Tag: Sonia Jain

Cars.com Inc. (NYSE: CARS) (“CARS” or the “Company”), a leading automotive marketplace platform that provides a robust set of digital solutions, today released its financial results for the fourth quarter and year ended December 31, 2021.

Q4 2021 Financial and Key Metric Highlights

• Revenue of $158.3 million, up $5.3 million, or 3% year-over-year
• Net loss of $6.0 million, or ($0.09) per diluted share, compared to Net income of $7.2 million, or $0.10 per diluted share, in the prior year
• Adjusted EBITDA of $46.8 million, or 30% of revenue, down $1.7 million, year-over-year
• Average Monthly Unique Visitors (“UVs”) of 23.6 million, up 6% year-over-year
• Traffic (Visits) of 134.0 million, down 3% year-over-year
• Monthly Average Revenue Per Dealer (“ARPD”) of $2,333, up 3% from $2,264 in the prior year period
• Dealer Customers of 19,179 as of December 31, 2021, up 150 compared to 19,029 as of September 30, 2021

2021 Full Year Financial and Key Metric Highlights

• Revenue of $623.7 million, up $76.2 million, or 14% year-over-year. Excluding the impact of the prior year invoice credits¹, revenue increased $38 million, or 6%
• Net income of $7.7 million, or $0.11 per diluted share, compared to a Net loss of $817.1 million, or ($12.15) per diluted share, in the prior year
• Adjusted EBITDA of $189.2 million, or 30% of revenue, compared to $155.9 million, or 28% of revenue, in the prior year
• Year-to-Date Net cash provided by operating activities of $138.0 million, flat compared to the prior year, with Free Cash Flow of $118.8 million, compared to $121.9 million in the prior year
• Average Monthly Unique Visitors of 25.1 million, up 5% year-over-year
• Traffic of 591.5 million, down 1% year-over-year
• Dealer Customers of 19,179 as of December 31, 2021, up 807 compared to 18,372 in the prior year

Operational Highlights

• Recently acquired CreditIQ, a cutting edge automotive fintech platform that provides instant online loan screening and approvals, now rolling out on the Cars.com platform and Dealer Inspire websites
• Announced agreement to acquire the Accu-Trade Group, a leading vehicle appraisal and acquisition solution, expected to close in the first quarter
• Announced a $200 million share repurchase program, underscoring the Company’s commitment to build shareholder value, while prioritizing continued investments in growth opportunities and maintaining modest leverage

“We achieved double-digit Revenue and Adjusted EBITDA growth this year, by driving continued adoption of our superior digital solutions across the industry,” said Alex Vetter, Chief Executive Officer of CARS. “We are leveraging our strong cash flow to acquire technology that advances our platform strategy and enables car buyers and sellers. Our recent acquisitions create incremental revenue streams and expand our TAM into new and growing markets. Our momentum coupled with new product launches position us to deliver strong and sustainable growth in 2022 and beyond.”

Q4 2021 Results

Revenue for the fourth quarter totaled $158.3 million, an increase of $5.3 million, or 3%, compared to the prior year period. Dealer revenue grew 8% year-over-year, driven by 4% growth in dealer customers and 3% growth in ARPD, primarily related to continued penetration of FUEL and the Company’s other digital solutions. OEM and national revenue was 23% lower compared to the prior period, reflecting lower OEM advertising budgets as inventory shortages persist.

Total operating expenses for the fourth quarter were $154.2 million, compared to $137.1 million for the prior year period. Adjusted Operating Expenses for the quarter were $136.6 million, a $6.3 million increase compared to the prior year period. This increase is primarily due to higher Product and Technology expenses as a result of lower investments in the prior year because of the COVID-19 uncertainty.

Net loss for the quarter was $6.0 million, or ($0.09) per diluted share, compared to Net income of $7.2 million, or $0.10 per diluted share, in the fourth quarter of 2020. The current quarter net loss was primarily a result of $9.6 million of compensation expense recognized as part of the $30 million upfront purchase price of CreditIQ.

Adjusted EBITDA for the quarter was $46.8 million, or 30% of revenue, compared to $48.5 million, or 32% of revenue, for the prior year period.

For the quarter, we delivered double-digit lead growth and 6% growth in Average Monthly Unique Visitors. Total Traffic was 3% lower compared to the fourth quarter of 2020.

Fourth-quarter ARPD was $2,333, up 3% year-over-year, driven by continued growth in FUEL and digital solutions.

Dealer Customers totaled 19,179 at December 31, 2021, up 150 Dealer Customers compared to the end of the third quarter of 2021. This increase was driven by continued strong retention rates and new customer additions. Compared to December 31, 2020, Dealer Customers increased 807, or 4%.

