Financial Data and Key Metrics Changes - Revenue for the first quarter was $179 million, which was within the guidance range, but slightly down year over year [6][18] - Adjusted EBITDA was $51 million, resulting in an adjusted EBITDA margin of 28.3%, exceeding expectations [24][25] - Free cash flow was $24 million, with a share repurchase of $22 million during the quarter [27][28] - Net loss for the quarter was $2 million, compared to a net income of $1 million in the previous year [24] Business Line Data and Key Metrics Changes - Dealer revenue decreased by 2% year over year, attributed to a softer start for Marketplace and media products [18][19] - The number of dealers increased to 19,250, marking the best quarter of sequential organic customer growth since mid-2022 [9][25] - Accu Trade appraisal volume rose to over 813,000, a 16% increase quarter over quarter [12] - The solutions portfolio added over 100 new website customers, with over 70% coming from Dealer Inspire [20] Market Data and Key Metrics Changes - OEM revenue grew by 6% year over year, reflecting the value placed on the platform by automakers [9][15] - Average monthly unique visitors reached a record 29 million in Q1, with overall traffic up 1% year over year [10] - Traffic to news and editorial content increased by over 50% year over year, driven by resources like the American Made Index [11] Company Strategy and Development Direction - The company is focused on deepening product penetration and leveraging AI and data intelligence to meet industry demand [7] - The platform strategy combines a consumer marketplace with dealer software tools, aiming for diversified growth [6][7] - The company plans to enhance value delivery through product innovation and commercial leadership, particularly in the used car market [12][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term uncertainty affecting the automotive outlook but emphasized the core value proposition of the platform [8] - The company is suspending full-year revenue guidance due to external visibility issues but expects Q2 revenue to be up year over year and quarter over quarter [29][30] - Management remains confident in the ability to drive full-year revenue growth through product adoption and innovation [30][31] Other Important Information - The company has demonstrated sustained cost discipline, with operating expenses up 3% year over year primarily due to severance costs [22][23] - Total liquidity was $321 million as of March 31, 2025, providing capacity for growth investments [28] Q&A Session Summary Question: Impact of tariffs on dealer and OEM spending - Management noted that tariffs have created uncertainty, affecting OEMs' commitments and dealer spending patterns, with some moving to month-to-month arrangements [34][37] Question: Growth in Accu Trade customer count - Management expressed confidence in Accu Trade's growth potential, noting increased dealer interest in sourcing inventory due to new car supply concerns [38][40] Question: Proactive measures taken for margin improvement - Management highlighted cost discipline and lower-than-expected integration costs for Dealer Club as factors contributing to improved EBITDA margins [46][48] Question: Visibility on media spending - Management indicated that while OEMs and dealers see value in media products, the timing of their spending has become more uncertain [55][76] Question: Revenue split between new and used vehicles - Management stated that approximately 15% to 20% of revenue is tied to new car traffic, with the majority being used vehicle-related [89]

Financial Data and Key Metrics Changes - Revenue for the first quarter of 2025 was $179 million, which was within the guidance range, but down slightly year over year [6][17] - Adjusted EBITDA was $51 million, resulting in an adjusted EBITDA margin of 28.3%, exceeding expectations due to cost discipline and lower integration costs [24][25] - Free cash flow was $24 million, down slightly year over year, reflecting adjusted EBITDA performance [27] - Net loss for the first quarter was $2 million, compared to a net income of $1 million in the previous year [23] Business Line Data and Key Metrics Changes - Dealer revenue decreased by 2% year over year, attributed to a softer start for Marketplace and media products [17] - The number of dealers increased to 19,250, marking the best quarter of sequential organic customer growth since mid-2022 [8][25] - Accu Trade appraisal volume rose to over 813,000, a 16% increase quarter over quarter [12] - The solutions portfolio added over 100 new website customers, with over 70% of those wins coming from Dealer Inspire [19] Market Data and Key Metrics Changes - OEM business grew by 6% year over year, reflecting the value automakers place on the high-quality audience [8][15] - Average monthly unique visitors reached a record 29 million in Q1, with overall traffic of 170 million visits, up 1% year over year [10] - Traffic to news and editorial content increased by more than 50% year over year, driven by resources like the American Made Index [11] Company Strategy and Development Direction - The company is focused on a platform strategy that combines a consumer marketplace with dealer software tools, aiming to deepen product penetration [7] - There is a strong emphasis on product innovation leveraging AI and data intelligence to simplify car buying and selling [7] - The company plans to enhance value delivery through new features and product packages, particularly in the Marketplace [12][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term uncertainty affecting the automotive outlook but emphasized the core value proposition of the platform remains strong [7][16] - The company is suspending full-year revenue guidance due to external visibility issues but expects Q2 revenue to be up year over year and quarter over quarter [29][30] - Management expressed confidence in the ability to deliver consistent growth and long-term value creation despite market volatility [16][30] Other Important Information - The company repurchased approximately 1.6 million shares for $22 million in Q1, significantly ahead of its capital return commitment for the year [28] - Total liquidity was $321 million as of March 31, 2025, providing ample capacity for future investments [28] Q&A Session Summary Question: Impact of tariffs on dealer and OEM spending - Management noted that tariffs have created uncertainty, leading to a pullback in OEM commitments, with some moving to month-to-month spending [34][37] Question: Growth in Accu Trade customer count - Management expressed confidence in Accu Trade's growth potential, noting elevated interest from dealers in sourcing inventory differently [38][40] Question: Proactive measures taken in response to tariff news - Management highlighted cost discipline and lower integration costs as factors contributing to better-than-expected EBITDA margins [45][48] Question: Visibility on ad spending from OEMs and dealers - Management indicated mixed signals from both segments, with some dealers pulling back on media commitments while still investing in Marketplace [52][56] Question: Improvement in Marketplace business - Management attributed sequential improvement in Marketplace to increased consumer demand and dealer recognition of the growing market [60][62] Question: Timing of OEM commitments and ad spend - Management clarified that OEMs are currently managing their spending on a month-to-month basis due to uncertainty, impacting visibility [76][78]

