Cars.com(US:CARS)2024-02-22 20:39Financial Data and Key Metrics Changes - Revenue for Q4 2023 reached $180 million, a 7% increase year-over-year, marking the 12th consecutive quarter of year-over-year revenue growth [65][66] - Adjusted EBITDA for the quarter was $55 million, representing a 31% margin, which exceeded guidance and showed a 12% increase year-over-year [67][68] - Net income for the quarter totaled $8 million, or $0.12 per diluted share, compared to $10 million, or $0.15 per diluted share in the prior year [67][68] - Full year revenue totaled $689 million, up 5% year-over-year, with adjusted EBITDA of $195 million, or 28.3% of revenue [80] Business Line Data and Key Metrics Changes - Dealer revenue grew 8% year-over-year to $161 million, driven by growth in websites, AccuTrade, and media sales [66][79] - OEM and National revenue increased to $15 million, up 8% year-over-year, with the OEM portion increasing by 24% year-over-year [66] - ARPD grew 7% to $2,523, driven by the strategic decision to include more offerings in higher-tier packages [69] Market Data and Key Metrics Changes - The automotive industry is shifting to a buyer's market with new car inventory up 36% year-over-year, while used vehicle listings are down 4% [52] - The company ended the year with approximately 7,300 dealer websites powered, including those acquired through D2C [61] Company Strategy and Development Direction - The company is focused on five growth drivers: engaging the audience, growing dealer partnerships, creating seamless experiences for OEMs, and enhancing platform advantages [76] - The integration of D2C Media is expected to enhance revenue and expand market reach, particularly in Canada [85] - The company aims to leverage its strong organic traffic and brand loyalty to maintain a competitive edge in the market [114] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2024, citing increased OEM production, new model launches, and rising dealer inventory as positive indicators [71][85] - The company anticipates continued dealer and OEM adoption of its platform, reflected in revenue growth guidance of 6% to 8% for the full year [72] Other Important Information - The company has a strong financial profile with total debt outstanding at $490 million and ample liquidity of $234 million [70] - The company repurchased 1.7 million shares in 2023, representing nearly 3% of total shares outstanding [91] Q&A Session Summary Question: Can you provide more granularity on the 2024 revenue guidance? - Management indicated that the guidance includes the full benefit of the D2C acquisition and positive performance in OEM and National revenue, despite some seasonality expected from Q4 to Q1 [84][85] Question: What is the outlook for dealer revenue and the impact of independent used car dealers? - Management noted that Q4 typically sees softer dealer net ads due to macroeconomic factors, but they remain optimistic about the overall growth trajectory for 2024 [96][98] Question: How does AccuTrade differentiate itself from competitors? - Management emphasized that AccuTrade allows dealers to buy cars directly from customers, providing precise valuations and significant cost savings compared to auction fees [114]