Cars.com (CARS) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $180.2 million, up 1% year-over-year, at the high end of guidance, driven by Marketplace momentum and disciplined cost initiatives.

• Net income improved to $5.0 million from a net loss of $2.0 million in Q1 2025, reflecting lower depreciation and amortization.

• Adjusted EBITDA was $51.0 million, up 1% year-over-year, with a margin of 28.3%, exceeding guidance by over a percentage point.

• Cost reduction initiatives, including an 11% workforce reduction, are expected to yield $25–$30 million in recurring annualized savings by 2027.

• Share repurchase target for 2026 increased to $90 million, with $33 million repurchased through April 30, 2026.

Financial highlights

• Dealer revenue grew 2% year-over-year to $163.0 million, supported by Marketplace and dealer count growth; OEM and National revenue declined 12% to $14.3 million.

• Dealer count increased by 140 year-over-year to 19,390; ARPD was $2,473, flat year-over-year.

• Adjusted net income was $26.7 million ($0.45 per diluted share), up from $24.0 million ($0.37 per share) a year ago.

• Free cash flow was $33.5 million, up from $23.7 million a year ago; net cash from operating activities was $39.8 million.

• Total operating expenses declined 5% year-over-year; adjusted operating expenses down 6%.

Outlook and guidance

• Q2 2026 revenue expected to be flat to up 2% year-over-year, with Dealer revenue growth and OEM/National revenue under pressure.

• Q2 Adjusted EBITDA margin expected between 28% and 29%.

• Full year 2026 guidance reaffirmed: flat to 2% revenue growth and Adjusted EBITDA margin of 29%-30%.

• Management expects adequate liquidity for the next twelve months and beyond, supported by positive operating cash flow and $295 million available under the revolving loan.