CAR Group (ASX:CAR) reported strong first-half FY2026 results and reaffirmed its full-year constant-currency guidance, with management highlighting continued audience growth across regions, expanding AI-driven product initiatives, and disciplined investment to support growth while maintaining robust margins.
First-half results and guidance reaffirmed
CEO and Managing Director William Elliott said the company delivered 13% revenue growth and 12% EBITDA growth on a constant-currency basis in the first half, with EBITDA margins holding at 54%. Adjusted net profit after tax increased 12% in constant currency, which Elliott attributed to “the high quality of our earnings” and a disciplined approach to scaling.
- Pro forma revenue growth of 12% to 14% (constant currency)
- Pro forma EBITDA growth of 10% to 13% (constant currency)
- Adjusted NPAT growth of 9% to 13% (constant currency)
On foreign exchange, Elliott noted a “headwind from an FX perspective” across multiple currencies. If current rates hold, he said the impact would be a 3% to 4% headwind in the second half and about a 2% difference between constant-currency growth and Australian dollar growth for FY2026.
Operating highlights and segment performance
Management emphasized strong marketplace engagement and supply fundamentals, citing 2.4 million vehicles online and growth in dealer customers. Elliott said unique audience, sessions, and leads were all up versus the prior corresponding period, with growth led by Australia, Brazil, and South Korea, and “a notable improvement in the U.S. market” showing positive momentum year over year.
By region, Elliott said all segments delivered revenue and earnings growth in the half, led by Latin America at 23% revenue growth. He said North America posted 13% revenue growth, Asia grew 17%, and Australia delivered 8%.
Australia: The Australian segment produced 8% growth in both revenue and EBITDA. Elliott described the automotive market as robust, with consumer intent skewed to used cars at 59%. He said used-car prices had stabilized at 39% above pre-COVID levels, supporting healthy dealer gross margins. Within the segment, Elliott said dealer revenue rose 10% driven mainly by lead volumes and “depth product uptake,” private revenue rose 5% driven by Instant Offer growth, media increased 10% on advertiser and product diversification, and data and research increased 6% through new customer acquisition in RedBook. In Q&A, Elliott said about 4% of the Australian dealer revenue growth came from leads.
North America (Trader Interactive): Management described momentum across multiple verticals, with revenue up 13% and EBITDA up 11%. Elliott said RV registrations had stabilized and were growing again, powersports returned to growth, and truck registrations rose 4%. He also pointed to contributions from marine, recent acquisitions, and private value-based pricing. Trader Interactive CEO David McMinn said yield was a key driver and noted the company’s media business and in-house agency also contributed. Elliott said the company expects some incremental benefit in the second half from pricing timing, but added it would also invest in marketing during seasonal peaks.
Latin America (Webmotors): Elliott said Latin America delivered revenue growth of 23% and EBITDA growth of 29% in constant currency. He cited a strong Brazilian auto market with 8.7 million vehicles transacted, up 13%, despite elevated interest rates. He attributed growth to national expansion, premium product performance, the Wallet loyalty program, finance revenue up 20% due to improved credit access and loan processes, and a strong first half for the TrueCar business.
Asia (Encar/NCAR): Asia reported revenue growth of 17% and EBITDA growth of 13%. Elliott said growth was driven by Guarantee inspections, which now account for 60% of new listings, supported by expanded inspection centers and AI-driven efficiency gains. He also highlighted “NCAR Home transactions up 55%” and said Dealer Direct returned to growth, supported by MeetGo.
Margins, cash flow, and dividend
Group EBITDA margins remained 54% while the company continued to invest for growth. Elliott said Australia’s margins were 65%, Latin America’s rose to 38% on operating leverage, North America declined modestly to 59% due to investment in marine expansion, and Asia declined slightly to 44% due to opening new Guarantee branches and scaling Dealer Direct.
CAR Group converted 95% of EBITDA to operating cash, and leverage stood at 1.8x net debt to EBITDA. Capex held steady at 10% of revenue. Elliott said AI is delivering “meaningful cost efficiency” in software development, allowing faster feature delivery with less engineering resource. He added the company is reinvesting those savings into accelerating its AI roadmap, while noting there is “optionality” over time in how to deploy future efficiencies.
