Operating cash flow exceeded net income by 1.92x in 2026Q2, with FCF margin at 37.5%, but stock-based compensation of $13.4M and aggressive buybacks ($27.7M in 2026Q2) warrant scrutiny.
CarGurus, Inc. (CARG) cash flow statement — 11-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 |
|---|
| Cash from Operations | 328.37M | 295.28M | 255.49M | 124.53M | 256.11M | 98.29M | 156.74M | 70.12M | 51.72M | 25.69M | 20M | 12.91M |
| Operating CF Margin % | - | 31.45% | 28.57% | 13.62% | 15.47% | 10.33% | 28.42% | 11.91% | 11.39% | 8.11% | 10.1% | 13.1% |
| Operating CF Growth % | 55.57% | 15.57% | 105.17% | -51.38% | 160.56% | -37.29% | 123.55% | 35.56% | 101.33% | 28.43% | 54.89% | - |
| Net Income | 184.01M | 155.9M | 20.97M | 22.05M | 78.95M | 110.37M | 77.55M | 42.15M | 65.17M | 13.2M | 6.5M | -1.64M |
| Depreciation & Amortization | 31.57M | 28.35M | 25.36M | 48.47M | 45.33M | 40.48M | 10.19M | 7.82M | 5.03M | 3.79M | 2.07M | 1.12M |
| Stock-Based Compensation | 51.52M | 50.44M | 62.27M | 63.74M | 54.78M | 53.52M | 45.09M | 34.3M | 20.79M | 5.03M | 322K | 1.04M |
| Deferred Taxes | 24.5M | 25.89M | -33.35M | -37.86M | -22.11M | 6.16M | 22.23M | -3.73M | -39.04M | -1.12M | 782K | -649K |
| Other Non-Cash Items | 42.44M | 51.38M | 161.13M | 12.24M | 13.29M | 16.71M | 14.71M | 8.82M | 5.18M | 1.25M | -313K | 258K |
| Working Capital Changes | -5.67M | -16.68M | 19.11M | 15.89M | 85.86M | -128.96M | -13.04M | -19.23M | -5.41M | 3.54M | 10.64M | 12.78M |
| Change in Receivables | -10.11M | 675K | -4.87M | 10.97M | 152.95M | -174.77M | 3.89M | -9.61M | -1.91M | -7.04M | -1.43M | -716K |
| Change in Inventory | 0 | 338K | -112K | 1.96M | 14.37M | -17.32M | 0 | 0 | -9.06M | 2.9M | 1.89M | 1.65M |
| Change in Payables | 1.28M | 3.56M | -4.66M | 2.08M | -35.05M | 35.4M | -15.08M | 4.27M | 9.35M | 6.24M | 5.81M | 6.1M |
| Cash from Investing | -27.23M | -29.32M | -72.97M | -61.56M | 72.73M | -68.15M | -16.89M | -22.26M | -80.28M | -12.6M | -51.99M | -7.62M |
| Capital Expenditures | -3.15M | -6.38M | -75.17M | -24.56M | -5.92M | -7.71M | -2.95M | -11.21M | -7.48M | -7.37M | -7.22M | -7.62M |
| CapEx % of Revenue | 0.32% | 0.68% | 8.4% | 2.69% | 0.36% | 0.81% | 0.54% | 1.9% | 1.65% | 2.33% | 3.64% | 7.72% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | -64.27M | -21.06M | -19.14M | 1.52M | 2.21M | 1.37M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -24.08M | -22.93M | -18.52M | -16.45M | -11.35M | -6.16M | -4.58M | -3.02M | -1.52M | -2.21M | -1.37M | -1.26M |
| Cash from Financing | -314.19M | -383.76M | -168.63M | -253.64M | -92.62M | 17.81M | -10.09M | -14.69M | -23.39M | 44.78M | 690K | 49.97M |
| Debt Issued (Net) | -66K | -81K | -75K | -70K | -68K | -14.29M | -37K | -30K | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | -282.01M | -351.46M | -141.26M | -208.52M | -14.43M | 663K | 0 | 0 | 0 | 47.69M | 0 | 49.87M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -282.11M | -351.93M | -146.18M | -208.52M | -14.43M | 0 | 0 | 0 | -25.89M | 0 | -60M | -18M |
| Other Financing | -32.11M | -32.23M | -27.3M | -45.05M | -78.12M | 31.43M | -10.05M | -14.66M | -23.39M | -2.91M | 690K | 93K |
| Net Change in Cash | -13.95M | -115.71M | 12.3M | -190.21M | 235.85M | 47.35M | 130.2M | 33.16M | -51.99M | 58.03M | -31.34M | 55.27M |
| Free Cash Flow | 325.22M | 288.9M | 180.32M | 83.32M | 238.84M | 84.42M | 149.21M | 55.89M | 44.24M | 18.32M | 12.79M | 5.3M |
| FCF Margin % | 32.72% | 30.77% | 20.16% | 9.11% | 14.43% | 8.87% | 27.06% | 9.49% | 9.74% | 5.78% | 6.45% | 5.38% |
| FCF Growth % | 29.28% | 60.21% | 116.43% | -65.12% | 182.93% | -43.43% | 166.97% | 26.32% | 141.53% | 43.27% | 141.25% | - |
| FCF per Share | 3.61 | 2.99 | 1.70 | 0.73 | 1.86 | 0.72 | 1.31 | 0.49 | 0.39 | 0.17 | 0.12 | 0.11 |
| FCF Conversion (FCF/Net Income) | 1.77x | 1.89x | 12.18x | 4.00x | 1.32x | 0.90x | 2.02x | 1.66x | 0.79x | 1.95x | 3.08x | -7.89x |
| Interest Paid | 560K | 590K | 772K | 566K | 64K | 0 | 0 | 10.91M | 19K | 29K | 26K | 17K |
| Taxes Paid | 9.1M | 19.76M | 40.78M | 74.78M | 61M | 27.52M | 2.83M | 300K | 2.31M | 4.39M | 2.04M | 316K |
Quick answers to the most common questions about buying CARG stock.
