On August 8, 2024, Cars.com Inc (CARS, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Cars.com Inc is an online destination for buying and selling new and used vehicles. The company brands include Dealer Inspire, DealerRater, FUEL, Accu-Trade, PickupTrucks.com, CreditIQ, and NewCars.com.
Performance Overview
Cars.com Inc (CARS, Financial) reported revenue of $178.9 million for Q2 2024, a 6.4% increase year-over-year but slightly below the analyst estimate of $182.10 million. The company achieved a net income of $11.4 million, or $0.17 per diluted share, surpassing the analyst estimate of $0.10 per share. Adjusted net income was $26.0 million, or $0.38 per diluted share, compared to $22.5 million, or $0.33 per diluted share, in the prior year.
Key Financial Achievements
Revenue growth was driven by a 28% year-over-year increase in OEM and National revenue, reflecting higher demand for media and advertising solutions. The dealer base grew to 19,390 customers, with a slight increase in Monthly Average Revenue Per Dealer (ARPD) to $2,474. Adjusted EBITDA rose to $50.4 million, or 28% of revenue, up from $45.6 million, or 27% of revenue, in the prior year.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $178.9 million | $168.2 million |
| Net Income | $11.4 million | $9.1 million |
| Adjusted Net Income | $26.0 million | $22.5 million |
| Adjusted EBITDA | $50.4 million | $45.6 million |
Balance Sheet and Cash Flow
Net cash provided by operating activities for the first six months of 2024 was $68.7 million, compared to $56.2 million in the prior year. Free cash flow totaled $56.4 million, up from $45.6 million in 2023. The company repaid $15.0 million of debt, reducing total debt to $475.0 million. Total liquidity stood at $304.1 million, including $29.1 million in cash and cash equivalents.
Operational Highlights
Average Monthly Unique Visitors were 26.1 million, slightly down from 26.9 million a year ago, while total traffic increased by 1% year-over-year to 158.1 million visits. The company also highlighted the certification of AccuTrade by multiple OEMs as a Trade & Appraisal solution.
Commentary and Outlook
"We drove disciplined growth and strong profitability during the second quarter on top of returning to sequential expansion in our dealer customer base," said Alex Vetter, Chief Executive Officer of Cars Commerce.
"We demonstrated robust operating leverage and free cash flow generation in the second quarter. Despite revisions to our revenue outlook, our business is strong and our platform advantage is clear," said Sonia Jain, Chief Financial Officer of Cars Commerce.
Analysis
Cars.com Inc (CARS, Financial) has shown resilience with solid revenue growth and profitability despite industry disruptions. The increase in OEM and National revenue is a positive indicator of recovery in vehicle production and inventory levels. However, the slight miss on revenue estimates and the challenges in subscription adoption for AccuTrade Connected highlight areas for improvement. The company's focus on returning capital to shareholders through share repurchases demonstrates confidence in its long-term strategy.
For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Cars.com Inc for further details.
