Cars.com (CARS) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $178.7 million, flat year-over-year, with OEM and National revenue up 5% and dealer revenue down 1% due to customer and product mix changes.

• Dealer count rose to 19,412, up about 160 sequentially, marking the best organic growth in over three years and signaling recovery in dealer engagement.

• Product innovation, especially in AI-powered search and analytics, contributed to higher lead quality and engagement, with AI search now accounting for nearly 20% of internet leads and doubling lead submission rates.

• Share repurchases totaled $51 million in Q2 and $70 million in H1 2025, with the full-year buyback target raised to $70–$90 million.

• Record consumer engagement with 162 million total visits in Q2 and monthly unique visitors reaching 26.6 million.

Financial highlights

• Adjusted EBITDA was $50.9 million in Q2, with a margin of 28.5%, at the high end of guidance.

• Net income was $7 million ($0.11 per diluted share), down from $11.4 million ($0.17 per share) a year ago, mainly due to changes in fair value of contingent consideration.

• Adjusted net income was $26.4 million ($0.41 per share), up from $0.38 per share last year.

• Free cash flow for H1 2025 was $41.8 million, down from $56.4 million a year ago, reflecting higher earnout payments.

• Share buybacks reached $45 million year-to-date, representing 107% of free cash flow.

Outlook and guidance

• Low single-digit year-over-year revenue growth is expected in the second half of 2025, with acceleration into 2026.

• Adjusted EBITDA margin outlook for 2025 is reaffirmed at 29%–31%.

• ARPD is expected to grow sequentially in Q3 and Q4 as repackaging and cross-selling efforts take effect.

• Dealer count is projected to continue growing sequentially through the remainder of 2025, despite typical Q4 seasonality.

• Liquidity is considered sufficient for the next 12 months and beyond, supported by positive cash flow and credit facility.