Cars24 Hits EBITDA Profitability Ahead of IPO

Cars24 Reports Significant Financial Milestone Ahead of Offering

-bound used car marketplace Cars24 has announced achieving adjusted profitability in the fourth quarter (Q4) of the fiscal year 2025-26 (FY26). The company stated it recorded an adjusted EBITDA of ₹20 Crore during this period, a crucial development as it gears up for a potential Initial Public Offering (IPO). This financial achievement underscores the startup’s progress in optimizing its operations and driving towards sustainable profitability.

The company’s international operations also demonstrated positive financial momentum. Cars24 reported that its UAE operations delivered “structurally positive” EBITDA margins, while its Australian arm reached “operating profitability” within the same Q4 FY26 timeframe. These results from key international markets complement the domestic performance, indicating a broader trend of financial improvement across Cars24’s global footprint.

Growth and Profitability Drivers

Cars24’s cofounder and CEO, Vikram Chopra, highlighted the company’s revenue growth, stating, “Adjusted net revenue grew 37% () to ₹760 Cr (in H2 FY26), ahead of our ₹750 Cr guidance, through a GST rate change in India and real disruption in the UAE. Inside that half sits Q4 FY26, the quarter we became a profitable company for the first time, with ₹20 Cr of adjusted EBITDA.” This substantial year-over-year revenue increase demonstrates Cars24’s expanding market presence and effective revenue generation strategies.

The company attributes its adjusted EBITDA profitability to several key factors. These include significant efficiencies driven by Artificial Intelligence (AI) integration, robust growth across its core used car business segments, and the performance of its lending vertical. Furthermore, the company cited the benefits of network effects within its marketplace and a consistently low cost of user acquisition as vital contributors to its improved financial standing.

Full-Year Financial Performance and Net Loss Reduction

For the full fiscal year FY26, Cars24 reported a notable reduction in its EBITDA loss, which narrowed by 35.7% to ₹357 Crore, compared to ₹555 Crore in the preceding fiscal year. This substantial decrease in EBITDA loss signifies a significant step towards overall profitability for the company.

In its detailed half-yearly performance update, Cars24 also disclosed that its adjusted net revenue, net of Goods and Services Tax (GST) and Value Added Tax (VAT), saw a 27.3% rise to ₹1,411 Crore in FY26, up from ₹1,108 Crore in FY25. Concurrently, the net loss from continuing operations decreased by 24% year-over-year, settling at ₹363 Crore. While audited financials for FY26 are pending, these reported figures offer a clear indication of the company’s financial trajectory.

Operational Metrics and Business Unit Performance

On the operational front, Cars24’s vehicle transaction Gross Merchandise Value (GMV) experienced a marginal decline of 0.5% year-over-year, amounting to ₹7,766 Crore in FY26. However, its vehicle ownership services GMV surged dramatically by 13 times year-over-year, reaching ₹280 Crore. The company also significantly increased its loan disbursals, up by 47.4% to ₹3,220 Crore in FY26 from ₹2,185 Crore in FY25, highlighting growth in its ancillary financial services.

Cars24, founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal, and Mehul Agrawal, operates as a comprehensive online platform for the buying and selling of pre-owned vehicles. Beyond transactions, it provides crucial financing, insurance support, and warranty services, positioning itself as a full-service automotive solutions provider. The company has successfully raised over $1.3 billion to date from prominent investors including SoftBank, Wave Global, and Peak XV Partners, and was last valued at over $3.2 billion.

AI Integration and Strategic Acquisitions Driving Efficiency

The company emphasized that each of its business units across India, Australia, and the UAE is now operating profitably. This widespread profitability is supported by healthy user traffic that the platform effectively converts into transacting customers at a significantly lower cost compared to paid acquisition models. GMV, in particular, grew by over 50% year-over-year in H2 FY26, with customer acquisition costs declining by more than 40% during the same period.

Per-car gross margins have expanded materially, driven by increased income from value-added services and improved financing unit economics. In H2 FY26, Cars24 recorded 3.8 Crore monthly active users, sold 85,975 cars (an 11% year-over-year decrease), and processed 15 Lakh vehicle ownership transactions, such as RC transfers, marking an 11% year-over-year increase. Earlier in the year, Cars24 strengthened its capabilities by acquiring two vehicle information startups, Car Info and Vehicle Info, which are expected to enhance monetization and user acquisition economics.

Artificial Intelligence (AI) has become a cornerstone of Cars24’s operational strategy, contributing approximately 300 basis points to its EBITDA. The company leverages AI to expedite inspection times, conduct audits at its retail hubs, and manage over 15 Lakh minutes of customer calls monthly across seven languages. AI is also instrumental in generating nearly a third of the company’s code and automating numerous workflows in marketing, design, and analytics, showcasing a deep integration of advanced technology into its business model.

Leadership Transitions Amidst IPO Preparations

The company has recently experienced several leadership exits. Himanshu Ratnoo, former CEO of Cars24’s India used-car business, stepped down in March. Co-founders Mehul Agrawal and Gajendra Jangid also stepped down from their executive roles as chief operating officer and chief marketing officer, respectively, last month. CEO Vikram Chopra stated that these decisions were made collaboratively, and the departing co-founders remain shareholders. Chopra and CFO Ruchit Agarwal will absorb most of their executive responsibilities, supported by the existing leadership team.

These leadership changes occur as Cars24 actively progresses towards its IPO. CEO Chopra indicated earlier this year that the company aims to list on the stock exchanges within the next six to twelve months, making the recent financial milestones and operational improvements particularly significant for its public market debut.