CarGurus (NASDAQ:CARG) used a fireside chat at the 28th Annual Needham Growth Conference to highlight an accelerated product cadence, a broader dealer-focused software strategy, and an expanding role for artificial intelligence across its platform. CEO Jason Trevisan, speaking with Needham’s Chris Pierce, said 2025 was defined by faster innovation and a push beyond the company’s legacy marketplace model into data and software tools that support more of the dealer workflow.
Leadership background and 2025 focus
Trevisan said he recently marked his 10-year anniversary at the company, joining in 2015 as CFO after working as an investor in high-growth, middle-market technology businesses. He described a broad CFO remit that included international, corporate development, partnerships, and talent initiatives before he transitioned to CEO about five years ago.
New products, AI, and the shift away from wholesale transactions
On the dealer side, Trevisan highlighted the launch of PriceVantage, described as CarGurus’ first standalone software product in the inventory category. He said the tool helps dealers understand how to price inventory by anchoring decisions to expected retail outcomes rather than wholesale book values. Trevisan argued that CarGurus has an advantage in retail signal visibility, citing “billions of vehicle detail pages” viewed each year and what he described as the largest and most engaged audience, enabling predictive intelligence about how the retail market may react over time.
He also pointed to growing adoption of Dealer Data Insights, which he described as a product that helps dealers with sourcing, merchandising, lead conversion, and broader market intelligence. In marketing, Trevisan cited continued innovation in the company’s core category, including products such as New Car Exposure.
On the consumer side, he described two AI-driven initiatives:
- Discover, an AI-based virtual assistant aimed at helping shoppers who don’t yet know what type of car they want, recommending makes, models, and trims and then directing users to relevant inventory.
- Dealership Mode, an in-app experience designed to help consumers navigate the in-dealership process, which Trevisan said dealers are embracing because it can improve conversion by educating shoppers and helping them evaluate financing options and alternative vehicles on the lot.
Trevisan also discussed a strategic change related to CarOffer, a prior acquisition intended to enter wholesale. He said CarGurus wound down the transaction portion of the wholesale business, characterizing it as lower margin and more operationally complex. While the company still believes dealers need to source inventory well, he said CarGurus is choosing to participate via technology, analytics, and AI-driven predictive intelligence rather than running wholesale transactions.
2026 priorities and macro backdrop
For 2026, Trevisan said the company expects continued expansion from marketing into inventory, conversion, and data/market intelligence, positioning CarGurus as not only a marketplace but also “a software and a data business for dealers.” He called Dealer Data Insights a “Trojan horse” due to daily dealer engagement with reports and recommendations, and he said 2026 will be the first full year for PriceVantage, which he described as having strong early adoption and usage.
On the macro environment, Trevisan said some normalization has occurred since COVID-era disruptions, but “few things in auto have been normal since COVID.” He cited affordability as a key theme, saying used car prices are higher than a year ago, inventory is higher, and time-on-lot has increased. He added that even if interest rates decline modestly, high vehicle prices remain an issue. He also referenced uncertainty around tariffs and trade policy and their potential ripple effects from new car pricing into used cars.
Digital retailing: mostly hybrid, with more online demand
Addressing consumer behavior, Trevisan said only “low to mid-single digits” of car purchases are completed fully virtually. He said more than 90% of transactions still involve in-person interaction because consumers want to see and test drive vehicles and, despite pain points, often gain comfort from dealing with people at the dealership.
However, he said most shoppers—more than 80% of those with an in-person component—want to do more online. He described this as CarGurus’ “sweet spot” and pointed to Digital Deal, which he said is now used by about half of CarGurus dealers. Trevisan said Digital Deal enables consumers to get fully financed, receive trade-in value, put down a deposit, purchase F&I products, and set appointments—reducing time spent in the dealership.
Monetization, TAM expansion, and capital allocation
Trevisan emphasized that CarGurus is “not just a lead gen marketplace business anymore,” while also defending the value of its core offering. He said dealer surveys typically show CarGurus as the highest lead provider, the highest lead quality, and the best ROI, which he said supports retention. He added that dealers using CarGurus’ data, insights, and predictions “are discernibly performing better on our marketplace,” which he said supports upsell and cross-sell, including features reserved for higher-tier packages.
On market sizing, Trevisan estimated U.S. dealer spending on marketplace lead generation at about $3.5 billion, describing CarGurus’ core as roughly an $800 million business with about a quarter of that market. He said expanding into software and data products across inventory, conversion, and intelligence opens “another about $4 billion of spend,” effectively doubling the company’s total addressable market with dealers.
He also provided metrics on dealership coverage, saying CarGurus typically lists about 4.0 million to 4.5 million vehicles on its marketplace at a given time, which he estimated as “north of 80%” of U.S. inventory, and currently about 50/50 new and used. In the U.S., he cited 42,000 to 45,000 rooftops in total and said CarGurus has about 26,000 paying rooftops, with over 30,000 including free dealers. He said the average dealer pays about $2,500 per month (or $7,500 per quarter), with smaller dealers paying under $1,000 per month and the largest paying “six figures a month.”
On margins and spending, Trevisan said CarGurus has grown margin for several years and is at the high end of its long-term marketplace margin target of 30% to 35%. He said the company expects “a slight step down in margin” in 2026 due to increased investment intended to maintain a higher growth rate, describing the trade-off as supporting long-term sustainable growth and deeper dealer relationships.
In capital allocation, Trevisan said the company will balance investment needs, potential M&A, and shareholder returns. He said CarGurus has remained active in evaluating acquisitions, particularly across dealer workflow pillars such as inventory (including sourcing, stocking, and appraising), conversion, and market/data intelligence. On repurchases, he said the company has used buybacks “really effectively,” and noted that at the end of Q3 it had roughly $55 million remaining on its approved share repurchase program. He added that CarGurus intends to be “aggressive” when it believes the stock is undervalued.
About CarGurus (NASDAQ:CARG)
CarGurus, Inc operates an online automotive marketplace designed to connect buyers and sellers of new and used vehicles. Through its proprietary search engine and data-driven pricing tools, the platform enables consumers to compare listings, assess fair market values and locate local dealers offering competitive deals. CarGurus also provides detailed vehicle history reports, dealer reviews and financing options to streamline the car-shopping process for both private parties and franchised dealerships.
The company’s core product offerings include Instant Market Value (IMV), which leverages pricing algorithms to help buyers identify over- or under-priced vehicles, as well as dealer subscription services that grant automotive retailers access to lead generation tools, targeted advertising and dynamic pricing insights.
