CarGurus, Inc.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
CARG$33.74-6.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-105055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-269604
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 198 previous paragraphs and 211 current paragraphs.
108 unchanged; 75 reworded; 20 added; 14 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 34 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
For further discussion of the wind-down, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
We are subject to evolving privacy laws governing cookies and tracking technologies. Privacy regulations that require user consent for tracking technologies, such as cookies, may limit our ability to collect certain data, which could result in an undercount of actual average monthly unique users. 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.
Current report
We are subject to evolving privacy laws governing cookies and tracking technologies. Privacy regulations that require user consent for tracking technologies, such as cookies, may limit our ability to collect certain data, which could result in an undercount of actual average monthly sessions. 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 sessions.
Current report
For further discussion of 2025 impairments, refer to Note 6 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
During the three months ended September 30, 2024, we decided to end our CG Buy Online pilot in order to redirect those resources toward other investment opportunities, including continued product innovation and development across our business. The CG Buy Online pilot was one of the initiatives that allowed consumers to purchase vehicles online. As a result, we recognized impairment losses of $15.8 million, $0.5 million, and $0.5 million for property and equipment, net, prepaid expenses, prepaid income taxes and other current assets, and other non-current assets, respectively. For both the three and nine months ended September 30, 2024, we recognized Digital Wholesale segment impairment charges related to CG Buy Online of $9.8 million and $7.0 million as wholesale cost of revenue and goodwill and other asset impairment operating expense, respectively.
Current report
For further discussion of 2024 impairments, refer to Note 6 of the consolidated financial statements included within the Annual Report.
Current report
For further discussion of the wind-down of CarOffer, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
Overall cost of revenue decreased $23.6 million, or 48%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current report
Product, technology, and development expense remained relatively flat in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was due primarily to a $1.3 million decrease in personnel-related expenses inclusive of decreases related to stock-based compensation and other personnel costs, offset in part by an increase in payroll due to an increase in headcount and merit increases. Stock-based compensation declined due to vested and forfeited awards, partly offset by new grants. The decrease in product, technology, and development expense was offset in part by a $1.2 million increase in one-time restructuring costs as a result of the wind-down of CarOffer. For further discussion of restructuring costs, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
Total other income, net decreased $0.7 million, or 28%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The $0.4 million decrease in interest income was due primarily to lower average cash and cash equivalents balances in interest-bearing accounts. The $0.3 million increase in other expense, net was due primarily to the strengthening of foreign currencies against the U.S. dollar.
Current report
Provision for Income Taxes
Current report
Provision for income taxes increased $4.3 million, or 57%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was due primarily to increased profitability. The increase in the provision for income taxes was offset in part by an aggregated $1.6 million tax benefit related to windfalls on the taxable compensation of stock-based awards, net of the Section 162(m) excess officer compensation limitation recorded during the three months ended September 30, 2025, compared to a $2.0 million tax expense related to the Section 162(m) excess officer compensation limitation, net of windfalls on the taxable compensation of stock-based awards recorded during the three months ended September 30, 2024.
Current report
For the nine months ended September 30, 2025 and 2024
Current report
Overall revenue increased $32.0 million, or 5%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Current report
For further discussion of the wind-down of CarOffer, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
Overall cost of revenue decreased $45.6 million, or 36%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Current report
Product, technology, and development expense decreased $1.5 million, or 1%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease was due primarily to a $1.8 million decrease in rent and related expenses due primarily to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park and a $1.7 million decrease in expense as a result of increase capitalized website development. The decrease was also driven in part by a $1.3 million decrease in personnel-related expenses, inclusive of decreases in stock-based compensation and other personnel costs, offset in part by an increase in payroll due to an increase in headcount and merit increases. Stock-based compensation declined due to vested and forfeited awards, partly offset by new grants. The decrease in product, technology, and development expense was offset in part by a $1.4 million increase in consulting fees, a $1.2 million increase in one-time restructuring costs as a result of the wind-down of CarOffer, and a $1.1 million increase in software subscription expense. For further discussion of restructuring costs, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current report
Total other income, net decreased $1.9 million, or 21%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The $1.5 million decrease in interest income resulted from lower average cash and cash equivalents balances in interest-bearing accounts.
