Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☐ ☒ No ☒^*☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 25, 2017,~~May 2, 2024, the registrant had ~~71,625,610~~66,116,556 shares of common stock, $0.01 par value per share, outstanding.


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements ~~(unaudited)~~:	2
	~~Condensed~~ Consolidated ~~and Combined~~ Balance Sheets	2
	Consolidated ~~and Combined~~ Statements of Income	3
	~~Condensed~~ Consolidated ~~and Combined~~Statements of Comprehensive Income	4
	Consolidated Statements of Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	46
	Notes to the Consolidated ~~and Combined~~Financial Statements ~~of Stockholders’ Equity~~ (Unaudited)	57
Item 2.	~~Notes to Unaudited Condensed Consolidated and Combined Financial Statements~~	6
~~Item 2.~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1416
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2322
Item 4.	Controls and Procedures	2322
PART II.	OTHER INFORMATION	2423
Item 1.	Legal Proceedings	2423
Item 1A.	Risk Factors	2423
Item 6.2.	~~Exhibits~~Unregistered Sales of Equity Securities and Use of Proceeds	2423
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	25
Signatures		25
		26

PART I—~~FINANCI~~ALFINANCIAL INFORMATION

Item 1. Financial Statements.

Cars.com Inc.

~~CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS~~Consolidated Balance Sheets

(In thousands, ~~(except~~except per share data)

September 30, 2017

December 31, 2016

(unaudited)

Assets

Current assets

Cash and cash equivalents

$
27,428

$
8,896

Accounts receivable, less allowance of $3,437 and $3,527, respectively

93,077

98,303

Prepaid expenses and other current assets

18,298

12,342

Total current assets

138,803

119,541

Property and equipment

Cost

61,783

37,190

Less accumulated depreciation

(20,908
)

(16,729
)
Net property and equipment

40,875

20,461

Intangible and other assets

Goodwill

788,107

788,107

Intangible assets, less accumulated amortization of $224,053 and $165,651, respectively

1,548,967

1,607,369

Investments and other assets

11,172

11,788

Total assets

$
2,527,924

$
2,547,266

Liabilities and equity

Current liabilities

Accounts payable

$
6,787

$
7,844

Current portion of long-term debt

21,162

—

Accrued liabilities

69,137

64,140

Total current liabilities

97,086

71,984

Noncurrent liabilities

Deferred incentive plans

1,677

3,913

Unfavorable contracts liability

25,185

44,085

Long-term debt

597,468

—

Deferred tax liability

282,504

8,325

Other noncurrent liabilities

17,532

1,674

Total noncurrent liabilities

924,366

57,997

Total liabilities

1,021,452

129,981

Commitments and contingent liabilities

Stockholders' equity

TEGNA's investment, net

—

2,417,285

Common Stock at par, $0.01 par value; authorized 300,000,000 shares; issued and outstanding 71,625,405 shares at September 30, 2017; no shares authorized, issued and outstanding at December 31, 2016

716

—

Additional paid-in capital

1,480,932

—

Retained earnings

24,824

—

Total stockholders' equity

1,506,472

2,417,285

Total liabilities and stockholders' equity

$
2,527,924

$
2,547,266


	March 31, 2024			December 31, 2023
	(unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	31,363		$	39,198
Accounts receivable, net		125,670			125,373
Prepaid expenses		12,494			12,553
Other current assets		7,644			1,314
Total current assets		177,171			178,438
Property and equipment, net		43,379			43,853
Goodwill		146,104			147,058
Intangible assets, net		647,302			669,167
Deferred tax assets, net		108,647			112,953
Investments and other assets, net		20,528			20,980
Total assets	$	1,143,131		$	1,172,449
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	25,583		$	22,259
Accrued compensation		17,996			31,669
Current portion of long-term debt, net		—			23,129
Other accrued liabilities		65,785			68,691
Total current liabilities		109,364			145,748
Noncurrent liabilities:
Long-term debt, net		473,755			460,119
Deferred tax liabilities		8,687			8,757
Other noncurrent liabilities		69,875			65,717
Total noncurrent liabilities		552,317			534,593
Total liabilities		661,681			680,341
Commitments and contingencies
Stockholders' equity:
Preferred Stock at par, $0.01 par value; 5,000 shares authorized; no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		—			—
Common Stock at par, $0.01 par value; 300,000 shares authorized; 66,228 and 65,929 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		662			659
Additional paid-in capital		1,489,525			1,500,232
Accumulated deficit		(1,008,950	)		(1,009,734	)
Accumulated other comprehensive income		213			951
Total stockholders' equity		481,450			492,108
Total liabilities and stockholders' equity	$	1,143,131		$	1,172,449

The accompanying notes are an integral part of ~~these condensed consolidated and combined financial statements.~~the Consolidated Financial Statements.

