CarGurus, Inc.

1. Organization and Business Description

CarGurus, Inc. (the “Company” or “CarGurus”) is a multinational automotive platform helping consumers and dealers confidently buy and sell vehicles. Founded in 2006 with a mission to bring more trust and transparency to car shopping, CarGurus is an automotive shopping site in the U.S. CarGurus’ selection, trusted automotive insights, and data-driven products and solutions support each shopper’s journey –from online research and shopping to in-dealership decisions – to empower them at every step. CarGurus provides dealers a personalized, predictive intelligence platform with software solutions that helps them run their businesses more efficiently and profitably at all stages of inventory acquisition and pricing, marketing, and conversion to sale.

The Company operates under the CarGurus brand in the U.S., Canada, and the U.K, with the U.S. representing its primary market. In addition, the Company operates the Autolist online marketplace in the U.S. and the PistonHeads online marketplace in the U.K. as independent brands.

The Company has subsidiaries in the U.S., Canada, Ireland, and the U.K.

CarOffer, LLC (“CarOffer”) completed its wind-down and, for accounting purposes, was considered abandoned as of December 31, 2025. For further information, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements (as defined below).

Effective as of the fourth quarter of 2025 the Company revised its segment reporting fromtwo reportable segments toone reportable segment, in connection with the wind-down of CarOffer and as a result of the Chief Operating Decision Maker (“CODM”) managing the business, making operating decisions, and evaluating operating performance on a consolidated basis. For further segment reporting and geographic information, refer to Note 13 of the Unaudited Condensed Consolidated Financial Statements.

The Company is subject to a number of risks and uncertainties common to companies in its and similar industries and stages of development including but not limited to rapid technological changes, competition from substitute products and services from larger companies, management of international activities, protection of proprietary rights, litigation, and dependence on key individuals.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited (the “Unaudited Condensed Consolidated Financial Statements”). The Unaudited Condensed Consolidated Financial Statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The Unaudited Condensed Consolidated Financial Statements have also been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial statements for interim periods. These interim period results are not necessarily indicative of the results to be expected for any other interim period or the full year.

The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 19, 2026 (the “Annual Report”).

The Company has 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 September 30, 2026 or December 31, 2025. No results of operations were classified as discontinued operations for the three and nine months ended September 30, 2026. The Unaudited Condensed Consolidated Income Statement for the three and nine months ended September 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 September 30, 2025, related to discontinued operations have not been separately reclassified and are included within each for the period referenced. Unless indicated otherwise, the information in these notes to the Unaudited Condensed Consolidated Financial Statements relates to the Company’s continuing operations and does not include the results of discontinued operations. For further information on discontinued operations, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements.

Principles of Consolidation

The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Subsequent Event Considerations

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the Unaudited Condensed Consolidated Financial Statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, other than those described in Note 14 of the Unaudited Condensed Consolidated Financial Statements.

Use of Estimates

The preparation of the Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Changes in estimates are recognized in the period in which they become known.

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, the Company considers this to be its critical accounting estimate, and believes that of the Company’s significant accounting policies, this involves the greatest degree of judgment and complexity.

Concentration of Credit Risk

The Company has no significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, and trade accounts receivable.

The Company maintains its cash and cash equivalents, principally with accredited financial institutions of high credit standing. Although the Company deposits its cash and cash equivalents with multiple financial institutions, its deposits with each such financial institution exceed governmental insured limits.

The Company routinely assesses the creditworthiness of its customers and does not require collateral. The Company generally has not experienced material losses related to receivables from individual customers or groups of customers as the losses were dispersed across a large number of customers. Due to this factor, no additional credit risk beyond amounts provided for collection losses was believed by management to be probable in the Company’s trade accounts receivable.

As of September 30, 2026 and December 31, 2025, a payment processor for several hundred dealer accounts represented 10.1% and 10.8%, respectively, of net trade accounts receivable. The related trade accounts receivable balance included unbilled and billed receivables. The concentration was driven by the timing of payments pursuant to the agreement with the payment processor. The remainder of the trade accounts receivable was dispersed among more than 1,000 customers. Therefore, the Company does not believe there is significant credit risk with respect to trade accounts receivable.

