Cars.com (CARS) Q4 2025 earnings summary

Executive summary

• Achieved record full-year 2025 revenue of $723.2 million, up 1% year-over-year, with Q4 revenue at $183.9 million, up 2% year-over-year, driven by dealer revenue growth and an expanded customer base of 19,544 dealers.

• Dealer revenue grew 3% year-over-year in Q4, while OEM/National revenue declined 9% due to lower OEM ad spend.

• Adjusted EBITDA for 2025 was $211.1 million (29.2% margin), flat year-over-year, with Q4 Adjusted EBITDA at $55 million (29.9% margin), down 90 bps.

• Net income for 2025 was $20.1 million ($0.32 per diluted share), down from $48.2 million ($0.72 per share) in 2024, mainly due to prior-year one-time gains.

• Repurchased 7.1 million shares for $86 million, retiring 9% of shares outstanding, using nearly 70% of free cash flow for buybacks.

Financial highlights

• Adjusted net income for 2025 was $108.1 million ($1.71 per share), slightly down from $114.9 million ($1.71 per share) in 2024.

• Free cash flow for 2025 was $125.7 million, with a 60% conversion from Adjusted EBITDA, slightly down from $128.1 million in 2024.

• Adjusted operating expenses for 2025 decreased to $603.9 million from $616.6 million in 2024, mainly due to lower depreciation and amortization.

• Net leverage ratio was 1.9x at year-end, with $455 million in debt and $351.2 million in liquidity.

• Monthly Average Revenue Per Dealer (ARPD) was $2,472 in Q4 2025.

Outlook and guidance

• Full-year 2026 revenue expected to be flat to up 2% year-over-year, with Adjusted EBITDA margin projected at 29%-30%.

• Q1 2026 revenue expected to be flat to up 1% year-over-year, with Adjusted EBITDA margin between 26%-27%.

• Minimum $60 million in share buybacks planned for 2026, with potential for more depending on free cash flow.

• Dealer revenue growth anticipated from marketplace and website repackaging, customer base expansion, and product adoption; OEM/National revenue expected to face continued pressure.