Cars.com Inc. · NYSE:CARS
Cars.com — Q3 2024 Earnings Presentation
25 slides from Cars.com's earnings presentation, Nov 7, 2024
Slide 1: Third Quarter 2024 Earnings
Third Quarter 2024 Earnings November 7, 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, Adjusted net income, Free Cash Flow and Adjusted Operating Expenses. These financial measures are not prepared in accordance with generally accepted accounting principles in the United States
Slide 4: Delivered year-over-year growth and margin expansion
Delivered year-over-year growth and margin expansion Quarterly Adj. EBITDA ($MM) Quarterly Revenue ($MM) YTD Free Cash Flow ($MM) & Margin (% Revenue) 28.5% 28.4% $104 $180 $51 $174 $76 $49 Q3 ‘23 Q3 ‘24 Q3 ‘23 Q3 ‘24 YTD ‘23 YTD ‘24 +3% YoY Growth 28.5% Adj. EBITDA Margin ~13% FCF Yield (as of Sept
Slide 5: Driving adoption of the Cars Commerce platform
Driving adoption of the Cars Commerce platform Marketplace Digital Experience Trade & Appraisal Media 5 Pursuing additional cross-selling opportunities in Q4
Slide 6: Maintained strong average revenue per dealer
Maintained strong average revenue per dealer Dealer Customers Q3 Average Revenue Per Dealer $2,478 19,255 Note: The decline of the digital dealer industry negatively impacted our Dealer Customer count by over 650 cancellations (which started in Q2’22). There are effectively no digital dealers in our
Slide 7: AccuTrade grows to 950 subscribers in Q3
AccuTrade grows to 950 subscribers in Q3 AccuTrade Connected Customers ● AccuTrade powered 671,000 appraisals, up 5% QoQ ~950 ● ~40% YoY increase in average number of vehicles acquired per dealer per month that are appraised through AccuTrade ● Simplified consumer website experience yielded sustained
Slide 8: AccuTrade service drive adoption creates more profitable sales
AccuTrade service drive adoption creates more profitable sales +87% more profit per 20% sale initiated in of service drive “the service lane appraisals acquired Ed Martin Toyota “AccuTrade has helped tremendously in our service drive with the committed to an transparency that customers have always wa
Slide 9: AccuTrade's OEM endorsements are driving growth
AccuTrade’s OEM endorsements are driving growth ● Nearly 50% of new AccuTrade customers in Q3 were affiliated with Ford, Stellantis, and Jaguar Land Rover (JLR), who have endorsed AccuTrade as an on-program solution ● Continued onboarding of JLR dealers to AccuTrade website application program, which
Slide 10: Digital experience solutions added ~150 customers QoQ
Digital experience solutions added ~150 customers QoQ Website Customers ● Powered 7,650 websites at the 7,650 end of Q3 2024, up 21% YOY ● Became the #1 dealer website provider in Canada in Q3 2024 ● Double digit increase in site response speed to enhance consumer experience ● New AI translation for
Slide 11: VPM growing and driving value for dealers
VPM growing and driving value for dealers Dealer vehicle Consumer views is first result vehicle on returned on Cars.com Vehicle Cars.com Detail Page search (VDP) 28% ● VPM has nearly quadrupled subscriber base since Q1 average reduction in days listed for used vehicles1 Consumer retargeted ● Custome
Slide 12: Robust marketplace audience engagement
Robust marketplace audience engagement Q3 Total Traffic (MM) ● More than 24 million average monthly visitors in Q3 154.2 ● Q3 repeat visitation +4% and leads per visit +7% quarter-over-quarter ● 62% organic traffic in Q3 70% 73% 84% higher lead are undecided on intend to buy conversion rate make and m
Slide 13: OEM and National revenue +17% YoY
OEM and National revenue +17% YoY OEM & National Q3 Revenue ($MM) ● Highest quarterly OEM and National revenue since Q1 2021 ● Increased vehicle inventory levels driving OEM demand for our solutions $17.0 ● Over half of OEM customers increased marketing and advertising investments in Cars Commerce p
Slide 14: Revenue growth of +3% year-over-year
Revenue growth of +3% year-over-year Quarterly Revenue ($MM) ● Achieved record third quarter revenue ● Dealer revenue +2% YoY, driven by growing product adoption ● OEM & National revenue +17% YoY, driven by additional investment to raise consumer awareness amid rising inventory levels Dealer OEM/Nat
Slide 15: Disciplined investment in growth
Disciplined investment in growth Quarterly Adjusted Operating Expense ($MM) ● Adjusted operating expenses +4% YoY ● Driven by product and technology investments, primarily related to headcount and third-party licenses Note: We define Adjusted Operating Expenses as total operating expenses adjusted to
Slide 16: Continued Adjusted EBITDA improvement
Continued Adjusted EBITDA improvement Quarterly Adjusted EBITDA ($MM) & Margin (% Revenue) ● Adjusted EBITDA margin of 28.5%, up ~10 bps YoY ● Adjusted EBITDA grew ~$2MM, +3%YoY 16
Slide 17: Key Operating Metrics
Key Operating Metrics Q3 2024 Q3 2023 AVERAGE MONTHLY UNIQUE 24.5 MM 26.0 MM VISITORS 1 TRAFFIC (VISITS)1 154.2 MM 151.4 MM MONTHLY ARPD2 $2,478 $2,548 DEALER CUSTOMERS3 19,255 18,715 1 UVs and Traffic were measured via Adobe Analytics prior to December 31, 2023, and measured via RudderStack of Januar
Slide 18: Robust cash flow and solid balance sheet
Robust cash flow and solid balance sheet YTD Free Cash Flow Trend ($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 18
Slide 19: Outlook
Outlook FULL YEAR 2024 OUTLOOK ● Full Year Revenue: 4.5% to 5.5% YoY growth ● Adjusted EBITDA margins: 28% to 30% 19
Slide 20: Q&A
Q&A 20
Slide 21: Appendix
Appendix 21
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 22
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 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