Cars24, a prominent online used car platform preparing for its IPO, announced adjusted EBITDA profitability of ₹20 crore for Q4 FY26, marking a significant milestone in its financial performance supported by AI-driven efficiencies and strong growth across its core markets.
- Q4 FY26 adjusted EBITDA profit of ₹20 Cr signals break-even progress
- UAE and Australia segments report positive margins and operating profits
- Retail GMV grows 50%+ while customer acquisition costs decline sharply
What happened
In the fourth quarter of the 2025-26 fiscal year, Cars24 achieved an adjusted EBITDA profitability of ₹20 crore, its first profitable quarter on this metric. This was driven by strong growth in net revenue, which increased 37% year-on-year in the second half of FY26, surpassing company guidance. The startup also reported structurally positive EBITDA margins in its UAE operations and operating profitability from its Australian business arm during this period.
The company’s overall EBITDA loss narrowed by 35.7% year-on-year to ₹357 crore for the full fiscal year, reflecting improved operating performance. Meanwhile, the firm's vehicle transaction gross merchandise value (GMV) remained nearly stable, with a slight 0.5% decline, while vehicle ownership service GMV surged by 13 times year-on-year. Lending also expanded significantly, with loans disbursed rising 47.4% to ₹3,220 crore.
Why it matters
These financial improvements demonstrate Cars24’s progress in scaling a profitable business model amid intense competition in the Indian and international used car marketplaces. Enhanced AI integration contributed roughly 300 basis points to EBITDA by streamlining operations such as vehicle inspections, audits, customer calls, and backend workflows, boosting efficiency and reducing costs.
The company’s ability to grow retail volume while cutting customer acquisition costs by over 40% year-on-year highlights effective user engagement and network effects. Positive operational results in multiple regions add to investor confidence ahead of the planned initial public offering and validate Cars24’s strategy of combining vehicle sales, ownership services, and financing under a unified platform.
What to watch next
Market participants will closely monitor Cars24’s formal IPO filing and how the company sustains profitability given recent leadership changes, including notable exits among founders and top executives. Continued momentum in vehicle ownership services and financing, areas with high growth potential, will be key to maintaining strong financial results.
Additionally, the impact of acquired vehicle information startups on user acquisition economics and monetization will be a focus, alongside the ongoing application of AI across the business. The company’s ability to navigate regulatory shifts in India and expand profitably in overseas markets such as UAE and Australia will also bear watching as it prepares for public scrutiny.