CARS · Cars.com Inc.

Cars.com delivered a materially improved financial performance in Q1 2026, marked by a return to GAAP profitability ($5.0M net income vs. $2.0M loss), strong margin execution (28.3% Adjusted EBITDA margin, above the 26–27% guidance range), and disciplined capital allocation. Revenue growth of 1% YoY to $180.2M was anchored by 2% growth in Subscription-based Dealer revenue—reflecting continued Marketplace momentum and dealer customer growth—while OEM and National revenue declined 12% YoY due to ongoing OEM spending shifts. The improvement in net income was driven primarily by lower depreciation and amortization, not top-line acceleration. Adjusted EBITDA grew 1% YoY to $51.0M, matching revenue growth but delivering outsized margin performance due to operating expense discipline: total operating expenses fell 5% YoY to $163.6M, and Adjusted Operating Expenses declined 6% YoY to $145.9M, aided by marketing efficiencies and lower depreciation, partially offset by severance costs. Management attributed the margin outperformance to early benefits from its cost reduction program, which is expected to generate $25–30M in recurring annualized savings in 2027. Capital return was significantly enhanced: the Company raised its 2026 share repurchase target by 50% to $90M and has already deployed $32.9M through April 30, 2026. Forward guidance remains conservative—reaffirming full-year revenue flat to +2% and Adjusted EBITDA margin of 29–30%—but signals confidence in sustained operational leverage and strategic execution as it advances AI-powered product integrations and platform differentiation.