CarGurus, Inc. reported a total revenue of $238.7 million for the third quarter of 2025, reflecting a 3% increase from $231.4 million in the same period last year. The company's marketplace revenue, which constitutes the majority of its income, rose by 14% to $231.7 million, driven by an increase in the number of paying dealers and higher average revenue per subscribing dealer (QARSD). In contrast, wholesale revenue plummeted by 81% to $2.2 million, and product revenue fell by 69% to $4.8 million, primarily due to the ongoing wind-down of CarOffer, which has significantly impacted transaction volumes.
In terms of profitability, CarGurus achieved a net income of $44.7 million for the quarter, compared to $22.5 million in the prior year. This improvement is attributed to a reduction in operating expenses, which totaled $158.9 million, a slight increase from $155.1 million in Q3 2024. The company also reported a gross profit of $213.5 million, up from $182.6 million a year earlier, indicating a gross margin of approximately 89%. The decrease in costs associated with the wind-down of CarOffer contributed to this margin expansion.
Strategically, CarGurus announced the decision to wind down CarOffer on August 6, 2025, after determining that the business model was less effective in the current market environment. The company expects to complete this wind-down by the end of 2025, with estimated costs ranging from $13 million to $15 million. This decision is part of a broader strategic reassessment aimed at focusing on its core marketplace and enhancing its technology and analytics capabilities.
Operationally, CarGurus reported a total of 33,673 paying dealers as of September 30, 2025, an increase from 31,684 a year earlier. The company also noted a significant rise in average monthly unique users, reaching 48.4 million, up from 42.1 million in the previous year. Despite the challenges posed by the wind-down of CarOffer, the company has maintained a strong user engagement, which is critical for its marketplace revenue.
Looking ahead, CarGurus remains optimistic about its growth trajectory, emphasizing its commitment to enhancing dealer and consumer experiences through technology and data-driven solutions. The company anticipates that the strategic focus on its U.S. Marketplace segment will yield positive results, although it acknowledges the potential risks associated with the wind-down of CarOffer and broader economic conditions.
About CarGurus, Inc.
CarGurus is a leading online automotive platform connecting consumers and dealers for buying, selling, and financing vehicles. It offers comprehensive listings, data-driven pricing, and digital retail solutions across the U.S., U.K., and Canada. The company provides tools for vehicle valuation, trade-in, and wholesale transactions, leveraging proprietary algorithms and data analytics to enhance transparency, trust, and efficiency in automotive commerce.
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