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, no customer accounted for more than 10% of total revenue.

As of September 30, 2026 and December 31, 2025, $15.7 million and $16.8 million, respectively, was included in accounts receivable, net representing unbilled accounts receivable relating primarily to both dealers and advertising customers invoiced in the period subsequent to services being rendered and revenue recognition adjustments for Company offered discounts given to dealers in accordance with ASC Topic 606, Revenue from Contracts with Customers(“ASC 606”).

Significant Accounting Policies

The Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements. As of September 30, 2026, there have been no material changes in the Company’s significant accounting policies, which are detailed in the Annual Report.

Recent Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company on or prior to the specified effective date. Unless otherwise disclosed below, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. As of September 30, 2026, there are no new accounting pronouncements that the Company is considering adopting, other than those described below.

In September 2025 the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”), which clarifies and modernizes the guidance to reflect the evolution of software development from a sequential to an agile development method. ASU 2025-06 removes all references to project development stages to reflect this change in software development and requires capitalization of software costs to begin when management has authorized and committed to funding the project and it is probable the project will be completed and used to perform the intended function. ASU 2025-06 does not change what internal-use software costs can be capitalized or when such capitalization ceases. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. ASU 2025-06 may be adopted either prospectively, using a modified transition approach, or retrospectively. The Company is currently evaluating the impact of ASU 2025-06 on its future consolidated financial statements and related disclosures.

In November 2024 the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to provide more detailed expense information and requires additional disaggregated disclosures in the notes to the financial statements for categories of expenses that are included on the face of the income statement. ASU 2024-03 is effective for the fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 may be applied either prospectively to financial statements issued for periods after the effective date of ASU 2024-03 or retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures.

3. Discontinued Operations

On August 6, 2025, the Company’s Board of Directors (the “Board”) determined, after considering all reasonably available options and a broader strategic reassessment, that it was in the best interests of the Company’s stockholders to wind down CarOffer. The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025. The assets, liabilities, and results of operations of CarOffer, excluding certain assets that have been repurposed for corporate use, have been presented as discontinued operations in accordance with ASC 205-20, Discontinued Operations, as the disposition represents a strategic shift that has a major effect on the Company’s operations and financial results. CarOffer’s operations were previously reported within the Digital Wholesale segment.

For the three and nine months ended September 30, 2025, major classes of discontinued operations included in the Unaudited Condensed Consolidated Income Statements were as follows:

(1)

Diluted earnings per share from discontinued operations is calculated using the net income from continuing operations to determine the denominator, in accordance with applicable guidance.

The Company has elected to present its Unaudited Condensed Consolidated Statement of Cash Flows on a consolidated basis, inclusive of discontinued operations activity in the table below. For thenine months ended September 30, 2025, the following table presents significant non-cash items and capital expenditures of the discontinued operations:

(1)

During the nine months ended September 30, 2025, the Company recognized impairments related to CarOffer of $0.3 million, $0.8 million, $4.8 million, $6.6 million, and $19.6 million for capitalized hosting arrangements, capitalized internal-use software, capitalized website development costs, intangible assets, and goodwill, respectively.

As a result of the wind-down, the Company incurred total expenditures of $13.3 million, of which all cash expenditures were incurred during the second half of 2025 and were all paid as of December 31, 2025. Of this amount, the Company incurred and paid $5.4 million of one-time restructuring costs, including severance and other employee-related costs and contract termination charges, attributable to discontinued operations.

4. Revenue Recognition

The Company provides disaggregation of revenue by geographic region. Revenue by geographic region is disaggregated by (i) U.S. and (ii) International regions as disclosed in Note 13 of the Unaudited Condensed Consolidated Financial Statements. The Company believes these categories best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of the relevant quarter end.

For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to the performance obligations that were unsatisfied as of September 30, 2026, was approximately$52.6 million, the majority of which the Company expects to recognize over the next 12 months.

