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Fourth Quarter and Full Y ear 2024 Earnings February 27, 2025
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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,” “anticipate,” “outlook,” “intend,” “strategy,” “plan,” “estimate,” “target,” “seek,” “will,” “may,” “would,” “should,” “could,” “forecasts,” “mission,” “strive,” “more,” “goal” or similar expressions. Forward-looking statements are based on our current expectations, beliefs, strategies, estimates, projections and assumptions, experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments, and other factors we think are appropriate. Such forward-looking statements are based on estimates and assumptions that, while considered reasonable by Cars Commerce and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. While Cars Commerce and its management make such statements in good faith and believe such judgments are reasonable, you should understand that these statements are not guarantees of future strategic action, performance or results. Our actual results, performance, achievements, strategic actions or prospects could differ materially from those expressed or implied by these forward-looking statements. Given these uncertainties, you should not rely on forward-looking statements in making investment decisions. When we make comparisons of results between current and prior periods, we do not intend to express any future trends, or indications of future performance, unless expressed as such, and you should view such comparisons as historical data. Whether or not any such forward-looking statement is in fact achieved will depend on future events, some of which are beyond our control. Forward-looking statements are subject to a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results and strategic actions to differ materially from those expressed in the forward-looking statements contained in this press release. For a detailed discussion of many of these and other risks and uncertainties, see “Part I, Item 1A., Risk Factors” and “Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2025 and our other filings filed with the SEC and available on our website at investor.cars.com or via EDGAR at www.sec.gov. Y ou should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties. The forward-looking statements contained in this press release are based only on information currently available to us and speak only as of the date of this press release. We undertake no obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise. The forward-looking statements in this report are intended to be subject to the safe harbor protection provided by the federal securities laws.
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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 ("GAAP"). These financial measures are presented as supplemental measures of operating performance because the Company believes they provide meaningful information regarding the Company’s performance and provide a basis to compare operating results between periods. In addition, the Company uses Adjusted EBITDA as a measure for determining incentive compensation targets. Adjusted EBITDA also is used as a performance measure under the Company’s credit agreement and includes adjustments such as the items defined below and other further adjustments, which are defined in the credit agreement. These non-GAAP financial measures are frequently used by the Company’s lenders, securities analysts, investors and other interested parties to evaluate companies in the Company’s industry. For a reconciliation of the non-GAAP measures presented in this earnings release to their most directly comparable financial measure prepared in accordance with GAAP, see "Non-GAAP Reconciliations" below. Other companies may define or calculate these measures differently, limiting their usefulness as comparative measures. Because of these limitations, non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. Definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are presented in the tables below. We define Adjusted EBITDA as net income (loss) before (1) interest expense, net, (2) income tax (benefit) expense, (3) depreciation, (4) amortization of intangible assets, (5) stock-based compensation expense, (6) unrealized mark-to-market adjustments and cash transactions related to derivative instruments, (7) unrealized foreign currency exchange gains and losses, and (8) certain other items, such as transaction-related items, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. Transaction-related items result from actual or potential transactions such as business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions, including, without limitation, (1) transaction-related bonuses and (2) expenses for advisors and representatives such as investment bankers, consultants, attorneys and accounting firms. Transaction-related items may also include, without limitation, transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees, consulting, compensation and other incremental costs associated with integration projects, fair value changes to contingent considerations and amortization of deferred revenue related to the AccuTrade acquisition. We define Adjusted Net Income as GAAP net income (loss) excluding, net of their related tax effects: (1) amortization of intangible assets, (2) stock-based compensation expense, (3) unrealized mark-to-market adjustments and cash transactions related to derivative instruments, (4) unrealized foreign currency exchange gains and losses, and (5) certain other items, such as transaction-related costs, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. We define Free Cash Flow as net cash provided by operating activities less capital expenditures, including purchases of property and equipment and capitalization of internally developed technology. We define Adjusted Operating Expenses as total operating expenses adjusted to exclude stock-based compensation, write-off and impairments of goodwill, intangible assets, long-lived assets, severance, transformation and other exit costs and transaction-related items. 3
