Business Performance - Cars Commerce's platform attracts over 26 million average monthly ready-to-buy shoppers, driving significant traffic to dealerships[15]. - The average monthly revenue per dealer exceeds $2,400, indicating a strong financial performance across its dealer base[30]. - Cars Commerce generates about 80% of its revenue through subscription services, providing a stable recurring revenue stream[29]. - The company has achieved net operating cash flow exceeding $125 million in each of the last three years, reflecting strong financial health[31]. - Total revenue for the year ended December 31, 2024, was $719.2 million, representing a 4% increase from $689.2 million in 2023[162]. - Net income for 2024 was $48.2 million, a decrease of 59% compared to $118.4 million in 2023, primarily due to the release of a valuation allowance for deferred tax assets in the previous year[162]. - Dealer revenue, which constitutes 89% of total revenue, increased by $19.1 million or 3% to $640.7 million, driven by growth in digital experience revenue[176]. - OEM and National revenue rose by $10.0 million or 18% to $65.9 million, representing 9% of total revenue, due to increased spending by OEMs[177]. Customer Engagement - Approximately 83% of the audience is in-market to buy a car, with 50% planning to purchase within 30 days[28]. - The company has approximately 26 million average monthly unique visitors and over 600 million visits per year, generating about 60% of its audience organically[36]. - The company aims to increase monthly average revenue per dealer by cross-selling its existing suite of solutions[36]. Market Position and Competition - The company has over 19,200 franchise and independent dealer customers across the U.S. and Canada, with a majority subscribing to the Cars.com marketplace[16]. - The dealer customer base exceeds 19,200, with a potential market of approximately 40,000 dealerships nationwide, indicating significant growth opportunities[36]. - The company faces significant competition in the online automotive retail industry, which may hinder its ability to attract and retain dealers[73]. - The competitive landscape may change if competitors merge or form partnerships, impacting the company's ability to compete effectively[76]. Acquisitions and Growth Strategy - The acquisition of D2C Media in 2023 enhances Cars Commerce's digital solutions and expands its service offerings to dealer customers[22]. - The company acquired CreditIQ, Inc. in November 2021 to enhance its automotive financial technology offerings[69]. - The company acquired D2C Media, a leading automotive technology provider in Canada, on November 1, 2023, and Dealer Club, Inc. on January 23, 2025, which requires integration of previously independent businesses[84]. - The acquisition of CreditIQ in November 2021 and AccuTrade in March 2022 aims to enhance the company's platform strategy, but successful integration is critical for realizing anticipated benefits[83]. Financial Health and Risks - The company has approximately $729.0 million in goodwill and intangible assets, representing about 66% of total assets as of December 31, 2024[118]. - The outstanding aggregate principal amount of indebtedness was $460.0 million, with an average interest rate of 6.4%[190]. - The company’s debt levels could adversely affect its ability to raise additional capital and react to changes in the economy or industry[131]. - The company faces risks related to strategic acquisitions, including increased leverage, integration challenges, and potential adverse effects on financial condition and operations[82]. - The company may experience increased tax exposure due to aggressive positions taken by state tax authorities regarding product sales[110]. Operational Challenges - The company is subject to various local, state, federal, and international regulations that could impact its business model and operations[41]. - The company faces risks related to the automotive ecosystem, including consumer demand fluctuations and macroeconomic issues that could impact revenue[51]. - Increased operations in Canada may expose the company to different risks, including local consumer behavior and compliance with foreign laws[60]. - The company relies on third-party service providers for key metrics, and any disruptions in these services could harm business operations and metrics accuracy[88]. Cybersecurity and Technology - The company’s financial performance may be adversely affected by cybersecurity incidents and technology system failures, which could disrupt operations and damage reputation[95]. - The company has implemented various cybersecurity measures, including annual employee training and the use of SOC 2 compliant hosting providers[136]. - The company’s management is responsible for overseeing cybersecurity risk management, with regular updates provided to the Audit Committee[144]. Employee and Workforce Management - The company employs approximately 1,800 full-time, part-time, seasonal, and temporary employees as of December 31, 2024[44]. - The shift to a virtual first workforce may have uncertain long-term impacts on financial results and employee management[115]. Shareholder Considerations - A share repurchase program has been authorized to acquire up to $250.0 million of common stock over a three-year period, which may affect stock price volatility[119]. - The company does not expect to pay any cash dividends for the foreseeable future, intending to retain earnings for business growth and share repurchases[121]. - Future equity financings may dilute existing stockholders and could decrease earnings per share, impacting the benefits derived from new ventures or acquisitions[85].