Current report
Net cash provided by operating activities of $212.2 million during the nine months ended September 30, 2025, was due primarily to net income of $106.1 million, adjusted for $38.6 million of stock-based compensation expense, $32.6 million of impairment related to CarOffer, as discussed in Note 6 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report, $20.6 million of depreciation and amortization expense, $14.0 million of deferred taxes, and $12.0 million of amortization of deferred contract costs. Net cash provided by operating activities included a $4.8 million increase in lease liabilities primarily due to lease amortization and a $3.4 million decrease in accounts receivable due to the wind-down of CarOffer. Net cash provided by operating activities was offset in part by a $13.7 million increase in deferred contract costs due to commission capitalization and an $8.5 million increase in prepaid expenses, prepaid income taxes, and other assets primarily due to the impact of the OBBBA.
Current report
Net cash provided by operating activities of $179.8 million during the nine months ended September 30, 2024, was due primarily to net loss of $24.9 million, adjusted for $144.4 million of impairment related to CarOffer and the end of the CG Buy Online pilot, as discussed in Note 6 of the consolidated financial statements included within the Annual Report, $47.3 million of deferred taxes, $46.6 million of stock-based compensation expense, $18.3 million of depreciation and amortization expense, and $10.2 million of amortization of deferred contract costs. Net cash provided by operating activities was also attributable to a $32.2 million increase in lease obligations primarily related to reimbursement of tenant improvement allowance costs incurred and amortization reducing the right-of-use asset related to 1001 Boylston Street, partially offset by rent payments as well as a $10.8 million increase in accounts payable. Net cash provided by operating activities was offset in part by a $11.3 million increase in deferred contract costs due to commission capitalization.
Removed paragraphs (14)
Previous report
CarOffer is a subsidiary of CarGurus and operates as an independent brand.
Previous report
Transactions
Previous report
We define Transactions within the Digital Wholesale segment as the number of vehicles processed from car dealers, consumers, and other marketplaces through the CarOffer website within the defined period. Transactions consists of each unique vehicle (based on vehicle identification number) that reaches“sold and invoiced” status on the CarOffer website within the defined period, including vehicles sold to car dealers, vehicles sold at third-party auctions, vehicles ultimately sold to a different buyer, and vehicles that are returned to their owners without completion of a sale transaction. We exclude vehicles processed within CarOffer’s intra-group trading solution (Group Trade) from the definition of Transactions, and we only count any unique vehicle once even if it reaches sold status multiple times. The Digital Wholesale segment includes Dealer-to-Dealer transactions and IMCO transactions. We view Transactions as a key business metric, and we believe it provides useful information to investors, because it provides insight into growth and revenue for the Digital Wholesale segment. Transactions drive a significant portion of Digital Wholesale segment revenue. We believe growth in Transactions demonstrates consumer and dealer utilization and our market share penetration in the Digital Wholesale segment. Beginning in the second half of 2025 we expect Transactions to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.
Previous report
Overall revenue increased $15.3 million, or 7%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.
Previous report
Overall cost of revenue decreased $6.6 million, or 18%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.
Previous report
Product, technology, and development expense decreased $2.2 million, or 6%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease was due primarily to a $0.9 million decrease in rent expense, due to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park. The decrease was also due in part to a $0.5 million decrease in salaries and employee-related expense, exclusive of stock-based compensation, due primarily to changes in headcount. The decrease was also due in part to a $0.5 million decrease in stock-based compensation due primarily to completed vesting of existing awards and forfeitures from employee departures, partially offset by new grants.
Previous report
Total other income, net was relatively flat in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.
Previous report
For the six months ended June 30, 2025 and 2024
Previous report
Overall revenue increased $24.7 million, or 6%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Previous report
Overall cost of revenue decreased $22.0 million, or 29%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Previous report
Product, technology, and development expense decreased $1.5 million, or 2%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease was due primarily to a $1.9 million decrease in rent expense due to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park.
Previous report
Total other income, net decreased $1.2 million, or 18%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The $1.1 million decrease in interest income was due primarily to the sale of interest-bearing short-term investments during the three months ended March 31, 2024. Other income, net was relatively flat for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Previous report
Net cash provided by operating activities of $141.0 million during the six months ended June 30, 2025, was due primarily to net income of $61.4 million, adjusted for $32.6 million of impairments, $25.9 million of stock-based compensation expense for equity awards to employees, $13.3 million of deferred taxes, and $13.2 million of depreciation and amortization expense.
Previous report
Net cash provided by operating activities of $123.6 million during the six months ended June 30, 2024, was due primarily to net loss of $47.4 million, adjusted for $127.7 million of impairment due to organizational changes and Transaction volume declines, which resulted in revisions to our financial projections for the CarOffer reporting unit, $31.2 million of stock-based compensation expense for equity classified awards to employees, $44.2 million of deferred taxes, and $13.1 million of depreciation and amortization expense. Net cash provided by operating activities was also attributable to a $27.4 million increase in lease obligations primarily related to our new headquarters at 1001 Boylston Street.
