CARS

Cars.com’s second quarter results aligned with Wall Street expectations, with management attributing flat sales to a deliberate shift in marketing to prioritize high-intent shoppers over pure audience growth. CEO Tobias Hartmann highlighted that the company’s “marketplace flywheel is solid,” and pointed to dealer subscription products and the launch of Dealer Verified Listings as key contributors to the period’s performance. Despite a year-over-year decline in website traffic, management emphasized improved lead conversion and a focus on organizational efficiency, such as cost discipline and process improvements, that supported higher operating margins. Is now the time to buy CARS? Find out in our full research report (it’s free). Revenue: $179.9 million vs analyst estimates of $180.6 million (flat year on year, in line) Adjusted EPS: $0.51 vs analyst estimates of $0.51 (in line) Adjusted EBITDA: $52.98 million vs analyst estimates of $51.95 million (29.4% margin, 2% beat) Operating Margin: 15.5%, up from 8.5% in the same quarter last year Dealer Customers: 19,343, in line with the same quarter last year Market Capitalization: $647.7 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Thomas White (D.A. Davidson) asked about the sustainability of marketplace revenue growth and Premium Plus package momentum. CFO Sonia Jain explained growth was driven by both dealer count improvements and new product adoption, with a target of 15% Premium Plus penetration by year-end. Marvin Fong (U.S. Bancorp) questioned the timeline for stabilizing and growing website solution subscribers. CEO Tobias Hartmann pointed to a roadmap focused on product innovation and cross-platform integration, aiming for a turnaround over the next two to three quarters. Naved Khan (B. Riley) pressed for clarity on increased marketing spend despite a quality-over-quantity approach. Hartmann clarified that higher spend includes investments in brand positioning to support the interconnected marketplace strategy. Alejandro Nuno (UBS) inquired about the flat EBITDA margin outlook despite ongoing cost efficiencies. Jain responded that innovation and resource reallocation are expected to yield margin scale as new products gain traction later in the year. Unknown Analyst (JPMorgan) asked about adapting to FTC dealer pricing transparency rules. Jain stated that the platform is supporting dealers with compliance tools and that transparency aligns with Cars.com's trust-based marketplace strategy. In the coming quarters, the StockStory analyst team will track (1) adoption rates of Dealer Verified Listings and Premium Plus packages among dealers, (2) the pace of website subscription stabilization and potential return to growth as product integration accelerates, and (3) the effectiveness of expanded AI features in driving shopper engagement and lead conversion. Additionally, we will monitor operational discipline and the impact of marketing strategy on both cost structure and traffic quality. Cars.com currently trades at $11.91, in line with $11.84 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 9:00 a.m. ET Vice President of Investor Relations - Katherine Chen Chief Executive Officer - Tobias Hartmann Chief Financial Officer - Sonia Jain Operator: Good morning, and welcome to our second quarter 2026 earnings conference call. [Operator Instructions] Please be advised that this call is being recorded today, August 7, 2026. I would now like to turn the conference over to Katherine Chen, Vice President of Investor Relations. Please go ahead. Katherine Chen: Good morning, everyone, and thank you for joining us for the Cars.com, Inc. Second Quarter 2026 Conference Call. With me this morning are Toby Hartmann, CEO; and Sonia Jain, CFO. Toby will start by discussing business highlights from our second quarter. Then Sonia will discuss our financial results in greater detail, along with our outlook. We'll finish the call with Q&A. Before I turn the call over to Toby, I'd like to draw your attention to our forward-looking statements and the description and definition of non-GAAP financial measures, which can be found in our presentation. We will be discussing certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted operating expenses, adjusted net income and free cash flow. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the financial tables included with our earnings press release and in the appendix of our presentation. Any forward-looking statements are subject to risks and uncertainties. For more information, please refer to the risk factors included in our SEC filings, including those in our most recently filed 10-K, which is available on the IR section of our website. We assume no obligation to update any forward-looking statements. And now I'll turn the call over to Toby. Tobias Hartmann: Thank you, Katherine, and thanks to everyone on the call for joining us to review our second quarter 2026 results. We delivered another quarter of revenue growth and increased profitability. Q2 revenue of $180 million was within our guidance range and grew year-over-year on the strength of dealer subscription products. Marketplace was a highlight for the quarter on both revenue and subscriber growth. Our expanded adjusted EBITDA margin of 29.4% outperformed the high end of guidance for a second consecutive quarter. And we continue to generate strong free cash flow, which enables both investment in organic growth and a 28% year-to-date increase in buybacks to return value to shareholders. Based on our results, we are pacing well to meet our 2026 financial targets, and we are positioned to deliver further improvement in 2027. As we laid out shortly after I joined in January, creating an interconnected marketplace-centric ecosystem is foundational to our long-term growth strategy. At its core, our marketplace flywheel is solid, and we remain a leader in driving vehicle sales at scale, integration between marketplace websites and appraisal solutions unlocks more opportunities to improve each component of this flywheel. For example, unifying our retail appraisal and vehicle insights helps build more trust and confidence in the purchase journey. A more seamless and personalized experience between Cars.com and dealer websites also powers better shopping signals and conversion. And we can speed product development velocity as we improve technical interoperability. We are operationalizing these goals through our focus on product, process and organizational improvements, the 3 initiatives that have guided our year-to-date execution. Marketplace results are already responding positively to the change in our strategy and operations. Marketplace revenue grew over 7% year-over-year in Q2. Putting this in context, outside of 2021's pandemic-related recovery, this is the fastest marketplace growth rate in our public company history. And as a result, dealer revenue growth more than offset the expected decline in OEM revenue. Underpinning this growth, in Q2, marketplace subscribers rebounded to their highest level since 2023 and marketplace ARPD reached an all-time high. We recently launched Dealer Verified Listings, a new feature that, for the first time, integrates aspects of AccuTrade and marketplace. Whereas AccuTrade has traditionally been a stand-alone dealership solution powering appraisals and trade-ins, we are now beginning to capitalize on its capabilities across the consumer marketplace. AccuTrade dealers and soon those wanting to participate in our dealer verified listings program can display current vehicle condition reports directly onto listings. This is a differentiated alternative to the traditional backward-looking vehicle history report. And for shoppers, the Dealer Verified badge is an additional trust signal unique to our marketplace. Dealer Verified Listings are the first step as we build cross-platform VIN-specific intelligence that helps maximize the value of each car. Compared to process and people changes, product typically requires a longer runway before results come to fruition. Therefore, it was exciting to see Dealer Verified Listings go from development to launch within just a few months. Overall, in 2026, our deployment rate for new features has already increased by 80% year-over-year. This new operating cadence underscores our growth potential as product momentum builds across our interconnected marketplace. We also continue to enhance the consumer product experience, adding our Carson's AI shopping assistance to more marketplace surfaces. Today, around 20% of active searches on Cars.com are engaging with Carson. Carson users are 4x more likely to submit a lead and accounted for nearly 30% of total leads submitted in the month of June, demonstrating our platform value. Offering an AI-first option for