. 28 Table of Contents Antitrust and Other Laws Antitrust and competition laws prohibit, among other things, any joint conduct among competitors that would lessen competition in the marketplace.
Additionally, any change to applicable laws or their interpretations that further restricts the way consumers and dealers interact through our platforms, or any governmental or private enforcement actions related thereto, could adversely affect our ability to attract customers and could harm our business, financial condition, results of operations, and cash flows.
Our future revenue is uncertain, including due to potential macroeconomic effects, including financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the U.S. and abroad, and additional tariffs, including as a result of the recent U.S. presidential election.
Our future revenue is uncertain, including due to potential macroeconomic effects, including financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the U.S. and abroad, and the imposition of new or increased tariffs by the U.S. or foreign governments.
If a significant number of dealers terminate their subscription agreements with us and/or dealer closures or consolidations occur that reduce demand for our products, our business and financial results would be materially and adversely affected. • If we fail to maintain or increase the number of dealers that pay subscription fees to us, or fail to maintain or increase the fees paid to us for subscriptions, our business and financial results would be materially and adversely affected. • Our business is subject to risks related to the larger automotive industry ecosystem, which could have a material adverse effect on our business, revenue, results of operations, and financial condition. • If the CarOffer business and/or our combined offerings do not grow, our revenue and business could be adversely affected. • If we are unable to provide a compelling experience to consumers on our marketplaces, connections between consumers and dealers using our marketplaces may decline and our business and financial results would be materially and adversely affected. • Any inability by us to develop new products, adapt to new technologies, or achieve widespread consumer and dealer adoption of those products could negatively impact our business and financial results. • We rely, in part, on internet search engines to drive traffic to our websites, and if we fail to appear prominently in the search results, our traffic would decline and our business would be adversely affected. • Our future revenue is uncertain, including due to potential macroeconomic effects, including financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the U.S. and abroad, and additional tariffs, including as a result of the recent U.S. presidential election. • We may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances.
If a significant number of dealers terminate their subscriptions with us and/or dealer closures or consolidations occur that reduce demand for our products, our business and financial results would be materially and adversely affected. • If we fail to maintain or increase the number of dealers that pay subscription fees to us, or fail to maintain or increase the fees paid to us for subscriptions, our business and financial results would be materially and adversely affected. • Any inability by us to develop new products, adapt to new technologies, or achieve widespread consumer and dealer adoption of those products could negatively impact our business and financial results. • We rely, in part, on internet search engines to drive traffic to our websites, and if we fail to appear prominently in the search results, our traffic would decline and our business would be adversely affected. • Our business is subject to risks related to the larger automotive industry ecosystem, which could have a material adverse effect on our business, revenue, results of operations, and financial condition. • If we are unable to provide a compelling experience to consumers on our marketplaces, the number of connections between consumers and dealers using our marketplaces may decline and our business and financial results would be materially and adversely affected. • Our future revenue is uncertain, including due to potential macroeconomic effects, including financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the U.S. and abroad, and the imposition of new or increased tariffs by the U.S. or foreign governments. • We may be subject to disputes regarding the accuracy of the pricing and valuation products and features of our marketplaces. • Failure to deal effectively with fraud or other illegal activity could harm our business. • Seasonality and other factors may cause fluctuations in our operating results and our marketing spend. • Failure to adequately protect our intellectual property could harm our business and operating results.
In addition, third parties have created and may in the future create copycat or squatter domains to deceive consumers, which could harm our brands, interfere with our ability to register domain names, and result in additional costs. We may be unable to halt the operations of websites that aggregate or misappropriate our data.
In addition, third parties have created and may in the future create copycat or squatter domains to deceive consumers, which could harm our brands, interfere with our ability to register domain names, and result in additional costs. We have made and may continue to make acquisitions that could disrupt our operations and harm our operating results.
Such interruptions have resulted, and may in the future result, in third parties accessing our confidential and proprietary information, including our intellectual property. Problems with the reliability or security of our systems could harm our reputation, harm our ability to protect our confidential and proprietary information, result in a loss of consumers and dealers, and result in additional costs.
Problems with the reliability or security of our systems could harm our reputation, harm our ability to protect our confidential and proprietary information, result in a loss of consumers and dealers, and result in additional costs.
There can be no assurance that innovations to our products, like Instant Max Cash Offer or Top Dealer Offers, or the development of future products, will increase consumer or dealer engagement, achieve market acceptance, create additional revenue, or become profitable.
There can be no assurance that innovations to our products, like PriceVantage, Dealership Mode, Discover, or Sell My Car, or the development of future products, will increase consumer or dealer engagement, achieve market acceptance, create additional revenue, or become profitable.
Any failure by us, or the third parties on which we rely, to follow, or successfully implement, appropriate processes and procedures in response to existing or future laws and regulations could result in legal and monetary liability, fines, and penalties or damage to our reputation in the marketplace, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Furthermore, several provisions of the TCPA, as well as applicable rules and orders, are open to multiple interpretations and compliance may involve fact-specific analyses. 36 Table of Contents Any failure by us, or the third parties on which we rely, to follow, or successfully implement, appropriate processes and procedures in response to existing or future laws and regulations could result in legal and monetary liability, fines, and penalties or damage to our reputation in the marketplace, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We are subject to taxation in the U.S. and certain other jurisdictions in which we operate, which could include value added tax, excise tax, sales and use tax, gross receipts tax, and property tax.
We could be subject to adverse changes in tax laws, regulations, and interpretations, plus challenges to our tax positions. We are subject to taxation in the U.S. and certain other jurisdictions in which we operate, which could include corporate income tax, value added tax, excise tax, sales and use tax, gross receipts tax, and property tax.
Any such questions or disagreements could result in distraction from our 27 Table of Contents business or potentially harm our reputation, could result in a decline in consumers’ confidence in, or use of, our marketplaces, and could result in legal disputes.
Any such questions or disagreements could result in distraction from our business or potentially harm our reputation, could result in a decline in consumers’ confidence in, or use of, our marketplaces, and could result in legal disputes. Failure to deal effectively with fraud or other illegal activity could harm our business.
If a significant number of our paying dealers independently or under advisement from influential groups (such as dealer associations, regulators, automotive manufacturers, and consumer advocates) decide to terminate their subscriptions with us, our business and financial results would be materially and adversely affected. 19 Table of Contents Additionally, in the past, the number of U.S. dealers has declined due to dealership closures and consolidations as a result of industry dynamics and macroeconomic issues.
If a significant number of our paying dealers independently or under advisement from influential groups (such as dealer associations, regulators, automotive manufacturers, and consumer advocates) decide to terminate their subscriptions with us, our business and financial results would be materially and adversely affected.
In addition, we have reduced our brand spend in comparison to our pre-COVID-19 pandemic levels, and it is possible that we may in the future decide to further reduce such spend depending on macroeconomic conditions.
In addition, we have, in the 24 Table of Contents past, reduced our brand spend, and it is possible that we may in the future decide to reduce such spend depending on macroeconomic conditions.
An inability to obtain adequate financing or financing on terms satisfactory to us when we require it could significantly limit our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances and could adversely affect our business, operating results, financial condition, and prospects.
An inability to obtain adequate financing or financing on terms satisfactory to us when we require it could significantly limit our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances and could adversely affect our business, operating results, financial condition, and prospects. 37 Table of Contents The 2022 Revolver contains certain covenants and other restrictions on our actions that may limit our operational flexibility or otherwise adversely affect our results of operations.
Additionally, if any third party that we share information with experiences a security breach or fails to comply with its privacy-related legal obligations or commitments to us, such matters may put employee, consumer, or dealer information at risk and could, in turn, expose us to claims for damages, regulatory fines, penalties, or litigation and harm our reputation, business, and operating results.
Additionally, if any third party that we share information with experiences a security breach or fails to comply with its privacy-related legal obligations or commitments to us, such matters may put employee, consumer, or dealer information at risk and could, in turn, expose us to claims for damages, regulatory fines, penalties, or litigation and harm our reputation, business, and operating results. 31 Table of Contents Cybersecurity risks and cyber incidents, as well as other significant disruptions of our information technology networks and related systems and resources, could adversely affect our business, disrupt operations, and expose us to liabilities to employees, customers, governmental regulators, and other third parties.
