Cars.com Reports 2Q Total Revenue of $168.5 Million, up 8% Year-over-Year


 
 
01:58 08/09/2018

Yesterday, August 8th, Cars.com Inc. CARS , released its financial results for the quarter ended June 30, 2018.

Cars.com CARS  is a leading two-sided digital automotive marketplace that creates meaningful connections between buyers and sellers.

Revenue for the second quarter of 2018 was $168.5 million, compared to $156.6 million in the prior year period. Dealer Inspire and LDM contributed $14.5 million to retail revenue. In addition, the conversions of affiliate markets contributed $21.2 million to retail revenue, while reducing wholesale revenue $18.9 million ($4.4 million of the reduction was related to the amortization of unfavorable contracts liability, which is now recorded as a reduction of affiliate revenue share expense).

Net income for the second quarter of 2018 was $12.7 million compared to $24.8 million in the second quarter of 2017. Adjusted net income for the quarter was $34.3 million compared to $50.5 million for the prior year period. These comparisons to prior year are impacted by changes in capital structure, including additions of interest and tax expense - which occurred in conjunction with the spin-off during the second quarter of 2017.  

For the second quarter, both average monthly unique visitor count and total traffic grew 8% year-over-year. Mobile traffic grew 25% year-over-year and accounted for 67% of total traffic compared to 58% in the prior year. SEO traffic grew year-over-year in each month of the second quarter, accelerating toward expected double digit growth for the full year.

"We celebrated our 20th anniversary in June, but this past year has been more transformative than the prior 19. We are taking direct control of our affiliate markets by converting these agreements prior to their expirations, at the same time moving from a classified listings site to a digital automotive marketplace that simplifies buying and selling," said Alex Vetter, President and Chief Executive Officer of Cars.com. "We have expanded into high-growth categories with Dealer Inspire products including the launch of our proprietary Social Solutions. I'm pleased with the positive momentum we've experienced with growth in traffic, unique visitors and now SEO, as well as our continued success in negotiating early affiliate conversions. However, our first-half subscription revenues are behind our plan, and as a result we have taken down our full-year outlook. As we welcome Doug Miller as Chief Revenue Officer, I am confident he will be instrumental in delivering our growth strategies to expand our suite of digital solutions and increase our customer network."   

"We're encouraged to see continued rapid growth in our Dealer Inspire and LDM businesses and affiliate markets, and we will continue to utilize our flexible capital structure and strong balance sheet to reinvest in the Cars.com brand and product to drive long-term growth in the business," said Becky Sheehan, Chief Financial Officer of cars.com.

Due to lower subscription revenue in the first half of the year and lower growth in our national advertising business, the Company is revising its full year 2018 guidance. CARS  now expects approximately 6 to 7% revenue growth with Adjusted EBITDA margin of approximately 34%.

Cars.com CARS  President and Chief Executive Officer Alex Vetter announced that Doug Miller, a seasoned marketplace executive with more than 20 years of experience building digital businesses, has been appointed Chief Revenue Officer, succeeding John Clavadetscher. The move fuels the company's growth agenda, adding a seasoned executive with experience growing, scaling and expanding multiple marketplace businesses.

Prior to joining Cars.com, Miller was the Chief Executive Officer of Chatbox, an early stage technology company that created a messaging platform for sales and service teams to chat and exchange structured data with customers, ultimately embedding the technology into the AI-powered chatbots of a Fortune 50 company. Miller also served as Chief Revenue Officer at online consumer marketplace LivingSocial where he helped grow the company from a small start-up to a global enterprise with nearly $2 billion in sales. Previously, Miller held executive positions at Expedia, Ticketmaster and Citysearch, and he has extensive experience leading large sales and strategy teams as well as integrating acquisitions.

"Doug is a key addition to our executive leadership team, bringing deep experience from technology, media and marketplace businesses using data to unlock new sources of revenue," Vetter said. "Doug's strength is running large global sales teams and transforming organizations for growth. I am confident he will be instrumental in delivering our growth strategies to expand our suite of digital solutions and increase our customer network.”

Launched in 1998 and headquartered in Chicago, the company empowers consumers with resources and information to make informed buying decisions and enables advertising partners with innovative digital solutions and data-driven intelligence to increase inventory turn and gain market share. A pioneer in online automotive classifieds, the company has evolved into one of the largest digital automotive platforms, connecting thousands of local dealers across the country with millions of consumers. In 2018, Cars.com (NYSE:CARS) CARS  acquired Dealer Inspire®, a company that builds technology that helps future-proof dealerships for changing consumer behaviors and makes the car buying process faster and easier.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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