For the quarter ended December 2023, Cars.com (CARS) reported revenue of $179.61 million, up 6.8% over the same period last year. EPS came in at $0.12, compared to $0.15 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $178.51 million, representing a surprise of +0.61%. The company delivered an EPS surprise of -40.00%, with the consensus EPS estimate being $0.20.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stree ...

Cars.com (CARS) came out with quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.20 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -40%. A quarter ago, it was expected that this online automotive marketplace would post earnings of $0.10 per share when it actually produced earnings of $0.07, delivering a surprise of -30%.Over the last four quarters, t ...

PART I [Business Overview](index=4&type=section&id=Item%201.%20Business) Cars Commerce Inc. is an audience-driven automotive technology company that simplifies vehicle transactions and enhances retail operations for dealers and OEMs through AI-powered products and solutions across its brand portfolio - Cars Commerce is an audience-driven technology company empowering the automotive industry with AI-powered products and solutions across pre-sale, retail, and post-sale activities for more efficient and profitable retail operations[5](index=5&type=chunk)[100](index=100&type=chunk)[243](index=243&type=chunk) - The company's platform is organized around four industry-leading brands: the flagship automotive marketplace Cars.com, digital retail technology and marketing services Dealer Inspire, trade and appraisal technology AccuTrade, and in-market media solutions Cars Commerce Media Network[5](index=5&type=chunk)[100](index=100&type=chunk)[243](index=243&type=chunk) - As of December 31, 2023, Cars.com featured over **2.5 million vehicle listings** and **13 million consumer reviews**, offering features like Instant Finance and Instant Offer to reduce friction, increase speed, and empower shoppers[7](index=7&type=chunk)[340](index=340&type=chunk) - The company boasts **26 million average monthly unique visitors** and over **600 million annual visits**, with over **60% of traffic being organic**, providing high-quality, unduplicated audiences to customers[344](index=344&type=chunk)[362](index=362&type=chunk)[386](index=386&type=chunk) - Over **80% of the company's revenue** is derived from subscription services, creating a reliable recurring revenue stream with an average monthly revenue per dealer exceeding **$2,500**[363](index=363&type=chunk) - Long-term growth strategies include continuously building the most engaged in-market audience, increasing dealer customer count (expanding into Canada via D2C Media Inc. acquisition), expanding dealer relationships through platform cross-selling, transforming OEM relationships, and creating platform advantages with AI tools[364](index=364&type=chunk)[386](index=386&type=chunk) - The company faces intense competition from other online automotive marketplaces, OEM websites, search engines, social media, and dealer websites, primarily based on marketing return on investment (ROI) provided by product offerings[13](index=13&type=chunk)[36](index=36&type=chunk)[346](index=346&type=chunk)[387](index=387&type=chunk) - As of December 31, 2023, Cars Commerce employed approximately **1,700 full-time, part-time, seasonal, and temporary employees**, committed to fostering a diverse, equitable, and inclusive workplace[14](index=14&type=chunk)[38](index=38&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including macroeconomic fluctuations, brand reputation decline, reliance on third-party services, cybersecurity threats, intense market competition, acquisition integration challenges, and operational risks from remote work and key personnel loss - Macroeconomic and market conditions, such as economic downturns, rising interest rates, supply chain disruptions, and OEMs shifting to D2C sales, could reduce vehicle sales and subsequently decrease spending on the company's solutions[16](index=16&type=chunk)[40](index=40&type=chunk)[350](index=350&type=chunk)[391](index=391&type=chunk) - The company's business relies on strong brand recognition for Cars Commerce, and any failure to maintain, protect, and enhance its brand image could harm consumer and customer bases, impacting operating results[42](index=42&type=chunk)[370](index=370&type=chunk) - The company partially relies on internet search engines and mobile app stores for traffic, where changes in search algorithms, competitor optimization efforts, or new technologies like generative AI could negatively impact traffic and consumer base[20](index=20&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[372](index=372&type=chunk)[394](index=394&type=chunk) - The company faces cybersecurity threats from computer viruses, network intrusions, phishing, and ransomware, alongside evolving data privacy regulations (e.g., CCPA, CPRA); failure to protect data or comply with regulations could lead to reputational damage, increased costs, and legal