Reworded paragraphs (75)
Previous wording
We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages, Real-time Performance Marketing, or RPM, our digital advertising suite, Digital Retail, and Sell My Car - Top Dealer Offers, (ii) advertising revenue from auto manufacturers and other auto-related brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from the purchase and sale of vehicles between dealers, or Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions (as defined below). We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles to dealers that were acquired directly from customers, or Sell My Car - Instant Max Cash Offer, or IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration.
Current wording
We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages, Real-time Performance Marketing, or RPM, our digital advertising suite, Digital Retail, and Sell My Car (formerly known as Sell My Car - Top Dealer Offers), (ii) advertising revenue from auto manufacturers and other brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from the purchase and sale of vehicles between dealers, or Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions (as defined below). We expect wholesale revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business, as discussed below. We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles to dealers that were acquired directly from customers, or Instant Max Cash Offer, or IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration. We expect product revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business, as discussed below.
Previous wording
For the three months ended June 30, 2025, we generated revenue of $234.0 million, a 7% increase from $218.7 million of revenue for the three months ended June 30, 2024. For the three months ended June 30, 2025, we generated net income of $22.3 million and Adjusted EBITDA, a non-GAAP measure, of $77.3 million, compared to net loss of $68.7 million and Adjusted EBITDA of $55.6 million for the three months ended June 30, 2024.
Current wording
For the three months ended September 30, 2025, we generated revenue of $238.7 million, a 3% increase from $231.4 million of revenue for the three months ended September 30, 2024. For the three months ended September 30, 2025, we generated net income of $44.7 million and Adjusted EBITDA, a non-GAAP measure, of $78.7 million, compared to net income of $22.5 million and Adjusted EBITDA of $64.9 million for the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, we generated revenue of $459.2 million, a 6% increase from $434.5 million of revenue for the six months ended June 30, 2024. For the six months ended June 30, 2025, we generated net income of $61.4 million and Adjusted EBITDA, a non-GAAP measure, of $143.6 million, compared to net loss of $47.4 million and Adjusted EBITDA of $106.0 million for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, we generated revenue of $697.9 million, a 5% increase from $665.8 million of revenue for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, we generated net income of $106.1 million and Adjusted EBITDA, a non-GAAP measure, of $222.3 million, compared to net loss of $24.9 million and Adjusted EBITDA of $170.8 million for the nine months ended September 30, 2024.
Previous wording
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, including the CarOffer Dealer-to Dealer and Instant Max Cash Offer products, or the CarOffer Transactions Business. 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 automation to streamline fulfillment than the model could provide. 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 Top Dealer Offers and will focus on technology and analytics that will enable smarter sourcing and pricing decisions rather than facilitating the transactions themselves.
Current wording
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, including the CarOffer Dealer-to-Dealer and Instant Max Cash Offer products, or the CarOffer Transactions Business. 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 automation to streamline fulfillment than the model could provide. 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 known as 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.
Previous wording
We expect to substantially complete the wind-down activities in the second half of 2025. As a result of the intended wind-down, we expect to incur total expenditures in the range of approximately $14.0 million to $19.0 million, primarily in the second half of 2025. A significant portion of the cash payments are expected to be paid in the second half of 2025, with the remaining expected to be paid in the first half of 2026.
Current wording
We have begun to wind down CarOffer and expect to substantially complete the wind-down activities by the end of 2025. During the third quarter of 2025 we lowered our estimate of total expenditures associated with the wind-down, inclusive of amounts incurred to date and those expected through completion, to be in the range of $13.0 million to $15.0 million. As of September 30, 2025, we expect remaining cash expenditures to be in the range of $7.0 million to $9.0 million. A significant portion of the cash payments are expected to be paid in the remainder of 2025, with the remaining expected to be paid in the first half of 2026.
Previous wording
The estimates of the charges and costs that we expect to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ materially from those described above. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the wind down of CarOffer, including the CarOffer Transactions Business.