Cars.com Inc.

~~CONSOLIDATED AND COMBINED STATEMENTS OF INCOME~~Consolidated Statements of Income

~~Unaudited, in~~(In thousands, ~~(except~~except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues:

Retail

$
118,825

$
119,828

$
346,780

$
343,013

Wholesale^(a)

41,074

42,467

122,917

128,421

Total

159,899

162,295

469,697

471,434

Operating expenses:

Product support, technology and operations

36,598

32,469

106,479

98,381

Marketing and sales

50,733

48,670

160,246

160,275

General and administrative

11,606

7,738

42,305

23,277

Affiliate revenue share

2,121

2,162

6,837

6,264

Amortization of intangible assets

19,467

19,088

58,402

55,416

Total

120,525

110,127

374,269

343,613

Operating income

39,374

52,168

95,428

127,821

Nonoperating (expense) income:

Interest (expense) income, net

(5,431
)

41

(7,160
)

53

Other income, net

64

88

199

142

Total nonoperating (expense) income, net

(5,367
)

129

(6,961
)

195

Income before income taxes

34,007

52,297

88,467

128,016

Provision for income taxes

13,019

452

15,782

452

Net income

$
20,988

$
51,845

$
72,685

$
127,564

Earnings per share, basic

$
0.29

$
0.72

$
1.01

$
1.78

Weighted-average common shares outstanding, basic

71,699

71,588

71,693

71,588

Earnings per share, diluted

$
0.29

$
0.72

$
1.01

$
1.78

Weighted-average common shares outstanding, diluted

71,767

71,588

71,763

71,588

(Unaudited)


	Three Months Ended March 31,
	2024			2023
Revenue:
Dealer	$	161,815		$	149,843
OEM and National		15,307			13,543
Other		3,054			3,682
Total revenue		180,176			167,068
Operating expenses:
Cost of revenue and operations		29,962			29,795
Product and technology		28,085			24,101
Marketing and sales		59,163			58,297
General and administrative		22,857			18,304
Depreciation and amortization		27,365			24,042
Total operating expenses		167,432			154,539
Operating income		12,744			12,529
Nonoperating expense:
Interest expense, net		(8,321	)		(8,244	)
Other (expense) income, net		(3,603	)		8,239
Total nonoperating expense, net		(11,924	)		(5	)
Income before income taxes		820			12,524
Income tax expense		36			1,045
Net income	$	784		$	11,479
Weighted-average common shares outstanding:
Basic		66,318			66,530
Diluted		67,291			67,747
Earnings per share:
Basic	$	0.01		$	0.17
Diluted		0.01			0.17

The accompanying notes are an integral part of ~~these condensed consolidated and combined financial statements.~~the Consolidated Financial Statements.

^(a)

Wholesale revenue includes related party revenue generated from TEGNA, Inc., through the Separation date of May 31, 2017, of $0 million and $3.4 million during the three and nine months ended September 30, 2017, respectively, and $2.1 million and $6.3 million during the three and nine months ended September 30, 2016, respectively (See Note 13). The commercial agreement with TEGNA is still effective after the Separation.

Cars.com Inc.

