Q2 2026 Cars.com Inc Earnings Call Transcript
Key Points
- Cars.com Inc (CARS) delivered another quarter of revenue growth and increased profitability, with Q2 revenue of $180 million within guidance and adjusted EBITDA margin of 29.4% outperforming the high end of guidance for a second consecutive quarter.
- Marketplace revenue grew over 7% year over year in Q2, the fastest growth rate in the company's public history outside of 2021, with marketplace subscribers rebounding to their highest level since 2023 and ARPD reaching an all-time high.
- The launch of Dealer Verified Listings, which integrates AccuTrade appraisal capabilities into the marketplace, provides a differentiated trust signal for consumers and represents a key step in cross-platform VIN-specific intelligence.
- Cars.com Inc (CARS) is seeing strong adoption of its AI shopping assistant, Carson, with around 20% of active searches engaging with it, and Carson users are 4x more likely to submit a lead, accounting for nearly 30% of total leads in June.
- The company is generating strong free cash flow, enabling a 28% year-to-date increase in buybacks, and has bought back and retired over 10% of shares outstanding since the start of the year.
- Cars.com Inc (CARS) is making progress on its Premium Plus package adoption, which was the fastest growing of its three marketplace packages in Q2, and is on track to reach its 15% adoption target for 2026.
- OEM and national revenue declined 18% year over year in Q2, partially offsetting dealer revenue growth, though the company expects this to be a trough with quarter-over-quarter growth in Q3.
- Website units (Dealer Inspire) declined compared to a year ago, and the company expects future growth in this segment to hinge on product innovation and packaging rather than unit volume expansion.
- The company experienced a year-over-year decline in Q2 traffic and visitors, which it attributes to strategic shifts to prioritize value delivery over pure audience reach.
- Lower uptake of add-on dealer media products remained a near-term headwind, partially offsetting gains from core marketplace adoption.
- Marketing and sales expenses increased roughly $2.7 million year over year, driven by targeted marketing to prioritize value delivery, which contributed to deleverage in the marketing line.
- The company acknowledged slower pace of new feature releases for its website business to date, along with organizational and process misalignments, which it is addressing through a new GM and product innovation focus.
Good morning, and welcome to our second quarter 2026 earnings conference call. (Operator Instructions) Please be advised that this call is being recorded today, August 7, 2026.
I would now like to turn the conference over to Katherine Chen, Vice President of Investor Relations. Please go ahead.
Good morning, everyone, and thank you for joining us for the Cars.com, Inc., second quarter 2026 conference call. With me this morning are Toby Hartmann, CEO; and Sonia Jain, CFO. Toby will start by discussing business highlights from our second quarter. Then Sonia will discuss our financial results in greater detail, along with our outlook. We'll finish the call with Q&A.
Before I turn the call over to Toby, I'd like to draw your attention to our forward-looking statements and the description and definition of non-GAAP financial measures, which can be found in our presentation. We will be discussing certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA
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