Recently, Cars.com – an audience-driven technology company – reported its first-quarter financial results for 2024, which ended on March 31.
The results revealed that revenue increased by 8% to $180.2 million in Q1. The growth was attributed to various factors, including the D2C Media acquisition, digital experience revenue, and the Marketplace Repackaging initiative. However, operating expenses also increased, reaching $167.4 million. Subscription-based Dealer revenue and OEM or National revenue both grew by 8% and 13%, respectively.
Adjusted net income improved to $28.7 million, while Adjusted EBITDA grew to $52.7 million, driven by revenue growth and controlled operating expenses. Despite these financial metrics, consumer interest in vehicle purchases remained robust, with significant traffic and unique visitors during the quarter.
In Q1 2024, Cars.com saw significant improvement in its financial metrics, with net cash from operating activities increasing to $33.5 million compared to $28.1 million in the previous year and free cash flow rising to $27.5 million from $22.8 million in 2023. An $8.3 million increase in Adjusted EBITDA and favorable working capital primarily drove this improvement, with higher one-time cash costs and increased cash paid for interest partially offsetting it.
During the quarter, the company reduced its debt, repaying $10 million and lowering total debt outstanding to $480.0 million as of March 31, 2024, resulting in an improved net leverage ratio of 2.2x compared to 2.3x in the previous year. Additionally, the company maintained strong liquidity with a total liquidity of $226.4 million, comprising cash and cash equivalents of $31.4 million and a revolver capacity of $195.0 million.
In May 2024, Cars Commerce strengthened its financial position by amending and extending its existing Credit Facility, consolidating its Term loan and Revolving loan into a new $350 million Revolving loan maturing in May 2029. This move, combined with share repurchases totaling $9.5 million, demonstrates the company’s commitment to its balanced capital allocation strategy.
Sonia Jain, Cars.com’s Chief Financial Officer, emphasized the company’s strong performance and financial flexibility, stating, “The refinancing of the credit facility on favorable terms enhances the company’s ability to invest in growth initiatives and create shareholder value.”
