Cars.com (CARS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 6% year-over-year to $179 million, marking the fifteenth consecutive quarter of growth and record first-half results.

• OEM and National revenue surged 28% year-over-year, driven by increased OEM marketing spend, higher vehicle inventory, and new model launches.

• Dealer revenue grew 4% year-over-year, supported by D2C Media acquisition and increased product adoption.

• Adjusted EBITDA rose 10% year-over-year to $50.4 million, with margin expanding to 28.2%.

• Net income was $11.4 million ($0.17 per diluted share), down from $94.1 million in Q2 2023 due to a prior-year tax benefit; adjusted net income was $26 million ($0.38 per diluted share).

Financial highlights

• Q2 2024 revenue: $179 million, up 6% year-over-year, with a 1% negative impact from legacy solutions contracts.

• Adjusted EBITDA: $50.4 million (28% margin), up from $45.6 million (27% margin) in Q2 2023.

• Free cash flow for the first six months: $56.4 million, up from $45.6 million in 2023.

• Net income for Q2 2024 was $11.4 million; adjusted net income: $26 million ($0.38 per diluted share).

• Cash and cash equivalents at June 30, 2024 were $29.1 million; total liquidity including undrawn revolver was $304.1 million.

Outlook and guidance

• Q3 2024 revenue expected between $178 million and $181 million, representing 2% to 4% year-over-year growth.

• Q3 Adjusted EBITDA margin guidance: 26.5% to 28.5%.

• FY 2024 revenue growth expected at 4.5%–5.5%, with full-year Adjusted EBITDA margin reaffirmed at 28%–30%.

• Guidance reflects slower AccuTrade adoption and 1%–2% revenue impact from the CDK cyber incident.

• Plan to return approximately 50% of second half free cash flow to shareholders via share repurchases.