CarGurus, Inc.

Previous wording

The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025. We have presented the financial results of CarOffer as discontinued operations in the Unaudited Condensed Consolidated Financial Statements. No assets or liabilities were classified as discontinued operations as of March 31, 2026 or December 31, 2025. No results of operations were classified as discontinued operations for the three months ended March 31, 2026. The Unaudited Condensed Consolidated Income Statement for the three months ended March 31, 2025, was derived from the Unaudited Condensed Consolidated Income Statement of CarGurus, Inc. as of that date, adjusted for the reclassification of discontinued operations. The Unaudited Condensed Consolidated Statement of Comprehensive Income, Unaudited Condensed Consolidated Statement of Stockholders’ Equity, and the Unaudited Condensed Consolidated Statement of Cash Flows as of March 31, 2025, related to discontinued operations have not been separately reclassified and are included within each for the period referenced.

Current wording

The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025. We have presented the financial results of CarOffer as discontinued operations in the Unaudited Condensed Consolidated Financial Statements. No assets or liabilities were classified as discontinued operations as of June 30, 2026 or December 31, 2025. No results of operations were classified as discontinued operations for the three and six months ended June 30, 2026. The Unaudited Condensed Consolidated Income Statement for the three and six months ended June 30, 2025, was derived from the Unaudited Condensed Consolidated Income Statement of CarGurus, Inc. as of that date, adjusted for the reclassification of discontinued operations. The Unaudited Condensed Consolidated Statement of Comprehensive Income, Unaudited Condensed Consolidated Statement of Stockholders’ Equity, and the Unaudited Condensed Consolidated Statement of Cash Flows as of June 30, 2025, related to discontinued operations have not been separately reclassified and are included within each for the period referenced.

Previous wording

Reportable Segments, Revenue, and Financial Overview

Current wording

Revenue and Financial Overview

Previous wording

We derive our revenue from (i) dealer subscription fees, (ii) advertising from auto manufacturers and other brand advertisers, and (iii) partnerships with financing services companies.

Current wording

We derive our revenue primarily from (i) dealer subscription fees, (ii) advertising from auto manufacturers and other brand advertisers, and (iii) partnerships with financing services companies.

Previous wording

For the three months ended March 31, 2026, we generated net income from continuing operations of $32.2 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $80.2 million, compared to net income from continuing operations of $42.1 million and Adjusted EBITDA from continuing operations of $68.7 million for the three months ended March 31, 2025.

Current wording

For the three months ended June 30, 2026, we generated revenue of $251.0 million, a 13% increase from $222.0 million of revenue for the three months ended June 30, 2025. For the three months ended June 30, 2026, we generated net income from continuing operations of $49.2 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $84.7 million, compared to net income from continuing operations of $49.0 million and adjusted EBITDA from continuing operations of $79.4 million for the three months ended June 30, 2025.

Previous wording

other income, net, which consists primarily of interest income earned on our cash, cash equivalents, and foreign exchange gains and losses; and

Current wording

other income, net, which consists primarily of interest income earned on our cash and cash equivalents, and foreign exchange gains and losses; and

Previous wording

For the three months ended March 31, 2026 and 2025, 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.

Current wording

For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, 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.

Previous wording

We derive our revenue from (i) dealer subscription fees, (ii) advertising from auto manufacturers and other brand advertisers, and (iii) partnerships with financing services companies.

Current wording

We derive our revenue primarily from (i) dealer subscription fees, (ii) advertising from auto manufacturers and other brand advertisers, and (iii) partnerships with financing services companies.

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.

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; and allocated overhead expenses. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase from quarter to quarter as we continue to scale our business.

