Cars.com Inc. (CARS) stock plummeted 5.03% in the pre-market trading session on Thursday, following the company's disappointing fourth-quarter earnings results.
The online automotive marketplace reported quarterly earnings of $0.49 per share, missing the analyst consensus estimate of $0.56 by 12.5%. Revenue for the quarter came in at $180.4 million, falling short of the expected $183.9 million by 1.88%.
Despite the top and bottom-line misses, Cars.com reported robust adjusted EBITDA of $55.5 million, or 30.8% of revenue, representing the strongest quarter in fiscal 2024. Subscription-based dealer revenue declined 1% year-over-year due to external pressures on dealer profitability and marketing spend. However, OEM and National revenue grew 15% year-over-year, driven by increased marketing and advertising activity by automakers as vehicle inventory levels rose.
The company highlighted the growth of its AccuTrade Connected solution, which grew to approximately 1,000 subscribers by the end of the quarter. Additionally, Cars.com closed the acquisition of DealerClub in January 2025, adding dealer-to-dealer wholesale auction capabilities to its platform.
"Our fourth quarter was highlighted by strong OEM and National revenue, which was up 15% year-over-year, and robust Adjusted EBITDA margin of nearly 31%, capping a year of solid growth and consistent profitability improvement," said Alex Vetter, CEO of Cars Commerce. "We are excited about new capabilities and additional product enhancements in 2025 that give us confidence in accelerating organic growth and creating long-term, sustainable value for shareholders."
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