Cars.com Inc. posted record total revenue of $181.6 million for the third quarter of fiscal 2025, a 1% year‑over‑year increase that slightly exceeded the consensus estimate of $181.31 million. Adjusted EBITDA rose to $54.6 million, lifting the margin to 30.1% from 28.5% in the same quarter a year earlier, a clear sign of improved operational leverage and disciplined cost management.
Dealer revenue, the company’s core business, grew 2% year‑over‑year to $159.1 million, driven by a 1% increase in dealer customers to 19,526 and a 1% rise in average monthly revenue per dealer. In contrast, OEM and National revenue fell 5% year‑over‑year, a decline attributed to lower media spending by certain OEM partners amid broader industry budget tightening.
Net income fell to $7.7 million, or $0.12 per diluted share, from $18.7 million a year earlier, largely due to a $10.9 million charge related to the fair‑value adjustment of contingent consideration from prior acquisitions. Adjusted net income reached $30.4 million, or $0.48 per diluted share, a $0.02 or 4% miss versus the consensus estimate of $0.50. The miss reflects the impact of the one‑time contingent‑consideration adjustment, which did not affect the company’s core operating performance.
Management reaffirmed its full‑year adjusted EBITDA margin guidance of 29%‑31% and projected low‑single‑digit revenue growth for the second half of fiscal 2025. The company also completed $64 million of common‑stock repurchases during the quarter, bringing cumulative buybacks to $63.9 million and keeping the program on track with its $70‑to‑$90 million target.
The quarter also marked the launch of Carson, Cars.com’s new AI‑powered search engine. CEO Alex Vetter highlighted the platform’s role in driving deeper shopper engagement, noting that Carson is already powering millions of web searches and delivering a two‑fold improvement in visitor engagement. Vetter emphasized that the AI initiative is a key lever for sustaining dealer revenue growth and expanding the company’s market share in the competitive automotive e‑commerce landscape.
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