Previous wording

During the three months ended March 31, 2026, we identified a triggering event requiring an impairment test for the 121 First Street lease , which we intend to sublease, primarily due to lower anticipated rental rates. We performed an updated fair value analysis of the lease, and subsequently recognized non-cash impairment charges of $14.7 million related to operating lease right-of-use asset and $4.5 million related to leasehold improvements and furniture and fixtures, which were recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

During the three months ended March 31, 2026, we identified a triggering event requiring an impairment test for the 121 First Street lease, which we intend to sublease, primarily due to lower anticipated rental rates. We performed an updated fair value analysis of the lease and subsequently recognized non-cash impairment charges. For the six months ended June 30, 2026, we recognized non-cash impairment charges of $14.7 million related to operating lease right-of-use asset and $4.5 million related to leasehold improvements and furniture and fixtures, which were recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. For the three months ended June 30, 2026, no impairment charges related to the 121 First Street lease were recognized. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

Other income, net consists primarily of interest income earned on our cash and cash equivalents, as well as foreign exchange gains and losses.

Current wording

Other income, net consists primarily of interest income earned on our cash and cash equivalents and foreign exchange gains and losses.

Previous wording

The provision for 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 March 31, 2026 and 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position.

Current wording

The provision for 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 June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position.

Previous wording

For the three months ended March 31, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements were as follows:

Current wording

For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements were as follows:

Previous wording

For the three months ended March 31, 2026 and 2025, 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 June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, 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

Revenue increased $31.3 million, or 15%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. 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 driven by subscription tier upgrades, broader adoption of add-on products, and like-for-like price increases for existing dealers.

Current wording

Revenue increased $29.0 million, or 13%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. 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 driven by broader adoption of add-on products, subscription tier upgrades, and like-for-like price increases for existing dealers.

Previous wording

Sales and marketing expense increased $13.8 million, or 17%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due primarily to a $7.3 million increase in advertising and marketing expense for our performance marketing vendors and brand awareness campaigns, a $3.1 million increase in personnel expenses due to an increase in headcount and merit increases, a $1.1 million increase in software and consulting expense, and a $1.0 million increase in commissions expense due to revenue growth.

Current wording

Sales and marketing expense increased $15.0 million, or 18%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was due primarily to a $10.2 million increase in marketing and advertising expense for our performance marketing vendors and brand awareness campaigns and a $4.0 million increase in employee-related expenses due primarily to headcount and merit increases.

Previous wording

Total other income, net decreased $1.7 million, or 62%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The $1.4 million decrease in interest income was due primarily to lower average cash balances and lower interest rates year over year.

Current wording

Total other income, net decreased $2.1 million, or 80%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The $1.2 million decrease in interest income was due primarily to lower average cash balances.

Previous wording

Cost of revenue increased $4.6 million, or 32%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and represented 8% of total revenue for the three months ended March 31, 2026, compared to 7% of total revenue for the three months ended March 31, 2025. The increase was due primarily to a $1.5 million increase in amortization due to new capitalized website development projects, a $1.3 million increase in data center and hosting costs due to higher overall usage, and a $0.7 million increase in spend related to provisioning advertising campaigns on external websites.

Current wording

Cost of revenue increased $8.8 million, or 29%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, and represented 8% of total revenue for the six months ended June 30, 2026, compared to 7% of total revenue for the six months ended June 30, 2025. The increase was due primarily to a $3.7 million increase in amortization due primarily to new capitalized website development projects, a $2.5 million increase in data center and hosting costs driven primarily by dealer subscription revenue growth, and a $1.3 million increase in spend related to provisioning advertising campaigns on external websites.

Previous wording

Product, technology, and development expense increased $2.6 million, or 8%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due primarily to a $1.6 million increase in consulting expense and a $1.5 million increase in personnel expenses due to an increase in headcount and merit increases.

Current wording

Product, technology, and development expense increased $7.1 million, or 10%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to a $3.7 million increase in employee-related expenses due primarily to headcount and merit increases, a $2.8 million increase in professional services expense primarily driven by contractor and consulting expense, and a $1.5 million increase in software expense.