liabilities[30](index=30&type=chunk)[55](index=55&type=chunk)[159](index=159&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[388](index=388&type=chunk) - The company operates in a highly competitive market where existing and new competitors may erode its competitiveness through new technologies, broader marketing campaigns, or existing relationships with OEMs/dealers, potentially leading to price reductions and decreased revenue[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk) - Strategic acquisitions, such as CreditIQ, AccuTrade, and D2C Media, pose integration risks, potentially leading to increased leverage, equity dilution, unforeseen liabilities, management distraction, and failure to achieve anticipated synergies and growth[28](index=28&type=chunk)[29](index=29&type=chunk)[52](index=52&type=chunk)[380](index=380&type=chunk)[403](index=403&type=chunk) - The company's debt agreements contain restrictive covenants that may limit operational flexibility, including borrowing, dividends, and M&A, and its floating-rate debt, representing **18.4% of total debt as of December 31, 2023**, faces interest rate increase risks, potentially raising interest expenses[33](index=33&type=chunk)[59](index=59&type=chunk)[89](index=89&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - The company has transitioned to a fully remote work model, but its long-term impact remains uncertain, potentially posing risks to company culture, employee attrition, and data security[169](index=169&type=chunk)[170](index=170&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments in this report - There are no unresolved staff comments in this report[62](index=62&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) Cars Commerce implemented an ISO 27001 certified Information Security Management System in 2023 to manage cybersecurity risks, overseen by the Board's Audit Committee, with no material threats identified to date - Cars Commerce has implemented an Information Security Management System (ISMS) to protect its infrastructure from potential threats, achieving **ISO 27001 certification in December 2023**[408](index=408&type=chunk) - The company's cybersecurity program includes annual employee security awareness training, phishing exercises, use of SOC 2 compliant hosting providers, anti-malware, intrusion prevention systems, firewalls, multi-factor authentication, and encryption[409](index=409&type=chunk) - The company identifies cybersecurity incidents through security alert tools, log monitoring, and employee reports, with a Security Incident Response Team (SIRT) to investigate and manage events[93](index=93&type=chunk)[410](index=410&type=chunk) - The Board of Directors oversees overall cybersecurity risk, delegating direct oversight to the Audit Committee, with management providing updates at least quarterly[66](index=66&type=chunk)[95](index=95&type=chunk) - As of the report date, the company has not identified any cybersecurity threats that have had or are reasonably likely to have a material impact on Cars Commerce's business strategy, operating results, or financial condition[411](index=411&type=chunk) [Properties](index=38&type=section&id=Item%202.%20Properties) Cars Commerce maintains its primary administrative office in Chicago, having ceased operations at its Naperville, Illinois office in 2023, with the lease terminating in February 2024 - The company maintains its primary administrative office in Chicago, having ceased operations at its Naperville, Illinois office in 2023, with the lease terminating in February 2024[413](index=413&type=chunk) [Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) Cars Commerce does not believe any pending legal proceedings, individually or in aggregate, will have a material adverse effect on its operations, financial condition, or cash flows - The company does not believe any pending legal proceedings, individually or in aggregate, will have a material adverse effect on its operating results, financial condition, or cash flows[96](index=96&type=chunk) [Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There are no mine safety disclosures in this report - There are no mine safety disclosures in this report[67](index=67&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Cars Commerce common stock trades on the NYSE under 'CARS', with 4,164 registered holders as of February 15, 2024, and an authorized $200 million share repurchase program, of which $119.7 million remained available as of December 31, 2023, with no cash dividends planned - Cars Commerce's common stock is listed on the New York Stock Exchange under the symbol **“CARS”**, with **4,164 registered holders** as of February 15, 2024[68](index=68&type=chunk) Fourth Quarter 2023 Equity Repurchase Activity | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands USD) (3) | |:---|:---|:---|:---|:---| | October 1 through October 31, 2023 | — | $ — | — | 127,422 | | November 1 through November 30, 2023 | 238,913 | 18.80 | 238,913 | 122,931 | | December 1 through December 31, 2023 | 170,070 | 18.85 | 170,070 | 