car shoppers boosts conversion, contributes to overall marketing efficiency and gives us additional bandwidth for strategic growth investments. Additional Carson features are slated for release this year, such as better comparison tools and more personalization that we expect will further improve consumer satisfaction. In terms of our overall marketplace audience, the year-over-year decline in Q2 traffic and visitors primarily reflects strategic shifts to prioritize value delivery. Adhering to a more rigorous marketing investment approach has helped us better target and convert high-intent shoppers. Q2 lead conversion was up double digits year-over-year and performance marketing cost per lead also improved throughout the quarter. Based on the clearly favorable customer response that fueled marketplace revenue and subscriber growth in Q2, we will continue to deemphasize lower quality traffic, opting instead to drive more value to dealers. We're also excited to have our new CMO leading these efforts. Leveraging her deep consumer and marketplace background will help us shape and refine our tactics. We believe marketplaces remain central to the car buying experience for shoppers. First, automotive is a considered purchase for the majority of consumers and requires deep vertical expertise and proprietary first-party insights like Dealers Verified Listings. Adding richer vehicle insights will continue to draw shoppers onto our marketplace. Second, organic traffic has consistently remained around 60% of our total traffic. SEO declines appear to have bottomed in late 2025 and direct traffic, our largest organic channel, grew year-over-year in the first half of 2026. Third, we view AI as a net benefit to the car shopping experience and seek to be a valuable partner in this expanded ecosystem. We are the #1 most cited public automotive marketplace amongst leading AI platforms. We also recently added 25-plus years of editorial content into our Cars.com ChatGPT app to enhance the consumer experience. In the medium term, we anticipate that pursuing a thoughtful AI strategy should be additive to our growth ambition. Each incremental step on product integration, process optimization and organizational improvement contributed to the meaningful uptick in marketplace performance in the first half. Simply put, our playbook shows impact. And we will reverse the recent decline in website customers by applying these same principles, particularly product innovation. Our goal is to accelerate product development velocity for websites first by adding current marketplace capabilities. This includes personalization, AI features like Carson and interconnected data insights between our products. For consumers, that means a more seamless and customized shopping experience when moving across Cars.com and Dealer Inspire websites. We will provide seekers with more options and choices for an interconnected marketplace experience. For dealers, aggregated consumer signals yield richer leads and a distinct advantage to closing sales. These enhancements plus further technical and product investments slated for 2027 are expected to position our website business for renewed growth. In summary, we have made solid progress to deliver our goals and objectives. Our 2026 financial performance has consistently met or exceeded guidance. Marketplace results are especially encouraging and reflect strong execution of our new strategy. Operating leverage is also improving via cost efficiencies, tighter internal processes and a leaner yet more productive organization. And product green shoots are showing the untapped potential of an interconnected marketplace platform. I want to acknowledge the discipline, hard work and focus of our team whose execution and collaboration has been instrumental to these initial successes. We are confident that these efforts will compound to drive long-term sustainable growth and shareholder value. Now Sonia will discuss our financial results and outlook. Sonia? Sonia Jain: Thank you, Toby. Second quarter financial performance highlighted strong execution of our marketplace first strategy and improved operating leverage across our business. Revenue of $179.9 million was up 1% year-over-year and within our guidance range. Dealer revenue growth was up 3% year-over-year and was slightly offset by the anticipated decline in OEM and national revenue, which was down 18% year-over-year. Within dealer revenue, robust marketplace growth more than offset flat to down performance for Solutions and Media products. ARPD and dealer count also broadly followed these same trends. Q2 ARPD of $2,500 was up 3% year-over-year and 1% quarter-over-quarter. Marketplace was the primary contributor to this year-over-year improvement, and we set a new record for marketplace-only ARPD during Q2. Premium Plus was up quarter-over-quarter and the fastest growing of our 3 marketplace packages, further supporting favorable pricing mix. We're making progress towards our stated 15% target adoption rate for 2026. However, lower uptake of add-on dealer media products remained a near-term headwind, partially offsetting gains from core marketplace adoption. Consolidated dealer count reflected similar puts and takes. Marketplace subscribers were up year-over-year and quarter-over-quarter. However, website units declined compared to a year ago, consistent with our view that future DI growth hinges on product innovation and packaging rather than unit volume expansion. Therefore, we're applying the same product-led approach that has worked well for marketplace. Step 1 is bringing existing marketplace capabilities to websites in Q3 and Q4, an efficient way to strengthen our focus on DI product innovation. As Toby also mentioned, we launched Dealer verified listings in June. This is an important first step as we integrate our product offerings to capture greater platform value, simplify go-to-market motions and unlock new cross-selling opportunities. Dealer Verified Listings are currently available to existing AccuTrade customers. And in Q4, we will begin expanding this feature to marketplace customers to drive further growth and adoption. As we migrate towards a more integrated marketplace and appraisal bundle, individual point sales of AccuTrade will become less relevant to our strategy. However, it's worth noting that AccuTrade subscribers were roughly flat sequentially in Q2, even as we retool our offering. Rounding out our revenue discussion, OEM and national revenue was down $3 million year-over-year in Q2. We signaled in May that this quarter would represent a trough in OEM revenue. And based on positive performance in July and incremental spend commitments for the remainder of the year, we anticipate quarter-over-quarter growth in Q3. Now to discuss cost. Second quarter operating expenses were $152.1 million, down 7% year-over-year. We drove operating leverage across the organization, maintaining strong cost discipline and a continued focus on process efficiencies. A meaningful decline in depreciation and amortization expense following the full amortization of customer list tied to our 2017 spin-off, combined with lower compensation costs accounted for the majority of the year-over-year delta. Q2 adjusted operating expenses were $144.3 million, down 6% year-over-year from the same cost levers. For the following line item detail, all comparisons are on a year-over-year basis unless otherwise noted. Product and technology expenses decreased $2.7 million on a reported basis and $2.5 million on an adjusted basis. Lower compensation expense related to streamlining our processes and improving interconnectivity and improvements in our capitalization rate drove both the reported and adjusted decrease. Marketing and sales increased roughly $2.7 million on both the reported and adjusted basis, largely driven by targeted marketing to prioritize value delivery. General and administrative expense was down $3.5 million on a reported basis and roughly $1 million on an adjusted basis. The reported decrease was primarily due to the elimination of the D2C earn-out expense accrual and lower compensation expense. As a reminder, the D2C earn-out is considered a special item and not included in adjusted operating expenses, which accounts for the delta between the decline in reported and adjusted G&A expense. Second quarter net income was $14.3 million or $0.25 per diluted share compared to net income of $7 million or $0.11 per diluted share a year ago. Net income was primarily driven by improved operating income. Adjusted net income for the second quarter was $28.7 million or $0.51 per diluted share compared to $26.4 million or $0.41 per diluted share a year ago. Adjusted EBITDA of $53 million in the second quarter was up 4% year-over-year, healthily