Previous wording

General and administrative expense increased $1.7 million, or 7%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due primarily to a $1.3 million increase in professional service expenses primarily driven by legal and consulting expenses, a $0.7 million increase in stock based compensation expense due to new grants partially offset by completed vesting of existing awards and forfeitures from employee departures, and a $1.1 million increase in general expenses. The increase was offset in part by a $1.5 million decrease in indirect tax expense.

Current wording

General and administrative expense increased $4.6 million, or 9%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to a $3.0 million increase in employee-related expenses due to headcount and merit increases and an increase in new stock-based compensation grants, partially offset by completed vesting of existing awards and forfeitures from employee departures. The increase was also due in part to a $1.9 million increase in professional services expense.

Previous wording

Impairment expense increased $19.2 million in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due primarily to the impairment of the 121 First Street lease during the three months ended March 31, 2026. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

Impairment expense increased $19.2 million in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to the impairment of the 121 First Street lease during the six months ended June 30, 2026. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

Provision for income taxes changed $2.5 million in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was due primarily to decreased profitability resulting from the recording of the lease impairment expense.

Current wording

Provision for income taxes decreased $2.3 million in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease was due primarily to increased permanent benefits and additional tax credits expected.

Previous wording

As of March 31, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents of $72.0 million and $190.5 million, respectively. As of March 31, 2026 and December 31, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.6 million.

Current wording

As of June 30, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents of $122.1 million and $190.5 million, respectively. As of June 30, 2026 and December 31, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.6 million.

Previous wording

The cash flows related to discontinued operations for the three months ended March 31, 2025, have not been separated. Accordingly, the Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025, and the following discussions include the results of continuing and discontinued operations. For additional information on discontinued operations, including significant non-cash items and capital expenditures of discontinued operations, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

The cash flows related to discontinued operations for the six months ended June 30, 2025, have not been separated. Accordingly, the Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and the following discussions include the results of continuing and discontinued operations. For additional information on discontinued operations, including significant non-cash items and capital expenditures of discontinued operations, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

During the three months ended March 31, 2026 and 2025, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Current wording

During the six months ended June 30, 2026 and 2025, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Previous wording

Our operations have been financed primarily from operating activities. During the three months ended March 31, 2026 and 2025, we generated cash from operating activities of $69.8 million and $67.9 million, respectively.

Current wording

Our operations have been financed primarily from operating activities. During the six months ended June 30, 2026 and 2025, we generated cash from operating activities of $164.4 million and $141.0 million, respectively.

Previous wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Credit Agreement. 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. The borrowing capacity under the Credit Agreement may be increased in accordance with the terms and subject to the adjustments as set forth in the Credit Agreement. Specifically, the borrowing capacity may be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Credit Agreement) if certain criteria are met and subject to certain restrictions. Any such increase requires lender approval. Proceeds of any borrowings may be used for general corporate purposes. The 2022 Revolver is scheduled to mature on September 26, 2027. As of March 31, 2026 and 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.

Current wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Credit Agreement. 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. The borrowing capacity under the Credit Agreement may be increased in accordance with the terms and subject to the adjustments as set forth in the Credit Agreement. Specifically, the borrowing capacity may be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Credit Agreement) if certain criteria are met and subject to certain restrictions. Any such increase requires lender approval. Proceeds of any borrowings may be used for general corporate purposes. The 2022 Revolver is scheduled to mature on September 26, 2027.

Previous wording

We believe that our existing sources of liquidity, including access to the 2022 Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. 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 (as defined below); and our investments in international markets. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report.

Current wording

We believe that our existing sources of liquidity, including access to the Amended Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. 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 (as defined below); and our investments in international markets. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report.

