#United States #Chicago #financial results #Automotive #Cars.com

Enhancing the Automotive Experience: Cars.com's Q1 2025 Insights

Cars.com Inc., known as Cars Commerce, has recently disclosed its financial results for the first quarter of 2025, emphasizing the pivotal changes and strategies that shaped its performance. Despite encountering various external economic pressures, the Company has demonstrated resilience and growth potential in several key areas.

Quarterly Highlights

In the first quarter, Cars.com reported total revenue of $179 million, slightly down from $180 million in the previous year. The firm saw a year-over-year increase of 6% in Original Equipment Manufacturer (OEM) and national revenue, signaling strong competition among automakers for consumer attention. Conversely, subscription-based dealer revenue experienced a 2% drop, primarily due to ongoing economic challenges impacting dealers’ marketing budgets.

Throughout Q1, the Company expanded its dealer customer base to 19,250, marking an increase from the previous quarter. This surge indicates a robust adoption of Cars.com’s products and solutions by automotive dealers seeking competitive advantages. Moreover, Cars.com achieved a new record of 29 million average monthly unique visitors, up 3% from last year, showcasing the effectiveness of its marketing shifts and strategic initiatives to engage consumers actively.

Strategic Initiatives and Growth

The Chief Executive Officer, Alex Vetter, expressed optimism about the growing momentum across Cars.com's marketplace. He highlighted that the recent spike in unique visitors and dealer count signifies the Company’s increasing market share during a crucial period for the automotive sector. He stated, “As laid out at the beginning of the year, our goal is to reignite dealer revenue growth through advancing our marketplace and enhancing product adoption.”

In alignment with this goal, Cars.com plans to enhance its product offerings further, which includes marketplace repackaging and scaling up used car product adoptions. The steps taken to manage operational expenses—especially in response to external uncertainties—are expected to contribute to delivering consistent Adjusted EBITDA margins in upcoming quarters.

Financial Performance Breakdown

As of March 31, 2025, Cars.com reported a net loss of $2 million, resulting in a per-share loss of $0.03, in contrast to a profit of $784,000 during the same period last year. The adjusted net income for the quarter was $24 million, or $0.37 per share, indicating a decrease from the previous year. Adjusted EBITDA for Q1 was recorded at $50.7 million, representing 28.3% of total revenue.

Despite financial setbacks, the Company reported a positive cash flow position with $29.5 million generated from operating activities. Free cash flow was noted at $23.7 million, reflecting a decrease relative to the prior year underlining the need for ongoing scrutiny of operational expenses.

Shareholder Commitment and Future Outlook

Cars.com executed a share repurchase of 1.6 million common stocks, underlining its strategy to return capital to shareholders as it aims for a repurchase total of $60 to $70 million in 2025.

Looking ahead, while the automotive landscape presents challenges related to economic volatility and tariff impacts, Cars.com has reaffirmed its guidance for Adjusted EBITDA margins between 29% and 31% for the full year. The Company chose to withhold revenue guidance for 2025, promising to provide updates as market conditions stabilize.

Conclusion

In summary, Cars.com’s Q1 results reveal a mix of resilient strategies and adaptive measures amid external pressures. By enhancing its technology-driven solutions and focusing on dealer needs, the Company aims to navigate ongoing challenges while remaining dedicated to its mission of empowering the automotive industry. With a strong balance sheet and clear strategic focus, Cars.com is well-positioned for the future as it adapts to the evolving marketplace.