Cars.com Inc. · NYSE:CARS
Cars.com — Q1 2024 Earnings Presentation
26 slides from Cars.com's earnings presentation, May 9, 2024
Slide 1: First Quarter 2024 Earnings
First Quarter 2024 Earnings May 9, 2024
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. These statements often use words such as “believe,” “expect,” “project,” “ant
Slide 3: Definitions: Non-GAAP Financial Measures
Definitions: Non-GAAP Financial Measures This presentation discusses Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow and Adjusted Operating Expenses. These financial measures are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These fi
Slide 4: Strong start to 2024
Strong start to 2024 Quarterly Adj. EBITDA ($MM) Quarterly Revenue ($MM) Avg Revenue Per Dealer & Margin (% Revenue) 29.2% $180 26.5% $53 $2,505 $167 $2,386 $44 Q1 ‘23 Q1 ‘24 Q1 ‘23 Q1 ‘24 Q1 ‘23 Q1 ‘24 +8% YoY Growth +5% YoY Growth 29% Adj. EBITDA Margin 4
Slide 5: Continuing to execute on our platform strategy
Continuing to execute on our platform strategy Q1 KEY GROWTH DRIVERS Transform OEM Unlock the Grow Relationships Cross-Sell Consumers Delivered best quarterly top-line growth in over two years 5
Slide 6: OEM and National revenue +13% YoY
OEM and National revenue +13% YoY OEM & National Q1 Revenue ($MM) ● Strong upfront and incremental sales benefiting from our consistent investments in OEM-related products ● Recent supply normalization driving OEM demand for our market-leading solutions ● New car inventory up 37% YoY1 and new model l
Slide 7: Increased OEM interest in media products
Increased OEM interest in media products ● Approximately two-thirds of OEM customers increased marketing and advertising investments in Cars Commerce products and solutions during Q1 ● Homepage Take Over product sales reached the highest level in four years ● EV-only manufacturers seeking direct mar
Slide 8: Served extensive base of dealer customers in Q1
Served extensive base of dealer customers in Q1 Dealer Customers ● Q1 new marketplace sales at highest 19,381 level in three years ● Modest attrition QoQ from temporary cost-cutting as they adjust to profitability pressures ● Remain confident in delivering dealer customer growth for FY24 Note: The dec
Slide 9: ARPD grew 5% YoY
ARPD grew 5% YoY Q1 Avg Revenue Per Dealer ● Grew all of our industry-leading brands year-over-year in Q1 ● Focused on cross-selling Cars Commerce platform products to help customers efficiently acquire vehicles and market to high-intent buyers 9
Slide 10: Cross-selling drove Cars Commerce platform growth
Cross-selling drove Cars Commerce platform growth Marketplace Digital Experience Trade & Appraisal Media Inventory turned ~20% faster on average for dealers adopting multiple products1 1 Cars Commerce internal data 10
Slide 11: AccuTrade Connected grew to ~1,000 customers in Q1
AccuTrade Connected grew to ~1,000 customers in Q1 AccuTrade Connected Customers ~1,000 $650 $1,300 Avg. Savings Per Vehicle Avg. Savings Per Vehicle By Uncovering Needed in Auction & Transportation Repairs Fees “ We haven’t gone to an auction in 2 years. With AccuTrade, the majority of our cars com
Slide 12: Strong website growth into new markets
Strong website growth into new markets Website Customers 7,450 ● Powered 7,450 websites for DI and D2C at end of Q1, up 22% YOY ● D2C has expanded website and AccuTrade TAM into the Canadian market *Website customer data includes D2C Media effective Q4’23 12
Slide 13: Media products driving value for dealers
Media products driving value for dealers Converts when same Consumer views EVs Consumer retargeted Consumer engaged on EV is first result on Cars.com Vehicle with dealer’s EVs on social with same EVs returned on Cars.com Detail Page (VDP) other sites search Illustrative example of Vin Performance Me
Slide 14: Reaching in-market shoppers at scale
Reaching in-market shoppers at scale Q1 Total Traffic (MM) ● More than 28 million average monthly visitors ● New Affordability Report published in April 2024 ● Tools like Your Garage and New Car Hub are driving strong repeat traffic ● Committed to delivering more innovative content and technology to to
Slide 15: Revenue growth of +8% YoY
Revenue growth of +8% YoY Quarterly Revenue ($MM) ● Dealer Revenue +8% YoY driven by D2C Media, 2023 Marketplace Repackaging Initiative and product penetration ● OEM & National +13% YoY, driven by additional investment to raise consumer awareness amid rising inventory levels Dealer OEM/National Othe
Slide 16: Disciplined investment in growth
Disciplined investment in growth Quarterly Adjusted Operating Expense ($MM) ● Adjusted operating expenses +6% YoY ● Driven by product and technology investments in support of platform strategy, such as enhancing marketplace features, further augmenting product portfolio, and investing in backend sys
Slide 17: Continued Adjusted EBITDA improvement
Continued Adjusted EBITDA improvement Quarterly Adjusted EBITDA ($MM) & Margin (% Revenue) ● Adjusted EBITDA margin of 29.2%, +270 bps YoY and -160 bps QoQ ● Adjusted EBITDA grew $8MM, +19% YoY 17
Slide 18: Strength across Key Operating Metrics
Strength across Key Operating Metrics Q1 2024 Q1 2023 AVERAGE MONTHLY UNIQUE VISITORS1 28.3 MM 28.5 MM TRAFFIC (VISITS)1 171.4 MM 164.8 MM MONTHLY ARPD2 $2,505 $2,386 DEALER CUSTOMERS3 19,381 19,186 1 UVs and Traffic were measured via Adobe Analytics prior to December 31, 2023, and measured via Rudder
Slide 19: Robust cash flow and solid balance sheet
Robust cash flow and solid balance sheet YTD Free Cash Flow Trend ($MM) Total Debt ($MM) & Net Leverage Ratio Reflects borrowing to fund AccuTrade acquisition Reflects borrowing to fund D2C Media acquisition Total Debt Total Net Leverage Ratio 19
Slide 20: Outlook
Outlook Q2 2024 OUTLOOK ● Q2 Revenue: $181.0 to $183.0 million Represents 7% to 9% YoY growth Continued strength in both Dealer revenue and OEM & National revenue Q2 Adjusted EBITDA margin: 27.5% to 29.5% FULL YEAR 2024 OUTLOOK ● Full Year Revenue: YoY growth of 6% to 8% ● Adjusted EBITDA margins: 2
Slide 21: Q&A
Q&A 21
Slide 22: Upcoming Conference Schedule 2024 CSR Report
Upcoming Conference Schedule 2024 CSR Report ● May 14: Needham Technology, Media, & Consumer Conference ● May 16: Barrington Virtual Spring Investment Conference ● May 21: J.P. Morgan Global Technology, Media and Communications Conference ● May 22: B. Riley Institutional Investor Conference Report c
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 24
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 25
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 26