outpacing revenue growth and clearly showing the early impact of our process, cost and organizational improvements. Adjusted EBITDA margin of 29.4% was up nearly 100 basis points year-over-year. Moving to the cash flow statement and balance sheet. Net cash provided by operating activities totaled $55.6 million for the first half of the year compared to $55.7 million a year ago. Free cash flow was $43.5 million year-to-date, up modestly from $41.8 million a year ago when we had higher spending related to the build-out of our office headquarters. Share buybacks totaled 6.2 million shares for $57 million year-to-date. Since the start of the year, we have bought back and retired over 10% of shares outstanding. We are pacing well towards our 2026 share repurchase target of $90 million through opportunistic deployment of our free cash flow in the first half of 2026. Lastly, debt outstanding was $450 million as of June 30, 2026, which includes a $5 million debt payment during the second quarter. Total liquidity was $333.3 million as of June 30, 2026, and we have ample capacity for our capital allocation needs. Finally, we'll conclude with outlook. Third quarter revenue growth is expected to be flat to up 2% year-over-year based on continued dealer revenue growth and marketplace improvement and quarter-over-quarter improvement for OEM and national revenue. Third quarter adjusted EBITDA margin is expected to be between 28.5% and 29.5%, benefiting from continued cost and operational discipline. Lastly, we are also reaffirming our full year 2026 guidance of flat to 2% revenue growth and adjusted EBITDA margin of 29% to 30%. And with that, I'd like to open the line for Q&A. Operator: [Operator Instructions] We now take our first question, and this comes from Thomas White from D.A. Davidson. Thomas White: So I guess just first off, marketplace, looks like a nice quarter there, 7% growth. I was hoping maybe you could just unpack a little bit more kind of the drivers there kind of between maybe some of the premium package adoption and the momentum from the new products and just sort of talk a little bit about the sustainability of that kind of trajectory? And then I've got a follow-up. Sonia Jain: Thanks for the question. No, we're excited about the marketplace performance that we saw in Q2. I would say that it was driven by a combination of both improvements in dealer count, which really helped accelerate the marketplace flywheel and continued progress on ARPD, a chunk of which was driven by the new Premium Plus package that we rolled out last year. We continue to see good adoption there. Our target, as a reminder, is to get to a 15% penetration rate by the end of the year. Thomas White: Okay. Great. And then -- so you called out growth in lead volume, but there's still a pretty sharp decline in Uniques. Toby, maybe can you help us -- or so can you help us reconcile that a little bit. It didn't sound like SEO headwinds for you kind of have gotten worse, although there's some other kind of Internet marketplaces who are talking about that. So I don't know, just help us kind of reconcile what's going on there with Uniques. And eventually, I presume that, that trend has to change, particularly if you're going to look to be adding more dealers to the marketplace. Tobias Hartmann: Yes, sure. As we laid out and shared, this is really an intentional shift. We looked at our marketing spend and our marketing practice, and we figured that there are some inefficiencies. We drove a lot of traffic in the past, a lot of clicks that didn't convert into leads. So we do not want to do this anymore. So we are intentionally shifting to prioritize the value delivery versus the pure audience reach. And they're very happy to see that this is actually kicking in. So a lot better conversion and lead volume also kicking in. We also have a new CMO who started, so she's going to take it to a new level. So you saw with marketplace. Obviously, it's a good sign that it's working. You saw the growth kicking in. We saw also the dealer growth and the revenue growth. So we think this is the right strategy. And of course, we'll create the right momentum to also reinvest in the right spots, but again, lower funnel versus just half of funnel. Operator: And the next question comes from Marvin Fong from U.S. Bancorp. Marvin Fong: Just would like to ask a question on the subscribers for solutions. You talked about turning that around with more innovation and new products. Can you just kind of talk about the time line you have for rolling out those new products? And do you have a time line in mind for when we can expect that the dealer or the subscriber count there to stabilize and turn positive? And then second question, I know it was just launched in June, but can you just talk about what you're seeing in terms of leads and conversion rates that you're able to on the dealer verified product? And what's the monetization strategy for that? What packages would it be included? And how would you monetize outside of in specific subscribers. Tobias Hartmann: Marvin, it's Toby. Thank you for your questions. Let's talk about the first part, which is the website part and the DI part. First of all, we'd like to recall that we did tell you in the future -- that the future growth will be a little bit slowing down and given the fact that we actually repackaged and this is actually what we did. So it's not just about a mere volume, but it's also the price points and the packaging. So we pushed that and that's totally in line with strategy. Having said that, our value delivery remains really, really strong. We're really scaled provider. We are endorsed by pretty much every major OEM, and we're still winning new customers. But let's also talk about the weakness, which I'd like to address. First of all, there's a slower pace of new feature releases to date. And what we've done is we've rolled out the playbook for marketplace. We talked about it. We are seeing great productivity enhancements and acceleration, and we are going to apply that same playbook also for the solutions business. So we have a pretty exciting road map ahead that we work behind closed doors, which will actually focus on the interconnectivity with some of the marketplace functionalities. And then another point I'd like to mention is, we do have some organizational and process misalignment in the past, which we're also addressing as part of our reorganization. We've named the new GM, and we're really picking up speed there. So over the next 2 to 3 quarters, there will be a focus on really product innovation and applying the same playbook. So we're very confident that we'll get this back on a growth trajectory. Now regarding your second question with the dealer verified listings, we're really very happy about that because it took us only a few months to launch that. And what it does is in terms of impact, it's basically creating already more impressions, which then converts into higher click-through rates to BDPs, which essentially then drives faster listing terms. Why? Because this is a major trust signal that we are integrating into marketplace to stand out and help consumers really getting a better coordination between lots of vehicles, and there's either CPOs or nothing. And this is another alternative that looks at not just the historic vehicle report, but at the actual condition and the actual inspection that a dealer had to go through by applying some of the assets from AccuTrade. So view this as a really important step, first step, we'll share more data points. We just rolled it out. So it's too early, but we are testing heavily towards an interconnected experience with a focus on trust signals and guiding consumers. So hopefully, this is some context for you. Thank... Operator: And the next question comes from Gary Prestopino from Barrington Research. Gary Prestopino: Toby, good progress here. I guess with some of the marketplace revenue growth, is that really somewhat of a function of that you're -- now got the sales force selling an integrated product and you're getting more uptake because of that integrated product sales approach? Tobias Hartmann: Yes. Thank you. There's a couple of factors. That's certainly one. I'm glad you called it out. We made good progress there as well. But the other piece is we're bundling it and it's easier to understand, it's easier to package and it's easier to roll it out. So away from point solutions more towards an interconnected subscription with a clear value delivery. And then also, let's not forget about the marketing piece that we just called out, we are focused on delivering more leads as opposed to just more traffic. And that is the -- at the very end, that's the value delivery that dealers want. So it's a combination of the