119,724 | | Total | 408,983 | | 408,983 | | - The Board of Directors authorized a **three-year, up to $200 million share repurchase program** in February 2022, with **$119.7 million remaining available** as of December 31, 2023[84](index=84&type=chunk)[503](index=503&type=chunk) - The company has never declared or paid cash dividends on its common stock and does not intend to pay any cash dividends in the foreseeable future[98](index=98&type=chunk)[128](index=128&type=chunk) [Reserved](index=24&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no specific content - This item is reserved and contains no specific content[417](index=417&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Cars Commerce achieved **5% total revenue growth** to **$689.2 million** in FY2023, with net income significantly increasing to **$118.4 million** due to deferred tax asset valuation allowance release, while maintaining strong liquidity and detailing debt and contractual obligations Fiscal Year 2023 Key Financial Data (vs. 2022) | Indicator | 2023 (in thousands USD) | 2022 (in thousands USD) | Change (in thousands USD) | Change (%) | |:---|:---|:---|:---|:---| | Total Revenue | 689,183 | 653,876 | 35,307 | 5 % | | Dealer Revenue | 621,661 | 579,222 | 42,439 | 7 % | | OEM and National Revenue | 55,904 | 58,557 | (2,653) | (5) % | | Other Revenue | 11,618 | 16,097 | (4,479) | (28) % | | Total Operating Expenses | 635,067 | 587,840 | 47,227 | 8 % | | Operating Income | 54,116 | 66,036 | (11,920) | (18) % | | Net Non-Operating Expenses | (36,011) | (43,460) | 7,449 | (17) % | | Net Income | 118,442 | 17,206 | 101,236 | *** | Fiscal Year 2023 Key Operating Metrics (vs. 2022) | Indicator | 2023 (in thousands) | 2022 (in thousands) | Change (%) | |:---|:---|:---|:---| | Average Monthly Unique Visitors (UVs) | 26,421 | 26,400 | 0 % | | Traffic | 614,798 | 587,388 | 5 % | | ARPD - Annual | $2,486 | $2,329 | 7 % | | Dealer Customers (as of Dec 31) | 19,504 | 19,506 | (0) % | | ARPD - Quarterly (Q4) | $2,523 | $2,361 | 7 % | | Dealer Customers (as of Sep 30) | | 18,715 | 4 % (QoQ) | - Net income significantly increased in 2023, primarily due to the release of a deferred tax asset valuation allowance[101](index=101&type=chunk)[428](index=428&type=chunk) - Dealer revenue grew by **7.3%**, driven by increased solutions revenue, marketplace repackaging initiatives, and media product growth[107](index=107&type=chunk) - OEM and national revenue decreased by **4.5%**, primarily due to reduced spending from certain insurance clients impacted by macroeconomic factors[79](index=79&type=chunk) - Product and technology expenses increased by **12%**, marketing and sales expenses by **6%**, and general and administrative expenses by **14%**, primarily due to higher compensation (including equity-based incentives) and third-party costs[108](index=108&type=chunk)[137](index=137&type=chunk)[427](index=427&type=chunk) - As of December 31, 2023, the company's total outstanding debt was **$490 million**, with a weighted average interest rate of **6.6%**[176](index=176&type=chunk)[430](index=430&type=chunk) 2023 Cash Flows (vs. 2022) | Cash Flow Type | 2023 (in thousands USD) | 2022 (in thousands USD) | Change (in thousands USD) | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | 136,720 | 128,511 | 8,209 | | Net Cash Used in Investing Activities | (97,050) | (84,377) | (12,673) | | Net Cash Used in Financing Activities | (31,748) | (51,488) | 19,740 | | Effect of Exchange Rate Changes | (439) | — | (439) | | Net Change in Cash and Cash Equivalents | 7,483 | (7,354) | 14,837 | Contractual Obligations as of December 31, 2023 (in thousands USD) | Contractual Obligation | Total | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | |:---|:---|:---|:---|:---|:---|:---|:---| | Long-Term Debt (1) | 490,000 | 25,000 | 65,000 | — | — | 400,000 | — | | Debt Interest (2) | 137,095 | 32,433 | 28,162 | 25,500 | 25,500 | 25,500 | — | | Operating Leases | 36,550 | 4,707 | 4,722 | 4,842 | 4,151 | 5,087 | 13,041 | | Other Obligations (3) | 30,588 | 23,332 | 6,874 | 382 | — | — | — | | Total | 694,233 | 85,472 | 104,758 | 30,724 | 29,651 | 430,587 | 13,041 | [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Cars Commerce faces interest rate risk from its floating-rate debt, potentially increasing interest payments, and foreign exchange risk from its expanding Canadian operations due to USD to CAD currency fluctuations - As of December 31, 2023, approximately **18.4% of the company's outstanding debt was floating-rate**, exposing it to interest rate risk where changes could increase interest payments and negatively impact future earnings and cash flows[33](index=33&type=chunk)[176](index=176&type=chunk)[203](index=203&type=chunk) - The acquisition of D2C Media Inc. in November 2023 expanded the company's operations into the Canadian market, increasing foreign exchange risk from USD to CAD currency fluctuations, a risk expected to persist[204](index=204&type=chunk) [Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Cars Commerce's audited consolidated financial