Current wording
The estimates of the costs and charges that we expect to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ materially from those described above. In addition, we may incur other costs and charges not currently contemplated due to unanticipated events that may occur as a result of or in connection with the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
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. We calculate average monthly unique users as the sum of the monthly unique users of each of our websites in a defined period, divided by the number of months in that period. Effective July 1, 2024, we count a unique user the first time a computer or mobile device with a unique device identifier accesses any of our websites or application during a calendar month and takes an action on such website or in such application, such as performing a search, visiting vehicle detail pages, and connecting with a dealer, which we refer to as a Visitor Action. If an individual accesses a website or application using a different device within a given month, the first Visitor Action taken by each such device is counted as a separate unique user. If an individual uses multiple browsers on a single device and/or clears their cookies and returns to our website or application and takes a Visitor Action within a calendar month, each such Visitor Action is counted as a separate unique user. We eliminate any duplicate unique users that may arise when users visit a webview within our native application. 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. 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. 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.
Current wording
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. We calculate average monthly unique users as the sum of the monthly unique users of each of our websites in a defined period, divided by the number of months in that period. Effective July 1, 2024, we count a unique user the first time a computer or mobile device with a unique device identifier accesses any of our websites or application during a calendar month and takes an action on such website or in such application, such as performing a search, visiting vehicle detail pages, and connecting with a dealer, which we refer to as a Visitor Action. If an individual accesses a website or application using a different device within a given month, the first Visitor Action taken by each such device is counted as a separate unique user. If an individual uses multiple browsers on a single device and/or clears their cookies and returns to our website or application and takes a Visitor Action within a calendar month, each such Visitor Action is counted as a separate unique user. We eliminate any duplicate unique users that may arise when users visit a webview within our native application.
Previous wording
We define monthly sessions as the number of distinct visits to our websites (excluding the CarOffer website) that include a Visitor Action that take place each month within a given time frame, as measured and defined by GA4. We calculate average monthly sessions as the sum of the monthly sessions in a defined period, divided by the number of months in that period. Effective July 1, 2024, a session is defined as beginning with the first Visitor Action from a computer or mobile device and ending at the earliest of when a user closes their browser window or after 30 minutes of inactivity. We eliminate any duplicate monthly sessions that may arise when users visit a webview within our native application. We believe that measuring the volume of sessions in a time period, when considered in conjunction with the number of unique users in that time period, is an important indicator to us of consumer satisfaction and engagement with our marketplace, and we believe it provides useful information to our investors because the more satisfied and engaged consumers we have, the more valuable our service is to dealers.
Current wording
We define monthly sessions as the number of distinct visits to our websites (excluding the CarOffer website) that include a Visitor Action that take place each month within a given time frame, as measured and defined by GA4. We calculate average monthly sessions as the sum of the monthly sessions in a defined period, divided by the number of months in that period. Effective July 1, 2024, a session is defined as beginning with the first Visitor Action from a computer or mobile device and ending at the earliest of when a user closes their browser window or after 30 minutes of inactivity. We eliminate any duplicate monthly sessions that may arise when users visit a webview within our native application.
Previous wording
We define Adjusted EBITDA as net income (loss), adjusted to exclude: depreciation and amortization, impairments, stock‑based compensation expense, transaction-related expenses, other income, net, and provision for (benefit from) income taxes.
Current wording
We define Adjusted EBITDA as net income (loss), adjusted to exclude: depreciation and amortization, stock‑based compensation expense, transaction-related expenses, restructuring expenses, impairments, other income, net, and provision for (benefit from) income taxes.
Previous wording
Adjusted EBITDA excludes 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;
Current wording
Adjusted EBITDA excludes impairments, which include non-cash one-time expenses associated with the impairment of CarOffer as well as impairments of certain other assets, which may have to be replaced in the future;
Previous wording
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable measure calculated in accordance with GAAP for each of the periods presented.
Current wording
For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, the following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable measure calculated in accordance with GAAP for each of the periods presented.
Previous wording
We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages, RPM, our digital advertising suite, Digital Retail, and Top Dealer Offers, (ii) advertising revenue from auto manufacturers and other auto‑related brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions. We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles that were acquired through IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration.
Current wording
We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages, RPM, our digital advertising suite, Digital Retail, and Sell My Car(formerly known as Sell My Car - Top Dealer Offers), (ii) advertising revenue from auto manufacturers and other brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions. We expect wholesale revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business. We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles that were acquired through IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration. We expect product revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
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.
Current wording
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, each of which require a paid subscription under a monthly, quarterly, semiannual, or annual subscription basis.
Previous wording
We also offer dealers subscribing to certain of our Listings packages other subscription advertising and customer acquisition products and enhancements such as Top Dealer Offers, which allows dealers to pay for leads to receive direct access to shoppers actively looking to sell their vehicles. Dealers can acquire inventory from shoppers who are looking to sell directly through the CarGurus Sell My Car page.
