Cars.com 2025 Q2 Earnings Revenue Declines, Net Income Falls 38.4%

Cars.com(CARS) reported its fiscal 2025 Q2 earnings on Aug 08th, 2025. The results reflect a challenging quarter as the company faces a revenue decline and a drop in profitability. Despite management’s guidance of continued growth, the latest performance shows a mixed picture of cautious optimism and operational headwinds.

Cars.com’s total revenue declined by 0.3% to $175.11 million in 2025 Q2, a slight dip from the $175.67 million reported in the same period last year. The breakdown of segment performance reveals a complex revenue picture, with retail emerging as the strongest contributor. The retail segment generated $178.74 million, a solid figure, while the dealer segment followed with $158.48 million. In comparison, the OEM and National segment contributed $16.64 million, and the Other category accounted for $3.63 million. This distribution highlights the reliance on core retail and dealer operations as the primary drivers of revenue, with limited contributions from other segments.

Earnings per share (EPS) for Cars.com dropped 35.3% to $0.11 in 2025 Q2, compared to $0.17 in the same period last year. This decline is mirrored in the company’s net income, which fell to $7.01 million, representing a 38.4% reduction from the $11.38 million recorded in 2024 Q2. The drop in profitability underscores the pressures facing the automotive digital marketplace amid shifting consumer trends and competitive dynamics.

The stock price of Cars.com has shown mixed performance in recent trading periods. Over the latest trading day, it climbed by 3.93%, a positive sign, but gains have been muted over the week, with a rise of just 0.08%. The month-to-date performance remains negative, with a 0.88% decline. This volatility reflects the uncertainty surrounding the company’s ability to reverse its earnings trend.

Post-earnings price action has been particularly disappointing for investors. A strategy of buying shares after a revenue increase quarter-over-quarter on the earnings release date and holding for 30 days resulted in a -17.43% return, significantly underperforming the 47.91% benchmark return. This underperformance translated into an excess return of -65.34%, indicating strong market skepticism about the company’s recent performance. The strategy’s CAGR of -6.25% and Sharpe ratio of -0.15 further emphasize the high volatility and unattractive risk-return profile.

CEO John Voelcker emphasized the company’s strategic focus on growth through enhanced user engagement and digital innovation. He noted the importance of leveraging exclusive test data and expert insights to build customer trust. Acknowledging the competitive challenges in the automotive market, Voelcker expressed confidence in strategic investments in electric vehicles and digital tools to maintain Cars.com’s leadership position. He stressed the need to adapt to evolving consumer preferences and described the company’s approach as “cautious yet optimistic,” emphasizing the importance of refreshing offerings to stay ahead in a rapidly changing industry.

Looking ahead, Cars.com outlined its expectations for sustained revenue growth and improved profitability as digital engagement tools scale. Management plans to maintain a disciplined approach to capital expenditures while investing in key areas such as EV content and user experience enhancements. Although the company did not provide specific numerical guidance, it expressed confidence in achieving positive EPS and revenue momentum, aligning with the reported 2025 Q2 results of $0.11 EPS, $175.1 million in revenue, and $7.0 million in net income.

Additional News: Nigeria’s FDI Crashes by 70% in Three Months

In unrelated news, Nigeria’s foreign direct investment (FDI) has reportedly plummeted by 70% over the past three months, signaling a sharp decline in international business confidence in the country. The drop has raised concerns among economic analysts and government officials, who worry about the implications for job creation and economic growth. Meanwhile, Sterling HoldCo directors announced a significant investment of N341.6 million into company shares, reflecting continued support from key stakeholders. In the manufacturing sector, Dangote Industries retained its position as the leading cement company in the country, winning the "Cement Company of the Year" award. These developments highlight a mix of economic challenges and resilience within the Nigerian business landscape.