Cars.com Inc (CARS) Reports 6% Revenue Growth and $4.5 Million Net Income in Q3 2023
Cars.com Inc (NYSE:CARS) reported a 6% year-over-year increase in total revenue, reaching $174.3 million in Q3 2023.
The company posted a net income of $4.5 million, compared to a net loss of $2.9 million in the same period last year.
CARS also announced the acquisition of D2C Media Inc., a leading provider of website and digital advertising solutions in Canada.
The company launched Cars Commerce, uniting its B2B brands and further reinforcing its platform strategy.
On November 2, 2023, Cars.com Inc (NYSE:CARS) released its financial results for the third quarter ended September 30, 2023. The company reported a 6% year-over-year increase in total revenue, reaching $174.3 million. This growth was driven by a 9% increase in Average Revenue Per Dealer (ARPD) and the successful launch of Cars Commerce, a platform uniting the company's B2B brands.
Financial Highlights
Net income for Q3 2023 was $4.5 million, or $0.07 per diluted share, a significant improvement from a net loss of $2.9 million, or $0.04 per diluted share, in the prior year. Adjusted EBITDA was $49.5 million, or 28% of Revenue, compared to $49.9 million a year ago.
Dealer revenue grew by 8% year-over-year, driven by growth in solutions and media products, and the 2023 Marketplace Repackaging initiative. However, OEM and National revenue was 2% lower compared to the prior year, totaling $14.5 million.
Operational Highlights
Cars.com Inc (NYSE:CARS) also announced the acquisition of D2C Media Inc., a leading provider of website and digital advertising solutions in Canada. This acquisition is expected to support the acceleration of Cars Commerce's profitable growth trajectory.
During the quarter, the company increased its website customers to over 6,300, an 8% increase year-over-year. The company also completed the 2023 Marketplace Repackaging initiative, a significant driver of the 9% year-over-year ARPD growth.
Outlook
For the fourth quarter, the company expects revenue to be between $177 million and $179 million, reflecting continued year-over-year revenue growth of 5.2% to 6.4%. The company's guidance reflects anticipated continued growth in its Dealer Revenue driven by adoption of dealer solutions and media products, as well as modest sequential improvement expected in OEM and National Revenue.
Adjusted EBITDA margin for the fourth quarter is expected to be between 29.5% and 30.5%, reflecting fourth quarter revenue guidance and sequential changes in investment mix.
Overall, Cars.com Inc (NYSE:CARS) has demonstrated a strong financial performance in Q3 2023, with significant growth in revenue and net income. The company's strategic acquisitions and initiatives, such as the launch of Cars Commerce and the acquisition of D2C Media Inc., further strengthen its position in the market and open up new growth opportunities.
Explore the complete 8-K earnings release (here) from Cars.com Inc for further details.
This article first appeared on GuruFocus.
