Latest news with #AccuTrade
Yahoo
2 hours ago
- Automotive
- Yahoo
CARS Q1 Earnings Call: Tariff-Driven Market Uncertainty and Focus on Used Car Solutions
Online new and used car marketplace (NYSE:CARS) fell short of the market's revenue expectations in Q1 CY2025, with sales flat year on year at $179 million. Its non-GAAP profit of $0.37 per share was 24.7% below analysts' consensus estimates. Is now the time to buy CARS? Find out in our full research report (it's free). Revenue: $179 million vs analyst estimates of $180.2 million (flat year on year, 0.6% miss) Adjusted EPS: $0.37 vs analyst expectations of $0.49 (24.7% miss) Adjusted EBITDA: $50.72 million vs analyst estimates of $47.48 million (28.3% margin, 6.8% beat) Operating Margin: 3.6%, down from 7.1% in the same quarter last year Dealer Customers: 19,250, in line with the same quarter last year Market Capitalization: $652.8 million first quarter was shaped by shifting industry conditions and the company's efforts to strengthen its marketplace and solutions portfolio. CEO Alex Vetter noted that 'our platform strategy, which combines the leading and scaled consumer marketplace with dealer software tools, has been key to our diversified growth.' Management highlighted gains in dealer count, robust consumer traffic—reaching a record 29 million monthly unique visitors—and expanding adoption of tools like AccuTrade and Dealer Club. CFO Sonia Jain pointed out that cost controls and operational discipline helped adjusted EBITDA margin exceed expectations despite flat year-over-year revenue. Looking ahead, is prioritizing product adoption and platform enhancements to capitalize on growing consumer interest and evolving dealer needs. Management suspended full-year revenue guidance due to uncertain OEM media spend, citing ongoing tariff-driven volatility. Vetter explained, 'the signals that we're getting give us less certainty on their commitment.' The company remains focused on growth initiatives such as further integration of AccuTrade and Dealer Club, website product expansion, and delivering value through data-driven marketplace improvements. Jain added, 'we expect Q2 revenue to be up year over year and quarter over quarter,' but cautioned that visibility into the timing and magnitude of advertising spend is limited. Management attributed first quarter outcomes to strong consumer engagement, new product adoption by dealers, and disciplined cost management, while acknowledging near-term challenges from evolving OEM and dealer media spending. Consumer demand and marketplace momentum: saw a surge in shopper activity, with 70 million total visits and a record 29 million monthly unique visitors. Tariff-related uncertainty drove consumers to seek deals and browse a wider inventory, benefiting the platform's traffic and engagement. Dealer solutions adoption: Adoption of digital tools, particularly AccuTrade (for vehicle appraisals) and Dealer Club (a dealer-to-dealer auction platform), accelerated as dealers looked for alternative ways to source used inventory. AccuTrade appraisals rose 16% quarter over quarter, and Dealer Club users nearly doubled transaction volume from February to March. OEM and media spending headwinds: While OEM business grew 6% year over year, management noted that several automakers and franchise dealers have shifted their advertising commitments to a month-to-month basis, impacting visibility and planning for media revenue. Operational efficiency and cost discipline: The company maintained flat adjusted operating expenses year over year, despite targeted headcount reductions and integration costs related to Dealer Club. Lower-than-expected integration costs contributed to exceeding adjusted EBITDA margin expectations. Independent dealer momentum: gained market share among independent dealers, responding to consumer demand for more affordable used vehicles. Management cited this as a driver of sequential dealer count growth in February and March. Management expects future results to be driven by the pace of product adoption, consumer engagement trends, and the timing of OEM and dealer advertising decisions. Tariff-driven volatility: Ongoing uncertainty around automotive tariffs is causing OEMs and dealers to shift advertising and marketing spend to shorter commitments. Management believes this could impact the timing of media revenue, with OEM clients moving to month-to-month spending until market conditions stabilize. Growth in solutions and subscriptions: Expansion of AccuTrade, Dealer Club, and website solutions is expected to drive dealer count and average revenue per dealer. aims to cross-sell and upsell these products, leveraging recent product enhancements and integration to boost adoption rates and long-term retention. Cost management and margin targets: The company is reaffirming full-year adjusted EBITDA margin targets of 29-31%, focusing on disciplined investment in product innovation and platform improvements. Management highlighted ongoing efforts to control operating expenses and optimize organizational structure in response to market headwinds. In the coming quarters, the StockStory team will focus on (1) the pace of product adoption in AccuTrade and Dealer Club, (2) stabilization or growth in OEM and dealer media commitments as tariff-driven uncertainty evolves, and (3) continued consumer engagement metrics such as unique visitor growth. Progress on operational efficiency and successful renegotiation of website agreements will also be key indicators. currently trades at a forward EV/EBITDA ratio of 3.1×. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-02-2025
- Automotive
- Yahoo
Cars.com Inc (CARS) Q4 2024 Earnings Call Highlights: Record Revenue and Strategic Growth ...