We may not be entirely successful in our efforts to effectively transition away from third-party cookies as well as comply with the evolving regulations to which we are subject due to various factors within our control, such as limited internal resource allocation, or outside our control, such as a lack of vendor cooperation, new regulatory interpretations, or lack of regulatory guidance in respect of certain Privacy Regulations and other statutory requirements. 31 Table of Contents Any failure or perceived failure by us to comply with U.S. and international data protection laws and regulations, our privacy policies, or our privacy-related obligations to consumers, customers, employees, and other third parties, or any compromise of security that results in the unauthorized release or transfer of data, which could include personal information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation, criminal penalties, or public statements against us by consumer advocacy groups or others, and could cause consumers and dealers to lose trust in us, which could significantly impact our brand reputation and have an adverse effect on our business.
Any failure or perceived failure by us to comply with U.S. and international data protection laws and regulations, our privacy policies, or our privacy-related obligations to consumers, customers, employees, and other third parties, or any compromise of security that results in the unauthorized release or transfer of data, which could include personal information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation, criminal penalties, or public statements against us by consumer advocacy groups or others, and could cause consumers and dealers to lose trust in us, which could significantly impact our brand reputation and have an adverse effect on our business.
We will also not be able to grow as expected, or at all, if we fail to: • increase the number of consumers using our marketplaces; • maintain and expand the number of dealers that subscribe to our marketplaces and maintain and increase the fees that they are paying; • expand the number of dealers engaging on the CarOffer platform and increase the share of wholesale transactions which they complete on such platform; • attract and retain advertisers placing advertisements in our marketplaces; • attract new consumers to sell their vehicles online through Instant Max Cash Offer; • further improve the quality of our marketplaces and introduce high quality new products; and 25 Table of Contents • increase the number of connections between consumers and dealers using our marketplaces and connections to paying dealers.
We will also not be able to grow as expected, or at all, if we fail to: • increase the number of consumers using our marketplaces; • maintain and expand the number of dealers that subscribe to our marketplaces and maintain and increase the fees that they are paying; • further improve the quality of our marketplaces and introduce high quality new products; • increase the new product adoption rate with dealers to profitability; • attract and retain advertisers placing advertisements in our marketplaces; and • increase the number of connections between consumers and dealers using our marketplaces and connections to paying dealers.
Furthermore, changes in our senior management team and other key employees have the potential to disrupt our business, and any such disruption could adversely affect our operations, growth, financial condition, or results of operations. We may be subject to disputes regarding the accuracy of IMV, Deal Ratings, Dealer Ratings, New Car Price Information, and other features of our marketplaces.
Furthermore, changes in our senior management team and other key employees have the potential to disrupt our business, and any such disruption could adversely affect our operations, growth, financial condition, or results of operations.
The failure to build, maintain, and protect our brands would harm our ability to attract a large consumer audience and to expand the use of our marketplaces by consumers and dealers.
These factors could have a material adverse effect on our business, revenue, results of operations, and financial condition. The failure to build, maintain, and protect our brands would harm our ability to attract a large consumer audience and to expand the use of our marketplaces by consumers and dealers.
If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business could be materially and adversely affected.
If we do not succeed in attracting well-qualified employees, including talent trained in AI, machine learning, and other market-leading skills and capabilities in new technologies, or retaining and motivating existing employees, our business could be materially and adversely affected.
Failure to 33 Table of Contents limit the impact of fraudulent and illegal activity on our websites could lead to potential legal liability, harm our business, cause us to lose paying dealer customers, and adversely affect our reputation, financial performance, and growth prospects. We have previously identified a material weakness in our internal control over financial reporting.
Failure to limit the impact of fraudulent and illegal activity on our websites could lead to 26 Table of Contents potential legal liability, harm our business, cause us to lose paying dealer customers, and adversely affect our reputation, financial performance, and growth prospects. Seasonality and other factors may cause fluctuations in our operating results and our marketing spend.
Our ability to engage in these activities may decline as a result of macroeconomic factors and any cost-savings initiatives on our business. These product, technology, and development expenses may include costs of hiring additional personnel and retaining our current employees, engaging third-party service providers, and conducting other research and development activities.
These product, technology, and development expenses may include costs of hiring additional personnel and retaining our current employees, engaging third-party service providers, and conducting other research and development activities.
If current advertisers reduce their advertising spending with us and we are unable to replace such reduced advertising spending, our advertising revenue and business and financial results would be harmed. 22 Table of Contents If we are unable to provide a compelling experience to consumers on our marketplaces, connections between consumers and dealers using our marketplaces may decline and our business and financial results would be materially and adversely affected.
If we are unable to provide a compelling experience to consumers on our marketplaces, the number of connections between consumers and dealers using our marketplaces may decline and our business and financial results would be materially and adversely affected.
Our success depends upon our relationships with third parties, including our transaction processor; our data center hosts; our information technology providers; our data providers for inventory and vehicle information; our advertising serving platforms; and our partners for vehicle transportation, inspection, and other logistics associated with our CarOffer business and Instant Max Cash Offer.
Our success depends upon our relationships with third parties, including our data center hosts; our information technology providers; our data providers for inventory and vehicle information; and our advertising serving platforms.
Any inability by us to develop new products, adapt to new technologies, or achieve widespread consumer and dealer adoption of those products could negatively impact our business and financial results.
If dealers do not subscribe to our paid offerings at the rates we expect, our business and financial results would be materially and adversely affected. Any inability by us to develop new products, adapt to new technologies, or achieve widespread consumer and dealer adoption of those products could negatively impact our business and financial results.
A governmental or private civil action alleging unlawful or anticompetitive activity could be costly to defend and could harm our business, results of operations, financial condition, and cash flows.
Antitrust and Other Laws Antitrust and competition laws prohibit, among other things, any joint conduct among competitors that would lessen competition in the marketplace. A governmental or private civil action alleging unlawful or anticompetitive activity could be costly to defend and could harm our business, results of operations, financial condition, and cash flows.
In addition, some stakeholders may disagree with our ESG goals and initiatives and the focus of stakeholders may change and evolve over time. 34 Table of Contents Stakeholders also may have very different views on where ESG focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Stakeholders also may have very different views on where ESG focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
If our revenue declines or fails to grow, investors’ perceptions of our business may be adversely affected, and the market price of our Class A common stock could decline. We may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances.
If our revenue declines or fails to grow, investors’ perceptions of our business may be adversely affected, and the market price of our Class A common stock could decline. We may be subject to disputes regarding the accuracy of the pricing and valuation products and features of our marketplaces.
Any problems with our implementation or use of AI or other technological advancements could negatively impact our business or results of our operations.
Any problems with our implementation or use of AI or other technological advancements could negatively impact our business or results of our operations. 41 Table of Contents We expect our results of operations to fluctuate on a quarterly and annual basis.
Our results may vary as a result of fluctuations in the number of dealers subscribing to our marketplaces, the size and seasonal variability of our advertisers’ marketing budgets, and the impact of vehicle arbitrations, volume, and prices in a given period in connection with our Instant Max Cash Offer product and the wholesale sale of automobiles.
Our results may vary as a result of fluctuations in the number of dealers subscribing to our marketplaces and the size and seasonal variability of our advertisers’ marketing budgets.
Revisions to or errors in our automated valuation models, or the algorithms that underlie them, may cause the IMV, the Deal Rating, New Car Price Information, or other features to vary from our expectations regarding the accuracy of these tools.
Revisions to or errors in our automated valuation models, or the algorithms that underlie them, may cause these products and features to vary from our expectations regarding the accuracy of these tools. In addition, from time to time, regulators, consumers, dealers, and other industry participants may question or disagree with our valuation underlying these products and features.
There can also be no assurance that our future products will meet consumer expectations in light of new technologies offered by others in the marketplace. In addition, revenue relating to new products is typically unpredictable and our new products may have lower gross margins, lower retention rates, and higher marketing and sales costs than our existing products.
In addition, revenue relating to new products is typically unpredictable and our new products may have lower gross margins, lower retention rates, and higher marketing and sales costs than our existing products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe maintain cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks, and other related breaches. We engage certain external parties to enhance our cybersecurity processes and strategies.
