On this page of StockholderLetter.com we present the 4/28/2023 shareholder letter from Cars.com Inc. — ticker symbol CARS. Reading current and past CARS letters to shareholders can bring important insights into the investment thesis.
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4/28/2023 Letter Continued (Full PDF)
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4/19/2024 CARS Stockholder Letter
• 4/25/2025 CARS Stockholder Letter
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CARS Benford's Law Stock Score = 89
4/28/2023 Letter Continued (Full PDF)
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4/19/2024 CARS Stockholder Letter•
4/25/2025 CARS Stockholder Letter•
More "Information Technology Services" Category Stockholder Letters•
CARS Benford's Law Stock Score = 89CARS 4/28/2023 Shareholder/Stockholder Letter Transcript:
2022 ANNUAL REPORT 2022 AT A GLANCE .ey FinanFial Measures Revenue Revenue growth accelerated each quarter and reached $654MM at year-end Adjusted EBITDA1 $654MM +5% YoY $187MM Adjusted EBITDA Margin 29% Operating Cash Flow $129MM Strong cash generation enabled CARS to return to its target net leverage range of 2.0-2.5x while repurchasing 4.2MM shares .ey Operating MetriFs Average Monthly Unique Visitors CARS consistently generates a high-quality, in-market audience TraI F 26.4MM +5% YoY 587.4MM CARS strong brand enabled it to generate 62% of traffic through organic channels ARPD $2,329 CARS platform strategy has resulted in 10 consecutive quarters of YoY +1% YoY ARPD growth Dealer Customers CARS strong value delivery drove YoY customer growth of 2% 1 19,506 +327 YoY A reconciliation of non-GAAP nancial measures to the relevant GAAP measures can be found in the Q4 2022 Earnings Presentation available at www.investor.cars.com Our Fellow Stockholders, 2022 marked another year of solid growth for CARS, re ective of the consistent value we delivered to consumers, dealers, OEMs and lenders through our integrated platform and category-leading audience. Our highly-recognized brand, together with our rich editorial content efficiently attracts a highly engaged audience at scale for dealers and OEMs, which is a key differentiator of our platform. We were Comscore s #1 ranked Marketplace in 2022 with 26 million average monthly unique visitors. In-market shoppers accounting for 587 million annual visits to Cars.com activates our solutions and generates demand for our customers. In an operating environment where inventory is constrained, our differentiated platform strategy generates diverse revenue streams. As a result, we are better positioned to continue making strategic investments across our business that are relevant to consumers and customers, while simultaneously strengthening our platform advantage. Expanding our Platform to Drive Long-Term Growth Our strategy is fueled by our integrated solutions that help consumers buy and sell vehicles, while also enabling automotive retailers to deliver a better customer experience and run more efficient and pro table businesses. We have made strategic investments in product development, accelerated through M&A, that have expanded our business beyond a pure classi ed listings model to one that further drives vehicle sales and industry pro tability. Most recently, we invested in the integration and launch of CreditIQ and Accu-Trade, empowering shoppers and buyers with digital nancing, buying and appraisal solutions. These acquisitions not only expanded our TAM to $50 billion, but opened up a signi cant opportunity for future growth as the industry adopts digital solutions to better compete and evolve the retail experience. Our value is clearly re ected in our increasingly loyal and growing customer base, which reached 19,506 dealers at year-end and has been instrumental in us delivering 10 consecutive quarters of year-over-year ARPD growth, which ended the year at over $2,300. Our growing product strength is further affirmed by nearly every OEM naming us as a certi ed website and technology provider, leading to 6,050 website customers at year-end. Solid Performance Bolstering our Financial Profile Our focused execution enabled us to deliver strong results again in 2022, with total revenue growth accelerating throughout the year to $654 million, representing 5% annual growth. Adjusted EBITDA was $187 million with an Adjusted EBITDA margin of 29%. Our asset-light model, coupled with disciplined nancial management enabled us to generate $129 million of Operating Cash Flow. We leveraged our strong cash generation to make value-accretive investments, pay down debt reducing leverage to within our target range of 2.0x to 2.5x, and return capital to shareholders. Creating Value Through our Environmental, Social and Governance Priorities More broadly, we have maintained ESG efforts that closely align with CARS business practices that foster an ethical culture of trust, transparency and accountability. Our efforts this year centered around programming on reducing carbon emissions through EV consumer education and helping advance the representation in the automotive and technology industries through our ongoing strategic partnerships and sponsorships of industry organizations such as National Association of Minority Automobile Dealers (NAMAD), Women in Automotive and Girls Who Code. Additionally, we maintained strong governance practices with best-in-class policies and protections. 2023 will mark our 25th anniversary. Our durable business with consistent growth and success are a testament to our incredibly talented and diverse workforce, trusted brand and strong corporate culture that welcomes and fosters diverse perspectives and ideas. Our leading audience and a quarter century of loyal customers enable us to continuously improve and advance our strategy of empowering local automotive retail with best-in-class innovative solutions. As we enter this signi cant anniversary year, we are con dent we have a bright future ahead that continues to generate sustainable shareholder value in 2023 and beyond. T. Alex Vetter Chief Executive Officer Scott E. Forbes Chairman of the Board