Cars.com — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $181.9 million, up slightly (not meaningful percentage change) year-over-year from $181.6 million.
• Net income increased to $16.3 million, a 113% year-over-year increase from $7.7 million.
• Net income per diluted share was $0.30, up 150% from $0.12.
• Adjusted net income was $32.3 million, up 6% year-over-year from $30.4 million.
• Adjusted net income per diluted share was $0.58, up 21% from $0.48.
• Adjusted EBITDA was $55.8 million, up 2% year-over-year from $54.6 million.
• Adjusted EBITDA margin was 30.7%, outperforming the guidance range by 120 basis points.
• Total operating expenses were $153.0 million, down 7% year-over-year from $164.8 million.
• Adjusted operating expenses were $142.4 million, down 5% year-over-year.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $114.7 million, compared to $114.5 million in the prior year.
• Free cash flow for the nine months ended September 30, 2026, was $97.3 million, compared to $94.5 million in the prior year.
• Total debt outstanding was $445.0 million as of September 30, 2026, after repaying $5 million during the quarter.
• Total liquidity was $369.6 million, comprising $64.6 million in cash and cash equivalents and $305.0 million in revolver capacity.

Guidance and Future Outlook:

• Full year 2026 revenue is expected to be flat to up 2% year-over-year.
• Full year 2026 Adjusted EBITDA margin is expected to be between 29.0% and 30.0%.
• The 2026 share repurchase target remains $90 million.

Business Segments and Product Lines:

• Marketplace revenue grew 5% year-over-year, driven by customer growth and higher-tier subscription uptake.
• Subscription-based Dealer revenue was $163.4 million, up 1% year-over-year.
• OEM and National revenue was $15.7 million, down 3% year-over-year but up 15% quarter-over-quarter.
• Premium+ package adoption reached 12% for the quarter.
• The new self-service Marketplace Starter package was adopted by nearly 400 independent dealers.
• Carson, the AI-powered shopping assistant, crossed 1 million monthly users, nearly doubling year-over-year.
• Cars.com was the #1 most cited automotive marketplace across major LLMs (ChatGPT, Google AI Overviews, Google AI Mode).
• Mausam Bhatt was appointed Chief Product Officer.

Market and Competitive Landscape:

• Dealer customers decreased 1% year-over-year to 19,251 (excluding Marketplace Starter packages).
• Average Monthly Revenue Per Dealer (ARPD) was $2,532, up 3% year-over-year, setting a second-highest quarterly record.
• Average Monthly Unique Visitors (UVs) were 24.7 million, down 3% year-over-year.
• Traffic (Visits) was 150.2 million, down 4% year-over-year.

Risks and Challenges:

• The press release notes that actual results could differ materially from forward-looking statements due to risks and uncertainties, including market conditions affecting Dealer and OEM media products.
• Specific risk factors are referenced in the company's Form 10-K for the year ended December 31, 2025, and other SEC filings.

Management Commentary and Tone:

• CEO Tobias Hartmann stated that results reinforced the strength of the core Marketplace and highlighted fundamental improvements to the operating model.
• Management expressed confidence in moving swiftly to extend momentum across the portfolio to build a foundation for product-led growth and long-term value creation.
• The tone emphasized efficiency, profitability gains, and the successful launch of new products to meet local dealer needs.

Other Key Points:

• Share repurchases totaled 1.4 million shares for $16 million in the third quarter.
• Year-to-date share repurchases totaled 7.6 million shares for $74 million.
• Shares repurchased and retired year-to-date represent over 12% of the Company's common shares outstanding as of prior year-end.
• Approximately $100.2 million remains available under the current share repurchase authorization, which expires in February 2028.