Q3 2024 Cars.com Inc Earnings Call Transcript
Key Points
- Cars.com Inc (CARS) achieved a 3% year-over-year revenue growth, marking the 16th consecutive quarter of growth and setting a new record for Q3 revenue.
- OEM revenue grew 17% year-over-year, reaching a new 3-year high, driven by broad demand from partners.
- AccuTrade returned to positive quarter-over-quarter subscriber growth, with appraisal volume rising 5% quarter-over-quarter.
- The company maintained a strong adjusted EBITDA margin of 28.5%, at the top of their guidance range.
- Cars.com Inc (CARS) saw significant growth in their digital website experience and media solutions, becoming the number-1 franchise dealer website provider in Canada.
- Dealer customer count decreased by 135 dealers quarter-over-quarter, reflecting challenges from a third-party DMS outage.
- Operating expenses increased by 5% year-over-year, with adjusted operating expenses up 4% compared to the same period last year.
- Average revenue per dealer (ARPD) was down $70 year-over-year, attributed to D2C growth which contributes lower average revenue per dealer.
- The company faced pressure from macro trends impacting dealer profitability and budget, affecting sales momentum.
- Despite positive growth in October, the company acknowledged that Q4 is typically a softer period for dealer growth due to seasonal factors.
Good morning, ladies and gentlemen, and welcome to the Cars third quarter 2024 conference call. (Operator Instructions)
I will now turn the call over to Katherine Chen, Vice President of IR. Please go ahead.
Good morning, everyone, and thank you for joining us to the Cars.com Inc. Third Quarter 2024 Conference Call. With me this morning are Alex Vetter, CEO; and Sonia Jain, CFO. Alex will start by discussing the business highlights from our third 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 Alex, 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 today, including adjusted EBITDA, adjusted EBITDA margins, adjusted operating expenses, adjusted net income and free cash flow. Reconciliations of these non-GAAP
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