For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under ASC 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of September 30, 2026. For performance obligations not satisfied as of September 30, 2026, and to which this expedient applies, the nature of the performance obligations, the variable consideration, and any consideration from contracts with customers not included in the transaction price is consistent with performance obligations satisfied as of September 30, 2026.

For the three months ended September 30, 2026 and 2025, revenue recognized from amounts included in deferred revenue at the beginning of the period was$25.0 million and$23.3 million, respectively. For thenine months ended September 30, 2026 and 2025, revenue recognized from amounts included in deferred revenue at the beginning of the period was$23.6 million and$21.5 million, respectively.

5. Fair Value of Financial Instruments

As of September 30, 2026 and December 31, 2025, assets measured at fair value on a recurring basis consisted of the following:

6. Property and Equipment, Net

As of September 30, 2026 and December 31, 2025, property and equipment, net consisted of the following:

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, depreciation and amortization expense, excluding amortization of intangible assets, amortization of capitalized hosting arrangements, disposals, write-offs, and impairments, was$8.5 million,$6.1 million,$23.1 million, and$17.1 million, respectively.

During the nine months ended September 30, 2026, the Company impaired $1.0 million of capitalized website development costs, inclusive of $0.5 million recognized in cost of revenue and $0.5 million recognized in operating expense, in the Unaudited Condensed Consolidated Income Statements. These impairments were related to certain developed technology that the Company decided to cease investment.

During the nine months ended September 30, 2026, the Company impaired $4.5 million of leasehold improvements and furniture and fixtures. These impairments were related to the impairment of the 121 First Street lease. For further discussion of the lease impairment, refer to Note 9 of these Unaudited Condensed Consolidated Financial Statements.

7. Accrued Expenses, Accrued Income Taxes, and Other Current Liabilities

As of September 30, 2026 and December 31, 2025, accrued expenses, accrued income taxes, and other current liabilities consisted of the following:

(1)

Accrued payroll, accrued income taxes, and other accrued expenses and other current liabilities as of December 31, 2025 have been reclassified to conform to current-period presentation.

8. Debt

As of September 30, 2026 and December 31, 2025, the Company hadno long-term debt outstanding.

Revolving Credit Facility

On September 26, 2022, the Company 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 Original Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time (the “Original Credit Agreement”). The Original Credit Agreement consisted of a revolving credit facility (the “2022 Revolver”), which allowed the Company to borrow up to $400.0 million, $50.0 million of which could be comprised of a letter of credit sub-facility (the “2022 Revolver Sub-facility”). The borrowing capacity under the Original Credit Agreement could be increased in accordance with the terms and subject to the adjustments as set forth in the Original Credit Agreement. Specifically, the borrowing capacity could be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Original Credit Agreement) if certain criteria were met and subject to certain restrictions. Any such increase required lender approval. Proceeds of any borrowings could be used for general corporate purposes.

On August 6, 2026, the Company entered into the First Amendment (the “Amendment”) to the Original Credit Agreement (as amended by the Amendment, the “Amended Credit Agreement”), by and among the Company, PNC Bank, National Association, as administrative agent and collateral agent, and an L/C Issuer (as defined in the Amended Credit Agreement), and the other lenders, L/C Issuers and parties thereto from time to time.

The Amendment, among other things, (i) reduced the aggregate revolving commitments under the Original Credit Agreement from $400.0 million to $200.0 million (the “Amended Revolver”), (ii) extended the maturity date of the Amended Revolver from September 26, 2027 to August 6, 2031, (iii) increased the cap of the Cash-Capped Incremental Facility (as defined in the Amended Credit Agreement) to the greater of $380.0 million and 100% of the trailing Four Quarter Consolidated EBITDA (as defined in the Amended Credit Agreement), and (iv) added a new incurrence-based negative covenant that prohibits the Company from incurring certain indebtedness unless, after giving pro forma effect thereto, the Consolidated Total Gross Leverage Ratio (as defined in the Amended Credit Agreement) does not exceed 6.25:1.00. Except as expressly modified by the Amendment, the material terms of the Original Credit Agreement remain unchanged and continue in full force and effect.

