Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $179 million, reflecting a steady year-over-year performance with a 5% growth in OEM and national revenue, partially offset by temporary softness in dealer revenue [5][21] - Adjusted EBITDA for Q2 was $51 million, with an adjusted EBITDA margin of 28.5%, at the high end of the outlook range, driven by cost efficiencies [27][34] - Net income for Q2 was $7 million, or $0.11 per diluted share, compared to $11 million, or $0.17 per diluted share a year ago [27] Business Line Data and Key Metrics Changes - Dealer count increased to 19,412, up 162 dealers quarter-over-quarter, marking the best sequential organic growth in over three years [5][14] - Solutions products, including AccuTrade and Dealer Club, contributed significantly to growth, with AccuTrade's subscriber base reaching 1,070 dealers [16][21] - Average revenue per dealer (ARPD) was $2,435, down approximately $40 year-over-year and sequentially, attributed to customer and product mix [28] Market Data and Key Metrics Changes - Traffic on the cars.com platform reached a record 162 million in Q2, up 2% year-over-year, with average monthly unique visitors totaling 26.6 million [10] - OEM and national revenue grew 5% year-over-year, with nearly half of OEM partners increasing their spending on the platform [8][25] - The marketplace performance showed strong momentum, with total marketplace customers growing sequentially every month since January [22] Company Strategy and Development Direction - The company is focused on enhancing its marketplace and solutions offerings, with new product innovations and repackaging efforts aimed at driving revenue growth [7][29] - Continued investment in AI features is expected to differentiate the platform and drive lead volume and quality [12][43] - The company anticipates low single-digit revenue growth for 2025, with expectations for acceleration heading into 2026 [9][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve stronger financial results in the second half of 2025, driven by growth initiatives and improved sales velocity [20][34] - There remains uncertainty regarding new vehicle production and pricing forecasts, which could impact discretionary media spending [33] - Management noted that dealer sentiment is improving, with a willingness to compete more aggressively for volume [88] Other Important Information - The company raised its full-year share repurchase target to $70 million to $90 million, consistent with its commitment to return value to shareholders [20][31] - Free cash flow for the year-to-date was $42 million, down year-over-year, primarily due to anticipated earn-out payments [30] Q&A Session Summary Question: Clarification on outlook and acceleration in business - Management expects to see acceleration from Q2 to Q3 to Q4, driven by unit growth and repackaging efforts [38] Question: Average revenue per dealer expectations - Management anticipates that ARPD will improve sequentially from Q2 to Q3 as repackaging takes effect [40] Question: Impact of AI on marketplace model - Management views AI as an opportunity to enhance user experience and engagement, with a focus on integrating AI capabilities into the platform [42][43] Question: Drivers of dealer revenue growth and ARPD decline - The decline in ARPD is attributed to customer mix and product mix, with a growing base of solutions-first customers impacting initial ARPD [49] Question: Retention of AccuTrade customers - Retention is improving, particularly with enterprise-level deals that standardize AccuTrade across multiple stores [66] Question: Marketplace repackaging rollout - The repackaging effort will be rolled out over the course of two quarters, focusing on creating added value for dealers [68] Question: OEM growth as a tailwind - OEM growth is expected to contribute positively to revenue goals in both Q3 and Q4, with management staying close to OEM partners [73] Question: Competitive threat from Amazon - Management acknowledges Amazon as a potential threat but believes the company is well-positioned due to its established platform and strong dealer relationships [78]

Group 1 - Cars.com Inc. will participate in the J.P. Morgan 53rd Annual Global Technology, Media and Communications Conference on May 13, 2025, at 3:30 p.m. CT / 4:30 p.m. ET [1] - The presentation will be available as a live webcast on the Cars.com Investor Relations website, with an archived replay accessible shortly after the presentation [1] Group 2 - Cars Commerce is an audience-driven technology company focused on empowering the automotive industry by simplifying car buying and selling through AI-driven technologies [2] - The company offers a platform organized around four leading brands: Cars.com, Dealer Inspire, AccuTrade, and DealerClub, providing various solutions for retail operations [2]

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].

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]