Biggest changeWe maintain cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks, and other related breaches. 43 Table of Contents We engage certain external parties to enhance our cybersecurity processes and strategies, and we continue to adjust and refine our processes and strategies in response to assessments by such external parties industry best practices and the shifting threat landscape (including AI-related threats).
Specialized knowledge also results from our Vice President, Information Security and Technology holding a Master of Information Security and Assurance from Norwich University. 39 Table of Contents In an effort to deter and detect cyber threats, we annually provide all employees, including part-time employees, with a data protection, cybersecurity, and incident response and prevention training program, which covers timely and relevant topics, including social engineering, phishing, password protection, confidential data protection, asset use, and mobile security, and educates employees on the importance of reporting all incidents immediately.
In an effort to deter and detect cyber threats, we annually provide all employees, including part-time employees, with a data protection, cybersecurity, and incident response and prevention training program, which covers timely and relevant topics, including social engineering, phishing, password protection, confidential data protection, asset use, and mobile security, and educates employees on the importance of reporting all incidents immediately.
Removed
Our Vice President, Information Security and Technology, who reports to our Chief Technology Officer , leads the operational oversight of company-wide cybersecurity strategy, policy, standards, and processes and works across relevant departments to assess and help prepare us and our employees to address cybersecurity risks.
Added
Our cybersecurity program is informed by recognized industry frameworks, including elements of the National Institute of Standards and Technology Cybersecurity Framework and ISO/IEC 27001 standards, and is considered as a part of our broader enterprise risk analysis.
Removed
Specific cybersecurity related responsibilities include overseeing our processes and strategies for the detection, mitigation, and remediation of cybersecurity incidents.
Added
We maintain a dedicated Security Operations and Trust team that conducts security reviews of third-party service providers critical to our business, which may include due diligence assessments, security questionnaires, and reviews of third-party attestations and certifications.
Removed
Our Vice President, Information Security and Technology has extensive experience assessing and managing cybersecurity and risk programs having served in the current position for us since December 2020 and prior Senior Director level positions in security and privacy at several private and public Software as a Service, or SaaS, companies.
Added
Our Chief Technology Officer and our Director of Information Security provide periodic, and at least quarterly, updates to the Audit Committee on cybersecurity risks and our risk management processes, which may include reports on identified threats, mitigation status, and applicable legal or regulatory developments.
Added
Cybersecurity matters are also formally raised to our Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel through their attendance at Audit Committee meetings or direct communications as needed. Our Director of Information Security leads our cybersecurity initiatives and oversees our Security Operations and Governance, Risk, and Compliance teams.
Added
This individual is primarily responsible for assessing, managing, and monitoring our cybersecurity risks and response programs and reports to our Chief Technology Officer. He has over 15 years of experience in the technology sector, including as a Chief Information Security Officer at other companies, and has deep expertise in cybersecurity, compliance, and risk assessment.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pro perties. We do not own any material real property. Our principal executive office is located in Boston, Massachusetts, where we lease a total of 225,428 square feet of space with a lease term through 2039. We also lease office space in Addison, Texas, and Dublin, Ireland, for our CarOffer and European operations, respectively. Our U.S.
Biggest changeItem 2. Pro perties. We do not own any material real property. Our principal executive office is located in Boston, Massachusetts, where we lease a total of 225,428 square feet of space with a lease term through 2039. We believe that our current facilities are suitable and adequate to meet our current needs.
Removed
Marketplace segment primarily utilizes the office in Boston, Massachusetts, and our Digital Wholesale segment primarily utilizes the office in Addison, Texas. The Other category of segment reporting utilizes the office in Dublin, Ireland. We believe that our current facilities are suitable and adequate to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently subject to any pending or threatened litigation that we believe, if determined adversely to us, would individually, or taken together, reasonably be expected to have a material adverse effect on our business or financial results. Item 4. Mine Saf ety Disclosures. Not applicable. 40 Table of Contents P ART II
Biggest changeWe are not presently subject to any pending or threatened litigation that we believe, if determined adversely to us, would individually, or taken together, reasonably be expected to have a material adverse effect on our business or financial results. 44 Table of Contents Item 4. Mine Saf ety Disclosures. Not applicable. 45 Table of Contents P ART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 40 PART II 41 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. [Reserved] 42 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 66 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 45 PART II 46 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities On November 7, 2023, we announced that our Board of Directors authorized a share repurchase program, or the 2024 Share Repurchase Program, pursuant to which we could, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $250.0 million.
Biggest changeIn February 2026 we announced that our Board of Directors authorized the 2026 Share Repurchase Program pursuant to which we may purchase up to $250.0 million of our Class A common stock.
Dividends We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings to fund development and growth of our business, and we do not anticipate paying cash dividends in the foreseeable future. Recent Sales of Unregistered Securities None.
Dividends We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings to fund development and growth of our business, and we do not anticipate paying cash dividends in the foreseeable future.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “CARG”. Holders As of February 13, 2025, we had six record holders of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “CARG”. Holders As of February 12, 2026, we had five record holders of our Class A common stock.
The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return for our Class A common stock, the Nasdaq Composite Index, and the S&P 500 Index. On December 31, 2019, the last reported sale price of our Class A common stock on the Nasdaq Global Select Market was $35.18 per share.
The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total return for our Class A common stock, the Nasdaq Composite Index, and the S&P 500 Index. On December 31, 2020, the last reported sale price of our Class A common stock on the Nasdaq Global Select Market was $31.73 per share.
The 2024 Share Repurchase Program expired on December 31, 2024. 41 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise be subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of CarGurus under the Exchange Act or the Securities Act of 1933, as amended.
We expect to fund share repurchases under the 2026 Share Repurchase Program through cash on hand and cash generated from operations. 47 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise be subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of CarGurus under the Exchange Act or the Securities Act of 1933, as amended.
Such returns are based on historical results and are not intended to suggest future performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 CARG $ 100 $ 90 $ 96 $ 40 $ 69 $ 104 Nasdaq Composite Index $ 100 $ 145 $ 177 $ 119 $ 173 $ 224 S&P 500 Index $ 100 $ 118 $ 152 $ 125 $ 158 $ 197
Such returns are based on historical results and are not intended to suggest future performance. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 CARG $ 100 $ 106 $ 44 $ 76 $ 115 $ 121 Nasdaq Composite Index $ 100 $ 122 $ 82 $ 119 $ 154 $ 187 S&P 500 Index $ 100 $ 129 $ 105 $ 133 $ 166 $ 196
Removed
During the quarter ended December 31, 2024, there was no share repurchase activity under the 2024 Share Repurchase Program.
Added
Recent Sales of Unregistered Securities None. 46 Table of Contents Purchases of Equity Securities The following table summarizes information about our purchases of our equity securities for each of the months during the quarter ended December 31, 2025: Period Total Number of Shares of Common Stock Purchased Weighted Average Price Paid per Share of Common Stock (2) Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Approximate Dollar Value of Shares of Common Stock that May Yet be Purchased Under the Plans or Programs (in thousands) (3) October 1, 2025 through October 31, 2025 998,555 $ 34.87 998,555 $ 19,956 November 1, 2025 through November 30, 2025 611,758 (1) $ 35.56 561,196 $ — December 1, 2025 through December 31, 2025 — $ — — $ — Total 1,610,313 $ 35.13 1,559,751 (1) The total number of shares of our Class A common stock that were purchased between November 1, 2025 through November 30, 2025 consist of (a) 561,196 shares purchased under the 2025 Share Repurchase Program (as defined below) and (b) 50,562 shares purchased by us during an open trading window under our Insider Trading Policy and at management’s discretion as to timing, manner, and pricing.
Added
(2) The weighted average price paid per share of our Class A common stock does not include cost of commissions. (3) In November 2024 we announced that our Board of Directors authorized a program to purchase up to $200.0 million of our Class A common stock, or the Original 2025 Share Repurchase Program.
Added
In August 2025 we announced that our Board of Directors amended the Original 2025 Share Repurchase Program to increase the authorization by an additional $150.0 million, for a total authorization to purchase up to $350.0 million of our Class A common stock, and extended the expiration of the Original 2025 Share Repurchase Program from December 31, 2025 to July 31, 2026, or, as amended, the 2025 Share Repurchase Program.
