Cars.com Reports Third Quarter 2025 Results

Core Insights - Cars.com Inc. achieved record total revenue of $182 million in Q3 2025, with dealer revenue growing by 2% year-over-year [1][5] - The company expanded its customer base by 271 year-over-year, reaching 19,526 dealer customers, supported by the launch of AI-powered search features [1][4] - The company repurchased $64 million of stock year-to-date, on track to meet its target of $70 to $90 million for FY25 [1][10] Financial Performance - Total revenue for Q3 2025 was $181.6 million, a 1% increase from $179.7 million in Q3 2024 [3][5] - Net income decreased to $7.7 million, or $0.12 per diluted share, down 59% from $18.7 million, or $0.28 per diluted share in the prior year [7] - Adjusted net income rose by 10% to $30.4 million, or $0.48 per diluted share, compared to $27.7 million, or $0.41 per diluted share a year ago [3][7] Operational Highlights - Average monthly unique visitors increased to 25.5 million, a 4% year-over-year growth [4] - The company reported a 1% increase in traffic, totaling 156.2 million visits [4] - Monthly average revenue per dealer (ARPD) was $2,460, reflecting a 1% increase quarter-over-quarter but a 1% decrease year-over-year [4] Cost Management - Total operating expenses decreased to $164.8 million from $168.2 million in the prior year, with adjusted operating expenses down 4% to $150.4 million [6][7] - Adjusted EBITDA for Q3 2025 was $54.6 million, representing 30.1% of revenue, an increase from 28.5% in the previous year [7] Cash Flow and Balance Sheet - Net cash provided by operating activities for the nine-month period ended September 30, 2025, was $114.5 million, down from $122.5 million in the prior year [8] - Free cash flow for the same period totaled $94.5 million, compared to $103.7 million in the previous year [8] - Total debt outstanding was $455 million, with a net leverage ratio of 1.9x, below the target range of 2.0x to 2.5x [9] Shareholder Returns - The company repurchased 1.5 million shares for $19.3 million in Q3, totaling 5.2 million shares for $63.9 million year-to-date [10] - The company reaffirmed its target for share repurchases of $70 to $90 million for fiscal 2025 [10][11] Future Outlook - The company anticipates low-single digit revenue growth for the second half of 2025, based on current market conditions and execution of growth initiatives [12] - Full-year adjusted EBITDA margin guidance remains at 29% to 31%, reflecting confidence in managing operating levers [13]