Cars.com, Inc. ((CARS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Cars.com, Inc. conveyed an overall positive sentiment, highlighting the company’s robust business health. The call showcased record revenue growth, a strong adjusted EBITDA margin, and the successful integration of AI technologies. However, challenges in OEM revenue due to external factors slightly tempered the otherwise optimistic outlook.
Record Revenue and Growth in Dealer Count
Cars.com achieved a record revenue of $182 million in the third quarter of 2025, marking a significant milestone. The dealer count increased for the third consecutive quarter, reaching a new three-year high. This growth was bolstered by marketplace performance that exceeded expectations, reflecting the company’s strategic focus on expanding its dealer network.
Strong Adjusted EBITDA Margin
The company’s adjusted EBITDA margin rose to 30.1%, an increase of over 160 basis points year-over-year. This improvement underscores Cars.com’s effective cost management and strong revenue flow-through, highlighting its operational efficiency.
Successful Marketplace Repackaging
Repackaging initiatives played a crucial role in Cars.com’s success, leading to the renegotiation of OEM website agreements and the launch of new marketplace packages. These efforts contributed significantly to dealer revenue growth, demonstrating the company’s ability to adapt and innovate.
AI Integration and Consumer Engagement
The integration of AI-powered search and recommendations, particularly through Carson, the AI search assistant, has significantly increased consumer engagement. Carson has tripled consumer engagement for vehicle saves and doubled the viewing of listings, showcasing the potential of AI in enhancing user experience.
AccuTrade and DealerClub Growth
AccuTrade and DealerClub have shown impressive growth, with AccuTrade reaching 1,150 subscribers and DealerClub increasing active users by nearly 40% quarter-over-quarter. This indicates strong adoption of Cars.com’s tech-first products by dealers, reinforcing the company’s position in the market.
Robust Cash Flow and Share Buybacks
The company generated $94.5 million in free cash flow year-to-date and completed $64 million in share buybacks. These figures reflect Cars.com’s strong financial health and commitment to delivering shareholder returns.
OEM and National Revenue Decline
Despite the overall positive performance, OEM and national revenue declined by 5% year-over-year in Q3. This decline was mainly due to reduced spending by two OEM partners, attributed to internal changes rather than Cars.com’s performance.
Challenges in OEM Ad Spending
The earnings call highlighted challenges in OEM ad spending, which showed variability and a preference for flexibility due to market conditions. The company expects these fluctuations to continue through the end of the year.
Forward-Looking Guidance
Looking ahead, Cars.com remains optimistic, with record revenue driven by strong performance across its platforms. The company achieved an adjusted EBITDA margin of 30% and executed $19 million in share buybacks during Q3. Dealer count reached a new high, with significant growth in marketplace traffic and AI-driven consumer engagement. Strategic initiatives, including marketplace repackaging, are expected to drive further growth.
In summary, Cars.com, Inc.’s earnings call painted a picture of a company in robust health, with record revenue and strong operational metrics. While challenges in OEM revenue present hurdles, the company’s strategic initiatives and technological advancements position it well for future growth. Investors and market watchers will be keen to see how Cars.com navigates the evolving market landscape.