Operational Highlights
“Revenue momentum continued in the third quarter, driven by expansion in traffic, broker consumers and improved adoption of Dealer Inspire and Accu-Trade responses. Our functionality is indicative of the strength of our embedded platform strategy,” said Alex Vetter, CEO. Officer. of CARS. ” We are well placed to generate long-term sustainable expansion as the automotive industry turns to virtual responses in the marketplace to better compete with car sales, increase transaction power and optimize profitability. “
Third Quarter 2022 Results
Third quarter revenue totaled $164. 6 million, a cumulative of $8. 0 million, or 5%, over the same time last fiscal year. Accu-Trade Connected and a 3% increase in reseller customers. While reduced production levels continue, the decline in domestic and OEM profits slowed to 2% year-over-year, but profits increased by 5% sequentially.
Net loss for the quarter $2. 9 million, or $0. 04 consistent with share, fully diluted, compared to net revenue source of $2. 4 million, or $0. 03 consistent with share, fully diluted, in the third quarter of 2021. The current year’s net loss is primarily due to the quarterly valuation of value supplements related to the acquisitions of CreditIQ and Accu-Trade, which were impacted by revised functionality expectations.
Adjusted EBITDA for the quarter totaled $49. 9 million, or 30% of revenue, to $45. 8 million, or 29% of revenue, in the last fiscal year.
For the quarter, overall traffic increased 6% compared to Q3 2021 and the company recorded an expansion of 12% on average per month of exclusive visitors, compared to last year.
As of September 30, 2022, broker consumers totaled 19,585, a cumulative of 556, or 3%, year-over-year, driven by strong and sustained retention rates and new sales. Compared to June 30, 2022, the backlog of network clients up to 68.
Cash and balance sheet
Net money from operating activities for the nine-month era ended September 30, 2022 was $91. 3 million, compared to $116. 2 million last year. Free cash flow in the first nine months totaled $76. 9 million, compared to $98. 3 million last year. it is basically due to an income tax refund source of $9. 1 billion won in the first quarter of 2021 similar to the reversal of the NOL, as well as the effect of unfavorable adjustments in current capital.
The Company issued debt invoices of $17. 5 million in the first nine months of 2022, which reduced overall extraordinary debt to $505. 0 million as of September 30, 2022. Total net leverage at the end of quarter 2. 6x, compared to 2. 8x as of June 30, 2022 Total money $226. 9 million, adding money and money equivalents of $31. 9 million and a revolver capacity of $195. 0 million, as of September 30, 2022.
As of September 30, 2022, the Company’s floating debt represented 21% of overall notable debt, restricting its exposure to an emerging interest rate environment.
“Our company continues to generate successful growth, even in an overall challenging economic environment that has already begun for many people. This is a testament to the benefits of our varied set of solutions. Revenue, adjusted EBITDA and operating cash flow for the quarter remained committed to a balanced capital allocation strategy aimed at making an investment in the business for growth, as we continue to deleverage our balance sheet and buy back shares,” said Sonia Jain, Chief Financial Officer of CARS.
Outlook 2022
By the fourth quarter of 2022, the company expects to generate revenue of approximately $165 million to $167 million, representing year-over-year and sequential expansion in what remains a challenging macro environment. The forecast is balanced with the company’s expected continued expansion Virtual solutions, tempered by the continued effect of economic headwinds, add industry-wide stock shortages, emerging inflation and interest rates.
Adjusted EBITDA margin for the fourth quarter is expected to be between 28. 5% and 30. 0%, reflecting the Company’s expected combination of earnings and modest increases in marketing and sales and products and generation investments to drive growth, generate profitable margins and generate cash flows.
As previously announced, Control will hold a conference call and webcast today at 8:00 a. m. m. CT. la conclusion of the call until November 17, 2022.
About cars
CARS is the leading automotive marketplace platform that provides a physically powerful set of virtual answers to link car buyers with sellers. Launched in 1998 with flagship market Cars. com and headquartered in Chicago, the company provides buyers with data, resources and virtual equipment. to make informed purchasing decisions and seamlessly link with automotive workshops and OEMs. In a conversion market, CARS enables dealers and OEMs with cutting-edge technical answers and data-driven intelligence to be more successful and influence ready-to-buy buyers, accumulating stock turnover and gaining market share.
In addition to Cars. com, CARS brands come with Dealer Inspire, a generation provider that creates answers that future-proof dealers with more effective operations and connected virtual experiences; FUEL, which gives dealers and OEMs the ability to harness the untapped power of virtual video by leveraging the naturalness of car buyers in the Cars. com market, DealerRater, a leading automotive dealer reputation review and monitoring platform, automotive money generation platform CreditIQ and Accu-Trade, a leading provider of vehicle acquisition generation and valuation data.