CarGurus, Inc. (CARG) generated $295.3M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
CarGurus, Inc. (CARG) generated $288.9M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
CarGurus, Inc. (CARG) spent $6.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, CarGurus, Inc. (CARG) spent $351.9M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Wholesale volatility and EPS uncertainty
Metrics are mathematically derived from official filings.
Cash Conversion Remains Robust
Operating cash flow exceeded net income by 1.92x in 2026Q2, per recent financial statements, indicating high earnings quality despite non-cash charges and working capital swings.
The OCF/NI ratio has consistently stayed above 1.5 over the past year, with 2026Q2 at 1.92, suggesting that reported earnings are well-backed by cash generation. The gap is partly explained by non-cash items like D&A and SBC, but the positive working capital contribution in 2026Q2 indicates efficient cash collection. This strong conversion supports the reliability of the company's profitability.
Free Cash Flow Margin Expansion
FCF margin improved to 37.5% in 2026Q2 from 27.9% a year earlier, as reported in the cash flow statement, reflecting strong operating leverage and disciplined capex.
FCF has grown from $65.3M in 2025Q2 to $94.0M in 2026Q2, a 44% increase, while revenue grew only 7.2% year-over-year. This indicates that the company is converting incremental revenue into cash at a high rate, likely due to the high-margin marketplace segment. The FCF margin now exceeds the peer average, positioning CarGurus as a cash generation leader.
Capital-Light Model Preserves Cash
Capex intensity fell to 0.2% of revenue in 2026Q2, down from 0.7% in 2025Q2, based on reported figures, underscoring the asset-light nature of the business.
Capital expenditures have been minimal, averaging under $2M per quarter recently, which is consistent with a software-driven marketplace. This low capex requirement means that nearly all operating cash flow converts to FCF, providing ample flexibility for capital returns. The decline from the 2024 levels, when capex spiked to 15.8% of revenue, suggests a return to a normalized, efficient investment phase.
Working Capital Volatility Reflects Wholesale
Working capital changes swung from -$26.0M in 2025Q3 to +$14.3M in 2026Q2, as per cash flow data, indicating timing effects likely tied to wholesale operations.
The quarterly working capital swings are significant, with negative contributions in several quarters, which may be due to the timing of wholesale vehicle purchases and sales. However, the positive contribution in 2026Q2 suggests improved management of receivables and payables. Investors should monitor these fluctuations as they can obscure underlying cash generation trends.
Aggressive Buybacks Offset by No Dividends
Share repurchases totaled $27.7M in 2026Q2, with no dividends paid, according to the cash flow statement, reflecting a strategy of returning capital via buybacks.
The company has consistently repurchased shares, with notable amounts in 2026Q1 ($174.4M) and 2025Q1 ($182.8M), indicating a strong commitment to returning capital to shareholders. The absence of dividends suggests a preference for buybacks, which can be more tax-efficient and flexible. This deployment strategy is supported by the fortress balance sheet, with minimal debt, allowing for continued repurchases without straining liquidity.
Cumulative Cash Outpaces Earnings
Over the last ten quarters, cumulative operating cash flow of $715.2M exceeded cumulative net income of $217.4M, per reported data, highlighting a persistent positive divergence.
The cumulative gap of nearly $500M indicates that earnings understate cash generation, largely due to non-cash charges like SBC and D&A. This divergence suggests that the company's economic profitability is stronger than GAAP net income implies, which may support a higher valuation multiple. However, the gap also reflects the impact of one-time charges in 2024Q2, which were non-cash in nature.
What Could Invalidate the Base Case
The cash flow statement may obscure the true cost of stock-based compensation and wholesale volatility, as SBC of $13.4M in 2026Q2 is added back to operating cash flow, potentially overstating cash generation.
While SBC is a non-cash expense, it represents a real economic cost to shareholders through dilution. The company's heavy use of buybacks may be offsetting this dilution, but the timing and magnitude of repurchases are discretionary. Additionally, the wholesale segment's working capital swings could mask underlying cash flow quality, as seen in the volatile WC changes. Investors should normalize for SBC and scrutinize wholesale-related cash flows to assess sustainable cash generation.