~~CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS~~Consolidated Statements of Comprehensive Income

~~Unaudited, in thousands~~(In thousands)

Nine Months Ended September 30,

2017

2016

Cash flows from operating activities:

Net income

$
72,685

$
127,564

Adjustments to reconcile net income to operating cash flows:

Depreciation and amortization

66,343

61,549

Amortization of unfavorable contracts liability

(18,900
)

(18,900
)
Write-off and loss on assets

1,446

111

Gain on trading securities related to deferred compensation

(199
)

(143
)
Provision for doubtful accounts receivable

2,561

2,177

Deferred income taxes

8,388

(34
)
Share-based compensation

1,493

—

Amortization of debt issuance costs

463

—

Increase (decrease) in operating assets and liabilities

12,916

(31,888
)
Net cash flow provided by operating activities

147,196

140,436

Cash flows from investing activities:

Purchase of property and equipment

(27,631
)

(7,387
)
Purchase of investments

—

(2,216
)
Payment for acquisition, net of cash acquired

—

(114,945
)
Proceeds from sale of property and equipment

—

15

Net cash used in investing activities

(27,631
)

(124,533
)
Cash flows from financing activities:

Proceeds from issuance of long-term debt

675,000

—

Payments of debt issuance costs and other fees

(6,208
)

—

Payments of long-term debt

(50,625
)

—

Cash distribution to TEGNA related to Separation

(650,000
)

—

Transactions with TEGNA, net

(69,200
)

(11,283
)
Net cash used in financing activities

(101,033
)

(11,283
)
Increase in cash and cash equivalents

18,532

4,620

Cash and cash equivalents at beginning of period

8,896

100

Cash and cash equivalents at end of period

$
27,428

$
4,720

Supplemental non-cash information:

Purchases of property and equipment in accrued liabilities and accounts payable

$
3,050

$
50

Supplemental cash flow information:

Cash paid for income taxes, net of refunds

$
5,726

$
—

Cash paid for interest

$
6,826

$
—

(Unaudited)


	Three Months Ended March 31,
	2024			2023
Net income	$	784		$	11,479
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(738	)		—
Total other comprehensive loss, net of tax		(738	)		—
Comprehensive income	$	46		$	11,479

The accompanying notes are an integral part of ~~these condensed consolidated and combined financial statements.~~

the Consolidated Financial Statements.

Cars.com Inc.

~~CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDERS’ EQUITY~~Consolidated Statements of Stockholders’ Equity

~~Unaudited, in thousands~~(In thousands)

(Unaudited)


	Preferred Stock				Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Stockholders'
	Shares		Amount		Shares			Amount			Capital			Deficit			Income			Equity
Balance at December 31, 2023		—	$	—		65,929		$	659		$	1,500,232		$	(1,009,734	)	$	951		$	492,108
Net income		—		—		—			—			—			784			—			784
Other comprehensive loss, net of tax		—		—		—			—			—			—			(738	)		(738	)
Repurchases of common stock		—		—		(533	)		(5	)		(9,490	)		—			—			(9,495	)
Shares issued in connection with stock-based compensation plans, net		—		—		832			8			(8,365	)		—			—			(8,357	)
Stock-based compensation		—		—		—			—			7,148			—			—			7,148
Balance at March 31, 2024		—	$	—		66,228		$	662		$	1,489,525		$	(1,008,950	)	$	213		$	481,450


	Preferred Stock				Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive		Stockholders'
	Shares		Amount		Shares			Amount			Capital			Deficit			Income		Equity
Balance at December 31, 2022		—	$	—		66,287		$	662		$	1,511,944		$	(1,128,176	)	$	—	$	384,430
Net income		—		—		—			—			—			11,479			—		11,479
Repurchases of common stock		—		—		(413	)		(4	)		(7,170	)		—			—		(7,174	)
Shares issued in connection with stock-based compensation plans, net		—		—		976			10			(9,807	)		—			—		(9,797	)
Stock-based compensation		—		—		—			—			6,049			—			—		6,049
Balance at March 31, 2023		—	$	—		66,850		$	668		$	1,501,016		$	(1,116,697	)	$	—	$	384,987

Common Stock

Shares

Amount

Additional Paid in Capital

TEGNA's Investment, net

Retained Earnings

Stockholders' Equity

Balance at December 31, 2016

—

$
—

$
—

$
2,417,285

$
—

$
2,417,285

Net income

—

—

—

47,861

24,824

72,685

Transactions with TEGNA, net

—

—

—

(69,200
)

—

(69,200
)
Cash distribution to TEGNA related to Separation

—

—

—

(650,000
)

—

(650,000
)
Deferred taxes related to Separation

—

—

—

(265,791
)

—

(265,791
)
Distribution by TEGNA

71,588

716

1,479,439

(1,480,155
)

—

—

Issuance of share-based compensation awards

37

—

—

—

—

—

Share-based compensation

—

—

1,493

—

—

1,493

Balance at September 30, 2017

71,625

$
716

$
1,480,932

$
—

$
24,824

$
1,506,472

Balance at December 31, 2015

—

$
—

$
—

$
2,304,519

$
—

$
2,304,519

Net income

—

—

—

127,564

—

127,564

Transactions with TEGNA, net

—

—

—

(11,283
)

—

(11,283
)
Balance at September 30, 2016

—

$
—

$
—

$
2,420,800

$
—

$
2,420,800

The accompanying notes are an integral part of ~~these condensed consolidated~~the Consolidated Financial Statements.