process and organizational adjustments we made plus the clear interconnectivity. First steps we are by no means done. Thirdly, sales efficiency and packaging. And fourthly, support from marketing efficiency and greater lead volume. Gary Prestopino: Okay. And then just a follow-up on the verified product, which is being generated by AccuTrade. Is the data that is being shown there very similar to some of the output that we were shown in Las Vegas? Or is it more or less just a deeper dive on versus a CARFAX where it's going to say no mechanical issues, et cetera, et cetera, things like that? Tobias Hartmann: Yes, it's a great question. Thank you. So the main difference between what you saw in Vegas and how we're utilizing it currently is it was very much dealer facing in Vegas, which is, if you remember, this was used as a tool to determine the best price, how to price the vehicle from a dealer's perspective to then put it onwards to consumer-facing potential sale listing. Now what this does today, our focus is really on guiding consumers to shift more towards consumers, giving them additional data points to really understand that this is a vehicle and a VIN number that went through an additional loop of 15, 18 points inspection, which, by the way, the dealer adhered to and signed off. So that's the difference. It's more consumer-facing as opposed to just price labeling. Gary Prestopino: So I don't want to -- I know I only have 2 questions, but I just want to be clear. In order to do a verified have this program, the dealer does have to do some kind of certified inspection and guarantee that inspection before for the purchaser of the car? Tobias Hartmann: Yes. They need to go through a rigorous process, which is obviously part of the AccuTrade assets and then they can put it up online. That's correct. Thank you. Operator: The next question comes from Naved Khan from B. Riley. Naved Khan: Two questions from me. One, maybe just on the traffic, website traffic between unique and visits. So you said that you're focusing on higher-quality traffic, not just the volume of traffic, which I understand. But if I just look at sort of marketing and sales as a percentage of revenue, that's up year-on-year. You're spending more money. So is it that you have to spend more money to kind of acquire the high-quality traffic? How should I understand that deleverage in the marketing line versus what you just spoke about in terms of quality trade-off? And then I have a follow-up. Tobias Hartmann: Yes. Good catch there. We anticipated that question. But there's something else that we're trying to catch up with and trying to have proper allocation, which is really, call it, brand. Remember, we still need some brand investments for the long-term interconnected strategy. So we need to position this not only just a listings destination, but instead as a transaction enablement platform. So the focus we just called out is really on the performance and growth marketing piece where we're really focused on driving more value. Separately from that, we are continuing and actually, we are spending money on positioning this right in terms of branding. And that's an important part of the journey because we are here for long-term success. So yes, that's why you see those numbers. Naved Khan: Okay. That's great. The second question I have is just on the verified listing. So it looks like you're creating a greater value proposition for the dealers that buy AccuTrade and ultimately, that should drive sales for this product. Is that the right way I should be understanding this? Or are you just going to expand the verified listing to more dealers regardless of whether or not they are AccuTrade customers? Tobias Hartmann: Yes. Good question, too. As Sonia shared, we started with the AccuTrade customers. Why? Because they are used to the procedures and the processes. And obviously, they're closer to our intentional shift of driving a differentiated listing and providing a different trust signal. That's the current testing. Now again, this is early innings. We are only out there for a couple of weeks, but the intent is to then also make this available to a broader audience of dealers, and we are seeing very positive and very encouraging signals right now. But also to be fair, we are learning because these are the power users, and they're giving us incredibly fundamental and good sound feedback on how we can further improve that. So in summary, correct, we started with activate customers only and also only a subgroup of those. We're getting their feedback. We're monitoring. We are financing the product, but the intent is to roll it out and expand it and make it available to other dealers. Operator: The next question comes from Alejandro Nuno from UBS. Alejandro Nuno: Maybe you can just sort of help us out with the guidance. The EBITDA guide basically implies margins are relatively flat quarter-over-quarter, but it sounds like you continue to make good progress on optimizing the cost structure and expect sort of return growth in OEM revenues. So why are margins sort of flat quarter-over-quarter? And then maybe sort of on top of that, like the fourth quarter margin sort of implies close to sort of 31%. Like what drives, I guess, the step-up then from Q3 to Q4? Sonia Jain: Yes. No, thank you for the question. We're happy with our EBITDA performance on a year-to-date basis. As you heard, we've kind of reaffirmed the full year guide. I think the shape of the year maybe looks a little bit different from a margin perspective than you may have originally anticipated. But we're definitely committed to finding those ongoing efficiencies. Some of them unlocked in Q2 with the changes that we made to streamline the organization. But you've also heard us talk about the importance of innovation in driving forward growth in the business. So we're fairly committed to identifying and reallocating resources as needed to deliver on the growth profile. And we would also expect as innovation takes hold, as we get more of these efficiencies, as we see revenue growth, we should see more scale in our EBITDA numbers as we progress quarter-over-quarter. Alejandro Nuno: Got it. And maybe just sort of one more follow-up, if I can. I'm sorry if I missed this, but on the new Premium Plus package, you highlighted that you're targeting sort of 15% by the end of the year. Like can you just give us an update of where you stand now? Sonia Jain: We're making good progress. We're midway through the year, and I think we're seeing a lot of momentum in terms of those sales. Premium Plus was the fastest growing of our 3 packages in Q2. And as we continue to add more features and improve the interconnectivity of our marketplace experience, we believe a lot of that value will accrete to the Premium Plus package. So we're focused on delivering the 15% by the end of the year. Alejandro Nuno: Do you have a penetration number for the quarter so far, like where you stand right now? Sonia Jain: We're getting -- we're basically at double digits or close to double-digit penetration. Operator: The next question comes from Rajat Gupta from JPMorgan. Unknown Analyst: This is Josh on for Rajat Gupta. I just wanted to start off with one on the FTC's push around dealer pricing transparency. I was just wondering if you could expand on how you've changed the platform to just adhere to that increasing pricing transparency standard. You said a step removed since dealers do the advertising. So does all-in pricing play to a marketplace built on trust? Or does it create somewhat of a friction for your dealers? And is your approach any different from that, that is employed by your peers? I have a quick follow-up. Sonia Jain: We tried to take a role in helping dealers ensure that they are able to get their information out there and be trusted partners to consumers. If you think about our vision for marketplace, it is embedded in trust, transparency. And so we've been supporting them through this process, encouraging compliance and just better information, right? Because when the consumer understands what they have to pay before they walk into a dealership, it reduces the friction of the transaction, right? It increases lead to sale conversion. So we feel like we're taking the right steps. Unknown Analyst: Understood. That's very helpful. And then just as a quick follow-up, could we get an update on where Cars.com's dealer-to-dealer wholesale initiatives stand just around Dealer Club? -- with AccuTrade connected dealers not yet seeing meaningful upward pressure. Just curious how that flywheel starts turning and what's the unlock that gets that system -- that ecosystem to compound? Tobias Hartmann: Yes. Currently, we are focused, as we just laid out, on really taking some of the