CarGurus is a Cambridge, Massachusetts-based online auto marketplace that connects car shoppers with dealers through the CarGurus platform, the Autotrader platform acquired in the CarGurus acquisition, and the broader portfolio of online automotive marketplaces, and the company is in the middle of a fiscal second quarter that demonstrates the kind of lead-generation pivot the online auto marketplace cohort has been waiting for. Q2 2026 revenue of $251.0 million was 13.0 percent above the prior-year quarter's $222.0 million, net income from continuing operations of $49.2 million was 0.4 percent above the prior-year quarter, and the H1 2026 revenue of $494.5 million was 13.9 percent above the prior-year period's $434.2 million. The combination of the revenue growth and the net income stability is the cleanest single-sentence read on what the online auto marketplace business model is producing, and the combination is the source of the operating profile the equity offers the buy-side.
The numbers tell the story with the kind of operational detail the online auto marketplace equity has been waiting for. The Q2 2026 revenue growth was driven by the dealer subscription revenue growth and the lead-generation revenue growth, with the lead-generation revenue showing the kind of platform-expansion the company has been positioning for. The H1 2026 revenue growth was consistent with the Q2 2026 revenue growth, and the H1 2026 growth rate reflects the platform-expansion execution.
The cost of revenue of $19.9 million in the quarter was 26.8 percent above the prior-year quarter's $15.7 million, and the cost of revenue growth was above the revenue growth in the quarter, reflecting the platform-expansion execution. The sales and marketing expense of $97.6 million in the quarter was 18.2 percent above the prior-year quarter's $82.6 million, and the sales and marketing expense growth was above the revenue growth in the quarter.
The principal question for the next four quarters resolve is whether the company can sustain the revenue growth and the net income stability through the online auto marketplace cycle and the broader U.S. auto market cycle. A second-half print that continues the 12 to 14 percent revenue growth and the net income stability would confirm the operating profile is sustainable. A second-half print that shows revenue growth decelerating or net income declining would force the market to reprice the equity for a more modest terminal value.