Cars.com (CARS) Q4 2022 earnings summary

Executive summary

• FY22 revenue grew 5% to $653.9M, with growth accelerating each quarter; Adjusted EBITDA was $187M at a 29% margin.

• Marketplace audience averaged 26.4M monthly unique visitors; 62% of traffic came through organic channels, and year-end dealer customers rose 2% YoY to 19,506.

Financial highlights

• Revenue was $653.9M, up 5% YoY; operating income increased 37% to $66.0M.

• Net income was $17.2M versus $10.8M in 2021; diluted EPS was $0.25 versus $0.15.

• Operating cash flow was $128.5M; Adjusted EBITDA was $187M and Adjusted EBITDA margin was 29%.

• Other expense rose to $8.1M, primarily from fair-value changes in acquisition contingent consideration.

Outlook and guidance

• Strategy centers on growing dealer relationships, cross-selling digital solutions, increasing shopper engagement, investing in the brand and continued platform innovation.

• CreditIQ and Accu-Trade broaden the platform into digital financing, appraisal, valuation and vehicle logistics, with management identifying a $50B total addressable market opportunity.

• Continued growth depends on integrating acquisitions, expanding dealer and consumer adoption, and attracting lenders to CreditIQ.