Financial Performance - Full year 2024 revenue grew by 4% year-over-year, reaching $719.2 million compared to $689.2 million in 2023[12, 67] - Adjusted EBITDA margin increased by approximately 90 basis points year-over-year, from 28.3% in FY23 to 29.2% in FY24[12, 66] - Free cash flow for FY24 was $128 million, representing an approximate 11% free cash flow yield[12] - Adjusted EBITDA grew by approximately $15 million, an increase of 8% year-over-year, totaling $209.7 million in FY24 compared to $194.9 million in FY23[66, 67] Key Growth Drivers - OEM and National revenue increased by 15% year-over-year in Q4, achieving over $17 million, marking the best quarterly revenue since Q1 2021[15, 35, 36] - AccuTrade achieved a record customer base, exiting 2024 with approximately 1,000 subscribers[15, 21] - Approximately 30% of new Q4 franchise subscriptions were affiliated with OEMs that have AccuTrade endorsements[24] Platform Engagement - Total traffic in Q4 reached 143.8 million visits[27] - Dealer Inspire websites experienced approximately 40% more engagement for customers who also subscribe to the Carscom marketplace[34]

Cars.com (CARS) Q4 2024 Earnings Call February 28, 2025 10:46 AM ET Company Participants Katherine Chen - Vice President, Investor RelationsAlex Vetter - CEOSonia Jain - CFONaved Khan - Managing Director - Equity ResearchGary Prestopino - Managing DirectorMarvin Fong - DirectorJoseph Spak - Managing DirectorRajat Gupta - Executive Director, AutosDouglas Arthur - Managing Director Conference Call Participants Tom white - Managing Director, Senior Equity Analyst Operator Good morning, ladies and gentlemen. We ...

Financial Data and Key Metrics Changes - The company reported record full-year revenue of $719 million, representing a 4% year-over-year increase, with nearly a full point of margin improvement [6][68] - Free cash flow reached $128 million, the highest level since 2018, reflecting strong operating discipline [6][106] - Fourth-quarter revenue was $180.4 million, a new quarterly record, driven by a 15% year-over-year growth in OEM and national revenue [29][93] - Adjusted EBITDA for the fourth quarter was $55 million, slightly up year-over-year, with an adjusted EBITDA margin of 30.8% consistent with the prior year [35][36] Business Line Data and Key Metrics Changes - AccuTrade saw significant growth, with annual appraisal volume increasing by 35% year-over-year and the number of vehicles acquired post-appraisal per dealer up 23% year-over-year in Q4 [12][75] - The Cars.com marketplace reached over 23 million shoppers, driving over 143 million visits, with repeat visitation up 6% year-over-year [15][78] - Dealer counts decreased to 19,206, down 49 dealers quarter-over-quarter, attributed to seasonal spending patterns [36][100] Market Data and Key Metrics Changes - OEM and national revenue grew by 15% year-over-year, exceeding expectations and contributing to an 18% full-year growth [20][83] - Upfront marketing dollars committed by OEMs for 2025 are up double digits year-over-year, indicating increased marketing investments [21][84] Company Strategy and Development Direction - The company aims to accelerate growth in 2025 by increasing sales velocity, improving packaging, and continuing product innovation [10][72] - The acquisition of Dealer Club is expected to enhance platform capabilities and tap into a $10 billion wholesale market [22][85] - Focus on cross-selling opportunities and enhancing dealer engagement through integrated solutions [11][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating dynamic economic conditions and achieving growth through diverse drivers [9][90] - The first half of 2025 is expected to see modest growth of 1.5% to 2% year-over-year, with more significant initiatives planned for the back half of the year [46][112] - Adjusted EBITDA margin for 2025 is projected to be between 29% to 31%, reflecting a 7% year-over-year growth [47][112] Other Important Information - The company repurchased approximately 800,000 shares for $13.5 million in Q4 and announced a new share repurchase authorization of $250 million over three years [42][107] - Total liquidity increased to $341 million, providing ample resources for growth strategies [44][109] Q&A Session Summary Question: Full-year revenue guidance and marketplace growth expectations - Management expects roughly two-thirds of incremental growth in 2025 to come from dealer revenue, including marketplace and upsells [53][118] Question: Impact of Dealer Club on revenue outlook - No significant revenue from Dealer Club is factored into the 2025 outlook as the focus is on integration and dealer engagement [58][122] Question: Explanation of dealer revenue performance in Q4 - Seasonal softness in Q4 led to a pullback in media solutions, impacting dealer revenues, but momentum is expected to return in Q1 [61][68]