AccuTrade assets and making them more interconnected. So that's the first step. That's plenty of stuff to chew on. So we're going to take it step by step. And the Dealer Verified Listings program as we just launched it is going to keep us busy for quite some months. So we'll give you more updates on the other stuff, but that's the focus -- that's the current focus right now. The other part that we're really embedding and making it more connected is also anything that's related to our Premium Plus features. So we've developed a stack of new features that are going to be launched as part of our rollout and our future subscription services. But again, too early to talk about in public, but there's a lot of work behind closed doors. So stay tuned. Thanks. Operator: Thank you, and no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect. Before you buy stock in Cars.com, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cars.com wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cars.com (CARS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Online new and used car marketplace Cars.com (NYSE:CARS) met Wall Street’s revenue expectations in Q2 CY2026, but sales were flat year on year at $179.9 million. Its non-GAAP profit of $0.51 per share was in line with analysts’ consensus estimates. Is now the time to buy CARS? Find out in our full research report (it’s free). Revenue: $179.9 million vs analyst estimates of $180.6 million (flat year on year, in line) Adjusted EPS: $0.51 vs analyst estimates of $0.51 (in line) Adjusted EBITDA: $52.98 million vs analyst estimates of $51.95 million (29.4% margin, 2% beat) Operating Margin: 15.5%, up from 8.5% in the same quarter last year Dealer Customers: 19,343, in line with the same quarter last year Market Capitalization: $656.3 million Cars.com’s second quarter results aligned with Wall Street expectations, with management attributing flat sales to a deliberate shift in marketing to prioritize high-intent shoppers over pure audience growth. CEO Tobias Hartmann highlighted that the company’s “marketplace flywheel is solid,” and pointed to dealer subscription products and the launch of Dealer Verified Listings as key contributors to the period’s performance. Despite a year-over-year decline in website traffic, management emphasized improved lead conversion and a focus on organizational efficiency, such as cost discipline and process improvements, that supported higher operating margins. Looking ahead, management is focused on accelerating product innovation and integrating AI features across its dealer and consumer offerings. The company sees upcoming launches, including expanded Carson AI capabilities and further rollout of Dealer Verified Listings, as central to driving renewed growth in dealer website subscriptions and maintaining marketplace momentum. CFO Sonia Jain stated, “We are fairly committed to identifying and reallocating resources as needed to deliver on the growth profile,” emphasizing that continued operational discipline and product-led strategy are expected to support margin expansion and moderate revenue growth. Management attributed the quarter’s performance to marketplace revenue growth, successful product launches, and a strategic focus on quality over quantity in website traffic. Marketplace revenue momentum: Marketplace revenue grew over 7% year-over-year, driven by increased dealer subscription adoption and particularly strong uptake of the Premium Plus package, which management aims to reach 15% penetration by year-end. Dealer Verified Listings launch: The company launched Dealer Verified Listings, integrating condition reports from AccuTrade into consumer-facing vehicle listings. This product is designed to differentiate Cars.com in the market by providing more transparent and trustworthy vehicle data to shoppers. AI-powered consumer assistance: Around 20% of active searches now use Carson, the company’s AI shopping assistant, which quadruples the likelihood of a shopper submitting a lead. Management cited plans to further expand Carson’s features, including improved comparison tools and personalization. Intentional marketing shift: Leadership shifted marketing strategy to focus on acquiring high-quality, high-conversion shoppers instead of maximizing total traffic. This led to improved lead conversion rates, even as overall website visits declined, and supported a more efficient cost structure. Organizational and product focus: The company streamlined processes, reduced compensation costs, and improved its development velocity, increasing the rate of feature deployment by 80% year-over-year. The addition of a new Chief Marketing Officer and a new GM for the solutions segment is intended to accelerate product innovation and cross-portfolio integration. Looking forward, management expects moderate revenue growth and stable margins, anchored by new product adoption, AI integration, and further cost efficiencies. Expansion of premium offerings: The company is prioritizing further adoption of the Premium Plus package and Dealer Verified Listings, aiming to bundle features and drive higher average revenue per dealer. Management believes this will bolster both revenue and dealer retention. AI and technology investment: With Carson AI shopping assistance already driving higher conversion rates, additional AI-powered features and deeper integration between Cars.com and dealer websites are expected to improve the consumer experience and differentiate the platform. Management anticipates this will support gradual growth in website subscriptions after a period of stagnation. Marketing and operational discipline: The company plans to maintain a rigorous approach to marketing spend, focusing on quality over quantity, while continuing to seek internal efficiencies. However, management cautioned that lower add-on media product uptake and ongoing investments in branding and product development could moderate near-term margin expansion. In the coming quarters, the StockStory analyst team will track (1) adoption rates of Dealer Verified Listings and Premium Plus packages among dealers, (2) the pace of website subscription stabilization and potential return to growth as product integration accelerates, and (3) the effectiveness of expanded AI features in driving shopper engagement and lead conversion. Additionally, we will monitor operational discipline and the impact of marketing strategy on both cost structure and traffic quality. Cars.com currently trades at $11.75, in line with $11.84 just before the earnings. Is there an opportunity in the stock? 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Interested in Cars.com Inc.? Here are five stocks we like better. Revenue and profitability improved: Q2 revenue rose 1% to $179.9 million, with marketplace revenue up more than 7% offsetting an 18% decline in OEM and national advertising. Adjusted EBITDA increased 4% to $53 million, while the margin expanded to 29.4%. Cars.com is prioritizing higher-intent traffic and product integration: Traffic declined, but lead conversion rose double digits and Carson AI users were four times more likely to submit leads. The company also launched Dealer Verified Listings and plans to add marketplace and AI features to dealer websites. Outlook reaffirmed amid strong shareholder returns: Cars.com generated $43.5 million in free cash flow during the first half of 2026 and repurchased 6.2 million shares for $57 million. Management maintained its full-year forecast of flat-to-2% revenue growth and a 29%-30% adjusted EBITDA margin. Advance Auto Parts: Retail Trends Suggest Big Gains Ahead Cars.com (NYSE:CARS) reported second-quarter revenue growth and higher profitability as marketplace subscription gains offset a decline in OEM and national advertising revenue, while management reaffirmed its full-year outlook. Revenue for the quarter totaled $179.9 million, up 1% from a year earlier and within the company’s guidance range. Dealer revenue increased 3% year over year, supported by more than 7% growth in marketplace revenue. That growth more than offset an 18% decline in OEM and national revenue, which fell by $3 million from the prior-year period. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth CarMax Is Firing on All Pistons as Growth Returns CEO Toby Hartmann said the marketplace performance reflected the company’s strategy of building a more interconnected platform spanning its consumer marketplace, dealer websites and appraisal products. “Marketplace subscribers rebounded to their highest level since 2023, and marketplace ARPD reached an all-time high,” Hartmann said, referring to average revenue per dealer. Cars.com generated adjusted EBITDA of $53 million in the second quarter, up 4% year over year. Adjusted EBITDA margin expanded nearly 100 basis points to 29.4%, exceeding the high end of the company’s guidance range for a second consecutive quarter. