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Cars.com Q3 2025 Financial Highlights

Cars.com Inc. has announced impressive results for the third quarter of 2025, achieving a record total revenue of $182 million. This represents a 1% increase from the previous year. Notably, dealer revenue also saw a 2% growth year-over-year as the company continues to successfully accelerate marketplace adoption. With an astonishing increase in the customer base of 271 compared to last year, Cars.com is now serving 19,526 dealer customers.

The CEO of Cars Commerce, Alex Vetter, marks this quarter as a representation of the company's focused strategies leading to a resurgence in dealer revenue. In his statement, Vetter pointed out that the new AI-powered shopping assistant, Carson, significantly enhances the user experience. Carson has already powered millions of web searches while doubling visitor engagement rates.

Financial Performance Overview

• - Total Revenue: For the quarter ending September 30, 2025, total revenue reached $181.6 million, up from $179.6 million in Q3 2024. The company had also predicted a rise in revenue during the low single-digit range for the second half of 2025 based on third-quarter performance.
• - Net Income: The company reported a net income of $7.7 million, which translates to $0.12 per diluted share, down compared to $18.7 million or $0.28 per diluted share from the same quarter last year. This decline in net income reflects changes in the fair value of contingent consideration related to prior-year acquisitions.
• - Adjusted Net Income: Adjusted net income rose by 10% to reach $30.4 million ($0.48 per diluted share), showing the company’s strong underlying performance notwithstanding the decrease in net income.

Key Metrics and Operational Highlights

1. Strong Growth in Dealer Customers: There was a notable rise in dealer customers, growing from 19,255 to 19,526. This increase is attributed to strategic market enhancements and successful sales execution.
2. Engagement and Traffic: Monthly unique visitors averaged 25.5 million, slightly down from last quarter but up by 4% year-over-year. Total visits of 156.2 million exhibited a minor decline of 4% from prior quarters.
3. AI Powered Features: The launch of Carson has driven a twofold increase in vehicle listing views, indicating its effectiveness in improving customer engagement. The mobile app version of Carson is currently in pilot testing, with expectations of widespread rollout soon.
4. Repackaging Success: The successful restructuring of the marketplace offerings has led to a approximately 60% increase in Premium subscribers, enhancing leads per listing by 14%.
5. Cash and Debt Management: The company reported a free cash flow of $94.5 million for the nine-month period, alongside a total debt of $455 million. The company's net leverage stood at 1.9x, which is below its target of 2.0x to 2.5x.

Future Outlook

Cars.com is poised for continued growth as it explores potential future revenue increases based on marketplace conditions and customer spending habits. Reiterating its adjusted EBITDA margin guidance of 29% to 31%, the company focuses on both identifying opportunities and managing operational costs effectively.

Shareholder Commitments

Furthermore, Cars.com has been active in returning value to its shareholders, repurchasing 1.5 million shares for $19.3 million in Q3, with plans to reach annual repurchases of $70 to $90 million by fiscal year-end.

Conclusion

Overall, Cars.com demonstrates solid financial health, driven by a substantial marketplace strategy, innovative AI integrations, and committed to creating value for its shareholders. As the business landscape continues to evolve, Cars.com’s agile approach positions the company strongly for what lies ahead.