Previous wording

In February 2026 we announced that our Board of Directors authorized a program pursuant to which we may purchase up to $250.0 million of our Class A common stock, or the 2026 Share Repurchase Program. 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. 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. All repurchased shares under the 2026 Share Repurchase Program will be retired. We have funded share repurchases and expect to continue to fund share repurchases under the 2026 Share Repurchase Program through cash on hand and cash generated from operations. During the three months ended March 31, 2026, we repurchased and retired 5,341,712 shares of our Class A common stock for $175.0 million, exclusive of commissions and excise tax, at an average cost of $32.76 per share, under the 2026 Share Repurchase Program. As of March 31, 2026, we had remaining authorization to purchase up to $75.0 million of our Class A common stock under the 2026 Share Repurchase Program.

Current wording

In February 2026 we announced that our Board of Directors authorized a program pursuant to which we may purchase up to $250.0 million of our Class A common stock, or the 2026 Share Repurchase Program. 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. 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. All repurchased shares under the 2026 Share Repurchase Program will be retired. We have funded share repurchases and expect to continue to fund share repurchases under the 2026 Share Repurchase Program through cash on hand and cash generated from operations.

Previous wording

In November 2024 we announced that our Board of Directors authorized a share repurchase program, or the Original 2025 Share Repurchase Program, pursuant to which we could purchase up to $200.0 million of our Class A common stock. 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. The 2025 Share Repurchase Program was completed in November 2025. All repurchased shares under the 2025 Share Repurchase Program were retired. During the three months ended March 31, 2025, we repurchased and retired 5,919,435 shares of our Class A common stock for $184.2 million, exclusive of commissions and excise tax, at an average cost of $31.12 per share under the 2025 Share Repurchase Program.

Current wording

In November 2024 we announced that our Board of Directors authorized a share repurchase program, or the Original 2025 Share Repurchase Program, pursuant to which we could purchase up to $200.0 million of our Class A common stock. 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. The 2025 Share Repurchase Program was completed in November 2025. All repurchased shares under the 2025 Share Repurchase Program were retired.

Previous wording

To the extent that our operating income, existing cash, cash equivalents, and our borrowing capacity under the 2022 Revolver are insufficient to fund our future activities, we may need to raise additional funds through a public or private equity or debt financing. Additional funds may not be available on terms favorable to us, or at all. 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. If 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.”in Part I, Item 1A in our Annual Report.

Current wording

To the extent that our operating income, existing cash, cash equivalents, and our borrowing capacity under the Amended Revolver are insufficient to fund our future activities, we may need to raise additional funds through a public or private equity or debt financing. Additional funds may not be available on terms favorable to us, or at all. 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. If 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.”in Part I, Item 1A in our Annual Report.

Previous wording

Net cash provided by operating activities of $69.8 million during the three months ended March 31, 2026, was due primarily to consolidated net income of $32.2 million, adjusted for $19.7 million of impairment primarily related to the 121 First Street lease, $13.3 million of stock-based compensation expense, $7.2 million of depreciation and amortization expense, and $4.7 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to a $4.7 million decrease in prepaid expenses, prepaid income taxes, and other current assets, and was offset in part by a $7.1 million decrease in accrued expenses, accrued income taxes, and other current liabilities and a $4.4 million increase in deferred contract costs primarily due to commission capitalization.

Current wording

Net cash provided by operating activities of $164.4 million during the six months ended June 30, 2026, was due primarily to consolidated net income of $81.4 million, adjusted for $26.6 million of stock-based compensation expense for equity awards to employees, $20.2 million of impairment primarily related to the 121 First Street lease, $15.1 million of depreciation and amortization expense, and $9.7 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to a $13.0 million decrease in prepaid expenses, prepaid income taxes, and other current assets driven primarily by a decrease in prepaid income taxes and a $6.5 million increase in accounts payable due to timing of vendor payments, and was offset in part by a $9.7 million increase in deferred contract costs.