statements for the three years ended December 31, 2023, including balance sheets, income statements, and cash flow statements, with related notes and an unqualified opinion from Ernst & Young LLP, detailing key audit matters like revenue recognition and acquisition valuations - Ernst & Young LLP issued an unqualified opinion on Cars.com Inc.'s consolidated financial statements for the three years ended December 31, 2023[178](index=178&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[221](index=221&type=chunk) - Key audit matters include revenue recognition (complexity in identifying distinct performance obligations in customer contracts), the D2C Media Inc. acquisition (significant estimation required for fair value of customer relationship intangible assets), and contingent consideration valuation (subjectivity in using Monte Carlo simulation models and evaluating assumptions)[210](index=210&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) Consolidated Balance Sheets (Summary, as of December 31, in thousands USD) | Indicator | 2023 | 2022 | |:---|:---|:---| | Cash and Cash Equivalents | $39,198 | $31,715 | | Total Assets | $1,172,449 | $1,024,870 | | Total Liabilities | $680,341 | $640,440 | | Total Stockholders' Equity | $492,108 | $384,430 | Consolidated Statements of Operations (Summary, as of December 31, in thousands USD, except per share data) | Indicator | 2023 | 2022 | 2021 | |:---|:---|:---|:---| | Total Revenue | $689,183 | $653,876 | $623,683 | | Operating Income | $54,116 | $66,036 | $48,338 | | Net Income | $118,442 | $17,206 | $10,791 | | Basic Earnings Per Share | $1.77 | $0.25 | $0.16 | | Diluted Earnings Per Share | $1.74 | $0.25 | $0.15 | Consolidated Statements of Cash Flows (Summary, as of December 31, in thousands USD) | Cash Flow Type | 2023 | 2022 | 2021 | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | $136,720 | $128,511 | $138,003 | | Net Cash Used in Investing Activities | $(97,050) | $(84,377) | $(39,450) | | Net Cash Used in Financing Activities | $(31,748) | $(51,488) | $(127,203) | - The company acquired D2C Media Inc. in November 2023 for a total purchase consideration of **$79.8 million**, with the fair value of customer relationship intangible assets estimated at **$29.153 million** and an amortization period of **14 years**[212](index=212&type=chunk)[292](index=292&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk) - As of December 31, 2023, contingent consideration liabilities related to the CreditIQ and AccuTrade acquisitions totaled **$61.408 million**, comprising **$25.8 million in current liabilities** and **$35.6 million in non-current liabilities**[141](index=141&type=chunk)[321](index=321&type=chunk) Changes in Goodwill and Indefinite-Lived Intangible Assets (in thousands USD) | Indicator | December 31, 2021 | December 31, 2022 | December 31, 2023 | |:---|:---|:---|:---| | Goodwill | $26,227 | $102,856 | $147,058 | | Cars.com Trademark | $390,020 | $390,020 | $390,020 | - The company recorded no impairment of goodwill or indefinite-lived intangible assets in either 2023 or 2022[474](index=474&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=98&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There is no information regarding changes in accountants or disagreements on accounting and financial disclosure in this report - There is no information regarding changes in accountants or disagreements on accounting and financial disclosure in this report[545](index=545&type=chunk) [Controls and Procedures](index=98&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2023, with D2C Media Inc. excluded due to recent acquisition and immateriality, and Ernst & Young LLP issued an unqualified opinion on internal controls - Management, including the Chief Executive Officer and Chief Financial Officer, assessed and concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[549](index=549&type=chunk) - Management assessed and concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[540](index=540&type=chunk)[546](index=546&type=chunk) - D2C Media Inc. was excluded from the December 31, 2023, assessment of internal control over financial reporting due to its recent acquisition and immateriality, representing less than **3% of consolidated assets** and **1% of consolidated revenues**[551](index=551&type=chunk) - Ernst & Young LLP issued an unqualified opinion on the effectiveness of Cars.com Inc.'s internal control over financial reporting as of December 31, 2023[554](index=554&type=chunk) - No material changes in internal control over financial reporting occurred during the period, other than those related to the D2C Media acquisition[553](index=553&type=chunk) [Other Information](index=100&type=section&id=Item%209B.