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4 Delivered 2024 revenue growth and margin expansion +4% YoY Growth Adj. EBITDA Margin up ~90 bps YoY Revenue ($MM) Adj. EBITDA ($MM) & Margin (% Revenue) $689 $719 FY’23 FY’24 28.3% 29.2% $195 $210 FY’23 FY’24 ~11% FCF Yield (as of December 31, 2024) Free Cash Flow ($MM) $116 $128 FY’23 FY’24
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5 Advanced key growth drivers during the fourth quarter $17MM+ OEM and National revenue up 15% YoY Best quarterly revenue since Q1 2021 Transform OEM Relationships 30.8% Adjusted EBITDA Margin Exceeded profitability expectations with strong operating leverage Create Platform Advantages ~1,000 AccuTrade subscribers Record AccuTrade customer base exiting 2024 Unlock the Cross-Sell
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6 Marketplace Digital Experience Trade, Appraisal & Wholesale Media Driving adoption and cross-selling of the platform
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7 AccuTrade Connected Customers ~1,000 AccuTrade achieves record subscribers in Q4 ● AccuTrade powered over 2.6 million appraisals in 2024, up 35% year-over-year ● ~23% year-over-year increase during Q4 in average number of vehicles acquired per dealer that are appraised through AccuTrade
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8 New OEM endorsements will accelerate AccuTrade growth ~30% of new Q4 franchise subscriptions were affiliated with OEMs who have AccuTrade endorsements
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9 Q4 Total Traffic (MM) *These metrics do not include traffic to Dealer Inspire or D2C Media websites. UVs and Traffic were measured via Adobe Analytics prior to December 31, 2023, and measured via RudderStack of January 1, 2024. Prior period UVs and Traffic information has not been recast. Scaled marketplace and engaged audience 143.8 1. Comscore Plan Metrix Multi-Platform, Desktop & Mobile, December 2024, U.S., Target Audience 18+, Total Unique Visitors / Viewers (Target Audience) and Average Minutes Per Visit, Custom-Defined List including [M] CARS.COM, [C] CARGURUS.COM, [E] AUTOTRADER.COM, [C] KBB.COM, [P] CARFAX.COM. 2. Dealer Inspire website GA4 data from Q2 2024 for 1,900 customers with Cars.com marketplace subscription 3. Cars.com Consumer Survey Metrics Q4 2024 Q3 repeat visitation ● Exited 2024 with the most average monthly unique visitors and most average time on site1 ● Q4 repeat visitation +6% Y o Y, and repeat visitation has increased Y o Y in each quarter of 2024 ● Drove 61% organic traffic in Q4 73% are undecided on make and model3 83% intend to buy within 6 months3 70% higher lead conversion rate for traffic from Cars.com vs Google2
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10 Website Customers 7,600 Website customer data includes D2C Media, effective Q4’23 1Compared to dealers using only a Dealer Inspire website Dealer websites drive platform benefits +40% more engagement1 on Dealer Inspire websites for customers who also subscribe to Cars.com marketplace 10% turn time improvement for customers who subscribe to both Cars.com and Dealer Inspire1 up to
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● Highest quarterly OEM and National revenue since Q1 2021 ● Higher vehicle inventory levels leading to sustained OEM demand for our marketing and advertising solutions ● Around half of OEM customers increased marketing and advertising investments in Cars Commerce products and solutions during Q4 ● 2025 OEM upfront spending commitments are up double digits year-over-year 11 OEM & National Q4 Revenue ($MM) OEM and National revenue +15% YoY $17.7
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CONSUMERS DEALER CUSTOMERS VEHICLES 12 Our platform powers dealership operations Buy & Sell Finance Research Ownership Audience Merchandize Engage Transact Appraise & Acquire Syndicate Inventory Retail or Wholesale
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13 Announced DealerClub acquisition at NADA 2025 ● DealerClub is a reputation-based, dealer-to-dealer digital wholesale auction ● Over 900 dealers enrolled since launch ● Transparent auctions with public seller ratings lowers DealerClub arbitration rate ● Planned integration with AccuTrade’s market-leading valuation algorithm and condition reports DealerClub is revolutionizing the used car buying and selling experience. -George Saliba J&S AutoHaus Group “ VIEW AUCTION RECENTL Y SOLD 2014 Mercedes-Benz G ClassSales Price: $35,200Bids: 21 Hey Alex, Check out this G Class that recently sold on DealerClub.
