CarGurus, Inc. Earnings Per Share Disclosure
12. 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 to one 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 into one 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 a 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 years ended December 31, 2025 and 2024, 770,495 shares and 1,012,428 shares of Class B common stock were converted into Class A common stock, respectively. During the year ended December 31, 2023, no 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 adjusted for net loss attributable to redeemable noncontrolling interest, deemed dividends on redemption of noncontrolling interest, and changes in the redemption value of redeemable noncontrolling interest, if applicable, 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 adjusted for net loss attributable to redeemable noncontrolling interest, deemed dividends on redemption of noncontrolling interest, and changes in the redemption value of redeemable noncontrolling interest, if applicable and dilutive, 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 RSUs. 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 the years ended December 31, 2025, 2024, and 2023, 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:
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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(dollars in thousands) |
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Numerator |
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Net income from continuing operations attributable to common stockholders — basic and diluted |
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$ |
196,742 |
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$ |
128,737 |
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$ |
92,435 |
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Net loss from discontinued operations |
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$ |
(40,839 |
) |
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$ |
(107,765 |
) |
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$ |
(70,382 |
) |
Net loss attributable to redeemable noncontrolling interest |
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|
— |
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|
|
— |
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|
(14,889 |
) |
Deemed dividend on redemption of noncontrolling interest |
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— |
|
|
|
— |
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|
5,838 |
|
Net loss from discontinued operations attributable to common stockholders — basic |
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$ |
(40,839 |
) |
|
$ |
(107,765 |
) |
|
$ |
(61,331 |
) |
Net loss attributable to redeemable noncontrolling interest |
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— |
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|
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— |
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(14,889 |
) |
Deemed dividend on redemption of noncontrolling interest |
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— |
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|
|
— |
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|
5,838 |
|
Net loss from discontinued operations attributable to common |
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$ |
(40,839 |
) |
|
$ |
(107,765 |
) |
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$ |
(70,382 |
) |
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Consolidated net income |
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$ |
155,903 |
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$ |
20,972 |
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$ |
22,053 |
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Net loss attributable to redeemable noncontrolling interest |
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— |
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— |
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(14,889 |
) |
Deemed dividend on redemption of noncontrolling interest |
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— |
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|
|
— |
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|
5,838 |
|
Net income attributable to common stockholders — basic |
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$ |
155,903 |
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$ |
20,972 |
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|
$ |
31,104 |
|
Net loss attributable to redeemable noncontrolling interest |
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— |
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— |
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(14,889 |
) |
Deemed dividend on redemption of noncontrolling interest |
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— |
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|
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— |
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|
5,838 |
|
Net income attributable to common stockholders - diluted |
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$ |
155,903 |
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$ |
20,972 |
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$ |
22,053 |
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Denominator |
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Weighted-average number of shares of common stock used |
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98,837,997 |
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104,535,572 |
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113,240,139 |
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Dilutive effect of share equivalents resulting from stock |
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15,812 |
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134,370 |
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225,691 |
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Dilutive effect of share equivalents resulting from |
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1,556,488 |
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1,593,944 |
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723,004 |
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Weighted-average number of shares of common stock |
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100,410,297 |
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106,263,886 |
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114,188,834 |
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Net income (loss) per share attributable to common |
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Basic |
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Continuing operations |
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$ |
1.99 |
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$ |
1.23 |
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$ |
0.82 |
|
Discontinued operations |
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$ |
(0.41 |
) |
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$ |
(1.03 |
) |
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$ |
(0.54 |
) |
Consolidated |
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$ |
1.58 |
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$ |
0.20 |
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$ |
0.27 |
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Diluted |
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Continuing operations |
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$ |
1.96 |
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$ |
1.21 |
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$ |
0.81 |
|
Discontinued operations |
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$ |
(0.41 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.62 |
) |
Consolidated |
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$ |
1.55 |
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$ |
0.20 |
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$ |
0.19 |
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For the years ended December 31, 2025, 2024, and 2023, 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:
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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Stock options outstanding |
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278,345 |
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503,505 |
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551,196 |
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Restricted stock units outstanding |
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62,129 |
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656,589 |
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2,333,489 |
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For the years ended December 31, 2025, 2024, and 2023, there were no contingently issuable shares as a result of the 2023 CarOffer Transaction.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.