The applicable interest rate is, at the Company’s option, based on a number of different benchmark rates and applicable spreads, based on the ratio of the outstanding principal amount of the Company’s secured indebtedness to the trailing Four Quarter Consolidated EBITDA (as defined in and determined under the Amended Credit Agreement, the “Consolidated Secured Net Leverage Ratio”). The Amended Credit Agreement also requires the Company to pay a commitment fee to the lenders with respect to the unutilized revolving commitments at a rate ranging from 0.125% to 0.175% per annum based on the Consolidated Secured Net Leverage Ratio, as determined on a quarterly basis.

The Amended Revolver is secured by a first priority lien on substantially all tangible and intangible property of the Company, as well as any future guarantors, and pledges of the equity of certain wholly-owned subsidiaries, in each case subject to certain exceptions, limitations, and exclusions from the collateral. The Amended Credit Agreement includes customary events of default and requires the Company to comply with customary affirmative and negative covenants, including a financial covenant requiring that the Company not exceed certain Consolidated Secured Net Leverage Ratio ranges at the end of each fiscal quarter. The Company was in compliance with all covenants as of September 30, 2026.

As of September 30, 2026, there wereno borrowings and$9.4 million in letters of credit outstanding under the Amended Revolver associated with the Company’s leases, which reduced the borrowing capacity under the Amended Revolver to$190.6 million. As of December 31, 2025, there wereno borrowings and$9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with the Company’s leases, which reduced the borrowing capacity under the 2022 Revolver to$390.6 million.

During the three months ended September 30, 2026, the Company capitalized an additional $0.7 million of deferred financing costs related to the Amended Credit Agreement. These costs, as well as the remaining unamortized deferred financing costs related to the Original Credit Agreement, are being amortized over the term of the Amended Revolver, which matures on August 6, 2031. As of September 30, 2026 and December 31, 2025, deferred financing costs were$1.1 million and$0.9 million, respectively, recognized within other non-current assets in the Unaudited Condensed Consolidated Balance Sheets.

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, amortization expense associated with deferred financing costs was immaterial.

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, commitment fees under the Amended Revolver and the 2022 Revolver were immaterial.

9. Commitments and Contingencies

Contractual Obligations and Commitments

As of September 30, 2026, all of the Company’s property and equipment, inclusive of capitalized website development and capitalized internal-use software, and capitalized hosting arrangements, have been purchased with cash with the exception of unpaid amounts as disclosed in the Unaudited Condensed Consolidated Statements of Cash Flows.

Leases

As of September 30, 2026, there were no material changes in the Company’s leases from those disclosed in the Annual Report, other than those disclosed below.

121 First Street Lease Impairment

During the three months ended March 31, 2026, the Company identified a triggering event requiring an impairment test for the 121 First Street lease, which it intends to sublease, primarily due to lower anticipated rental recovery rates. The Company assessed the asset group for recoverability, and determined the asset group was not recoverable. Therefore, the Company estimated the fair value of the asset group to compare to the carrying value for impairment.

The Company estimated fair value using the discounted cash flow method, with key inputs including the selected market rental rates based upon similar office spaces, the discount rate, and other estimated costs. The fair value measurement was categorized as Level 3 within the fair value hierarchy as there were significant unobservable inputs utilized in the valuation technique. As the estimated fair value of the asset group was less than its carrying value, the Company recognized an impairment of the 121 First Street lease to reduce the carrying value to fair value.

For the nine months ended September 30, 2026, the Company 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 September 30, 2026, no impairment charges related to the 121 First Street lease were recognized.

Letters of Credit

As of September 30, 2026,$9.4 million in letters of credit associated with the Company’s leases were included under the Amended Revolver. As of December 31, 2025,$9.4 million in letters of credit associated with the Company’s leases were included under the 2022 Revolver Sub-facility.