Full Year Revenue: $719 million, up 4% year over year. Fourth Quarter Revenue: $180.4 million, a new quarterly record. OEM and National Revenue Growth: Up 15% year over year in Q4. Free Cash Flow: $128 million, reaching a multi-year high. Adjusted EBITDA: $55 million for Q4, with a margin of 30.8%. Net Income for Q4: $17 million or $0.26 per diluted share. Adjusted Net Income for Q4: $33 million or $0.49 per diluted share. Dealer Counts: 19,206 dealer customers, down 49 dealers quarter over quarter. ARPD (Average Revenue Per Dealer): $2,475, effectively flat quarter over quarter. Share Repurchase: 2.8 million shares for $49 million in 2024. Total Debt Outstanding: $460 million as of December 31, 2024. Total Liquidity: $341 million as of December 31, 2024. 2025 Revenue Guidance: $745 million to $755 million. 2025 Adjusted EBITDA Margin Guidance: 29% to 31%. Warning! GuruFocus has detected 4 Warning Signs with CARS. Release Date: February 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Inc (NYSE:CARS) achieved record full-year revenue of $719 million in 2024, marking a 4% year-over-year increase. The company reported a multi-year high in free cash flow at $128 million, showcasing strong operating discipline. OEM and National revenue outperformed expectations, growing 15% year-over-year in Q4, the best quarterly revenue since 2021. AccuTrade reached over 1,000 dealerships, with appraisal volume up 35% year-over-year, indicating strong dealer adoption. The acquisition of DealerClub positions Inc (NYSE:CARS) to enter the $10 billion wholesale market, enhancing platform capabilities. Dealer revenue was slightly down year-over-year in Q4, with some pressure on dealer advertising revenue. Marketplace performance experienced seasonal softness, with elevated churn and fewer upgrades affecting dealer accounts and ARPD. Q1 2025 adjusted EBITDA margin is expected to be lower year-over-year due to investments in DealerClub integration. The company anticipates some pressure from targeted rate increases, which may elevate churn in the near term. Despite strong consumer metrics, dealer revenue expectations for Q1 2025 are based on a slightly down year-over-year exit rate from Q4. Q: Can you discuss the full-year revenue guidance and the expected impact of DealerClub on 2025 revenue? A: Sonia Jain, CFO: We expect two-thirds of our incremental growth in 2025 to come from dealer revenue, including marketplace and upsells like websites, AccuTrade, and media products. DealerClub's revenue contribution is not heavily factored in as we focus on integration, but we are optimistic about its potential impact later in the year. Q: What happened to dealer revenues in the fourth quarter, and what are the expectations moving forward? A: Alex Vetter, CEO: We experienced seasonal softness in Q4, with some pullback in media solutions as inventory levels normalized. However, we are seeing good momentum in Q1 as inventory levels have returned to normal, similar to prior cycles. Q: How is AccuTrade performing, and what are the expectations for its growth? A: Alex Vetter, CEO: AccuTrade showed strong momentum in Q4, with appraisal volume up 13% from Q1 to Q4. Dealers are increasingly using AccuTrade for vehicle appraisals and acquisitions. OEM endorsements are expected to drive further growth, particularly in the second half of the year. Q: Can you explain the margin guidance for 2025 and the impact of DealerClub on margins? A: Sonia Jain, CFO: Q1 margins reflect the Q4 exit rate and investments in DealerClub integration. We expect margins to improve throughout the year as revenue grows and DealerClub integration progresses. The full-year margin expansion is driven by natural flow-through benefits from our platform strategy. Q: How are you incorporating macroeconomic uncertainties, such as tariffs, into your full-year guidance? A: Sonia Jain, CFO: We assume a relatively stable macro environment and are actively monitoring key indicators like consumer affordability and interest rates. Our initiatives for the back half of the year, including repackaging and bundling, are expected to strengthen value delivery and retention. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