Current wording
We also offer dealers subscribing to certain of our Listings packages other subscription advertising and customer acquisition products and enhancements such as Sell My Car(formerly known as Sell My Car - Top Dealer Offers), which allows dealers to pay for leads to receive direct access to shoppers actively looking to sell their vehicles. Dealers can acquire inventory from shoppers who are looking to sell directly through the CarGurus Sell My Car page.
Previous wording
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. An impression is an advertisement loaded on a web page. We also have advertising sold on a cost-per-click basis. 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, 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. Advertising is also sold indirectly through revenue sharing arrangements with advertising exchange partners.
Current wording
Marketplace revenue also consists of non-dealer advertising revenue from 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. 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, 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. Advertising is also sold indirectly through revenue sharing arrangements with advertising exchange partners.
Previous wording
Beginning in the second half of 2025 we expect CarOffer wholesale revenue to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.
Current wording
We expect CarOffer wholesale revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
Beginning in the second half of 2025 we expect CarOffer product revenue to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.
Current wording
We expect CarOffer product revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
Wholesale cost of revenue includes expenses related to supporting and hosting Digital Wholesale service offerings, including Dealer-to-Dealer transactions and vehicles sold to dealers acquired at other marketplaces on the CarOffer Matrix. These expenses include vehicle transportation and inspection expenses; net losses on vehicles related to guarantees offered to dealers through Dealer-to-Dealer transactions; personnel and related expenses for employees directly involved in the fulfillment and support of transactions, including salaries, benefits, incentive compensation, and stock-based compensation; third-party service provider expenses; amortization of developed technology; amortization and impairment of capitalized website development; and allocated overhead expenses.
Current wording
Wholesale cost of revenue includes expenses related to supporting and hosting Digital Wholesale service offerings, including Dealer-to-Dealer transactions and vehicles sold to dealers acquired at other marketplaces on the CarOffer Matrix. These expenses include vehicle transportation and inspection expenses; net losses on vehicles related to guarantees offered to dealers through Dealer-to-Dealer transactions; personnel and related expenses for employees directly involved in the fulfillment and support of transactions, including salaries, benefits, incentive compensation, and stock-based compensation; third-party service provider expenses; amortization of developed technology; amortization and impairment of capitalized website development; one-time restructuring costs; and allocated overhead expenses.
Previous wording
Beginning in the second half of 2025 we expect CarOffer wholesale cost of revenue to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.
Current wording
We expect CarOffer wholesale cost of revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
Beginning in the second half of 2025 we expect CarOffer product cost of revenue to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.
Current wording
We expect CarOffer product cost of revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer, including the CarOffer Transactions Business.
Previous wording
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. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. 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, inclusive of an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Current wording
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; one-time restructuring costs; and allocated overhead expenses. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. 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, inclusive of an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Previous wording
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. 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 fluctuate from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform, inclusive of an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Current wording
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; one-time restructuring costs; and allocated overhead expenses. 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, offset in part by an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Previous wording
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. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase as we continue to scale our business, offset by an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Current wording
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; one-time restructuring costs; and allocated overhead expenses. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase as we continue to scale our business, partly offset by an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.
Previous wording
During the three months ended June 30, 2025, we identified a triggering event that required an interim impairment test at the CarOffer reporting unit due to the sustained low Transaction volume and a delay in the business’s expected return to growth. We performed an updated fair value analysis of the CarOffer reporting unit, and subsequently recognized impairment losses of $0.5 million, $0.3 million, $0.8 million, $4.8 million, $6.6 million, and $19.6 million for right-of-use assets, capitalized hosting arrangements, capitalized internal-use software, capitalized website development costs, intangible assets, and goodwill, respectively. For further discussion of impairments in the CarOffer reporting unit, refer to Note 6 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current wording
During the three months ended June 30, 2025, we identified a triggering event that required an interim impairment test at CarOffer due to the sustained low volume of the number of vehicles processed from car dealers, consumers, and other marketplaces through the CarOffer website within the applicable period within the Digital Wholesale segment, which we refer to as Transactions, and a delay in the business’s expected return to growth. We performed an updated fair value analysis of CarOffer, and subsequently recognized impairment losses of $0.5 million, $0.3 million, $0.8 million, $4.8 million, $6.6 million, and $19.6 million for right-of-use assets, capitalized hosting arrangements, capitalized internal-use software, capitalized website development costs, intangible assets, and goodwill, respectively. For the three months ended September 30, 2025, we did not recognize any Digital Wholesale segment impairment charges related to CarOffer. For the nine months ended September 30, 2025, we recognized Digital Wholesale segment impairment charges related to CarOffer of $29.6 million as impairment operating expense.