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14 Manage the vehicle lifecycle on a unified platform Appraise & Acquire Inventory Appraise in minutes with real-time market data for better gross margins and more retail opportunities Manage inventory and track vehicle profitability with predictive analytics to optimize retail vs wholesale strategy Wholesale or retail instantly on Cars Commerce platform Wholesale Retail
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15 Leverage Cars Commerce data insights to maximize profitability 3 days 72 days
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16 Maintaining strong market position Q4 Average Revenue Per Dealer $2,475 Dealer Customers Note: The decline of the digital dealer industry negatively impacted our Dealer Customer count by over 650 cancellations (which started in Q2’22). There are effectively no digital dealers in our Dealer Customer count. Includes D2C customers as of Q4’23. 19,206
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Quarterly Revenue ($MM) OtherOEM/NationalDealer 17 Full year revenue growth of +4% year-over-year ● Q4 revenue of $180.4MM set new quarterly record ● OEM & National revenue +15% Y o Y, driven by additional investment to raise consumer awareness amid rising inventory levels ● Dealer revenue down slightly Y o Y, reflecting lower customer count and ARPD as dealer spending trends adjust to ongoing profit normalization
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Quarterly Adjusted Operating Expense excl. D&A ($MM) ● Q4 Adjusted operating expenses were down (1%) Y o Y ● Q4 operating expenses benefited from improved marketing and sales spending efficiency ● FY24 Adjusted operating expenses totaled $617MM, up 4% Y o Y, primarily from product and technology investments 18 Disciplined investment in growth Note: We define Adjusted Operating Expenses as total operating expenses adjusted to exclude stock-based compensation, write-off and impairments of goodwill, intangible assets, long-lived assets, severance, transformation and other exit costs and transaction-related items. Adjusted Operating Expenses in this graph exclude depreciation and amortization.
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● FY24 Adjusted EBITDA margin of 29.2% was up ~90 bps Y o Y ● FY24 Adjusted EBITDA grew ~$15MM, +8% Y o Y 19 Quarterly Adjusted EBITDA ($MM) & Margin (% Revenue) Continued growth in Adjusted EBITDA
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($MM) 2024 2023 REVENUE $719.2 $689.2 DEALER REVENUE $640.7 $621.7 OEM AND NATIONAL REVENUE $65.9 $55.9 OPERATING EXPENSES $665.7 $635.1 ADJUSTED OPERATING EXPENSES $616.6 $594.1 NET INCOME $48.2 $118.4 ADJUSTED NET INCOME $114.9 $108.8 ADJUSTED EBITDA $209.7 $194.9 20 Full Y ear 2024 Financial Results Note: We define Adjusted Operating Expenses as total operating expenses adjusted to exclude stock-based compensation, write-off and impairments of goodwill, intangible assets, long-lived assets, severance, transformation and other exit costs and transaction-related items.
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Q4 2024 Q4 2023 AVERAGE MONTHLY UNIQUE VISITORS1 23.1 MM 24.3 MM TRAFFIC (VISITS)1 143.8 MM 142.7 MM MONTHLY ARPD2 $2,475 $2,523 DEALER CUSTOMERS 19,206 19,504 1UVs and Traffic were measured via Adobe Analytics prior to December 31, 2023, and measured via RudderStack of January 1, 2024. Prior period UVs and Traffic information has not been recast. These metrics do not include traffic to Dealer Inspire or D2C Media websites. 2ARPD excludes revenue from Dealer Inspire and D2C Media digital advertising services. 21 Quarterly Key Operating Metrics
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Free Cash Flow Trend ($MM) Share Repurchase ($MM) 22 Robust cash flow and consistent capital return ~61% FCF conversion in FY’24 Returned ~49% of 2H’24 FCF via share buybacks
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● Full Y ear Revenue: $745 to $755 million ● Adjusted EBITDA margins: 29% to 31% ● Capital Expenditures: $25 to $27 million ● Share repurchases: $60 to $70 million 23 FULL YEAR 2025 OUTLOOK Outlook ● Q1 Revenue: $178 to $181 million ● Adjusted EBITDA margins: 25.5% to 27% Q1 2025 OUTLOOK
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Q&A 24
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Appendix 25
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Non-GAAP Reconciliations (unaudited and in thousands) 26
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27 Non-GAAP Reconciliations (unaudited and in thousands)
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28 Non-GAAP Reconciliations (unaudited and in thousands)
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29 Non-GAAP Reconciliations (unaudited and in thousands)