Cars.com (CARS) Q4 2021 earnings summary

Executive summary

• FY21 delivered double-digit revenue and Adjusted EBITDA growth, with record-high dealer retention and 19,179 dealer customers at year-end.

• Platform expansion advanced through CreditIQ, the cloud-based Cars.com platform launch, and the FordDirect preferred-provider agreement.

Financial highlights

• FY21 revenue was $623.7M, up 14% YoY; operating income was $48.3M versus an $887.3M operating loss in FY20, which included impairment charges.

• Net income was $7.7M, or $0.11 diluted EPS, versus a net loss of $817.1M, or $12.15 per share, in FY20.

• Adjusted EBITDA was $189.2M, 30% of revenue; free cash flow totaled $118.8M.

• Dealer revenue rose 19% to $549.9M; OEM and National revenue fell 11% to $65.1M amid lower OEM spending and production shortages.

• FY20 included $905.9M of goodwill and intangible impairment and $38.2M of dealer invoice credits; FY21 G&A included $9.6M of CreditIQ equity-award compensation expense.

Outlook and guidance

• 2022 priorities include integrating acquisitions, building revenue streams, and investing in product and platform growth to support accelerated, sustainable growth.

• CreditIQ rollout to select dealer customers began in Q1 2022; EV-focused editorial content is planned to increase by over 20% in 2022.

• Accu-Trade acquisition, for $65M cash at closing plus potential additional consideration, was expected to close in March 2022.