Previous wording
During the three months ended June 30, 2024, we identified a triggering event for impairment testing purposes at the CarOffer reporting unit due to organizational changes and Transaction volume declines, which resulted in revisions to our financial projections for the CarOffer reporting unit. As a result, we performed an updated fair value analysis of the CarOffer reporting unit, and subsequently recognized impairment losses of $4.7 million, $7.6 million, and $115.2 million for right-of-use assets, intangible assets, and goodwill, respectively. For further discussion of goodwill and other asset impairments, refer to Note 6 of the consolidated financial statements contained within the Annual Report.
Current wording
During the three months ended June 30, 2024, we identified a triggering event for impairment testing purposes at CarOffer due to organizational changes and Transaction volume declines, which resulted in revisions to our financial projections for CarOffer. As a result, we performed an updated fair value analysis of CarOffer, and subsequently recognized impairment losses of $4.7 million, $7.6 million, and $115.2 million for right-of-use assets, intangible assets, and goodwill, respectively. For the three months ended September 30, 2024, there were no impairment losses recognized related to CarOffer. For the nine months ended September 30, 2024, we recognized Digital Wholesale segment impairment charges related to CarOffer of $127.5 million as impairment operating expense.
Previous wording
The provision for (benefit from) income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. For the three and six months ended June 30, 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position. For the three and six months ended June 30, 2024, a benefit from income taxes was recognized as a result of the discrete tax benefit associated with the impairment charge despite our consolidated taxable income position.
Current wording
The provision for (benefit from) income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. For the three months ended September 30, 2025 and 2024, and for the nine months ended September 30, 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position. For the nine months ended September 30, 2024, a benefit from income taxes was recognized as a result of the discrete tax benefit associated with the impairment charge and our consolidated taxable loss position.
Previous wording
On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was enacted in the U.S. The OBBBA includes significant tax provisions, such as accelerated cost recovery of qualified property, immediate expensing of U.S.-based research and development costs, and changes to the U.S. international taxation regime. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The impact of these changes will be recognized in the period in which the legislation was enacted. We are currently evaluating the impact of the OBBBA on our future consolidated financial statements and related disclosures and expect material cash tax savings over the next several years. We will continue to monitor developments related to OBBBA and will update our disclosures as appropriate.
Current wording
On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was enacted in the U.S. The OBBBA includes significant tax provisions, such as accelerated cost recovery of qualified property, immediate expensing of U.S.-based research and development costs, and changes to the U.S. international taxation regime. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The impact of these changes will be recognized in the period in which the legislation was enacted. The OBBBA includes a provision which allows for immediate expensing of domestic research costs and accelerated amortization of previously capitalized domestic research costs. For the nine months ended September 30, 2025, we have incorporated the change into our provision for income taxes. Accordingly, the change has decreased deferred tax assets and increased prepaid expenses, prepaid income taxes, and other current assets within the Unaudited Condensed Consolidated Balance Sheets. The OBBBA did not have a material impact on our effective tax rate for the three and nine months ended September 30, 2025. We do not expect the OBBBA to have a material impact on our future effective tax rate. We will continue to monitor developments related to OBBBA and will update our disclosures as appropriate.
Previous wording
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements were as follows:
Current wording
For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements were as follows:
Previous wording
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, our segment revenue and our segment income (loss) from operations were as follows:
Current wording
For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, our segment revenue and our segment income (loss) from operations were as follows:
Previous wording
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):
Current wording
For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):
Previous wording
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, our segment revenue as a percentage of total revenue and our segment income (loss) from operations as a percentage of segment revenue were as follows (amounts in the table below may not sum due to rounding):
Current wording
For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, our segment revenue as a percentage of total revenue and our segment income (loss) from operations as a percentage of segment revenue were as follows (amounts in the table below may not sum due to rounding):
Previous wording
Marketplace revenue increased $26.8 million, or 14%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 95% of total revenue for the three months ended June 30, 2025, compared to 89% of total revenue for the three months ended June 30, 2024. The increase was due primarily to an increase in Listings revenue, as a result of strong growth in both paying dealer count and QARSD. We have increased wallet share across our dealer base, driven by upgrades, broader adoption of add-on products, and like-for-like price increases. The increase was also due in part to an increase in advertising revenue due primarily to increased spend by advertisers related to new and existing campaigns.