Added
The 2025 Share Repurchase Program was completed in November 2025. All repurchased shares under the 2025 Share Repurchase Program were retired. We funded share repurchases under the 2025 Share Repurchase Program through cash on hand and cash generated from operations.
Added
Share repurchases under the 2026 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Added
The 2026 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares. The 2026 Share Repurchase Program has an expiration date of December 31, 2026, and prior to its expiration may be modified, suspended, or discontinued by our Board of Directors at any time without prior notice.
Added
All repurchased shares under the 2026 Share Repurchase Program will be retired.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

99 edited+54 added−97 removed47 unchanged
Biggest changeSome of these limitations are: • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future; • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude impairments, which include non-cash one-time expenses associated with the impairment of the CarOffer reporting unit as well as impairments of certain other assets, which may have to be replaced in the future; • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude stock-based compensation expense, which will be, for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude stock-based compensation expense for CarOffer, LLC Units, which consists of one-time modifications and expense associated with our CO Incentive Units, Subject Units, and Noncontrolling Interest Units (as defined in Note 2 to our consolidated financial statements included elsewhere in this Annual Report); • Consolidated Adjusted EBITDA and Adjusted EBITDA exclude transaction-related expenses incurred by us during a reporting period, which are inclusive of certain transaction and integration costs associated with the 2023 CarOffer Transaction and which may not be reflective of our operational performance during such period, for acquisitions that have been completed as of the filing date of our annual or quarterly report (as applicable) relating to such period; • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude other income, net, which consists primarily of interest income earned on our cash, cash equivalents, and short-term investments, and foreign exchange gains and losses; • Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest exclude the provision for income taxes; • Adjusted EBITDA excludes Adjusted EBITDA attributable to redeemable noncontrolling interest, which is calculated as the net loss attributable to redeemable noncontrolling interest, adjusted for all exclusions used to calculate Consolidated Adjusted EBITDA as described above; and • other companies, including companies in our industry, may calculate Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest differently, which reduces their usefulness as a comparative measure.
Biggest changeSome of these limitations are that Adjusted EBITDA from continuing operations excludes: • depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future; • stock-based compensation expense, which will be, for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • transaction-related expenses incurred by us during a reporting period, which are inclusive of certain transaction and integration costs associated with our 2023 acquisition of the remaining minority equity interests in CarOffer and which may not be reflective of our operational performance during such period, for acquisitions that have been completed as of the filing date of our annual or quarterly report (as applicable) relating to such period; • impairments, which include non-cash one-time expenses associated with the impairments of certain other assets, which may have to be replaced in the future; • other income, net, which consists primarily of interest income earned on our cash, cash equivalents, and short-term investments, and foreign exchange gains and losses; and • the provision for income taxes. 53 Table of Contents In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA from continuing operations differently, which reduces its usefulness as a comparative measure.
General and Administrative General and administrative expense consists primarily of personnel and related expenses for our executive, finance, legal, people & talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; expenses associated with professional fees for audit, tax, external legal, and consulting services; payment processing and billing expenses; insurance expenses; software subscription expenses; and allocated overhead expenses.
General and Administrative General and administrative expense consists primarily of personnel and related expenses for our executive, finance, legal, people and talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; expenses associated with professional fees for audit, tax, external legal, and consulting services; payment processing and billing expenses; insurance expenses; software subscription expenses; and allocated overhead expenses.
The Credit Agreement consists of a revolving credit facility, or the 2022 Revolver, which allows us to borrow up to $400.0 million, $50.0 million of which may be comprised of a letter of credit sub-facility.
The Credit Agreement consists of a revolving credit facility, or the 2022 Revolver, which allows us to borrow up to $400.0 million, $50.0 million of which may be comprised of a letter of credit sub-facility, or 2022 Revolver Sub-facility.
Investing Activities Net cash used in investing activities of $73.0 million during the year ended December 31, 2024, was due primarily to $75.2 million in purchases of property and equipment primarily related to our new headquarters at 1001 Boylston Street and $18.8 million in capitalized website development costs due to continued investment on our product offerings, offset in part by $21.2 million in sales of short-term investments.
Net cash used in investing activities of $73.0 million during the year ended December 31, 2024, was due primarily to $75.2 million in purchases of property and equipment primarily related to our new headquarters at 1001 Boylston Street and $18.8 million in capitalized website development costs due to continued investment on our product offerings, offset in part by $21.2 million in sales of short-term investments.
Financing Activities Net cash used in financing activities of $168.6 million during the year ended December 31, 2024, was due primarily to $146.2 million related to the repurchase of our Class A common stock under the 2024 Share Repurchase Program, $24.9 million related to the payment of withholding taxes on net share settlements of restricted stock units, and $1.6 million for the payment of excise taxes on repurchases of common stock, offset in part by $4.9 million related to the proceeds from issuance of common stock upon exercise of stock options.
Net cash used in financing activities of $168.6 million during the year ended December 31, 2024, was due primarily to $146.2 million related to the repurchase of our Class A common stock under the 2024 Share Repurchase Program, $24.9 million related to the payment of withholding taxes on net share settlements of restricted stock units, and $1.6 million for the payment of excise taxes on repurchases of Class A common stock, offset in part by $4.9 million related to the proceeds from issuance of Class A common stock upon exercise of stock options.
A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods.
A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods.
Net cash used in financing activities of $253.6 million during the year ended December 31, 2023, was due primarily to $208.5 million of payment for repurchase of our Class A common stock under the 2022 Share Repurchase Program, $25.0 million of payment for repurchase of redeemable noncontrolling interest, $15.6 million of payment of withholding taxes on net share settlements of restricted stock units, and $4.5 million of change in gross advance payments received from third-party transaction processor.
Net cash used in financing activities of $253.6 million during the year ended December 31, 2023, was due primarily to $208.5 million related to the repurchase of our Class A common stock under the 2022 Share Repurchase Program, $25.0 million of payment for repurchase of redeemable noncontrolling interest, $15.6 million related to the payment of withholding taxes on net share settlements of restricted stock units, and $4.5 million of change in gross advance payments received from third-party transaction processor.
As discussed below, we also make certain adjustments to the GA4 data in order to improve the accuracy of the reported monthly unique users and monthly sessions. Due to the change in methodology, we are unable to provide comparable monthly unique user and monthly session information for prior periods, including any periods prior to June 30, 2024.
As discussed below, we also make certain adjustments to the GA4 data in order to improve the accuracy of the reported monthly unique users and monthly sessions. Due to the change in methodology, we are unable to provide comparable monthly unique user and monthly session information for any periods prior to June 30, 2024.
Investors should not consider non-GAAP financial measures in isolation from or in substitution for, financial information presented in compliance with U.S. generally accepted accounting principles, or GAAP. This section of this Annual Report discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Investors should not consider non-GAAP financial measures in isolation from or in substitution for, financial information presented in compliance with U.S. generally accepted accounting principles, or GAAP. This section of this Annual Report discusses 2025, 2024, and 2023 items and year-to-year comparisons between 2025 and 2024 and between 2024 and 2023.
The number of paying dealers we have is important to us and we believe it provides valuable information to investors because it is indicative of the value proposition of our marketplace products, as well as our sales and marketing success and opportunity, including our ability to retain paying dealers and develop new dealer relationships.
The number of paying dealers we have is important to us and we believe it provides valuable information to investors because it is indicative of the value proposition of our products, as well as our sales and marketing success and opportunity, including our ability to retain paying dealers and develop new dealer relationships.
Net cash provided by operating activities was also attributable to a $15.2 million increase in lease obligations, a $11.0 million decrease in accounts receivable, a $9.1 million increase in deferred revenue, a $2.1 million increase in accounts payable, and a $2.0 million decrease in inventory.
Net cash provided by operating activities was also attributable to a $15.2 million increase in lease obligations, an $11.0 million decrease in accounts receivable, a $9.1 million increase in deferred revenue, a $2.1 million increase in accounts payable, and a $2.0 million decrease in inventory.
Measuring unique users is important to us and we believe it provides useful information to our investors because our marketplace revenue depends, in part, on our ability to provide dealers with connections to our users and exposure to our marketplace audience.
Measuring unique users is important to us and we believe it provides useful information to our investors because our revenue depends, in part, on our ability to provide dealers with connections to our users and exposure to our audience.