Cars.com (CARS) came out with quarterly earnings of $0.49 per share, missing the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -5.77%. A quarter ago, it was expected that this online automotive marketplace would post earnings of $0.44 per share when it actually produced earnings of $0.41, delivering a surprise of -6.82%.Over the last four quarter ...

Revenue Performance - Full year revenue reached $719 million, an increase of 4% year-over-year[1] - Q4 2024 revenue totaled $180.4 million, slightly up from the prior year period[6] - Total revenue for the year ended December 31, 2024, was $719,152,000, an increase from $689,183,000 in 2023, representing a growth of approximately 4.0%[42] - First quarter 2025 revenue is expected to be between $178 million and $181 million[20] - Full year 2025 revenue guidance is set at $745 million to $755 million, driven by new product launches[21] Net Income and Profitability - Net income for Q4 2024 was $17.3 million, a 107% increase compared to $8.3 million in Q4 2023[8] - Net income for the year ended December 31, 2024, was $48,188, a decrease of 59.3% compared to $118,442 in 2023[48] - The Company’s total operating income for the year ended December 31, 2024, was $53,498,000, slightly down from $54,116,000 in 2023, a decrease of about 1.1%[42] - Adjusted EBITDA for the year was $209.7 million, representing a margin of 29.2%[14] - Adjusted EBITDA for the year ended December 31, 2024, reached $209,717, an increase of 7.6% compared to $194,884 in 2023[51] - Adjusted EBITDA margin for 2025 is projected to be between 29% and 31%[22] Expenses and Liabilities - Adjusted Operating Expenses for the year ended December 31, 2024, totaled $665,654,000, compared to $635,067,000 in 2023, indicating an increase of approximately 4.8%[42] - Total operating expenses for the year ended December 31, 2024, were $665,654, a decrease of 10.5% from $735,067 in 2023[58] - The Company reported a decrease in total liabilities from $680,341,000 in 2023 to $600,380,000 in 2024, a reduction of approximately 11.8%[44] Cash Flow and Assets - Cash and cash equivalents increased to $50,673,000 as of December 31, 2024, from $39,198,000 in 2023, marking a growth of 29.4%[44] - Net cash provided by operating activities increased to $152,524, up 11.5% from $136,720 in 2023[48] - Free cash flow for the year ended December 31, 2024, was $128,143, representing a 10.6% increase from $115,838 in 2023[53] - The Company’s total assets decreased from $1,172,449,000 in 2023 to $1,111,865,000 in 2024, a decline of approximately 5.2%[44] Shareholder Actions - The company authorized a $250 million share repurchase program for 2025[18] - The weighted-average common shares outstanding for diluted earnings per share decreased from 68,326,000 in 2023 to 66,802,000 in 2024[42] Subscriber and Market Growth - AccuTrade Connected expanded to approximately 1,000 subscribers, supported by ten OEM partners[11] - OEM and National revenue grew 15% year-over-year in Q4 2024, driven by increased marketing efforts[6] - The Company anticipates continued growth in Average Revenue Per Dealer (ARPD), which is calculated as dealer revenue divided by the monthly average number of dealer customers[34] Stock and Compensation - Stock-based compensation for the year ended December 31, 2024, totaled $32,373, an increase of 7.4% from $30,127 in 2023[52] - Payments for acquisitions, net of cash acquired, were $(216), significantly lower than $(76,168) in 2023[48] - Capitalization of internally developed technology for the year was $(21,381), compared to $(19,602) in 2023[48] - Payments of contingent consideration amounted to $(27,435) in 2024, with no payments recorded in 2023[48] Traffic and Analytics - Average Monthly Unique Visitors (UVs) and Traffic metrics were measured via Adobe Analytics for the year ended December 31, 2023, with a transition to RudderStack starting January 1, 2024, for improved visibility[33]

