Cars.com, also known as Cars Commerce Inc., has reported encouraging financial results for the third quarter of 2024. The platform saw its revenue increase to $179.7 million, marking a 3.1% rise compared to the same quarter last year, largely fueled by strong growth in its OEM and National revenue segments which increased by 17% year-over-year. This upsurge was driven by key products such as AccuTrade, D2C Media, and VIN Performance Media. Despite a slight decline in unique visitors to 24.5 million from 26.0 million the previous year, total traffic saw a 2% year-over-year rise, reaching 154.2 million visits, with over 60% originating from organic sources, evidencing sustained consumer engagement with Cars.com’s platform.
The company's net income leaped to $18.7 million, a substantial improvement from the previous year’s $4.5 million, alongside adjusted net income reaching $27.7 million compared to $27.3 million last year. Adjusted EBITDA also reflected this upward trend, amounting to $51.1 million, up by $1.6 million year-over-year, representing impressive financial health and profitable growth. Executive leadership emphasized strategic developments paving the shareholders’ return, with $123 million of net cash generated year-to-date by operating activities, reflecting an increase of 34% compared to the prior year. Cars.com executed a share repurchase of 1.2 million shares, accounting for 45% of the quarterly free cash flow.
As for operational highlights, the total number of dealer customers slightly declined to 19,255 from 19,390 in June 2024, with the monthly average revenue per dealer (ARPD) dropping marginally by 3% to $2,478. AccuTrade showed promising growth with 950 subscribers, spurred by endorsements from original equipment manufacturers (OEMs). The company's extension in Canada saw Cars Commerce become the leading dealer website provider, serving approximately 1,100 customers by the quarter's end.
The company’s strategic focus on capital allocation and liquidity was evident, with a reduction in its outstanding debt to $470 million through the repayment of $20 million. Total liquidity stood at $329.6 million, ensuring financial flexibility for future endeavors. Committing to its capital return strategy, Cars.com plans further share repurchases, with $84 million remaining under repurchase authorization.
Looking ahead, Cars.com maintains its optimistic outlook for the rest of 2024, expecting to achieve a 4.5% to 5.5% revenue growth as it capitalizes on the industry trends. The firm anticipates continued robust demand, particularly from OEMs, which it expects will drive further revenue gains. The strategic focus remains on expanding product innovation and capital deployment to enhance shareholder value. A conference call for discussing these results further has been scheduled, underlining the management’s commitment to transparent communication with investors.
On future considerations, Cars.com’s management strategically navigates business uncertainties, aligning performance with evolving consumer expectations and technological advancements. This proactive stance is instrumental in maintaining the company’s competitive edge, positioning Cars Commerce as a robust player in the automotive industry, guiding the company toward long-term profitable growth and shareholder satisfaction.