Tax Contingencies

The Company is subject to taxation in the U.S. and certain other jurisdictions in which it operates, which could include corporate income tax, sales and use tax, value added tax, excise tax, gross receipts tax, and property tax. State, local, and foreign jurisdictions have differing rules and regulations governing corporate income, sales, use, value added, and other taxes. These rules and regulations are complex and subject to varying interpretations that may change over time due to new court interpretations and newly enacted rules and regulations. As a result, the Company could face the possibility of tax assessments and audits, and its liability for these taxes and associated penalties could exceed its original estimates, which could be material.

Legal Matters

From time to time, the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. The Company recognizes a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. The Company is not presently subject to any pending or threatened litigation that it believes, if determined adversely to the Company, individually or taken together, would reasonably be expected to have a material adverse effect on its business or financial results. However, litigation is inherently unpredictable and the future outcome of legal proceedings and other contingencies may be unexpected or differ from the Company’s estimated liabilities, which could have a material adverse effect on the Company’s future financial results.

10. Stock-based Compensation and Common Stock Share Repurchases

Stock-based Compensation Expense

Forthe three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, stock-based compensation expense, consisting primarily of restricted stock units, was recognized in the Unaudited Condensed Consolidated Income Statements as follows:

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, consolidated stock-based compensation expense excluded$1.3 million,$1.7 million,$4.2 million, and$5.2 million, respectively, of capitalized website development costs, capitalized internal-use software costs, and capitalized hosting arrangements.

Common Stock Share Repurchase Programs

In February 2026 the Company announced that the Board authorized a program pursuant to which it may purchase up to $250.0 million of its Class A common stock (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. The 2026 Share Repurchase Program does not obligate the Company 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 the Board at any time without prior notice. All repurchased shares under the 2026 Share Repurchase Program will be retired. The Companyhas funded share repurchases and expects to continue to fund share repurchases under the 2026 Share Repurchase Program through cash on hand and cash generated from operations.

In November 2024 the Company announced that the Board authorized a program pursuant to which it may purchase up to $200.0 millionof its Class A common stock (the “Original 2025 Share Repurchase Program”). In August 2025 the Company announced that the Board 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 its Class A common stock, and extended the expiration of the Original 2025 Share Repurchase Program from December 31, 2025 to July 31, 2026 (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 September 30, 2026, the Company repurchased and retired 592,502 shares of its Class A common stock for$20.8 million, exclusive of commissions and excise tax, at an average cost of$35.03 per share, under the 2026 Share Repurchase Program. During the nine months ended September 30, 2026, the Company repurchased and retired 6,881,185 shares of its Class A common stock for$225.0 million, exclusive of commissions and excise tax, at an average cost of$32.70 per share, under the 2026 Share Repurchase Program. As of September 30, 2026, the Company had remaining authorization to purchase up to$25.0 million of its Class A common stock under the 2026 Share Repurchase Program.

During the three months ended September 30, 2025, the Company repurchased and retired 3,233,649 shares of its Class A common stock for$110.7 million, exclusive of commissions and excise tax, at an average cost of$34.23 per share, under the 2025 Share Repurchase Program. During the nine months ended September 30, 2025, the Company repurchased and retired 9,164,088 shares of its Class A common stock for$295.2 million, exclusive of commissions and excise tax, at an average cost of$32.22 per share, under the 2025 Share Repurchase Program. The 2025 Share Repurchase Program was completed in November 2025.

11. Earnings Per Share

The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled toone vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible intoone share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s fourth amended and restated certificate of incorporation, including upon either the death or voluntary termination of the Company’s Executive Chair. The Company allocates undistributed earnings attributable to common stock between the common stock classes on aone‑to‑one basis when computing net income per share. As a result, basic and diluted net income per share of Class A common stock and per share of Class B common stock are equivalent.

During the three months ended September 30, 2026, no shares of Class B common stock were converted into Class A common stock. During thenine months ended September 30, 2026,452,637 shares of Class B common stock were converted into Class A common stock. During thethree months ended September 30, 2025, no shares of Class B common stock were converted into Class A common stock. During thenine months ended September 30, 2025 and year ended December 31, 2025,770,495 shares of Class B common stock were converted into Class A common stock.

