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Did Cars.com beat or miss consensus estimates last quarter?

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What factors drove the changes in Cars.com's revenue and profit?

- **Revenue Resilience**: $182M Q3 revenue (+1% YoY) despite macro headwinds, driven by dealer count growth (+300+ YoY).
- **AI-Driven Engagement**: Carson users save 3x more vehicles and return 2x as frequently, signaling AI's conversion potential.
- **Profitability Expansion**: Adjusted EBITDA margin of 30.1% (up 160bps YoY) reflects cost control and revenue mix shift.
- **Share Buybacks**: $64M spent year-to-date, targeting high end of $70-90M range.
- **Dealer Momentum**: Marketplace ARPD for multi-product users is 3x higher, highlighting cross-selling opportunity.

**【CEO Summary Section】**
- Q3 revenue reached $182 million, up 1% year-over-year, driven by dealer count growth and AI-driven marketplace innovations.
- Dealer count increased by 300+ year-over-year, with marketplace contributing 50% of net adds, reflecting strong dealer adoption of Premium and Premium Plus packages.
- AI initiatives like Carson (natural language search assistant) boosted consumer engagement, with users saving 3x more vehicles and returning 2x as frequently.
- Adjusted EBITDA margin expanded to 30.1%, up 160 basis points YoY, supported by cost control and revenue mix improvements.
- Share buybacks totaled $64 million year-to-date, with plans to reach the high end of the $70-90 million target.

**【CFO Financial Commentary】**
- Q3 GAAP net income was $7.7 million, with adjusted EBITDA of $55 million, up 7% YoY.
- Dealer revenue grew 2% YoY, offsetting a 5% decline in OEM/national revenue due to temporary customer pullbacks.
- Operating expenses decreased 2% YoY, driven by headcount and lease cost efficiencies.
- Free cash flow of $94.5 million year-to-date supported share buybacks and debt reduction.
- Full-year outlook reaffirms low single-digit revenue growth and adjusted EBITDA margin of 29-31%.

**【Q&A Key Highlights】**
- **Dealer Adoption**: AccuTrade added 82 subscribers Q/Q, with 50%来自enterprise deals. DealerClub active users grew 40% Q/Q.
- **AI Impact**: Cars.com cited 2x more frequently than peers in LLMs, driving record 25.4M monthly visitors (+4% YoY).
- **Capital Allocation**: Share buybacks remain top priority, with $64M spent year-to-date.
- **Competitive Strategy**: Marketplace ARPD for multi-product users is 3x higher than single-product users, highlighting cross-selling opportunities.
- **OEM Pipeline**: Positive discussions for 2026 ad spend, with unique ability to deliver Tier 1-3 outcomes for automakers.

Cars.com Inc. (CARS) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Current Income Tax

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Income Tax Adjustments

Net Income from Continuing Operations

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Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

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Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CARS

CARS fundamentals

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