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High MarketBeat Week in Review – 2/26 - 3/1 Net income rose to $14.3 million, or $0.25 per diluted share, from $7 million, or $0.11 per diluted share, a year earlier. Adjusted net income was $28.7 million, or $0.51 per diluted share, compared with $26.4 million, or $0.41 per diluted share, in the prior-year quarter. Operating expenses declined 7% to $152.1 million. CFO Sonia Jain said the decline was driven primarily by the full amortization of customer lists associated with the company’s 2017 spinoff, as well as lower compensation expense. Adjusted operating expenses fell 6% to $144.3 million. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Product and technology expense declined by $2.7 million on a reported basis, while marketing and sales expense increased by roughly $2.7 million as the company invested in targeted marketing. General and administrative expense fell by $3.5 million, including the elimination of a direct-to-consumer earn-out accrual and lower compensation costs. Management said the company has intentionally reduced emphasis on lower-quality website traffic in favor of attracting and converting higher-intent shoppers. While traffic and unique visitors declined year over year in the second quarter, Hartmann said lead conversion increased by double digits and performance marketing cost per lead improved during the quarter. “We are intentionally shifting to prioritize the value delivery versus the pure audience reach,” Hartmann said during the question-and-answer session. He added that the company is directing more performance marketing toward lower-funnel activity while continuing to invest in brand positioning. Cars.com said roughly 60% of its traffic remained organic. Hartmann said search-engine-optimization declines appeared to have bottomed in late 2025, while direct traffic, the company’s largest organic channel, increased year over year during the first half of 2026. The company also expanded use of its Carson AI shopping assistant across additional marketplace surfaces. About 20% of active Cars.com searchers now engage with Carson, according to Hartmann. Users of the tool were four times more likely to submit a lead and accounted for nearly 30% of total leads submitted in June. Cars.com launched Dealer Verified Listings in June, integrating elements of its AccuTrade appraisal business into the consumer marketplace. The feature allows participating dealers to display current vehicle condition reports on listings, providing what the company described as a consumer-facing trust signal based on vehicle inspections rather than a traditional historical vehicle report. The program is currently available to existing AccuTrade customers, with an expansion to marketplace customers planned for the fourth quarter. Hartmann said the company is initially gathering feedback from a subset of AccuTrade dealers before making the capability available more broadly. Jain said the company’s Premium Plus marketplace package was its fastest-growing marketplace offering during the quarter. Cars.com continues to target a 15% adoption rate for Premium Plus by the end of 2026. She said penetration was at or close to double digits, without providing a more specific figure. Management also plans to apply its marketplace product-development approach to its Dealer Inspire websites business, where unit counts declined from a year earlier. Hartmann said the company expects to add marketplace capabilities, including personalization, Carson AI features and connected data insights, to dealer websites during the third and fourth quarters. He said the company is focusing on product innovation and packaging rather than website unit-volume expansion, with a goal of returning the business to growth over the next two to three quarters. For the first half of 2026, Cars.com generated $55.6 million of operating cash flow and $43.5 million of free cash flow, compared with $41.8 million of free cash flow a year earlier. The company repurchased 6.2 million shares for $57 million year to date and said it had bought back and retired more than 10% of shares outstanding since the start of the year. Debt outstanding stood at $450 million as of June 30, following a $5 million debt payment during the quarter. Total liquidity was $333.3 million. For the third quarter, Cars.com expects revenue growth ranging from flat to 2% year over year and adjusted EBITDA margin between 28.5% and 29.5%. The company reaffirmed its full-year 2026 outlook for revenue growth of flat to 2% and adjusted EBITDA margin of 29% to 30%. Jain said OEM and national revenue was expected to grow sequentially in the third quarter following stronger performance in July and additional spending commitments for the remainder of the year. Cars.com operates as a leading online automotive marketplace in the United States, connecting car shoppers with new and used vehicle listings from dealerships and private sellers. The platform enables consumers to research makes and models, compare prices, read expert and user reviews, and access tools such as TrueCost to estimate ownership expenses over time. Through its website and mobile applications, Cars.com aims to simplify the car-buying process by aggregating detailed vehicle data, payment calculators, and dealership ratings into a single user-friendly experience. On the dealer side, Cars.com provides a suite of marketing and lead-generation services designed to help automotive retailers reach potential buyers and manage their online presence. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cars.com Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Marketplace revenue grew 7% year-over-year, the fastest rate in public company history excluding pandemic recovery, driven by a strategic shift toward an interconnected product ecosystem. Management is intentionally prioritizing high-intent shopper conversion over raw traffic volume, resulting in double-digit year-over-year lead conversion growth despite a decline in total visitors. The launch of Dealer Verified Listings marks the first major integration of AccuTrade appraisal capabilities into the consumer marketplace, providing real-time vehicle condition trust signals. Product development velocity has increased by 80% year-over-year as the company operationalizes new organizational and technical interoperability goals. AI adoption is scaling rapidly, with the Carson AI assistant now engaging 20% of active searches and accounting for nearly 30% of total leads submitted in June. Operating leverage improved through cost discipline and a leaner organizational structure, resulting in an adjusted EBITDA margin of 29.4% that outperformed guidance. Full-year 2026 guidance is reaffirmed at flat to 2% revenue growth with adjusted EBITDA margins between 29% and 30%, assuming continued dealer revenue strength. OEM and national revenue is expected to grow quarter-over-quarter in Q3 following a Q2 trough, supported by incremental spend commitments for the second half of the year. Management targets a 15% adoption rate for the Premium Plus marketplace package by the end of 2026, up from current near double-digit penetration. The 'Marketplace Playbook' will be applied to the Dealer Inspire website business in Q3 and Q4 to reverse recent unit declines through personalization and AI feature integration. Future margin expansion is expected to scale as product innovation takes hold and the company realizes further efficiencies from organizational streamlining. The company retired over 10% of outstanding shares year-to-date, deploying $57 million toward a full-year buyback target of $90 million. Reported G&A expenses decreased due to the elimination of the D2C earn-out expense accrual and lower overall compensation costs. Depreciation and amortization declined significantly following the full amortization of customer lists associated with the company's 2017 spin-off. Marketing and sales expenses increased as a percentage of revenue due to deliberate investments in brand positioning as a transaction enablement platform. Growth was driven by a combination of improved dealer count and record-high marketplace ARPD. Premium Plus is currently the fastest-growing marketplace package, and management remains confident in reaching the 15% penetration target by year-end. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified the decline is an intentional shift away from low-quality clicks that do not convert. The strategy focuses on performance marketing efficiency and 'lower funnel' high-intent shoppers to drive higher value to dealers. Management acknowledged a past slower pace of feature releases and organizational misalignment in the solutions business. A new GM has been appointed to apply the marketplace productivity playbook to websites over the next 2 to 3 quarters. The feature currently drives higher click-through rates to vehicle detail pages by providing a 'trust signal' based on actual inspections rather than just history reports. While currently limited to AccuTrade power users for feedback, the intent is to expand the program to the broader dealer audience in the future. Management views transparency as a friction reducer that increases lead-to-sale conversion. The platform is actively encouraging dealer compliance to ensure they remain trusted partners to consumers.

