Cars.com generated gains in revenue and net income in the first quarter, with the dealership technology company's recent acquisitions and increased dealer revenue helping to offset declines in some dealer customer areas.
Net income more than doubled to $11.5 million for the quarter ending March 31, from $4.3 million in the period a year ago. First-quarter revenue grew 5.6 percent to $167.1 million, while monthly average revenue per dealer rose 4.1 percent to $2,386.
"We achieved these solid results through continued marketplace strength, website growth, the addition of Accu-Trade and media product upsells," CEO Alex Vetter said on the Chicago-based company's earnings call Thursday.
In 2022, Cars.com acquired Accu-Trade, a provider of vehicle appraisal and valuation data and logistics technology. It snatched up automotive financial technology company CreditIQ in 2021. Both companies were integrated into operations last year. Cars.com said it launched new marketplace packages and adjusted subscription pricing in the first quarter to accommodate the additions.
The company reported 19,186 dealer marketplace customers as of March 31, down 320 from the fourth quarter and 314 from the first quarter of 2022. Cars.com blamed the decrease on expected pullback "by certain digital dealers," adding its dealer customer count otherwise would have increased compared to the previous year.
While dealer revenue grew, automaker and national revenue dipped 11 percent, due mostly to reductions from some insurance sector customers related to the economy, the company said.
Average monthly unique visitors reached 28.5 million, up 7 percent.
Shares of Cars.com slipped 11.8 percent to close at $17.10 on Thursday.
Q1 revenue: $167.1 million, up 5.6 percent from a year earlier
Q1 net income: $11.5 million, up 167 percent from a year earlier
Q1 adjusted EBITDA: $44.3 million, up 5.5 percent from a year earlier
2023 guidance: Full-year revenue growth of 3 to 6 percent, assuming historically low inventory levels continue