Financial Performance - The company's Q1 2025 Adjusted EBITDA reached $50.721 million, with a margin of 28.3%, exceeding the guidance range of 25.5% to 27%[12, 46, 63] - Q1 2025 revenue was $179 million, slightly down year-over-year from $180 million in Q1 2024[12, 38] - The company repurchased 1.6 million shares in Q1 2025, spending $22 million, compared to $9 million in Q1 2024[12] - Adjusted net income for Q1 2025 was $23.956 million, compared to $28.663 million in Q1 2024[64] - Free cash flow for Q1 2025 was $23.660 million, compared to $27.455 million in Q1 2024[65] Key Metrics and Growth Drivers - Average monthly unique visitors reached 29 million in Q1 2025, a new quarterly record[14, 17, 52] - Total traffic (visits) was 170.1 million in Q1 2025[17, 52] - The company had 19,250 dealer customers, up approximately 40 QoQ[14, 48] - OEM and National revenue increased by 6% year-over-year[14, 32, 38] - AccuTrade appraisals grew 16% QoQ, powering over 813,000 appraisals in Q1[25] Outlook - The company projects an Adjusted EBITDA margin of 27% to 29% for Q2 2025[56] - The company anticipates an Adjusted EBITDA margin of 29% to 31% for the full year 2025[60] - The company plans to repurchase $60 to $70 million in shares for the full year 2025[60]

Q1 2025 Financial Highlights | (in thousands, except per share data) | Quarter Ended March 31, | | | | | | --- | --- | --- | --- | --- | --- | | | 2025 | | 2024 | | Change % | | Total Revenue | $ 179,024 $ | | | 180,176 | (1%) | | Net (loss) income | | (2,013) | | 784 | NM | | Adjusted net income | | 23,956 | | 28,663 | (16%) | | Adjusted EBITDA | | 50,721 | | 52,673 | (4%) | | Net (loss) income per diluted share | | (0.03) | | 0.01 | NM | | Adjusted net income per diluted share | | 0.37 | | 0.43 | (14%) | ...

Core Insights - Cars.com Inc. reported Q1 2025 revenue of $179 million, a slight decrease of 1% year-over-year, driven by a 6% growth in OEM and National revenue, while subscription-based Dealer revenue fell by 2% due to macroeconomic pressures [3][6] - The company achieved a record of 29 million average monthly unique visitors, reflecting strong engagement and adoption of its solutions [1][11] - Cars.com increased its dealer customer base to 19,250, indicating a positive trend in dealer engagement [1][11] Financial Performance - Total revenue for Q1 2025 was $179.0 million, down from $180.2 million in Q1 2024 [3][31] - Net loss for the quarter was $2.0 million, or $0.03 per diluted share, compared to a net income of $0.8 million, or $0.01 per diluted share in the prior year [8][32] - Adjusted net income decreased by 16% to $24.0 million, or $0.37 per diluted share, from $28.7 million, or $0.43 per diluted share a year ago [3][36] Operational Highlights - Average monthly unique visitors increased by 26% quarter-over-quarter and 3% year-over-year, reaching 29 million [5][11] - The company reported a 16% quarter-over-quarter growth in AccuTrade appraisals, indicating improved customer engagement [11] - DealerClub saw a 60% increase in active users and nearly doubled the volume of completed auctions from February to March 2025 [11] Cost Management - Total operating expenses for Q1 2025 were $172.6 million, up from $167.4 million in the prior year, influenced by the acquisition of DealerClub and higher severance costs [7][31] - Adjusted operating expenses remained flat at $155.3 million, reflecting disciplined cost management [7][38] Cash Flow and Balance Sheet - Net cash provided by operating activities was $29.5 million, down from $33.5 million in the prior year [9][33] - Free cash flow for the quarter totaled $23.7 million, compared to $27.5 million in Q1 2024 [9][37] - As of March 31, 2025, total debt outstanding was $460 million, with total liquidity of $321.4 million [10][10] Strategic Outlook - The company aims to reaccelerate dealer revenue growth in Q2 2025 through growth initiatives, including marketplace and website repackaging [2][14] - Full-year 2025 revenue guidance has been suspended due to macroeconomic uncertainties, but the company reaffirms its Adjusted EBITDA margin guidance of 29% to 31% [14][15]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Financial Results Announcement - Cars.com Inc. expects to report its financial results for the first quarter ended March 31, 2025, on May 8, 2025 [1] - A conference call will be held at 8:00 a.m. CT/9:00 a.m. ET on the same day to discuss the results [1][2] Company Overview - Cars Commerce is an audience-driven technology company that empowers the automotive industry [3] - The company offers products and solutions that simplify car buying and selling, utilizing AI-driven technologies across various stages of the retail process [3] - The Cars Commerce platform includes four leading brands: Cars.com®, Dealer Inspire, AccuTrade, and Cars Commerce Media Network [3]