%20Other%20Information) During the quarter ended December 31, 2023, no directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - During the quarter ended December 31, 2023, no directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[450](index=450&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=100&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) There are no disclosures regarding foreign jurisdictions that prevent inspections in this report - There are no disclosures regarding foreign jurisdictions that prevent inspections in this report[451](index=451&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=101&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed within 120 days after the fiscal year ended December 31, 2023 - The information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023[447](index=447&type=chunk)[563](index=563&type=chunk) [Executive Compensation](index=101&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed within 120 days after the fiscal year ended December 31, 2023 - The information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023[447](index=447&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=101&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed within 120 days after the fiscal year ended December 31, 2023 - The information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023[448](index=448&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=101&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed within 120 days after the fiscal year ended December 31, 2023 - The information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023[559](index=559&type=chunk) [Principal Accounting Fees and Services](index=101&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed within 120 days after the fiscal year ended December 31, 2023 - The information required for this item will be incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2023[560](index=560&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=102&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the company's filed financial statements and schedules, including consolidated balance sheets, income statements, and cash flow statements, with related notes and the independent registered public accounting firm's report, alongside a detailed exhibit index covering corporate documents, debt agreements, and certifications - This item lists the company's filed financial statements, including consolidated balance sheets, income statements, comprehensive income statements, statements of changes in stockholders' equity, and cash flow statements, along with related notes and the independent registered public accounting firm's report[565](index=565&type=chunk) - The exhibit index includes corporate charters, debt agreements, incentive compensation plans, executive agreements, and various certification documents, such as those from the Chief Executive Officer and Chief Financial Officer[449](index=449&type=chunk)[460](index=460&type=chunk)[462](index=462&type=chunk)[466](index=466&type=chunk)[518](index=518&type=chunk)[567](index=567&type=chunk)[568](index=568&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk) [Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) There is no Form 10-K summary in this report - There is no Form 10-K summary in this report[458](index=458&type=chunk)

Cars.com Reports Fourth Quarter and Full Year 2023 Results Exceeded Fourth Quarter Guidance, Delivered 7% Year-Over-Year Revenue Growth Achieved 7% Year-Over-Year ARPD Growth coupled with Strong Fourth Quarter OEM Performance Generated $137MM of Annual Cash Flows From Operating Activities Q4 2023 Financial and Key Metric Highlights • Net income of $8.3 million, or $0.12 per diluted share, compared to Net Income of $10.3 million, or $0.15 per diluted share, in the prior year • Adjusted EBITDA of $55.4 millio ...

Automotive Advertisers Volkswagen, Kia, Toyota and BMW See an Average Traffic Spike of 235% on Cars.com During Last Night's Big Game CHICAGO, Feb. 12, 2024 /PRNewswire/ -- Automakers that bet big on prime-time advertising were among the winners of last night's nail-biting Big Game with significant spikes in consumer traffic to their pages on car-shopping marketplace Cars.com® (NYSE: CARS). Kia, Toyota, Volkswagen and BMW made waves with prime-time commercials highlighting electric vehicles and pickup trucks ...

Cars.com Automotive Experts Call This Year's Feature-Filled Winners "Pin-You-to-Your-Seat Fun," "Massive Marriage Saver" and "A New Bar for What Consumers Should Expect" CHICAGO, Feb. 7, 2024 /PRNewswire/ -- Car-shopping marketplace Cars.com® (NYSE: CARS) today announced the winners of its annual Best Of Awards, which recognize the top vehicles in six categories: Best Family Car, Best Luxury Car, Best SUV, Best Electric Vehicle, Best Pickup Truck and the highest honor: Best Car of the Year. This year, Chevr ...

CHICAGO, Jan. 30, 2024 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce Inc."), an audience-driven technology company empowering automotive, today shared the top three dealer pain points in 2024 and how the company plans to help its customers solve these challenges to unleash growth. This news comes ahead of the 2024 NADA Show in Las Vegas Feb. 2-4, where dealers and partners can experience the Cars Commerce platform and its connected solutions live in booth #3421W. "The challenges our indus ...

