Cars.com Reports First Quarter 2025 Results

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]