Cars.com, a dealership technology company, reported growth in revenue and net income for the first quarter of the year. The company’s acquisition of Accu-Trade and CreditIQ as well as increased dealer revenue helped offset declines in some customer areas. Net income more than doubled to $11.5 million from $4.3 million in the previous year, while revenue grew 5.6% to $167.1 million and monthly average revenue per dealer increased 4.1% to $2,386. CEO Alex Vetter attributed the positive results to marketplace strength, website growth, Accu-Trade integration, and media product upsells.
However, Cars.com reported a decrease in dealer marketplace customers, blaming it on certain digital dealers’ expected pullback. Additionally, automaker and national revenue dipped 11% due to some insurance sector customers’ reductions related to the economy. Despite these setbacks, average monthly unique visitors increased 7% to 28.5 million. Cars.com also launched new marketplace packages and adjusted subscription pricing in the first quarter to accommodate the acquired companies.
Cars.com is projecting revenue growth of 3-6% for the full year 2023 assuming historically low inventory levels continue. As of the publication of this article, shares of Cars.com were trading down 14.5% at $16.58.
In conclusion, Cars.com saw significant growth in net income and revenue in the first quarter of 2023 due to several factors, including the integration of acquired companies and increased dealer revenue. However, the company also experienced some setbacks in dealer marketplace customers and automaker and national revenue. Despite this, the company is optimistic for the future and projecting growth for 2023.