2021 Full-Year Results

Revenue for the year totaled $623.7 million, a 14% increase compared to $547.5 million in 2020, which reflects the impact of the financial relief the Company provided to its dealer customers. Excluding the impact of the financial relief the Company provided to its dealer customers, revenue increased 6% year-over-year.

For the year, total operating expenses were $575.3 million, compared to $1.4 billion, or $528.9 million excluding the 2020 goodwill and intangible asset impairment charge. Adjusted Operating Expenses for the year were $536.3 million, a $31.4 million increase compared to the prior year period. The increase was primarily related to the Company’s management of expenses to adjust to changes in revenue due to the COVID-19 pandemic 2020. In 2021, Product and Technology expense increased due to continued investments to support growth, including the Company’s replatforming. Marketing and Sales expense also grew as the Company gradually returned to a more typical operating environment.

GAAP net income for 2021 totaled $7.7 million, or $0.11 per diluted share, compared to GAAP net loss of $817.1 million, or ($12.15) per diluted share, in 2020. The 2020 net loss was driven by the goodwill impairment.

Adjusted EBITDA for the year was $189.2 million, or 30% of revenue, compared to $155.9 million, or 28% of revenue, in the prior year period.

Average Monthly Unique Visitors grew 5% and Traffic was 1% lower. Organic traffic remained strong at 70% of Traffic for the full year 2021.

Cash Flow and Balance Sheet

Net cash provided by operating activities in 2021 was $138.0 million, or flat compared to the prior year. Free Cash Flow in 2021 was $118.8 million compared to $121.9 million in 2020.

The Company made $120.0 million in debt repayments during 2021, reducing total debt outstanding to $477.5 million as of December 31, 2021. The Company’s total net leverage ratio at year-end improved to 2.3x, compared to 3.4x as of December 31, 2020. Total liquidity was $269.1 million, including cash and cash equivalents of $39.1 million and $230.0 million of revolver capacity, as of December 31, 2021.

“We delivered another quarter of solid Revenue and Adjusted EBITDA growth, in line with expectations, while also generating substantial free cash flow, closing the year in a strong financial position. We’re entering 2022 with significant momentum and the financial flexibility to execute on our growth strategy, while reinvesting in the business, paying down debt, and returning capital to shareholders,” said Sonia Jain, Chief Financial Officer of CARS.

2022 Outlook

For the first quarter of 2022, the Company expects Revenue of approximately $156.5 million to $158.5 million. Guidance reflects our strong 2021 performance along with the impact of industry-wide inventory shortages on advertising budgets, particularly for OEMs. The Company expects year-over-year revenue growth to accelerate throughout the year with the roll-out of recently announced and acquired solutions and as inventory recovers. Full-year revenue growth is expected to be between 6% to 8%, with double-digit revenue growth in the fourth quarter, assuming inventory shortages have recovered in the second half.

Adjusted EBITDA guidance for the first quarter includes the margin impact of our expected revenue mix as well as higher year-over-year expenses. We expect to invest in the integration and launch of our recent acquisitions and marketing and trade events, and we also expect higher expenses in areas that had been curtailed due to the COVID-19 pandemic. These investments will position the Company for accelerated long-term growth. Adjusted EBITDA margin for the first quarter is expected to be between 26% and 28% and is expected to approach 30% in the fourth quarter as revenue growth accelerates, inventory returns to more normalized levels, and OEM revenue returns to modest growth and also because investments are weighted towards the first half of the year.

Q4 2021 Earnings Call

As previously announced, management will hold a conference call and webcast today at 8:00 a.m. CT. This webcast may be accessed at investor.cars.com. A replay of the webcast will be available at this website following the conclusion of the call until March 10, 2022.

Cars.com Inc. (NYSE: CARS) (“CARS” or the “Company”), a leading digital marketplace and solutions provider for the automotive industry, today released its financial results for the quarter ended March 31, 2021.

Q1 2021 Financial and Key Metric Highlights

• Revenue of $153.3 million, up $5.2 million, or 4% year-over-year
• GAAP net income of $5.3 million, or $0.08 per diluted share
• Adjusted EBITDA of $48.1 million, or 31% of revenue, up $13.0 million year-over-year
• Net cash provided by operating activities of $50.4 million, up 74% year-over-year, with Free Cash Flow of $44.1 million, compared to $28.9 million of net cash provided by operating activities and $23.1 million of Free Cash Flow in the prior-year period
• Average Monthly Unique Visitors of 26.0 million, up 4% year-over-year
• Traffic of 156.6 million, down 1% year-over-year
• Monthly Average Revenue Per Dealer (“ARPD”) of $2,268, up 8% from $2,092 in the prior-year period, representing three consecutive quarters of year-over-year growth
• Dealer Customers of 18,823 as of March 31, 2021, up 451, the highest number of additions since the spin-off, compared to 18,372 as of December 31, 2020