The company declared an interim dividend of AUD 0.425 per share, up 10% on the prior corresponding period, representing an 82% payout ratio. Elliott said the effective tax rate was 20.5%, marginally higher due to the expiry of Trader Interactive tax losses, and non-controlling interests increased as Webmotors’ profit growth flowed to minority shareholders.
AI strategy and ecosystem investments
Elliott positioned AI as central to both customer experience improvements and operational efficiency. He announced a new global AI hub, CG Lab, based in Brazil, which will build “shared core agentic AI capabilities” and deploy them across marketplaces. Elliott said CG Lab will focus on end-to-end buyer and seller agents and integrating experiences into generative platforms. He added that CG Lab “won’t result in incremental investment for the group,” with AI investment funded within current spending levels through efficiencies in areas such as software development and customer service.
In Q&A, Elliott said it is difficult to isolate total AI investment but noted capitalized software development spend was AUD 60 million for the half (AUD 120 million annualized), with a growing proportion directed to AI, and additional spend “probably close to double that” within the P&L. He also said CG Lab would start with about 30 people and grow over time, with costs apportioned across the group “most likely” based on revenue.
Management also discussed product-level AI rollouts across regions, including conversational voice-based search released to 100% of carsales iOS users in Australia (with Android to follow), a fully AI-driven search experience on Webmotors’ home pages in Brazil, and smart inquiry qualification across platforms. Elliott said NCAR Home’s AI home agent supported a 55% increase in completed transactions, while Webmotors’ lead nurturing drove four times more buyer engagement for dealers.
Product initiatives and competitive positioning
Executives highlighted several initiatives aimed at strengthening dealer and consumer value propositions:
- Australia: C2C Payments processed AUD 268 million since launch, and Elliott said users of the product had a 2.5x higher Net Promoter Score. Autogate was modernized with AI-powered insights, call transcriptions, and assistants for the live auction platform. Management also cited strong performance from Instant Offer and the launch of Trade-in, as well as media revenue from new OEM entrants up 49%.
- North America: Trader Interactive rolled out tiered dealer packages (Core, Pro, Ultimate). Elliott said the repackaging produced a 6% to 7% uplift in dealer yield. Direct media revenue rose 49%, and Dinara expanded its customer base by 300% while landing new accounts including BRP and Winnebago. Management also cited marine momentum, with Boatmart leads per dealer up 110% and site visits up 30%, and SSI revenue growth accelerating from 10% to 18%.
- Brazil: Webmotors’ national expansion drove traffic, which Elliott said was 4.4 times the nearest competitor. Wallet reached more than 10,600 dealers and Wallet revenue rose 51%. Depth products Fairal and Acelerador increased 151% and 61%, respectively, while OEM media revenue rose 19%.
- Korea: Elliott said inspection center footprint expanded to 66 branches, with plans to exceed 90. Encar CEO SB Kim said the newer Guarantee Plus Plus product is in early stages, with costs about 10% to 20% higher than Guarantee 1.0 and pricing roughly 30% to 40% higher, which management expects to be more profitable.
On the potential impact of generative AI on traffic and leads-based pricing models, Elliott said the company remains confident in its ability to drive the “vast majority” of traffic directly through improving consumer experience and investing in brands. He added that if lead quality improves and conversion rates rise, the company can adjust pricing accordingly. Elliott also said CAR Group’s competitive moat is supported by brand leadership, data at scale, and deep integrations across the vehicle ecosystem, including recent acquisitions of dealership ERP systems in Brazil and South Korea and a specialized CRM business in the U.S.
About CAR Group (ASX:CAR)
CAR Group Limited operates online automotive, motorcycle, and marine classifieds business in Australia, Brazil, South Korea, Malaysia, Indonesia, Thailand, Chile, China, the United States, and Mexico. The company operates through Online Advertising Services; Data, Research and Services; Carsales Investments; North America; Latin America; and Asia segments. The Online Advertising Services segment offers classified advertising that allows private and dealer customers to advertise automotive and non-automotive goods and services for sale across the carsales network; products, including subscriptions, lead fees, listing fees, and priority placement services; and display advertising services, such as placing advertisements on carsales network websites for corporate customers comprising automotive manufacturers and finance companies.