Previous wording

Net cash provided by operating activities of $67.9 million during the three months ended March 31, 2025, was due primarily to consolidated net income of $39.0 million, adjusted for $12.9 million of stock-based compensation expense, $6.6 million of depreciation and amortization expense, and $3.8 million of amortization of deferred contract costs. Net cash provided by operating activities was also attributable in part to a $4.6 million increase in lease obligations primarily due to interest accretion, right-of-use asset amortization, and tenant improvement allowance reimbursement, offset in part by rent payments. Net cash provided by operating activities was also due in part to a $6.8 million decrease in prepaid expenses, prepaid income taxes, and other current assets and a $4.1 million increase in accounts payable due to increased marketing spend as a result of seasonality, as well as the timing of payments. Net cash provided by operating activities was offset in part by a $5.6 million decrease in accrued expenses, accrued income taxes, and other current liabilities due primarily to a decrease in accrued bonuses following the payout of the fiscal year 2024 bonuses during the quarter, and a $4.7 million increase in deferred contract costs primarily due to commission capitalization.

Current wording

Net cash provided by operating activities of $141.0 million during the six months ended June 30, 2025, was due primarily to consolidated net income of $61.4 million, adjusted for $32.6 million of impairments related to the prior year impairment of the CarOffer reporting unit, $25.9 million of stock-based compensation expense for equity awards to employees, $13.3 million of deferred taxes, $13.2 million of depreciation and amortization expense, and $7.8 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to an $8.9 million decrease in prepaid expenses, prepaid income taxes, and other current assets, a $6.7 million increase in accounts payable, and a $6.0 million increase in lease obligations, and was offset in part by a $9.4 million increase in deferred contract costs.

Previous wording

Net cash used in investing activities of $6.7 million during the three months ended March 31, 2026, was due primarily to $6.3 million in capitalized website development costs due to continued investment in our product offerings.

Current wording

Net cash used in investing activities of $13.6 million during the six months ended June 30, 2026, was due primarily to $12.6 million in capitalized website development costs due to continued investment in our product offerings.

Previous wording

Net cash used in investing activities of $7.6 million during the three months ended March 31, 2025, was due to $5.4 million in capitalization of website development costs related to continued investments on our product offerings and $2.2 million in purchases of property and equipment related to internal-use software as well as our headquarters at 1001 Boylston Street.

Current wording

Net cash used in investing activities of $15.5 million during the six months ended June 30, 2025, was due to $11.7 million in capitalized website development costs related to continued investments in our product offerings and $3.8 million in purchases of property and equipment, primarily related to additions in capitalized internal-use software.

Previous wording

Net cash used in financing activities of $181.0 million during the three months ended March 31, 2026, was due primarily to $174.4 million in repurchases of our Class A common stock under the 2026 Share Repurchase Program and $6.6 million in payments of withholding taxes on net share settlements of restricted stock units.

Current wording

Net cash used in financing activities of $218.4 million during the six months ended June 30, 2026, was due primarily to $202.1 million in repurchases of our Class A common stock under the 2026 Share Repurchase Program and $13.6 million in payments of withholding taxes on net share settlements of restricted stock units.

Previous wording

Net cash used in financing activities of $191.5 million during the three months ended March 31, 2025, was due primarily to $182.8 million in repurchases of our Class A common stock under the 2025 Share Repurchase Program and $9.0 million in payment of withholding taxes on net share settlements of restricted stock units.

Current wording

Net cash used in financing activities of $200.5 million during the six months ended June 30, 2025, was due primarily to $184.6 million in repurchases of our Class A common stock under the Original 2025 Share Repurchase Program and $15.3 million in payment of withholding taxes on net share settlements of restricted stock units.

Previous wording

Critical estimates relied upon in preparing the Unaudited Condensed 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. 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.

Current wording

Critical estimates relied upon in preparing the Unaudited Condensed Consolidated Financial Statements include the capitalization and useful lives of product, technology, and development costs for website development, internal-use software, and hosting arrangements. Accordingly, we consider this to be our critical accounting estimate and believe that of our significant accounting policies, this involves the greatest degree of judgment and complexity.