Cars.com (CARS) came out with quarterly earnings of $0.51 per share, beating the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.08%. A quarter ago, it was expected that this online automotive marketplace would post earnings of $0.48 per share when it actually produced earnings of $0.45, delivering a surprise of -6.25%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Cars.com, which belongs to the Zacks Internet - Commerce industry, posted revenues of $179.93 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.3%. This compares to year-ago revenues of $178.74 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cars.com shares have lost about 3% since the beginning of the year versus the S&P 500's gain of 12.8%. While Cars.com has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cars.com was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.57 on $182.55 million in revenues for the coming quarter and $2.10 on $727.83 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Commerce is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, PDD Holdings Inc. Sponsored ADR (PDD), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $2.85 per share in its upcoming report, which represents a year-over-year change of -7.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. PDD Holdings Inc. Sponsored ADR's revenues are expected to be $17.13 billion, up 18% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cars.com Inc. (CARS) : Free Stock Analysis Report PDD Holdings Inc. Sponsored ADR (PDD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Delivered expected revenue growth and strong profitability, underpinned by focused strategy with highest Marketplace revenue growth in five years Revenue grew to $179.9 million, up 1% year-over-year and in line with guidance Net income increased to $14.3 million, up 103% year-over-year Adjusted EBITDA grew to $53.0 million, up 4% year-over-year; Adjusted EBITDA margin of 29.4%, outperformed guidance range of 28% to 29% margin Share repurchases totaled 3.7 million shares for $37 million; year-to-date share repurchases totaled 6.2 million shares for $57 million and are on pace to 2026 target of $90 million CHICAGO, Aug. 6, 2026 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS), a trusted audience-powered and data-driven technology platform that simplifies buying and selling cars, today released its financial results for the second quarter ended June 30, 2026. "We delivered revenue and profitability growth in the second quarter while making steady progress on our Marketplace-focused strategy. Deliberate prioritization of Marketplace product, processes, and organizational improvements drove Marketplace revenue growth to its highest level since 2021, more than offsetting the expected decline in OEM revenue. New product launches, such as Dealer Verified Listings, as well as stronger customer value delivery through more precise audience targeting, are encouraging signals. Looking ahead, we will deploy these learnings and operational drivers across our ecosystem to deliver sustainable long-term growth and value creation," said Tobias Hartmann, Chief Executive Officer of Cars.com, Inc. Marketplace revenue grew over 7% Y/Y and represents the fastest quarterly growth rate since 2021. Dealer count declined slightly Y/Y, reflecting lower Solutions adoption that was partially offset by Marketplace strength; Marketplace dealer customers grew 2% Y/Y, reaching four consecutive quarters of Y/Y subscriber growth. Traffic and UV performance reflects a deliberate strategic shift to value delivery, which produced year-to-date growth in lead volume. Dealer Verified Listings feature launched on marketplace, adding inspection and pricing insights onto vehicle listings. Q2 2026 Results Revenue for the second quarter was $179.9 million, up 1% year-over-year. Subscription-based Dealer revenue of $163.3 million was up 3% year-over-year, primarily driven by improved Marketplace value delivery and dealer count, partially offset by a decline in media products. OEM and National revenue of $13.6 million was down 18% year-over-year, consistent with previously communicated expectations of OEM advertising. Total operating expenses for the second quarter were $152.1 million compared to $163.5 million in the prior year period, down 7% year-over-year. Lower depreciation and amortization was the largest driver of the year-over-year decline, though expenses were broadly down and reflective of improving operating leverage across the business and a partial quarter of efficiencies associated with April cost reduction activities. Adjusted operating expenses were $144.3 million, down 6% year-over-year, driven by the aforementioned factors. Net income for the second quarter was $14.3 million, or $0.25 per diluted share, compared to $7.0 million, or $0.11 per diluted share, in the year-ago period. The change in Net income is primarily attributable to improved operating income. Adjusted net income for the second quarter was $28.7 million, or $0.51 per diluted share, compared to $26.4 million, or $0.41 per diluted share a year ago. Adjusted EBITDA for the second quarter was $53.0 million, or 29.4% of revenue, compared to $50.9 million, or 28.5% of revenue in the year-ago period. Adjusted EBITDA grew 4% year-over-year, demonstrating operating leverage against revenue growth. Cash Flow and Balance Sheet Net cash provided by operating activities for the six-month period ended June 30, 2026 was $55.6 million, compared to $55.7 million in the prior year. Free cash flow for the six-month period ended June 30, 2026 totaled $43.5 million, compared to $41.8 million in the prior year. Total debt outstanding was $450.0 million as of June 30, 2026. Total liquidity as of June 30, 2026 was $333.3 million, which is defined as Cash and cash equivalents of $33.3 million and revolver capacity of $300.0 million. Share Repurchase The Company repurchased 3.7 million shares of common stock for $37 million in the second quarter ended June 30, 2026, and 6.2 million shares of common stock for $57 million year-to-date in 2026. The Company's 2026 share repurchase target remains $90 million, reflecting its commitment to returning capital to stockholders. Shares repurchased and retired year-to-date through June 30, 2026 represent over 10% of the Company's common shares outstanding as of prior year end. As of June 30, 2026, approximately $116.6 million remains available under the current share repurchase authorization, which expires in February 2028. "Second quarter financial performance was anchored by strong Marketplace growth, coupled with improved operating leverage and Adjusted EBITDA margin outperformance. We also continued to return significant capital to stockholders, and are pacing comfortably to our $90 million share repurchase target for 2026. Looking ahead, we remain focused on efficient and disciplined growth to create long-term value for stakeholders," said Sonia Jain, Chief Financial Officer of Cars.com, Inc. Outlook Third Quarter 2026 Revenue is expected to be flat to up 2% year-over-year, driven by continued Dealer revenue growth and Marketplace improvement. OEM and National revenue is expected to reflect ongoing pressure in OEM advertising investment. Adjusted EBITDA margin is expected to be between 28.5% and 29.5%, reflecting continued operating efficiencies and cost savings. Full Year 2026The Company reaffirms its full year 2026 guidance: Revenue is expected to be flat to up 2% year-over-year Adjusted EBITDA margin is expected to be between 29.0% to 30.0% Q2 2026 Earnings Call As previously announced, management will hold a conference call and webcast today at 8:00 a.m. CT. This webcast may be accessed at the Cars.com Investor Relations website, investor.cars.com. An archive of the webcast will be available at investor.cars.com following the conclusion of the call. About Cars Commerce Cars.com Inc. (NYSE: CARS) is a trusted audience-powered and data-driven technology platform that simplifies buying and selling cars. The flagship Cars.com marketplace connects millions of consumers to dealerships