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CHICAGO - Cars.com Inc. (NYSE:CARS) reported fourth-quarter earnings that fell short of analyst expectations and provided weaker-than-anticipated guidance, sending its shares tumbling 18.6% in trading.
The automotive marketplace platform posted adjusted earnings per share of $0.49, missing the analyst consensus of $0.56. Revenue for the quarter came in at $180.43 million, below estimates of $183.9 million and up only slightly from $179.6 million in the same period last year.
Looking ahead, Cars.com projected first-quarter revenue between $178 million and $181 million, below the $184.9 million analysts were expecting. For the full year 2025, the company forecasts revenue of $745 million to $755 million, also shy of the $757.7 million consensus estimate.
CEO Alex Vetter highlighted strong OEM and National revenue growth of 15% YoY in Q4, as well as robust adjusted EBITDA margin of nearly 31%. However, subscription-based Dealer revenue declined 1% YoY, reflecting "external pressures on dealer profitability and marketing spend," according to the company.
"As the automotive industry looks for efficiency, the benefits of leveraging our platform of connected solutions are leading to measurable benefits and meaningful sales impact for our customers," Vetter stated.
The company’s AccuTrade Connected product expanded to approximately 1,000 subscribers. Cars.com also announced a new $250 million share repurchase authorization.
For the full year 2024, Cars.com reported record revenue of $719.2 million, up 4% YoY. Net income fell to $48.2 million from $118.4 million in 2023, which had benefited from a tax valuation allowance release.
The steep stock decline suggests investors were disappointed by the company’s results and outlook, despite management’s optimism about new capabilities and product enhancements planned for 2025.
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