Cars.com Exceeds Revenue Expectations, Reports Strong Cash Flows

By Tamara Parker • Thursday, February 22 10:52 • Permanent Link

Cars.com Inc. (NYSE: CARS), operating as Cars Commerce Inc., has reported its financial results for the fourth quarter and full year ending December 31, 2023. The company exceeded its fourth quarter guidance, achieving a 7% year-over-year revenue growth and generating $137 million of annual cash flows from operating activities.

In the fourth quarter of 2023, Cars.com reported a revenue of $179.6 million, up 7% year-over-year, with net income of $8.3 million. For the full year, the company's revenue reached $689.2 million, reflecting a 5% increase from the prior year. Notably, the company's net income for the year totaled $118.4 million, compared to $17.2 million in the prior year, primarily related to the release of a significant portion of the company’s valuation allowance.

Alex Vetter, Chief Executive Officer of Cars Commerce, expressed, "2023 marked a year of significant progress. We advanced our platform strategy through the introduction of Cars Commerce, the rollout of our marketplace repackaging initiative, and our expansion into Canada with the acquisition of D2C Media. Our focus on simplifying everything about buying and selling cars enabled us to continue to deliver value for consumers, dealers, and OEMs, supporting our twelve consecutive quarters of year-over-year profitable revenue growth."

Sonia Jain, Chief Financial Officer of Cars Commerce, commented, "2023 was a year with robust revenue growth and strong adjusted EBITDA margins, driven by our focus on execution. Our asset-light business model consistently generates strong free cash flow conversion that enables us to invest in growth areas that continue to deliver sustained value for consumers, customers, and shareholders."

Looking ahead, the company expects to deliver another year of strong growth. The market conditions are anticipated to improve, with increased OEM production, new model launches, and rising dealer inventory, making the company’s in-market solutions more valuable. The company anticipates continued growth across its platform, reflected in its revenue growth guidance of 6% to 8%.

Cars.com's shares have moved -0.4% today, and are currently trading at a price of $17.97.

The company's full 8-K submission is available here.

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