#USA #Chicago #Cars Commerce #DealerClub #AccuTrade

Cars.com Financial Results Overview

On February 27, 2025, Cars.com Inc., trading as Cars Commerce, unveiled its financial performance for the fourth quarter and the entire year of 2024. With a record revenue of $719 million, the company achieved a year-over-year growth of 4%. This robust financial performance was driven by strong sales and operational efficiencies within their digital marketplace.

Highlights of Q4 2024

The fourth quarter of 2024 saw Cars.com generate $180.4 million in revenue, slightly up from $179.6 million in the prior year. The net income surged 107% year-over-year, reaching $17.3 million, attributed primarily to favorable adjustments from prior equity investments. The company's adjusted EBITDA reached $55.5 million, marking a significant margin performance of nearly 31%.

CEO Alex Vetter stated, "This quarter showcased impressive gains in OEM and national revenue, up 15% since last year. The consistent growth attests to our commitment to providing efficient solutions to the automotive market."

Cars.com also noted that their AccuTrade Connected service had expanded to approximately 1,000 subscribers by the end of 2024, signifying a growing ecosystem of users who leverage their platform for trade assessments and vehicle appraisals.

Annual Financial Performance

For the fiscal year, Cars.com reported total revenue of $719.2 million, marking it as their highest full-year revenue on record. The increase was fueled by strong OEM and national revenue, which rose 18% as manufacturers ramped up marketing efforts amidst a rise in vehicle inventory. The subscription-based dealer revenue also grew modestly by 3%, indicating steady demand for their dealer-focused offerings.

Operating expenses for the year amounted to $665.7 million, reflecting careful cost management aligned with revenue growth strategies. Notably, the company achieved a 29.2% adjusted EBITDA margin for the year, illustrating strong operational leverage.

Cash Flow and Shareholder Returns

One of the critical highlights from Cars.com's performance was the net cash provided by operating activities, totaling $152.5 million for 2024, alongside a free cash flow of $128.1 million. This strong cash generation allowed the company to repay $30 million in debt and initiated significant share repurchases.

In pursuit of returning value to its shareholders, Cars.com successfully repurchased 2.8 million shares of its common stock for approximately $49.2 million. Furthermore, in February 2025, they announced a new share repurchase program worth $250 million, aiming to buy back shares over a three-year period, reflecting their strategy to maintain shareholder confidence and manage stock dilution from compensation plans.

Looking Ahead

Looking forward to 2025, Cars.com projects revenues between $745 million and $755 million, underpinned by expanding its innovative AccuTrade platform and launching new products, including DealerClub. The anticipated adjusted EBITDA margin is projected to remain strong between 29% and 31% as they continue to drive revenue growth and maintain operational discipline.

With its clear focus on product innovation and commitment to enhancing customer experiences, Cars.com is poised for a promising trajectory, reinforcing its status as a leader within the automotive digital marketplace.

Conclusion

As Cars.com navigates the evolving needs of the automotive industry, its strategic investments in technology and customer engagement positions it well for future growth and increased shareholder returns. The upcoming year will be crucial as the company continues to implement initiatives aimed at further expanding its market reach and improving overall profitability.