Operational Highlights

• Became a semi-exclusive provider of website services for FordDirect, opening up a new opportunity to sell to FordDirect’s 3,000 U.S. dealers
• Surpassed 10 million vehicle, dealership and salesperson reviews, demonstrating a focus on continuously providing unique content to consumers through digital solutions like DealerRater
• Appointed auto industry veteran, Jenell Ross, to CARS’ Board of Directors; Jenell is the President of Bob Ross Auto Group, a leading Midwest dealership, and was recently named to Automotive News‘ 100 Leading Women in the North American Auto Industry

“We maintained strong momentum in our business in the first quarter, delivering continued sequential growth in dealer customers and year-over-year growth in ARPD and across all key financial measures. Our value, which includes our unique organic traffic and industry-leading digital solutions, creates a competitive advantage that attracts and retains dealer customers,” said Alex Vetter, President and Chief Executive Officer of CARS. “So far this year we have seen positive industry trends, an indication of strong consumer demand and continued dealer health. These trends reinforce confidence in our outlook for growth in 2021.”

Q1 2021 Results

Revenue for the first quarter totaled $153.3 million, up $5.2 million, or 4%, compared to the prior year period, due to growth in ARPD driven by increased solutions sales and underlying strength in the Company’s marketplace business.

Total operating expenses were $136.7 million, compared to $1.1 billion for the prior year period, or $147.3 million excluding a non-cash goodwill and intangible asset impairment charge of $905.9 million triggered by the COVID-19 pandemic and related restrictions, which was recorded during the first quarter of 2020. This decrease was driven by the conclusion of affiliate revenue share expense, which had been provided to our prior owners, in the second half of 2020 as well as a reduction in depreciation and amortization expense coupled with continued focus on cost savings and reinvestment in growth areas like innovation.

GAAP net income was $5.3 million, or $0.08 per diluted share, compared to GAAP net loss of $787.4 million, or $11.76 per diluted share, in the first quarter of 2020.

Adjusted EBITDA was $48.1 million, or 31% of revenue, compared to $35.2 million, or 24% of revenue, for the prior-year period.

The Company remains focused on driving high-quality traffic and leads, while continuing to optimize marketing investments. Average Monthly Unique Visitors in the first quarter increased 4% and total traffic was down 1% compared to the first quarter of 2020. Organic traffic was 74% of Traffic and grew 12% year-over-year, fueled by record SEO traffic in the quarter, further demonstrating the unique, high-quality traffic that the Company delivers to its dealer customers. This strength in SEO enabled the Company to reduce planned marketing investments during the quarter.

For the quarter, ARPD was $2,268, up 8% year-over-year and flat compared to the fourth quarter of 2020. The ARPD growth was driven by continued growth in solutions products.

Dealer Customers totaled 18,823 at the end of the first quarter, nearly back to pre-COVID-19 pandemic levels. Growth in both marketplace and solutions-only Dealer Customers drove the 451 sequential increase.

Cash Flow and Balance Sheet

Net cash provided by operating activities in the first quarter was $50.4 million, up 74% compared to $28.9 million in the prior year. Free Cash Flow in the first quarter was $44.1 million, compared to $23.1 million in the prior year.

Total liquidity was $283.7 million, including cash and cash equivalents of $53.7 million and $230.0 million of revolver capacity, as of March 31, 2021. The Company made $52.5 million in debt repayments during the first quarter, of which $50.0 million was voluntary, reducing total debt outstanding to $545.0 million as of March 31, 2021. Total net leverage as of March 31, 2021 was 2.9x and senior secured leverage was 0.9x, compared to maximum allowable senior secured leverage of 3.5x, in accordance with the Company’s credit agreement.

“Our thriving digital solutions strategy enabled us to deliver strong financial performance in the quarter and gives us confidence in our second quarter guidance for continued growth in revenue and Adjusted EBITDA. Our balance sheet remains strong, giving us ample flexibility to opportunistically pay down debt and continue our investments in product innovation, marketing and talent acquisition supporting and enabling dealers to meet consumers in both physical and digital channels,” said Sonia Jain, Chief Financial Officer of CARS.

Outlook

For the second quarter of 2021, revenue is expected to be approximately $152 million to $154 million. The Company expects to deliver strong year-over-year Adjusted EBITDA growth while investing in the business, resulting in Adjusted EBITDA margins for the second quarter of approximately 28% to 30%.

Q1 Earnings Call

As previously announced, management will hold a conference call and webcast today at 9:00 a.m. CDT. This webcast may be accessed at investor.cars.com. A replay of the webcast will be available at this website following the conclusion of the call until May 20, 2021.