CHICAGO, Jan. 24, 2024 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce Inc."), an audience-driven technology company empowering automotive, today announced that FordDirect has selected AccuTrade, a Cars Commerce solution, as its preferred vehicle acquisition and trade and appraisal solution for The Shop, a newly launched e-commerce platform for 3000+ Ford dealers and Lincoln retailers. More than half of car buyers plan to trade-in a vehicle prior to purchase, and AccuTrade speeds transactio ...

Financial Data and Key Metrics Changes - Revenue for Q3 2023 totaled $174 million, a 6% increase year-over-year, driven by dealer revenue growth of 8% to $157 million [58] - Net income for the quarter was $4.5 million or $0.07 per diluted share, compared to a net loss of $0.04 per diluted share a year ago [32] - Adjusted EBITDA was $49 million, representing 28.4% of revenue, with a sequential margin expansion of 125 basis points [32][36] - Cash provided by operating activities for the nine-month period ended September 30, 2023, was $92 million, and free cash flow was $76 million [35] Business Line Data and Key Metrics Changes - The company launched Cars Commerce, a new B2B brand aimed at simplifying the car buying and selling process [12][17] - The traffic to Cars.com increased to 151 million visits, with organic traffic remaining strong at 62% [18] - The average new vehicle price on the marketplace increased by 29%, and used car prices rose by 40% compared to 2019 [49] - The number of dealer customers stabilized at 18,715, with over 80% of repackaged customers upgrading to higher-tier packages [21][62] Market Data and Key Metrics Changes - The company reported a 12% year-over-year increase in revenue from OEM advertising customers, with a sequential growth of $2.1 million [30] - The acquisition of D2C Media is expected to expand the company's geographical footprint and add approximately 1,000 new dealer customers in Canada [16][27] - The company noted that 90% of OEM advertising dollars are currently spent on audiences not in the market to buy a car, indicating a significant opportunity for growth [91] Company Strategy and Development Direction - The company aims to enhance its platform strategy through the integration of D2C Media and the expansion of its digital solutions into Canada [55][120] - The focus remains on delivering value to customers through improved traffic, SEO, and a robust service network [106] - The company plans to continue its balanced capital allocation strategy, including debt repayment and share repurchases [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in driving growth despite a mature market, citing the high engagement of the Cars.com audience [47] - The company anticipates continued growth in dealer revenue driven by the adoption of dealer solutions and media products [85] - Management highlighted the potential for OEM revenue to recover as inventory levels improve, with expectations for a sequential increase in Q4 [90] Other Important Information - The company was recognized as one of US News & World Report's Best Companies to Work for in 2024 [28] - The fourth quarter guidance includes two months of revenue from the D2C Media acquisition, expected to contribute approximately 1.5% to total revenue [65] Q&A Session Summary Question: Can you discuss the competitive landscape in the Canadian market? - Management noted that the Canadian market is similar to the US, with confidence in driving growth through established relationships and innovative solutions [106] Question: What are the key drivers of growth going forward? - Management highlighted diversified growth vectors, including dealer count expansion, OEM revenue recovery, and the introduction of new digital solutions [89] Question: How do you plan to increase OEM endorsements in Canada? - The company plans to leverage existing relationships and capabilities to expand OEM endorsements, aiming for a healthier mix of full OEM inclusion [120]

Financial Performance - Net income for the three months ended September 30, 2023, was $4,491 thousand, compared to a net loss of $2,941 thousand for the same period in 2022, representing a significant turnaround [9]. - For the nine months ended September 30, 2023, net income was $110,096 thousand, a substantial increase from $6,944 thousand in the same period of 2022 [9]. - Comprehensive income for the nine months ended September 30, 2023, was $110,096 thousand, compared to $8,229 thousand for the same period in 2022, indicating strong performance [9]. - Total revenue for the three months ended September 30, 2023, was $174.3 million, a 5.3% increase from $164.6 million in the same period of 2022 [24]. - For the nine months ended September 30, 2023, total revenue was $509.6 million, an increase of $23.9 million or 5% compared to $485.7 million for the same period in 2022 [126]. - The company’s diluted earnings per share for the nine months ended September 30, 2023, was $1.61, compared to $0.10 