Current wording
Marketplace revenue increased $27.6 million, or 14%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 97% of total revenue for the three months ended September 30, 2025, compared to 88% of total revenue for the three months ended September 30, 2024. The increase was due primarily to an increase in Listings revenue as a result of growth in both paying dealer count and QARSD. We have expanded wallet share across our dealer base, driven by upgrades, broader adoption of add-on products, and like-for-like price increases. The increase was also due in part to higher advertising revenue primarily due to increased spend by advertisers related to new and existing campaigns. The increase in Marketplace revenue was inclusive of a 27% increase in international revenue, similarly driven by growth in both paying dealer count and QARSD.
Previous wording
Wholesale revenue decreased $6.8 million, or 52%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 3% of total revenue for the three months ended June 30, 2025, compared to 6% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a 55% decrease in Transactions, which includes Dealer-to-Dealer transactions and IMCO transactions, to 3,955 for the three months ended June 30, 2025, compared to 8,778 for the three months ended June 30, 2024.
Current wording
Wholesale revenue decreased $9.9 million, or 81%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 1% of total revenue for the three months ended September 30, 2025, compared to 5% of total revenue for the three months ended September 30, 2024. The decrease was due primarily to a 82% decrease in Transactions, which includes Dealer-to-Dealer transactions and IMCO transactions, to 1,460 for the three months ended September 30, 2025, compared to 8,249 for the three months ended September 30, 2024. The decrease in Transactions was due primarily to the wind-down of CarOffer.
Previous wording
Product revenue decreased $4.6 million, or 45%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 2% of total revenue for the three months ended June 30, 2025, compared to 5% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a decrease in proceeds received from the sale of vehicles through IMCO transactions and proceeds received from the sale of vehicles acquired through arbitration, as a result of lower Transaction volume.
Current wording
Product revenue decreased $10.4 million, or 69%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 2% of total revenue for the three months ended September 30, 2025, compared to 7% of total revenue for the three months ended September 30, 2024. The decrease was due primarily to a decrease in proceeds received from the sale of vehicles through IMCO transactions and proceeds received from the sale of vehicles acquired through arbitration, as a result of lower Transaction volume due to the wind-down of CarOffer.
Previous wording
U.S. Marketplace segment revenue increased $22.6 million, or 13%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 87% of total revenue for the three months ended June 30, 2025, compared to 82% of total revenue for the three months ended June 30, 2024. The increase was due primarily to a $26.8 million increase in marketplace revenue, as described above.
Current wording
U.S. Marketplace segment revenue increased $23.2 million, or 12%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 88% of total revenue for the three months ended September 30, 2025, compared to 81% of total revenue for the three months ended September 30, 2024. The increase was due primarily to the increase in marketplace revenue, as described above.
Previous wording
Digital Wholesale segment revenue, which is comprised of wholesale revenue and product revenue, decreased $11.5 million, or 49%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 5% of total revenue for the three months ended June 30, 2025, compared to 11% of total revenue for the three months ended June 30, 2024. The decrease in Digital Wholesale segment revenue was due to a $6.8 million decrease in wholesale revenue and a $4.6 million decrease in product revenue, as described above.
Current wording
Digital Wholesale segment revenue, which is comprised of wholesale revenue and product revenue, decreased $20.3 million, or 74%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 3% of total revenue for the three months ended September 30, 2025, compared to 12% of total revenue for the three months ended September 30, 2024. The decrease in Digital Wholesale segment revenue was due to decreases in wholesale revenue and product revenue, which were attributable to the wind-down of CarOffer, as described above.
Previous wording
Marketplace cost of revenue increased $2.3 million, or 8%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, and represented 6% of total revenue for both the six months ended June 30, 2025 and 2024. The increase was due primarily to a $1.6 million increase in amortization due to new capitalized website development projects that were put into service after June 30, 2024, and a $0.5 million increase in data costs due to higher overall usage.
Current wording
Marketplace cost of revenue increased $3.4 million, or 25%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 7% of total revenue for the three months ended September 30, 2025, compared to 6% of total revenue for the three months ended September 30, 2024. The increase was due primarily to a $1.4 million increase in amortization due to new capitalized website development projects that were put into service after September 30, 2024. The increase was also due in part to a $0.8 million increase in advertising service costs and a $0.7 million increase in data costs due to higher overall usage.