We believe it is important to evaluate these metrics, as applicable, for the U.S. and International geographic regions. The International region derives revenue from marketplace revenue from customers outside of the U.S.
We believe it is important to evaluate these metrics, as applicable, for the U.S. and International geographic regions. The International region derives revenue from customers outside of the U.S.
Off‑Balance Sheet Arrangements As of December 31, 2024 and 2023, we did not have any off-balance sheet arrangements, or material leases that are less than 12 months in duration, that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Off‑Balance Sheet Arrangements As of December 31, 2025 and 2024, we did not have any off-balance sheet arrangements, or material leases that are less than 12 months in duration, that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Number of Paying Dealers We define a paying dealer as a dealer account with an active, paid marketplace subscription at the end of a defined period.
Number of Paying Dealers We define a paying dealer as a dealer account with an active, paid subscription at the end of a defined period.
Share repurchases under the 2025 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act.
Share repurchases under the 2026 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act.
Depreciation and Amortization Depreciation and amortization expense consists of depreciation on property and equipment and amortization of intangible assets and internal-use software. Other Income, Net Other income, net consists primarily of interest income earned on our cash, cash equivalents, and short-term investments, as well as foreign exchange gains and losses.
Depreciation and Amortization Depreciation and amortization expense consists of depreciation on property and equipment and amortization of intangible assets and internal-use software. Other Income, Net Other income, net consists primarily of interest income earned on our cash, cash equivalents, and short-term investments, and foreign exchange gains and losses.
Through RPM, dealers can buy advertising that appears in our marketplace, on other sites on the internet, and/or on high-converting social media platforms. Such advertisements can be targeted by the user’s geography, search history, CarGurus website activity, and a number of other targeting factors, allowing dealers to increase their visibility with in-market consumers and drive qualified traffic for dealers.
Through Audience Targeting, dealers can buy advertising that appears on other sites on the internet and/or on high-converting social media platforms. Such advertisements can be targeted by the user’s geography, search history, CarGurus website activity, and a number of other factors, allowing dealers to increase their visibility with in-market consumers and drive qualified traffic for dealers.
Operating Expenses Sales and Marketing Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with consumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; consulting services; software subscription expenses; travel expenses; amortization of capitalized hosting arrangements; and allocated overhead expenses.
Operating Expenses Sales and Marketing Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with con sumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; software subscription expenses; consulting services; amortization of capitalized hosting arrangements; and allocated overhead expenses.
Monthly Unique Users For each of our websites (excluding the CarOffer website), we define a monthly unique user as an individual who has visited any such website and taken a Visitor Action (as defined below) within a calendar month, based on data as measured by GA4.
Monthly Unique Users For each of our websites, we define a monthly unique user as an individual who has visited any such website and taken a Visitor Action (as defined below) within a calendar month, based on data as measured by GA4.
Marketplace revenue also includes revenue from partnerships with certain financing services companies pursuant to which we enable eligible consumers on our CarGurus U.S. website to pre-qualify for financing on cars from dealerships that offer financing through such companies.
Financing Revenue We also derive revenue from partnerships with certain financing services companies pursuant to which we enable eligible consumers on our CarGurus U.S. website to pre-qualify for financing on cars from dealerships that offer financing through such companies.
Marketplace Revenue We offer multiple types of marketplace Listings packages to our dealers for our CarGurus U.S. platform (availability varies on our other marketplaces): Restricted Listings, which is free; and various levels of Listings packages, which each require a paid subscription under a monthly, quarterly, semiannual, or annual subscription basis.
Dealer Subscription Revenue We offer multiple types of Listings packages to our dealers for our CarGurus platform (availability varies on our marketplaces): Restricted Listings, which is free; and various levels of Listings packages, each of which require a paid subscription under a monthly, quarterly, semiannual, or annual subscription basis.
We define connections as interactions between 44 Table of Contents consumers and dealers on our marketplace through phone calls, email, managed text and chat, and clicks to access the dealer’s website or map directions to the dealership.
We define connections as interactions between consumers and dealers on our marketplace through phone calls, email, managed text and chat, and clicks to access the dealer’s website or map directions to the dealership.
Accordingly, we believe that Consolidated Adjusted EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision making.
Accordingly, we believe that Adjusted EBITDA from continuing operations provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision‑making.
During the years ended December 31, 2024 and 2023, we generated cash from operating activities of $255.5 million and $124.5 million, respectively.
During the years ended December 31, 2025, 2024, and 2023, we generated cash from operating activities of $295.3 million, $255.5 million, and $124.5 million, respectively.
See below for more information regarding our use and reconciliation of Consolidated Adjusted EBITDA and other non-GAAP financial measures. Key Business Metrics We regularly review a number of metrics, including the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions.
See below for more information regarding our use and reconciliation of Adjusted EBITDA from continuing operations and other non-GAAP financial measures. 50 Table of Contents Key Business Metrics We regularly review a number of metrics, including the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions.
The increase was due primarily to a $17.6 million increase in advertising and marketing expense for strategic advertising spend with our performance marketing vendors to maintain year-over-year lead volume and grow with the market as well as our brand awareness campaigns.
The increase was due primarily to an $18.7 million increase in advertising and marketing expense for strategic advertising spend with our performance marketing vendors to maintain year-over-year lead volume and grow with the market as well as our brand awareness campaigns.
The 2022 Revolver is scheduled to mature on September 26, 2027. As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.
The 2022 Revolver is scheduled to mature on September 26, 2027. As of December 31, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.6 million.
Dealers can acquire inventory from shoppers who are looking to sell directly through the CarGurus Sell My Car page. Marketplace revenue also consists of non-dealer advertising revenue from auto manufacturers and other auto-related brand advertisers sold on a cost-per-thousand impressions basis, or CPM basis. An impression is an advertisement loaded on a web page.
Dealers can acquire inventory from shoppers who are looking to sell directly through the CarGurus Sell My Car page. Advertising Revenue We offer non-dealer advertising to auto manufacturers and other brand advertisers sold on a cost-per-thousand impressions basis. An impression is an advertisement loaded on a web page. We also have advertising sold on a cost-per-click basis.
These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and are not necessarily comparable to any similarly titled measures presented by other companies.
This non‑GAAP financial measure is not based on any standardized methodology prescribed by GAAP, and is not necessarily comparable to any similarly titled measures presented by other companies.
As of December 31, 2023, there were no borrowings and $9.6 million in letters of credit outstanding under the 2022 Revolver associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.4 million.
As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.
Three Months Ended December 31, Average Monthly Sessions 2024 2023 (1) (in thousands) United States 74,591 N/A International 19,230 N/A Total 93,821 N/A (1) As a result of the change from Google Analytics to GA4, we are unable to provide comparable monthly sessions information for this period.
Three Months Ended December 31, Average Monthly Sessions 2025 2024 2023 (1) (in thousands) U.S. 79,482 74,591 N/A International 18,168 19,230 N/A Total 97,650 93,821 N/A (1) As a result of the change from Google Analytics to GA4, we are unable to provide comparable average monthly sessions information for this period.
Our subscriptions for customers generally auto-renew on a monthly basis and are cancellable by dealers with 30 days’ advance notice prior to the commencement of the applicable renewal term.
Our dealer Listings subscription packages generally auto-renew on a monthly basis and are cancellable by dealers with 30 days’ advance notice prior to the commencement of the applicable renewal term.
See “Risk Factors—Risks Related to Our Business and Industry—We may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or 60 Table of Contents unforeseen circumstances.
See “Risk Factors—Risks Related to Our Operations—We may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances.
Critical estimates relied upon in preparing the consolidated financial statements include the determination of sales allowance and variable consideration in our revenue recognition, the impairment and useful lives of long-lived assets, the capitalization and useful lives of product, technology, and development costs for website development, internal-use software, and hosting arrangements, and the valuation and recoverability of intangible assets and goodwill.
Critical estimates relied upon in preparing the consolidated financial statements include the determination of variable consideration in our revenue recognition and the capitalization and useful lives of product, technology, and development costs for website development, internal-use software, and hosting arrangements.
Impairment Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Impairment $ 134,501 $ — $ 134,501 NM (1) Percentage of total revenue 15 % — (1) Not meaningful Impairment expense increased $134.5 million in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Impairment Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Impairment $ 11,757 $ — $ 11,757 NM (1) Percentage of total revenue 1 % 0 % (1) Not meaningful Impairment expense increased $11.8 million in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; payments received in advance from a third-party transaction processor; activity under the 2025 Share Repurchase Program; and our investments in international markets.
Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; activity under the 2026 Share Repurchase Program; and our investments in international markets.
For the three months ended December 31, Quarterly Average Revenue per Subscribing Dealer (QARSD) 2024 2023 United States $ 7,337 $ 6,532 International $ 2,072 $ 1,773 Consolidated $ 6,144 $ 5,503 Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Redeemable Noncontrolling Interest To provide investors with additional information regarding our financial results, we have presented within this Annual Report Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest, each of which is a non-GAAP financial measure.
For the three months ended December 31, Quarterly Average Revenue per Subscribing Dealer (QARSD) 2025 2024 2023 U.S. $ 7,938 $ 7,337 $ 6,532 International $ 2,413 $ 2,072 $ 1,773 Consolidated $ 6,616 $ 6,144 $ 5,503 Adjusted EBITDA from Continuing Operations To provide investors with additional information regarding our financial results, we have presented within this Annual Report Adjusted EBITDA from continuing operations, which is a non‑GAAP financial measure.
We believe Consolidated Adjusted EBITDA and Adjusted EBITDA help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude.
We believe Adjusted EBITDA from continuing operations helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude.
The increase was due primarily to an increase in Listings revenue, inclusive of certain digital add-on products, as a result of growth in QARSD, which was driven by signing on new dealers with higher average subscription revenue and revenue expansion through product adoption or upgrades and price increases for existing dealers.
The increase was due primarily to an increase in dealer subscription revenue as a result of growth in QARSD, which was driven by signing on new dealers at market rates, and revenue expansion through product adoption or subscription tier upgrades and price increases for existing dealers.
Operating Activities Net cash provided by operating activities of $255.5 million during the year ended December 31, 2024, was due primarily to consolidated net income of $21.0 million, adjusted for $144.4 million of goodwill and other asset impairment due to the CarOffer reporting unit impairment and the end of the CG Buy Online pilot, as discussed in Note 6 to our consolidated financial statements included elsewhere in this Annual Report, $62.3 million of stock-based compensation expense for equity classified awards to employees, and $25.4 million of depreciation and amortization expense, offset in part by $33.3 million of deferred taxes.
Net cash provided by operating activities of $255.5 million during the year ended December 31, 2024, was due primarily to consolidated net income of $21.0 million, adjusted for $144.4 million of impairment related to CarOffer and the end of the CG Buy Online pilot, $62.3 million of stock-based compensation expense, and $25.4 million of depreciation and amortization expense, offset in part by $33.3 million of deferred taxes.
Accordingly, we consider these to be our critical accounting estimates and believe that of our significant accounting policies, these involve the greatest degree of judgment and complexity. Revenue Recognition – Sales Allowance and Variable Consideration Total consideration for marketplace revenue is stated within the contracts.
Accordingly, we consider these to be our critical accounting estimates and believe that of our significant accounting policies, these involve the greatest degree of judgment and complexity. Revenue Recognition – Variable Consideration Total consideration for subscription revenue is stated within the contracts. At the portfolio level, there is also variable consideration that needs to be included in the transaction price.
We expect to fund share repurchases under the 2025 Share Repurchase Program through cash on hand and cash generated from operations.
All repurchased shares under the 2026 Share Repurchase Program will be retired. We expect to fund share repurchases under the 2026 Share Repurchase Program through cash on hand and cash generated from operations.
The provision for income taxes differs from the federal statutory rate primarily due to federal and state research and development tax credits, partially offset by state and local income taxes, non-deductible meals and entertainment and transportation expenses, and Section 162(m) excess officers compensation disallowance.
The provision for income taxes differs from the federal statutory rate primarily due to state and local income taxes and Section 162(m) excess officers’ compensation disallowance, partially offset by federal and state research and development tax credits and windfall tax benefits on share-based compensation.
Our Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest are not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.
Our Adjusted EBITDA from continuing operations is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.
The decrease was offset in part by a $9.8 million increase in impairment of capitalized website development costs due to the end of the CG Buy Online pilot.
The increase was due primarily to a $9.8 million increase in impairment of capitalized website development costs due to the end of the CG Buy Online pilot and a $2.2 million increase in amortization expense related to the CG Buy Online pilot.
As of December 31, 2023, our principal sources of liquidity were cash and cash equivalents of $291.4 million and short-term investments of $20.7 million. As of December 31, 2024 and 2023, our borrowing capacity under the 2022 Revolver was $390.1 million and $390.4 million, respectively.
Liquidity and Capital Resources Cash, Cash Equivalents, Short-term Investments, and Borrowing Capacity As of December 31, 2025 and 2024, our principal sources of liquidity were cash and cash equivalents of $190.5 million and $304.2 million, respectively. As of December 31, 2025 and 2024, our borrowing capacity under the 2022 Revolver was $390.6 million and $390.1 million, respectively.
On December 8, 2022, we announced that our Board of Directors authorized a share repurchase program, or the 2022 Share Repurchase Program, pursuant to which we could, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $250.0 million. The 2022 Share Repurchase Program expired on December 31, 2023.
In December 2022 we announced that our Board of Directors authorized a program to purchase up to $250.0 million of our Class A common stock, which expired on December 31, 2023, or the 2022 Share Repurchase Program.
On November 7, 2023, we announced that our Board of Directors authorized the 2024 Share Repurchase Program pursuant to which we could, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $250.0 million. The 2024 Share Repurchase Program expired on December 31, 2024.
In November 2023 we announced that our Board of Directors authorized a program to purchase up to $250.0 million of our Class A common stock, which expired on December 31, 2024, or the 2024 Share Repurchase Program.
The decrease was due primarily to a $4.4 million decrease in fees related to provisioning advertising campaigns on external websites.
The increase was offset in part by a $4.4 million decrease in spend related to provisioning advertising campaigns on external websites.
We define Consolidated Adjusted EBITDA as consolidated net income adjusted to exclude: depreciation and amortization, impairments, stock‑based compensation expense, stock-based compensation expense for CarOffer, LLC Units (as defined below), transaction-related expenses, other income, net, and provision for income taxes. We define Adjusted EBITDA as Consolidated Adjusted EBITDA adjusted to exclude: Adjusted EBITDA attributable to redeemable noncontrolling interest.
We define Adjusted EBITDA from continuing operations as net income from continuing operations adjusted to exclude: depreciation and amortization, stock‑based compensation expense, transaction-related expenses, impairments, other income, net, and provision for income taxes.
This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the ROI that our paying dealers realize from our products.
We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two. 52 Table of Contents This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the ROI that our paying dealers realize from our products.
Sources and Uses of Cash During the years ended December 31, 2024 and 2023, our cash flows from operating, investing, and financing activities, as reflected in the consolidated statements of cash flows, were as follows: Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 255,494 $ 124,527 Net cash used in investing activities (72,966 ) (61,564 ) Net cash used in financing activities (168,629 ) (253,644 ) Impact of foreign currency on cash (1,596 ) 475 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 12,303 $ (190,206 ) 59 Table of Contents Our operations have been financed primarily from operating activities.
For additional information on discontinued operations , including significant non-cash items and capital expenditures of discontinued operations, refer to Note 3 to our consolidated financial statements included elsewhere in this Annual Report. 64 Table of Contents During the years ended December 31, 2025, 2024, and 2023, our cash flows from operating, investing, and financing activities, as reflected in the consolidated statements of cash flows, were as follows: Year Ended December 31, 2025 2024 2023 (dollars in thousands) Net cash provided by operating activities $ 295,280 $ 255,494 $ 124,527 Net cash used in investing activities (29,316 ) (72,966 ) (61,564 ) Net cash used in financing activities (383,764 ) (168,629 ) (253,644 ) Impact of foreign currency on cash 2,089 (1,596 ) 475 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (115,711 ) $ 12,303 $ (190,206 ) Our operations have been financed primarily from operating activities.
All repurchased shares of our Class A common stock under the 2022 Share Repurchase Program were retired. We funded share repurchases under the 2022 Share Repurchase Program through cash on hand and cash generated from operations.