Core Insights - The automotive industry experienced a strong start in 2025, with new-vehicle sales increasing by 4.8% year over year in the first quarter, and March sales marked the sixth-highest in nearly 50 years, driven by pre-tariff buying, seasonal tax refunds, and automaker incentives [3][5]. Market Dynamics - Affordability concerns are rising as vehicles priced under $30,000 now represent only 14% of new-vehicle inventory, a significant drop from 38% during the 2019-21 period, indicating a reduced availability of budget-friendly models [3][4]. - The majority of sub-$30K vehicles (nearly 90%) are assembled outside the U.S., making them vulnerable to price hikes or production cuts due to shifting trade policies [4]. Inventory and Pricing - Inventory levels have improved, with new-car supply up 9% year over year, and vehicles are spending an average of 78 days on dealer lots, aligning with pre-pandemic norms [6]. - The average new-car price has remained around $49,000 for the past 18 months, which is still 30% higher than in Q1 2019, and the introduction of tariffs is expected to push prices higher [6]. Financing Conditions - Despite a 100 basis point cut in interest rates by the Federal Reserve between September and December 2024, auto-loan APRs increased by 19 basis points year over year in Q1, as lenders tightened credit terms amid market uncertainty, adding to affordability challenges for buyers [7][8].

Core Insights - Cars.com has released its 2025 Affordability Report, highlighting the best value new cars available to consumers in a changing market [1] - The report indicates that pending 25% tariffs on vehicles assembled outside the U.S. could significantly impact vehicle prices, with potential increases of $3,000 to $10,000 [2][3] - Current average new vehicle prices have remained steady at around $49,000, but are expected to rise if tariffs take effect as planned on April 3 [2] Industry Impact - The automotive industry is facing pressure from potential tariffs, which could lead consumers to act quickly to secure better deals [3] - Imports accounted for approximately 50% of U.S. vehicle sales in 2024, affecting even American-branded models [3] - Automakers like Ford, Hyundai, and Kia have increased their U.S.-based inventory by over 25% year over year in response to these market conditions [3] Best Value Vehicles - Cars.com identified the best value vehicles for model year 2025 based on price, safety features, fuel economy, and one-year fuel costs [4] - The report emphasizes vehicles made in the U.S. as potentially protected from rising tariff-related costs [4] - The best value vehicles by segment include: - Subcompact Car: Nissan Versa (SV) - Compact Car: Nissan Sentra (S) - Subcompact SUV: Chevrolet Trax (LS with Driver Confidence Package) - Compact SUV: Ford Escape (Active) - Mid-Size SUV: Kia Sorento (LX) - Compact Pickup Truck: Ford Maverick (XL with 2.5-liter hybrid engine) - Mid-Size Pickup Truck: Nissan Frontier (S 4x2 King Cab) - Full-Size Pickup Truck: Ford F-150 (XL 4x2 SuperCab) - Electric Vehicle: Hyundai Ioniq 6 (SE Long Range) [5]

 Largest Dealership Review Platform Reveals Best Dealers Across North America; Subaru, Acura and Volvo Stand Out as Highest-Rated BrandsCHICAGO, March 11, 2025 /PRNewswire/ -- Car-shopping marketplace and dealer reputation site Cars.com® (NYSE: CARS) today announced the winners of its Dealer of the Year Awards, presented annually to the top automotive dealers across North America. Auto dealers were honored as Cars.com Dealer of the Year recipients based on more than 1.3 million online consumer reviews submi ...