Previous wording
Wholesale cost of revenue decreased $4.3 million, or 34%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 4% of total revenue for the three months ended June 30, 2025, compared to 6% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a $3.9 million decrease in transportation expense, inspection expense, and data and other transaction fees as a result of lower Transaction volume. The decrease was also due in part to a $2.2 million decrease in amortization, due primarily to the end of the CG Buy Online pilot during the third quarter of 2024, as well as a decrease in amortization of capitalized website development due to a project that became fully amortized in 2024. The decrease was offset in part by a $2.7 million increase in impairment of capitalized website development costs. For further discussion of impairments in the CarOffer reporting unit, refer to Note 6 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Current wording
Wholesale cost of revenue decreased $17.0 million, or 84%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 1% of total revenue for the three months ended September 30, 2025, compared to 9% of total revenue for the three months ended September 30, 2024. The decrease was due primarily to a $9.8 million decrease in impairment of capitalized website development costs due to the end of the CG Buy Online pilot during the third quarter of 2024, a $5.2 million decrease in transportation expense, inspection expense, and data and other transaction fees as a result of lower Transaction volume due to the wind-down of CarOffer, and a $1.6 million decrease in amortization due primarily to the end of the CG Buy Online pilot. For further discussion of the CG Buy Online impairment, refer to Note 6 of the consolidated financial statements included within the Annual Report.
Previous wording
Product cost of revenue decreased $4.7 million, or 45%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 2% of total revenue for the three months ended June 30, 2025, compared to 5% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a decrease in expenses related to vehicles sold to dealers through IMCO transactions and related to vehicles sold to dealers acquired through arbitration as a result of lower Transaction volume.
Current wording
Product cost of revenue decreased $10.0 million, or 67%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and represented 2% of total revenue for the three months ended September 30, 2025, compared to 6% of total revenue for the three months ended September 30, 2024. The decrease was due primarily to a decrease in expenses related to vehicles sold to dealers through IMCO transactions and vehicles sold to dealers acquired through arbitration as a result of lower Transaction volume due to the wind-down of CarOffer.
Previous wording
Sales and marketing expense increased $2.0 million, or 2%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was due primarily to a $4.2 million increase in advertising and marketing expense for our brand awareness campaigns. The increase was offset in part by a $1.3 million decrease in salaries and employee-related expenses due primarily to changes in headcount. The increase was also offset in part by a $0.7 million decrease in rent expense due to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park.
Current wording
Sales and marketing expense increased $8.2 million, or 10%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was due primarily to a $6.0 million increase in advertising and marketing expense for our performance marketing vendors and our brand awareness campaigns. The increase was also due in part to a $1.4 million increase in one-time restructuring costs as a result of the wind-down of CarOffer. For further discussion of restructuring costs, refer to Note 7 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
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. 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. 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.
Current report — wording carried from elsewhere
We believe that measuring the volume of sessions in a time period, when considered in conjunction with the number of unique users in that time period, is an important indicator to us of consumer satisfaction and engagement with our marketplace, and we believe it provides useful information to our investors because the more satisfied and engaged consumers we have, the more valuable our service is to dealers.
Current report — wording carried from elsewhere
Adjusted EBITDA excludes restructuring expenses incurred by us during a reporting period, which may not be reflective of our operational performance during such period;
Current report — wording carried from elsewhere
Provision for (Benefit from) Income Taxes
Current report — wording carried from elsewhere
Overall revenue increased $7.3 million, or 3%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current report — wording carried from elsewhere
Provision for (Benefit from) Income Taxes
Current report — wording carried from elsewhere
Across the retail automotive industry, consumer purchasing activity is typically greatest in the first three quarters of each year, due in part to the introduction of new vehicle models from manufacturers and the seasonal nature of consumer spending.
Current report — wording carried from elsewhere
The U.S. Marketplace segment operating results have reflected the macroeconomic conditions of the automotive industry. However, to date, the U.S. Marketplace segment operating results have not been materially impacted by the general seasonality of the automotive industry. This could possibly change as our business and markets mature.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Provision for (benefit from) income taxes changed $27.9 million in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The change was due primarily to increased profitability and the recognition of an $8.0 million discrete deferred tax benefit in association with the goodwill and long-lived assets impairment charges related to the CarOffer reporting unit recognized during the six months ended June 30, 2025, compared to $31.5 million discrete deferred tax benefit in association with the goodwill and long-lived assets impairment charges related to the CarOffer reporting unit recognized during the six months ended June 30, 2024.