The 2025 Share Repurchase Program was completed in November 2025. All repurchased shares under the 2025 Share Repurchase Program were retired. We funded share repurchases under the 2025 Share Repurchase Program through cash on hand and cash generated from operations.
The 2025 Share Repurchase Program has an effective date of January 1, 2025, and an expiration date of December 31, 2025, and prior to its expiration may be modified, suspended, or discontinued by our Board of Directors at any time without prior notice. All repurchased shares under the 2025 Share Repurchase Program will be retired.
The 2026 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares. The 2026 Share Repurchase Program has an expiration date of December 31, 2026, and prior to its expiration may be modified, suspended, or discontinued by our Board of Directors at any time without prior notice.
Provision for Income Taxes Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Provision for income taxes $ 3,685 $ 29,634 $ (25,949 ) (88 )% Percentage of total revenue 0 % 3 % Provision for income taxes decreased $25.9 million, or 88%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Provision for Income Taxes Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Provision for income taxes $ 39,649 $ 46,694 $ (7,045 ) (15 )% Percentage of total revenue 5 % 7 % Provision for income taxes decreased $7.0 million, or 15%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Operating Expenses Sales and Marketing Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Sales and marketing $ 322,249 $ 304,070 $ 18,179 6 % Percentage of total revenue 36 % 33 % Sales and marketing expense increased $18.2 million, or 6%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Operating Expenses Sales and Marketing Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Sales and marketing $ 307,439 $ 277,829 $ 29,610 11 % Percentage of total revenue 39 % 40 % Sales and marketing expense increased $29.6 million, or 11%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Depreciation and Amortization Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Depreciation and amortization $ 12,285 $ 15,831 $ (3,546 ) (22 )% Percentage of total revenue 1 % 2 % Depreciation and amortization expense decreased $3.5 million, or 22%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Depreciation and Amortization Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Depreciation and amortization $ 9,118 $ 6,738 $ 2,380 35 % Percentage of total revenue 1 % 1 % Depreciation and amortization expense increased $2.4 million, or 35%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
There are a number of limitations related to the use of Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest rather than consolidated net income and net loss attributable to redeemable noncontrolling interest, respectively, which are the most directly comparable GAAP equivalents.
There are a number of limitations related to the use of Adjusted EBITDA from continuing operations rather than net income from continuing operations, which is the most directly comparable GAAP equivalent.
We expect product, technology, and development expense to increase as we invest in additional engineering resources to develop new solutions and make improvements to our existing platform.
Other than website development, internal-use software, and hosting arrangement expenses, research and development expenses are expensed as incurred. We expect product, technology, and development expense to increase from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform.
During the year ended December 31, 2024, we repurchased and retired 6,357,302 shares for $146.1 million, exclusive of commissions and excise tax, at an average cost of $22.98 per share under the 2024 Share Repurchase Program.
During the year ended December 31, 2024, we repurchased and retired 6,357,302 shares for $146.1 million, exclusive of commissions and excise tax, at an average cost of $22.98 per share under the 2024 Share Repurchase Program. 65 Table of Contents In November 2024 we announced that our Board of Directors authorized the Original 2025 Share Repurchase Program pursuant to which we could purchase up to $200.0 million of our Class A common stock.
Because of these limitations, we consider, and you should consider, Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA attributable to redeemable noncontrolling interest together with other operating and financial performance measures presented in accordance with GAAP. 47 Table of Contents For the years ended December 31, 2024 and 2023, the following table presents a reconciliation of Consolidated Adjusted EBITDA and Adjusted EBITDA to consolidated net income, the most directly comparable measure calculated in accordance with GAAP for each of the periods presented.
For the years ended December 31, 2025, 2024, and 2023, the following table presents a reconciliation of Adjusted EBITDA from continuing operations to net income from continuing operations, the most directly comparable measure calculated in accordance with GAAP, for each of the periods presented.
Other marketplace revenue includes revenue from contracts for which the performance obligation is a series of distinct services with the same level of effort daily. For these contracts, primarily related to our partnerships with financing services companies, we estimate the value of the variable consideration in determining the transaction price and allocate it to the performance obligation.
For these contracts, primarily related to our partnerships with financing services companies, we estimate the value of the variable consideration in determining the transaction price and allocate it to the performance obligation. Revenue is estimated and recognized on a ratable basis over the contractual term. We reassess the estimate of variable consideration at each reporting period.
Typical seasonality trends may not be observed in periods where other external factors more significantly impact the wholesale industry.
Typical seasonality trends may not be observed in periods where other external factors, such as changes in international trade policies, tariffs, higher interest rates, and other macroeconomic issues, more significantly impact the industry.
We also offer all dealers on the platform access to our Dealer Dashboard, which includes a performance summary, Dealer Insights tool, and user review management platform. Only dealers subscribing to a paid Listings package have access to the Pricing Tool, Market Analysis tool, and IMV Scan tool. We also offer paid Listings packages for the Autolist and PistonHeads websites.
We also offer all dealers on the platform access to our Dealer Dashboard, which includes a performance summary, dealer insights features, and user review management platform. Only dealers subscribing to a paid Listings package receive access to certain additional features. We also offer dealers subscribing to certain of our Listings packages additional exposure and lead enhancements, such as Audience Targeting.
Macroeconomic conditions, such as slower growth or recession, higher interest rates, unemployment, inflation, consumer confidence in the economy, consumer debt levels, labor disruptions, work stoppages, or strikes, geopolitical conflicts, foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences, can also impact the volume of wholesale vehicle sales, as was evidenced by the global semiconductor chip shortage and other supply related shortages.
Historically, our operating results have been more influenced by macroeconomic conditions that impact the volume of vehicle sales, such as slower growth or recession, higher interest rates, unemployment, inflation, consumer confidence in the economy, consumer debt levels, labor disruptions, work stoppages, or strikes, geopolitical conflicts, foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences, than by consistent seasonal patterns. 67 Table of Contents To date, our operating results have not been materially impacted by the general seasonality of the automotive industry.
Auto manufacturers and other brand advertisers can execute advertising campaigns that are targeted across a wide variety of parameters, including demographic groups, behavioral characteristics, 49 Table of Contents specific auto brands, categories such as Certified Pre-Owned, and segments such as hybrid vehicles. We do not provide minimum impression guarantees or other types of minimum guarantees in our contracts with customers.
Pricing is primarily based on advertisement size and position on our websites and mobile applications. Auto manufacturers and other brand advertisers can execute advertising campaigns that are targeted across a wide variety of parameters, including demographic groups, behavioral characteristics, and, for automotive campaigns, specific auto brands, categories such as Certified Pre-Owned, and segments such as hybrid vehicles.
We view our average monthly unique users as a key indicator of the quality of our user experience, the effectiveness of our advertising and traffic acquisition, and the strength of our brand awareness.
Conversely, interactions with our websites generated by bots and other automated mechanisms may inflate GA4 data, which could lead to an overcount of average monthly unique users. We view our average monthly unique users as a key indicator of the quality of our user experience, the effectiveness of our advertising and traffic acquisition, and the strength of our brand awareness.
Three Months Ended December 31, Average Monthly Unique Users 2024 2023 (1) (in thousands) United States 29,282 N/A International 9,139 N/A Total 38,421 N/A (1) As a result of the change from Google Analytics to GA4, we are unable to provide comparable monthly unique user information for this period.
Three Months Ended December 31, Average Monthly Unique Users 2025 2024 2023 (1) (in thousands) U.S. 32,480 29,282 N/A International 8,938 9,139 N/A Total 41,418 38,421 N/A (1) As a result of the change from Google Analytics to GA4, we are unable to provide comparable average monthly unique user information for this period. 51 Table of Contents Monthly Sessions We define monthly sessions as the number of distinct visits to our websites that include a Visitor Action that take place each month within a given time frame, as measured and defined by GA4.
We primarily generate revenue from these partnerships based on the number of funded loans from consumers who pre-qualify with our lending partners through our site. Wholesale Revenue The CarOffer Matrix enables buying dealers to create standing buy orders and provides instant offers to selling dealers.
We primarily generate revenue from these partnerships based on the number of funded loans from consumers who pre-qualify with our lending partners through our site. Cost of Revenue Cost of revenue includes expenses related to supporting and hosting service offerings.
