CAR Group Shares Surge Nearly 10% After Carsales Owner Posts 14% Profit Jump And Lifts FY26 Dividend

MELBOURNE — Shares in CAR Group Ltd jumped nearly 10% Monday after the company behind Australia's largest online car marketplace, carsales.com.au, reported a double-digit rise in annual profit and lifted its dividend, capping a strong finish to the 2026 financial year.

The stock closed at $29.70, up $2.68, or 9.92%, on the Australian Securities Exchange, adding more than $900 million to the company's market capitalization in a single session. The rally came after CAR Group reported reported net profit after tax of $314 million for the year ended June 30, up 14% from the prior year, alongside proforma revenue of $1.253 billion, a 12% increase in constant currency terms.

Adjusted net profit after tax, the company's preferred earnings measure, reached $407 million, up 11% on a constant currency basis and 8% in Australian dollar terms after accounting for foreign exchange headwinds. The company said it maintained an EBITDA margin of 56% for the year despite continued investment in artificial intelligence infrastructure and expansion into new product categories, and reported 100% conversion of EBITDA to cash.

CAR Group also raised its final dividend to 43.5 cents per share, up from 41.5 cents a year earlier, extending a track record of dividend growth that has made the stock a consistent presence in Australian income portfolios.

Chief Executive William Elliott, who took over the role in August 2025 after Cameron McIntyre stepped down following 18 years in charge, said the results reflected the company's push to expand beyond its roots as a classifieds business. "We continued to move beyond traditional classifieds, building connected automotive ecosystems that support customers across more of the vehicle ownership journey," Elliott told investors.

Elliott pointed to product launches across the group's international markets as a driver of the year's performance. In Australia, the company recently rolled out Nexgate, a platform combining dealer workflow tools and data services under a single brand, alongside upgrades to search and personalization features aimed at improving the customer experience. "In Australia, we recently launched Nexgate, bringing together a broader suite of dealer workflow and data solutions," he said.

The company's four geographic segments all posted growth in constant currency terms. Australia, anchored by the flagship carsales.com.au marketplace, generated revenue of $519 million, up 7%, with adjusted EBITDA rising 8% as the business benefited from a mix of pricing gains, higher volumes and expanded product depth. North America, where CAR Group operates the Trader Interactive platform, delivered $327 million in revenue, a 12% increase, with earnings growing at the same pace.

Latin America was the standout performer, with the Webmotors platform in Brazil posting the fastest earnings growth in the group, up 23% in constant currency terms. Asia, which includes the Encar marketplace in South Korea, saw earnings climb 14% for the year, helped by the continued rollout of the company's Guarantee 2.0 vehicle inspection and warranty program and growth in its Encar Home Services and Dealer Direct offerings. "In South Korea, the scaling of Guarantee 2.0 is creating a more seamless experience across the vehicle transaction journey," Elliott said.

Looking ahead, CAR Group issued guidance for the 2027 financial year, forecasting revenue growth of between 11% and 14% and earnings growth of between 10% and 13%, both on a constant currency basis. The company flagged that foreign exchange remains a headwind, citing a roughly 2% negative impact on FY26 results tied largely to the U.S. dollar and South Korean won, with a similar drag expected in the year ahead. Executives also indicated that margins in North America and Asia could contract slightly in FY27 as the company continues to invest in its marine listings expansion in the United States and the scaling of its Dealer Direct service in South Korea.

The results build on guidance CAR Group issued at the half-year mark, when the company pointed to proforma revenue growth of 12% to 14% and adjusted profit growth of 9% to 13%, both in constant currency terms, based on half-year revenue of roughly $626 million. Monday's full-year numbers landed within or ahead of that range, reinforcing investor confidence in the company's ability to sustain growth across its international portfolio.

CAR Group, formerly known as Carsales.com Ltd, listed on the Australian Securities Exchange in September 2009 and has since grown from a single domestic classifieds site into a global operator of vehicle marketplaces spanning Australia, North America, South Korea, Brazil and Chile. The company holds a dominant position in the Australian market, where it has said its flagship platform commands roughly nine times the total time spent by users compared with its nearest competitor.

The stock's advance Monday outpaced the broader market, with the S&P/ASX 200 Communication Services index, which tracks CAR Group alongside other media and internet companies, posting a more modest gain for the session. The move followed a period of steady but comparatively muted trading for the stock in the weeks leading up to the results, including a 3.54% rise on August 4 and a more modest 0.85% gain on August 6, as investors awaited the full-year figures.

Analysts have generally maintained bullish coverage of the stock heading into the results, with earlier commentary noting the company's consistent earnings growth and its strategy of expanding into adjacent markets and services beyond core vehicle listings. Monday's share price reaction suggests investors viewed the FY26 results, along with the accompanying FY27 outlook, as validation of that broader strategy.

CAR Group's next major investor update is expected to come with its half-year results early in 2027, when the company is likely to provide a progress check against the guidance issued Monday.