Cars.com Reports Decline in Revenue and Net Loss in Q1 2025

Cars.com Inc. reported a decline in financial performance for the first quarter of 2025, with total revenue reaching $179.0 million, a decrease of 1% from $180.2 million in the same period last year. The company's net loss for the quarter was $2.0 million, compared to a net income of $784,000 in the first quarter of 2024. This shift in profitability was attributed to a combination of increased operating expenses and a decrease in dealer revenue, which constitutes the majority of the company's income.

Operating expenses rose to $172.6 million, up 3% from $167.4 million in the prior year. The increase was driven by higher general and administrative costs, which surged by 13% to $25.9 million, largely due to severance-related expenses. In contrast, dealer revenue, which accounts for approximately 89% of total revenue, fell by 2% to $159.1 million, reflecting macroeconomic pressures impacting dealer profitability. However, revenue from OEM and national customers increased by 6% to $16.3 million, indicating some growth in that segment.

In terms of strategic developments, Cars.com completed the acquisition of DealerClub Inc. in January 2025 for $25.3 million, enhancing its digital wholesale auction capabilities. This acquisition is expected to bolster the company's offerings in the dealer-to-dealer market. Additionally, Cars.com reported a significant cash inflow of $9.5 million from the sale of its RepairPal equity investment during the quarter, which contributed to its liquidity position.

Operationally, Cars.com reported a slight decrease in dealer customers, down 1% year-over-year to 19,250, while the average monthly unique visitors to its platform increased by 3% to 29.0 million. The company also initiated a share repurchase program, authorizing up to $250 million to buy back its common stock, with $21.5 million spent on repurchasing 1.6 million shares during the quarter. As of March 31, 2025, Cars.com had cash and cash equivalents of $31.4 million, alongside a borrowing capacity of $290 million under its revolving loan.

Looking ahead, Cars.com aims to navigate the challenges posed by the automotive ecosystem, including supply chain disruptions and changing consumer behaviors. The company plans to leverage its strategic strengths, including its digital solutions and audience engagement, to enhance its market position. Management remains focused on executing its platform strategy to drive growth and profitability, despite the current economic headwinds.