Non-GAAP Financial Measures
This news release discusses Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Adjusted Operating Expenses. These monetary measures are not listed in accordance with sometimes accepted accounting principles in the United States (“GAAP”). These monetary measures are presented as supplemental measures of operating functionality because the Company believes that they provide meaningful insights into the Company’s functionality and provide a basis for comparing the effects of operations from period to period. In addition, the Company uses Adjusted EBITDA as a measure to determine incentive pay targets. Adjusted EBITDA is also used as a measure of functionality under the Company’s credit agreement and includes changes such as those explained below and additional changes, which are explained in the credit agreement Array. These non-GAAP monetary measures are used at through lenders, securities analysts and investors. and other Company stakeholders to compare corporations in the Company’s industry. For a reconciliation of the non-GAAP measures presented in this press release to their highest directly comparable monetary measure listed under GAAP, see “Non-GAAP Reconciliations” below.
Other corporations would possibly delineate or calculate those measures differently, restricting their usefulness as comparative measures. Because of these limitations, non-GAAP monetary measures should not be considered in isolation or as substitutes for functionality measures calculated in accordance with GAAP. Definitions of those Non-GAAP monetary measures and reconciliations to maximum directly comparable GAAP monetary measures are provided in the tables below.
The Company defines adjusted EBITDA as net earnings (losses) before (1) net interest expense, (2) source of income tax expense (profit), (3) depreciation, (4) amortization of intangible assets, (5) redemption expense, (6) unrealized market price changes and derivative-like monetary transactions, and (7) other safe items, as items similar to transactions, indemnity packages, transformation and other exit costs, and cancellations and impairments of goodwill, intangible assets and other long-term assets.
The Company defines loose money as net money from operating activities minus capital expenditures, adding tangible capital asset purchases and capitalization of internal-use software and online page progression costs.
The Company defines adjusted operating expenses as adjusted general operating expenses to exclude stock-based compensation, write-offs and impairments of goodwill, intangible assets, long-term assets, indemnities and costs related to transactions and exits.
Definitions of key measures
Traffic (“Visits”). Traffic is central to the Company’s business. Traffic to CARS’ network of websites and mobile programs brings price to the Company’s advertisers in terms of audience, awareness, attention and conversion. In addition to tracking the volume and sources of traffic, the Company monitors activity in their homes, allowing it to innovate and refine its customers’ offerings. Traffic is explained as the number of visits to CARS (responsive sites and mobile apps) mobile and desktop homes, as measured by Adobe Analytics. Traffic does not come with traffic to Dealer Inspire websites. Traffic provides an indication of the success of the company’s customers. While the success of the company’s customers does not directly generate revenue, the company believes its ability to succeed with car buyers in the marketplace is exciting for its domestic brokerage clients and advertisers.
Average profit consistent with the broker (“ARPD”). The Company believes its ability to grow ARPD is an indicator of its platform’s price proposition. The Company defines ARPD as the broker’s profit, excluding virtual advertising services, during the consistent period divided by the average consistent with the broker’s monthly number of consumers over the same constant period. As of the quarter ended June 30, 2022, Accu-Trade is included in our ARPD metric, which had an intangible impact on ARPD; However, no coherent term from the past has been reformulated, as it is highly unlikely to do so.
Reseller consumers. Distributor consumers constitute brokers who employ the Company’s products at the end of each era of financial reporting. Each physical or virtual brokerage location is counted separately, whether it is a sole proprietorship or part of a large consolidated brokerage group. Brokers from multiple franchises located on the same site are counted as a single broker. As of June 30, 2022, this key operational measure includes Accu-Trade; However, no past era has been recast as it would be.
Forward-Looking Statements
Forward-looking statements are subject to a number of vital hazards, uncertainties and other factors, many of which are beyond the Company’s control, which may cause their actual effects and strategic moves to differ materially from those expressed in the statements. prospective. content in this press release. For a detailed discussion of many of these and other dangers and uncertainties, see the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and their other presentations with Securities and Exchange. Commission, available on the company’s website at investor. cars. com or through EDGAR at www. sec. gov. All forward-looking statements contained in this press release are qualified by those cautionary statements. It is worth comparing all forward-looking statements made in this press release in the context of those dangers and uncertainties. The forward-looking statements contained in this news release are based solely on data recently received from the Company and speak only as of the date of this news release. The Company undertakes no obligation, as required by law, to update or revise any forward-looking statements or cautionary statements to reflect adjustments in assumptions, the occurrence of events, whether unforeseen or not, or adjustments in long-term operating effects. term over time or otherwise. .
The forward-looking statements contained in this report are intended to be a subject matter for hedging under the federal securities laws.
CARS Investor Relations Contact: Robbin Moore-Randolphrmr@cars. com312. 601. 5929
CARS Media Contact: Marita Thomasmthomas@cars. com312. 601. 5692
SOURCE Cars. com Inc.