across the U.S., powering the car buying experience with artificial intelligence ("AI") shopping tools and comprehensive vehicle reviews and content. Our interconnected ecosystem of products enables dealers and OEMs to sell more cars by efficiently leveraging our marketplace, dealer websites, trade and appraisal tools, and proprietary in-market media solutions. Learn more at www.carscommerce.inc. Non-GAAP Financial Measures This earnings release discusses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net (loss) income, Free Cash Flow and Adjusted Operating Expenses. These financial measures are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These financial measures are presented as supplemental measures of operating performance because the Company believes they provide meaningful information regarding the Company's performance and provide a basis to compare operating results between periods. In addition, the Company uses Adjusted EBITDA as a measure for determining incentive compensation targets. Adjusted EBITDA also is used as a performance measure under the Company's credit agreement and includes adjustments such as the items defined below and other further adjustments, which are defined in the credit agreement. These non-GAAP financial measures are frequently used by the Company's lenders, securities analysts, investors and other interested parties to evaluate companies in the Company's industry. While a reconciliation of non-GAAP measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to, as applicable, the timing, amount, valuation and number of future employee equity awards and the uncertainty relating to the timing, frequency, and effect of acquisitions and the significance of the resulting transaction-related expenses, the Company has provided a reconciliation of non-GAAP financial measures to their most directly comparable financial measure prepared in accordance with GAAP in this earnings release, see "Non-GAAP Reconciliations" below. Other companies may define or calculate these measures differently, limiting their usefulness as comparative measures. Because of these limitations, non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. Definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are presented in the tables below. The Company defines Adjusted EBITDA as net income (loss) before (1) interest expense, net, (2) income tax (benefit) expense, (3) depreciation, (4) amortization of intangible assets, (5) stock-based compensation expense, (6) unrealized mark-to-market adjustments and cash transactions related to derivative instruments, (7) unrealized foreign currency exchange gains and losses, and (8) certain other items, such as transaction-related items, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. Transaction-related items result from actual or potential transactions such as business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions, including, without limitation, (1) transaction-related bonuses and (2) expenses for advisors and representatives such as investment bankers, consultants, attorneys and accounting firms. Transaction-related items may also include, without limitation, transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees, consulting, compensation and other incremental costs associated with integration projects, fair value changes to contingent considerations and amortization of deferred revenue related to the AccuTrade acquisition. The Company defines Adjusted Net Income as GAAP net (loss) income excluding, net of their related tax effects: (1) amortization of intangible assets, (2) stock-based compensation expense, (3) unrealized mark-to-market adjustments and cash transactions related to derivative instruments, (4) unrealized foreign currency exchange gains and losses, and (5) certain other items, such as transaction-related costs, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures, including purchases of property and equipment and capitalization of internally developed technology. The Company defines Adjusted Operating Expenses as total operating expenses adjusted to exclude stock-based compensation, write-off and impairments of goodwill, intangible assets, long-lived assets, severance, transformation and other exit costs and transaction-related items. Key Metric Definitions Average Monthly Unique Visitors ("UVs") and Traffic ("Visits"). The Company defines UVs in a given month as the number of distinct visitors that engage with its platform during that month. Visitors are identified upon first visit to an individual Cars.com property on an individual device/browser combination or installation of one of its mobile apps on an individual device. If a visitor accesses more than one of its web properties or apps or uses more than one device or browser, each of those unique property/browser/app/device combinations counts toward the number of UVs. Traffic is defined as the number of visits to Cars.com desktop and mobile properties (responsive sites and mobile apps). The Company measures UVs and Traffic via RudderStack. These metrics do not include traffic to Dealer Inspire, D2C Media, or DealerClub websites. Monthly Average Revenue Per Dealer ("ARPD"). The Company believes that its ability to grow ARPD is an indicator of the value proposition of its platform. The Company defines ARPD as Dealer revenue, excluding digital advertising services and DealerClub, during the period divided by the monthly average number of Dealer Customers during the same period. Dealer Customers. Dealer Customers represent dealerships using the Company's products as of the end of each reporting period. Each physical or virtual dealership location is counted separately, whether it is a single-location proprietorship or part of a large, consolidated dealer group. Multi-franchise dealerships at a single location are counted as one dealer. Dealer Customer metrics do not include DealerClub. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical facts are forward-looking statements. These statements often use words such as "believe," "expect," "project," "anticipate," "outlook," "intend," "strategy," "plan," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecasts," "mission," "strive," "more," "goal" or similar expressions. Forward-looking statements are based on our current expectations, beliefs, strategies, estimates, projections and assumptions, experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments, and other factors we think are appropriate. Such forward-looking statements are based on estimates and assumptions that, while considered reasonable by Cars Commerce and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. While Cars Commerce and its management make such statements in good faith and believe such judgments are reasonable, you should understand that these statements are not guarantees of future strategic action, performance or results. Our actual results, performance, achievements, strategic actions or prospects could differ materially from those expressed or implied by these forward-looking statements. Given these uncertainties, you should not rely on forward-looking statements in making investment decisions. When we make comparisons of results between current and prior periods, we do not intend to express any future trends, or indications of future performance, unless expressed as such, and you should view such comparisons as historical data. Whether or not any such forward-looking statement is in fact achieved will depend on future events, some of which are beyond our control. Forward-looking statements are subject to a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results and strategic actions to differ materially from those expressed in the forward-looking statements contained in this press release. For a detailed discussion of many of these and other risks and uncertainties, see "Part I, Item 1A., Risk Factors" and "Part II, Item 7., Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission ("SEC") on February 26, 2026 and our other filings filed with the SEC and available on our website at investor.cars.com or via EDGAR at www.sec.gov. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties. The forward-looking statements contained in this press release are based only on information currently available to us and speak only as of the date of this press release. We undertake no obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise. The forward-looking statements in this report are intended to be subject to the safe harbor protection provided by the federal securities laws. Cars Commerce Investor Relations Contact:Katherine [email protected] Cars Commerce Media Contact:Christine [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/carscom-reports-second-quarter-2026-results-302844769.html