for the same period in 2022 [179]. - The company’s basic earnings per share for the nine months ended September 30, 2023, was $1.65, compared to $0.10 in the same period of 2022 [203]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2023, was $91,580 thousand, slightly up from $91,291 thousand in the same period of 2022 [13]. - The company reported a net cash used in investing activities of $15,575 thousand for the nine months ended September 30, 2023, compared to $79,169 thousand in the same period of 2022, showing improved cash management [13]. - Cash and cash equivalents at the end of the period were $49,085 thousand, up from $31,920 thousand at the end of September 30, 2022 [13]. - The company had cash and cash equivalents of $49.1 million and total liquidity of $279.1 million as of September 30, 2023 [134]. - The company reported a net change in cash and cash equivalents of $17.37 million for the nine months ended September 30, 2023, compared to a decrease of $7.15 million for the same period in 2022 [158]. Expenses and Costs - Stock-based compensation for the nine months ended September 30, 2023, was $20,930 thousand, an increase from $17,103 thousand in the same period of 2022 [13]. - Total operating expenses increased by $15.3 million or 11% to $160.0 million, primarily due to higher costs in marketing and sales, product and technology, and depreciation [119]. - Marketing and sales expense represented 35% of total revenue for the nine months ended September 30, 2023, up from 34% in the same period of 2022, driven by higher compensation and marketing costs [101]. - Product and technology expenses represented 15% of total revenue for the nine months ended September 30, 2023, increasing due to higher compensation and third-party costs [129]. Revenue Breakdown - Subscription advertising and digital solutions revenue for the nine months ended September 30, 2023, reached $419.9 million, up 4.0% from $403.1 million in 2022 [24]. - Dealer revenue, which represents 90% of total revenue, increased by $11.7 million or 8% to $157.1 million, driven by growth in solutions revenue and marketplace initiatives [119]. - Display advertising revenue increased by 18.9% to $26.8 million for the three months ended September 30, 2023, compared to $22.7 million in 2022 [24]. - Other revenue decreased by $2.8 million or 24% to $8.8 million, primarily due to the expiration of an Accu-Trade license agreement [128]. Acquisitions and Goodwill - The company recorded goodwill of $76.9 million from the Accu-Trade acquisition, primarily due to expected sales growth and the value of the acquired workforce [37]. - The company acquired D2C Media Inc. for CA$105 million (approximately USD $76 million) and may pay an additional CA$35 million (approximately USD $25 million) based on performance [78]. - The company incurred total acquisition costs of $2.0 million for the nine months ended September 30, 2023, with $1.1 million recorded in the same period of 2022 [34]. Debt and Financing - As of September 30, 2023, the company had total indebtedness of $455.0 million, with an effective interest rate of 6.5% [106]. - The Company issued $400.0 million aggregate principal amount of 6.375% Senior Unsecured Notes due 2028 [58]. - The company entered into a Fourth Amendment to its Credit Agreement in Q2 2023, replacing LIBOR with SOFR and adjusting credit spread terms [42]. - As of September 30, 2023, the outstanding principal amount under the Term Loan was $55.0 million with an interest rate of 7.4% [57]. - The Company made $11.3 million in Term Loan payments during the nine months ended September 30, 2023 [57]. - The company reported a total of $1,103.188 million in assets as of September 30, 2023, an increase from $1,024.870 million as of December 31, 2022 [197]. Taxation - The effective income tax rate differed from the statutory federal income tax rate of 21% due to the release of a valuation allowance of $103.3 million as of December 31, 2022 [77]. - The income tax benefit for the nine months ended September 30, 2023, was $93.9 million, primarily due to the release of a significant portion of the valuation allowance for deferred tax assets [132]. - The net income for the nine months ended September 30, 2023, was primarily related to the release of a significant portion of the valuation allowance for deferred tax assets [85]. Share Repurchase - The company repurchased 1.3 million shares for $23.6 million at an average price of $18.30 during the nine months ended September 30, 2023, as part of its $200 million share repurchase program [107]. - The total number of shares that may yet be purchased under the announced share repurchase program is approximately $127.42 million [167]. - For the nine months ended September 30, 2023, the company repurchased 1.3 million shares for $23.6 million at an average price of $18.30 per share, compared to 3.5 million shares for $40.0 million at an average price of $11.47 per share in the same period of 2022 [185].