Accomplished commercial leader brings proven track record of accelerating organic revenue growth and transforming go-to-market strategies across SaaS, adtech and dataCHICAGO, Feb. 27, 2025 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce"), an audience-driven technology company empowering automotive, announced today the appointment of Lisa Gosselin as its Chief Commercial Officer, succeeding Doug Miller. Gosselin brings more than 25 years of commercial leadership experience within SaaS, adte ...

Core Insights - Analysts expect Cars.com (CARS) to report quarterly earnings of $0.52 per share, reflecting a year-over-year increase of 333.3% [1] - Revenue is projected to be $182.51 million, which is a 1.6% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating a stable outlook from analysts [1] Revenue Estimates - The consensus estimate for 'Revenue- Dealer' is $161.83 million, showing a year-over-year change of +0.3% [4] - 'Revenue- OEM and National' is estimated at $16.68 million, suggesting an increase of +8.2% year over year [4] - The 'Monthly Average Revenue Per Dealer (ARPD)' is projected to be $2,496.50, slightly down from $2,523 in the previous year [4] Customer Metrics - Analysts project that 'Dealer Customers' will reach 19,332, a decrease from 19,504 reported in the same quarter last year [5] Stock Performance - Shares of Cars.com have declined by -17.7% in the past month, contrasting with a -2.3% change in the Zacks S&P 500 composite [6] - Cars.com holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the overall market in the near future [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Cars.com (CARS) as a strong value stock based on its favorable valuation metrics and earnings outlook [2][3][6] Valuation Metrics - Cars.com has a Price-to-Book (P/B) ratio of 2.25, which is significantly lower than the industry average of 5.62, indicating it may be undervalued [4] - The stock's P/B ratio has fluctuated between 1.99 and 2.85 over the past year, with a median of 2.37 [4] - Additionally, Cars.com has a Price-to-Cash Flow (P/CF) ratio of 7.83, compared to the industry average of 16.77, further suggesting undervaluation [5] - The P/CF ratio has ranged from 5.03 to 10.36 in the past year, with a median of 7.56 [5] Investment Outlook - Cars.com holds a Zacks Rank of 2 (Buy) and an "A" grade in the Value category, making it one of the strongest value stocks currently available [3][6] - The combination of its attractive valuation metrics and strong earnings outlook positions Cars.com as an impressive value stock [6]

Group 1 - Cars.com Inc. expects to report its financial results for Q4 and the full year ended December 31, 2024, on February 27, 2025 [1] - A conference call will be hosted by CEO Alex Vetter and CFO Sonia Jain to discuss the results, available via live webcast [2] - Cars Commerce is an audience-driven technology company that simplifies the buying and selling of cars, offering a range of services including a marketplace, digital marketing technology, and AI-driven retail operations [3]