Consolidated basic net income per share (“Basic EPS”) is computed by dividing consolidated net income by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year plus the weighted-average of any additional shares issued and outstanding during the reporting period, less the weighted-average of any shares repurchased during the period.

Consolidated diluted net income per share (“Diluted EPS”) gives effect to all potentially dilutive securities. Diluted EPS is computed by dividing consolidated net income by the weighted-average number of common shares outstanding during the reporting period using (i) the number of shares of common stock used in the Basic EPS calculation as indicated above, and (ii) if dilutive, the incremental weighted-average common stock that the Company would issue upon the exercise of stock options and the vesting of restricted stock units. The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method.

Continuing basic and diluted net income per share and discontinued basic and diluted net income per share are calculated using the same methodology as described above, as applicable. Diluted earnings per share from discontinued operations is calculated using net income from continuing operations to determine the denominator, in accordance with applicable guidance.

For thethree months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, a reconciliation of the numerator and denominator used in the calculation of continuing, discontinued, and consolidated basic and diluted net income (loss) per share was as follows:

For thethree months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, potentially dilutive common stock equivalents that have been excluded from the calculation of diluted weighted-average shares outstanding as their effect would have been anti-dilutive was as follows:

12. Income Taxes

During the three months ended September 30, 2026 and 2025 and during the nine months ended September 30, 2026 and 2025, the Company recognized an income tax provision of$15.8 million,$14.1 million,$39.0 million, and$39.6 million, respectively, representing an effective tax rate of 23.1%,21.3%,22.5%, and 21.7%, respectively.

The effective tax rates for the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, were greater than the statutory tax rate of 21%, primarily due to state and local income taxes, partially offset by federal and state research and development tax credits and windfall tax benefits on share-based compensation.

13. Segment and Geographic Information

Beginning in the fourth quarter of 2025, in connection with the wind-down of CarOffer, the Company’schief executive officer, who acts as the CODM, began to manage the business, make operating decisions, and evaluate operating performance based on consolidated results. Accordingly, the change led to revisions to the nature and substance of information regularly provided to and used by the CODM, and served to align the Company’s reported results with its ongoing growth strategy. As a result, beginning in the fourth quarter of 2025 the Company reports its financial results as asingle reportable segment. Accordingly, the Company has recast prior year segment disclosures for comparability.

The Unaudited Condensed Consolidated Income Statements represent the Company’s segment presentation and are presented in the same manner as the CODM reviews the Company’s operating results in assessing performance and allocating resources. In evaluating performance, the CODM reviews revenue and income from operations. Income from operations is also used in the Company’s annual budgeting and monthly forecasting process and is compared against budgeted and forecasted amounts to evaluate performance and make decisions for the allocation of capital and other resources.

The Company’s significant segment expenses consist of cost of revenue and sales and marketing expense. Significant segment expenses are presented in the Unaudited Condensed Consolidated Income Statements. The Company’s other segment items consist of product, technology, and development expense, general and administrative expense, impairment expense, and depreciation and amortization expense, which have been disclosed separately on the Unaudited Condensed Consolidated Income Statements to meet disclosure requirements.

Segment assets are reported on the Unaudited Condensed Consolidated Balance Sheets as total assets.

For thethree months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, revenue by geographical region was as follows:

14. Subsequent Event

2027 Share Repurchase Program

On November 5, 2026, the Company announced that the Board authorized a share repurchase program (the “2027 Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares of its Class A common stock for an aggregate purchase price not to exceed $250.0 million. Share repurchases under the 2027 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. The 2027 Share Repurchase Program does not obligate the Company to repurchase any minimum dollar amount or number of shares. The 2027 Share Repurchase Program has an effective date of November 4, 2026, and an expiration date of December 31, 2027, and prior to its expiration may be modified, suspended, or discontinued by the Board at any time without prior notice. All repurchased shares under the 2027 Share Repurchase Program will be retired. The Company expects to fund share repurchases under the 2027 Share Repurchase Program through cash on hand and cash generated from operations.

Item 2. Management’s Discussion and Analysis of