On November 7, 2024, Cars.com Inc (CARS, Financial) released its 8-K filing detailing its financial results for the third quarter of 2024. Cars.com Inc, a leading online platform for buying and selling vehicles, operates through various brands including Dealer Inspire, DealerRater, and AccuTrade, among others.
Performance Overview
Cars.com Inc reported a revenue of $179.7 million for Q3 2024, slightly below the analyst estimate of $179.87 million. However, the company exceeded earnings expectations with a net income of $18.7 million, or $0.28 per diluted share, surpassing the estimated earnings per share of $0.26. This represents a significant increase from the previous year's net income of $4.5 million, or $0.07 per diluted share.
Key Financial Achievements
Revenue growth was driven by a 17% year-over-year increase in OEM and National revenue, reflecting strong demand from manufacturers seeking to enhance consumer awareness. The company's platform growth was notably supported by AccuTrade, D2C Media, and VIN Performance Media Products.
Adjusted EBITDA for the quarter was $51.1 million, representing 28.5% of revenue, a slight increase from the previous year's $49.5 million. This growth in Adjusted EBITDA underscores the company's ability to maintain profitability amidst rising operating expenses.
Operational Highlights and Challenges
Despite a decrease in Average Monthly Unique Visitors from 26.0 million to 24.5 million, traffic increased by 2% year-over-year to 154.2 million visits. However, the Monthly Average Revenue Per Dealer (ARPD) declined by 3% to $2,478, indicating potential challenges in dealer profitability due to macroeconomic trends.
Dealer Customers decreased slightly to 19,255 from 19,390 in the previous quarter, highlighting a potential area of concern for sustained growth. Nonetheless, Cars Commerce became the leading dealer website provider in Canada, supporting approximately 1,100 customers.
Financial Statements and Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $179.7 million | $174.3 million |
| Net Income | $18.7 million | $4.5 million |
| Adjusted EBITDA | $51.1 million | $49.5 million |
Net cash provided by operating activities for the first nine months of 2024 was $122.5 million, a 34% increase year-over-year. The company also repurchased 1.2 million shares, representing 45% of its quarterly free cash flow, demonstrating a commitment to returning value to shareholders.
Strategic Insights
Cars.com Inc's strategic focus on expanding its platform capabilities and enhancing dealer engagement is evident in its financial results. The company's ability to drive revenue growth through OEM and National channels, despite challenges in dealer revenue, highlights its adaptability in a dynamic market environment.
We demonstrated steady and consistent execution against our platform strategy as we drove profitable growth across the Cars Commerce product suite during the third quarter," said Alex Vetter, Chief Executive Officer of Cars Commerce.
Overall, Cars.com Inc's Q3 2024 results reflect a balanced approach to growth and profitability, with strategic investments in technology and product innovation poised to support future performance in the competitive automotive industry.
Explore the complete 8-K earnings release (here) from Cars.com Inc for further details.