For the year ended December 31, 2024, we generated revenue of $894.4 million, a 2% decrease from $914.2 million of revenue for the year ended December 31, 2023.
For the year ended December 31, 2025, we generated revenue of $907.0 million, a 14% increase from $798.0 million of revenue for the year ended December 31, 2024.
For the year ended December 31, 2024, we generated consolidated net income of $21.0 million and Consolidated Adjusted EBITDA, a non-GAAP measure, of $247.2 million, compared to consolidated net income of $22.1 million and Consolidated Adjusted EBITDA of $195.8 million for the year ended December 31, 2023.
For the year ended December 31, 2025, we generated net income from continuing operations of $196.7 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $319.0 million, compared to net income from continuing operations of $128.7 million and Adjusted EBITDA from continuing operations of $255.6 million for the year ended December 31, 2024.
On November 7, 2024, we announced that our Board of Directors authorized the 2025 Share Repurchase Program pursuant to which we may, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $200.0 million.
In February 2026 we announced that our Board of Directors authorized the 2026 Share Repurchase Program pursuant to which we may purchase up to $250.0 million of our Class A common stock.
At an individual contract level, we may give a credit for a customer satisfaction issue or other circumstance. Due to the known possibility of future credits, a monthly review is performed to defer revenue at an individual contract level for such future adjustments in the period of incurrence.
Due to the known possibility of future credits, a monthly review is performed to defer revenue at an individual contract level for such future adjustments in the period of incurrence. 68 Table of Contents Other revenue includes revenue from contracts for which the performance obligation is a series of distinct services with the same level of effort daily.
Wholesale cost of revenue decreased $35.7 million, or 40%, in the year ended December 31, 2024, compared to the year ended December 31, 2023, and represented 6% of total revenue for the year ended December 31, 2024, compared to 10% of total revenue for the year ended December 31, 2023.
Cost of Revenue Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) Cost of revenue $ 65,467 $ 70,347 $ (4,880 ) (7 )% Percentage of total revenue 7 % 9 % Cost of revenue decreased $4.9 million, or 7%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, and represented 7% of total revenue for the year ended December 31, 2025, compared to 9% of total revenue for the year ended December 31, 2024.
The decrease was due primarily to the CarOffer customer relationships intangible asset becoming fully amortized during the first quarter of 2024, offset in part by increased depreciation from assets placed in service related to the 1001 Boylston Street lease. 57 Table of Contents Other Income, net Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Other income, net: Interest income $ 12,189 $ 18,430 $ (6,241 ) (34 )% Other (expense) income, net (944 ) 630 (1,574 ) NM (1) Total other income, net $ 11,245 $ 19,060 $ (7,815 ) (41 )% Percentage of total revenue: Interest income 1 % 2 % Other (expense) income, net (0 ) 0 Total other income, net 1 % 2 % (1) Not meaningful Total other income, net decreased $7.8 million, or 41%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
The increase was due primarily to assets placed into service in 2024 associated with the 1001 Boylston Street lease. 63 Table of Contents Other Income, net Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Other income, net Interest income $ 12,196 $ 18,436 $ (6,240 ) (34 )% Other (expense) income, net (957 ) 364 (1,321 ) NM (1) Total other income, net $ 11,239 $ 18,800 $ (7,561 ) (40 )% Percentage of total revenue Interest income 2 % 3 % Other (expense) income, net (0 ) 0 Total other income, net 1 % 3 % (1) Not meaningful Total other income, net decreased $7.6 million, or 40%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
We also offer dealer advertising products for the PistonHeads website. We also offer dealers subscribing to certain of our Listings packages other subscription advertising and customer acquisition products and enhancements such as Digital Retail, which allows shoppers to complete much of the vehicle-purchase process online through the Dealers’ Listings page.
We also offer dealers subscribing to certain of our Listings packages other subscription products such as Digital Deal, which allows shoppers to complete much of the vehicle-purchase process online through the Dealers’ Listings page and gives dealers higher quality leads through upfront consumer-provided information. 54 Table of Contents We also offer dealers subscribing to certain of our Listings packages other subscription products such as Sell My Car, which allows dealers to pay for leads to receive direct access to shoppers actively looking to sell their vehicles.
We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness.
We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness. 55 Table of Contents Product, Technology, and Development Product, technology, and development expense consists primarily of personnel and related expenses for our research and development team, including salaries, benefits, incentive compensation, and stock-based compensation; software subscription expenses; consulting services; and allocated overhead expenses.
Marketplace revenue increased $98.4 million, or 14%, in the year ended December 31, 2024, compared to the year ended December 31, 2023, and represented 89% of total revenue for the year ended December 31, 2024, compared to 76% of total revenue for the year ended December 31, 2023.
Cost of Revenue Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Cost of revenue $ 70,347 $ 61,810 $ 8,537 14 % Percentage of total revenue 9 % 9 % Cost of revenue increased $8.5 million, or 14%, in the year ended December 31, 2024, compared to the year ended December 31, 2023, and represented 9% of total revenue for the years ended December 31, 2024 and 2023.
Product, Technology, and Development Expense Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Product, technology, and development $ 144,432 $ 146,169 $ (1,737 ) (1 )% Percentage of total revenue 16 % 16 % Product, technology, and development expense decreased $1.7 million, or 1%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
General and Administrative Expense Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) General and administrative $ 101,419 $ 103,222 $ (1,803 ) (2 )% Percentage of total revenue 11 % 13 % General and administrative expense decreased $1.8 million, or 2%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we had cash and cash equivalents of $304.2 million, which consisted of bank deposits, money market accounts, and mutual funds. As of December 31, 2023, we had cash, cash equivalents, and short-term investments of $312.1 million, which consisted of bank deposits, money market accounts, and mutual funds.
Biggest changeAs of December 31, 2025 and 2024, we had cash and cash equivalents of $190.5 million and $304.2 million, respectively, which consisted of cash on deposit with banks and money market funds. Such interest-earning instruments carry a degree of interest rate risk.
However, fluctuations in exchange rates in the future may have a material impact on our business, financial condition, or results of operations. We have not used any financial instruments to manage our foreign currency exchange risk exposure. As circumstances change, we will continue to reassess our approach to managing these risks. 66 Table of Contents
However, fluctuations in exchange rates in the future may have a material impact on our business, financial condition, or results of operations. We have not used any financial instruments to manage our foreign currency exchange risk exposure. As circumstances change, we will continue to reassess our approach to managing these risks. 70 Table of Contents
Foreign Currency Exchange Risk As of December 31, 2024 and 2023, we had foreign currency exposures in the British pound, the Euro, and the Canadian dollar, but fluctuations resulting from exchange rates between these foreign currencies and the U.S. dollar have not been material to our business, financial condition, or results of operations.
Foreign Currency Exchange Risk As of December 31, 2025 and 2024, we had foreign currency exposures in the British pound, the Euro, and the Canadian dollar, but fluctuations resulting from exchange rates between these foreign currencies and the U.S. dollar have not been material to our business, financial condition, or results of operations.
As circumstances change, we will continue to reassess our approach to managing these risks. Inflation Risk As of December 31, 2024 and 2023, we did not believe that inflation had a material effect on our business, financial condition, or results of operations.
As circumstances change, we will continue to reassess our approach to managing these risks. Inflation Risk As of December 31, 2025 and 2024, we did not believe that inflation had a material effect on our business, financial condition, or results of operations.
Interest Rate Risk As of December 31, 2024 and 2023, our exposure to market risk associated with changes in interest rates related primarily to the 2022 Revolver, which allows us to borrow up to $400.0 million.
Interest Rate Risk As of December 31, 2025 and 2024, our exposure to market risk associated with changes in interest rates related primarily to the 2022 Revolver, which allows us to borrow up to $400.0 million.
As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.
As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.
As of December 31, 2023, there were no borrowings and $9.6 million in letters of credit outstanding under the 2022 Revolver associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.4 million.
As of December 31, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.6 million.
Such interest-earning instruments carry a degree of interest rate risk. For the year ended December 31, 2024 and 2023, fluctuations resulting from changes in the interest rate environment in interest income have not been material to our business, financial condition, or results of operations.
For the years ended December 31, 2025 and 2024, fluctuations resulting from changes in the interest rate environment in interest income have not been material to our business, financial condition, or results of operations.

Other CARG 10-K year-over-year comparisons