Cars.com Inc. · NYSE:CARS
Cars.com — Q2 2023 Earnings Presentation
25 slides from Cars.com's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Earnings
Second Quarter 2023 Earnings August 3, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical facts are forward-looking statements. Forward-looking statements include information concerning our dealer customer
Slide 3: Definitions: Non-GAAP Financial Measures
Definitions: Non-GAAP Financial Measures This presentation discusses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses and Free Cash Flow. These financial measures are not prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). These finan
Slide 4: Delivered Solid Results and Profitable Growth in Q2
Delivered Solid Results and Profitable Growth in Q2 Revenue Growth, ARPD Growth, Improved QOQ +3% YOY +6% YOY Adjusted EBITDA, 27% Margin
Slide 5: New Packages Deliver Greater Value
Marketplace Repackaging Initiative BASE PREFERRED PREMIUM All Inventory Listed New Packages Merchandising + AutoCorrected Deliver Greater Value Similar Vehicles Managed Chat ● Two-thirds of customers Deep Linking shifting to higher tier packages (VDP To VDP Website Transfers) Retailer Instant Financ
Slide 6: ARPD up 6% YOY
ARPD Monthly Average Revenue Per Dealer ARPD up 6% YOY ● ARPD driven by balance of Marketplace Repackaging and Solution Sales ● Packages capture benefit of product development and 30%+ traffic growth over the last 5 years ARPD excludes revenue from Dealer Inspire digital advertising services.
Slide 7: Digital Solutions Account for ~50% of ARPD Growth
Solutions Growth Digital Solutions Account for ~50% of ARPD Growth Dealer Inspire Website Customers Accu-Trade Connected Customers ~6,200 ~750 +500 +650 YOY YOY
Slide 8: Platform Strength Driven by High-Quality Traffic
Traffic & Value Delivery Platform Strength Driven by High-Quality Traffic Q2 Average Monthly Unique Visitors and Q2 Visits (MM) 60% + Q2 Traffic Organic Traffic ~27MM UVs, flat YOY 156MM Visits, +5% YOY
Slide 9: Our Platform Generates Nearly 2X More Traffic to Dealer Websites than Peers
Traffic & Value Delivery Dealer Website Referrals Our Platform Generates Nearly 2X More Traffic to Dealer Websites than Peers Shoppers who visit Cars.com and a dealer website are 3X MORE likely to buy a car than shoppers who only visit a dealer website Cars.com Peer A Peer B Source: Dealer Inspire G
Slide 10: Artificial Intelligence Further Simplifies Buying & Selling Experience
Product Innovation Artificial Intelligence Further Simplifies Buying & Selling Experience Before After Before After DEALER REVIEWS VEHICLE REVIEWS
Slide 11: Launched New Cars.com Ad Campaign and Refreshed Logo
Modernized Brand Launched New Cars.com Ad Campaign and Refreshed Logo “Possibilities” reminds us that car buying is fun and spurred by various life changes
Slide 12: Dealer Revenue Growth +6% YOY
Revenue Dealer Revenue Growth +6% YOY Quarterly Revenue ($MM) Drivers of Revenue Growth ● Dealer Revenue +6% YOY driven by Total growth in solutions, media upsells and Revenue +3% Marketplace Repackaging Initiative YOY ● Dealer revenue growth was partially offset by softer OEM and National revenue De
Slide 13: Disciplined Investment in Growth
Operating Expenses Disciplined Investment in Growth Quarterly Adjusted Operating Expense ($MM) Drivers of Changes in Expense ● YOY increase in Marketing and sales due to compensation expense and our investment in the Cars.com brand ● YOY increase in Product and technology driven by compensation expe
Slide 14: Solid Adjusted EBITDA
Adjusted EBITDA Solid Adjusted EBITDA Quarterly Adjusted EBITDA ($MM) & Margin (% Revenue) Drivers of Adjusted EBITDA ● Adjusted EBITDA reflects investments that support growth and higher YOY Marketing expense for new Cars.com advertising campaign
Slide 15: Strength Across Key Operating Metrics
Operating Metrics Strength Across Key Operating Metrics Q2 2023 Q2 2022 AVERAGE MONTHLY UNIQUE VISITORS 26.9 MM 27.1 MM TRAFFIC (VISITS) 156.0 MM 148.0 MM MONTHLY ARPD 1 $2,472 $2,326 DEALER CUSTOMERS 18,785 19,517 ¹ARPD excludes revenue from Dealer Inspire digital advertising services.
Slide 16: Robust Cash Flow, Solid Balance Sheet
Cash Flow Robust Cash Flow, Solid Balance Sheet YTD Free Cash Flow Trend ($MM) Total Debt ($MM) & Net Leverage Ratio Includes $9MM Tax Refund Related to Reflects borrowing CARES Act to fund Accu-Trade acquisition Total Debt Total Net Leverage Ratio
Slide 17: Outlook
Outlook Q3 2023 OUTLOOK ● Q3 Revenue: $172.0 to $174.0 million ○ Represents 4.5% to 5.7% YOY growth ● Q3 Adjusted EBITDA margin: 26.5% to 28.5% RAISED MIDPOINT OF FULL-YEAR REVENUE GUIDANCE ● Full Year Revenue: YOY growth of 4% to 6% ● Adjusted EBITDA margins are expected to improve over the course
Slide 18: Q&A
S@~- 60 Q&A
Slide 19: Appendix
S@~- 60 Appendix
Slide 20: New Car Market Continues Recovery
Industry Trends Quarterly Average Daily Listings (MM) New Car Market Continues Recovery ● Although still below historical levels, new vehicle daily inventory listings on Cars.com are up 7% QOQ and 101% YOY ● Used car market remains healthy
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands)
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands)
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands)
Slide 24: Definitions: Key Metrics
Definitions: Key Metrics Average Monthly Unique Visitors (“UVs”) and Traffic (“Visits”). The Company defines UVs in a given month as the number of distinct visitors that engage with its platform during that month. Visitors are identified when a user first visits an individual CARS property on an ind
Slide 25: Thank You!
THANK YOU! S>@- 060680 CARS