Cars.com Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net income	$	784		$	11,479
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation		6,360			4,884
Amortization of intangible assets		21,005			19,158
Changes in fair value of contingent consideration		2,554			(8,259	)
Stock-based compensation		7,074			5,982
Deferred income taxes		4,426			(228	)
Provision for doubtful accounts		741			447
Amortization of debt issuance costs		738			781
Unrealized loss on foreign currency denominated transactions		1,009			—
Amortization of deferred revenue related to AccuTrade acquisition		—			(883	)
Other, net		217			134
Changes in operating assets and liabilities:
Accounts receivable		(1,155	)		(6,552	)
Prepaid expenses and other assets		(5,531	)		(3,039	)
Accounts payable		3,294			(859	)
Accrued compensation		(13,585	)		(6,904	)
Other liabilities		5,537			12,000
Net cash provided by operating activities		33,468			28,141
Cash flows from investing activities:
Capitalization of internally developed technology		(5,305	)		(5,172	)
Purchase of property and equipment		(708	)		(199	)
Net cash used in investing activities		(6,013	)		(5,371	)
Cash flows from financing activities:
Payments of Revolving Loan borrowings and long-term debt		(10,000	)		(18,750	)
Payments for stock-based compensation plans, net		(8,357	)		(9,797	)
Repurchases of common stock		(9,096	)		(7,100	)
Payments of contingent consideration		(7,750	)		—
Net cash used in financing activities		(35,203	)		(35,647	)
Effect of exchange rate changes on Cash and cash equivalents		(87	)		—
Net decrease in Cash and cash equivalents		(7,835	)		(12,877	)
Cash and cash equivalents at beginning of period		39,198			31,715
Cash and cash equivalents at end of period	$	31,363		$	18,838
Supplemental cash flow information:
Cash paid for income taxes	$	1,168		$	96
Cash paid for interest		2,566			1,486

The accompanying notes are an integral part of the Consolidated Financial Statements.

Cars.com Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1. Description of Business and ~~combined financial statements.~~

~~NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS~~Summary of Significant Accounting Policies

~~NOTE 1~~

~~Separation from TEGNA, description~~Description of ~~business~~Business. Cars.com Inc., d/b/a Cars Commerce Inc. (the "Company" or "Cars Commerce") is an audience-driven technology company empowering the automotive industry. The Company simplifies everything about car buying and ~~basis of presentation~~

~~Separation from TEGNA. On September 7, 2016, TEGNA Inc. (“TEGNA”), our former parent company, announced its plan to separate its digital~~selling with powerful products, solutions and AI-driven technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations. The Cars Commerce platform is organized around four industry-leading brands: the flagship automotive marketplace ~~business, including~~and dealer reputation site Cars.com, ~~LLC,~~award-winning digital retail technology and marketing services from Dealer Inspire, essential trade-in and appraisal technology from AccuTrade, and exclusive in-market media solutions from the ~~principal entity through which TEGNA’s digital automotive marketplace business has historically~~Cars Commerce Media Network.

Basis of Presentation. The accompanying unaudited interim consolidated financial statements ("Consolidated Financial Statements") have been ~~operated,~~prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and ~~DMR Holdings, Inc. (“DealerRater”), a leading automotive dealer review website, from its other digital businesses (the “Separation”). The Separation occurred on May 31, 2017 by means~~the rules and regulations of ~~a spin-off of a newly formed company named Cars.com Inc. (“Cars.com,”~~ the ~~“Company,” “our,” “us” or “we”), which now owns the digital automotive marketplace business. We filed a Registration Statement on Form 10 relating to the Separation with the U.S.~~ Securities and Exchange Commission (the “SEC”) on May 5, 2017, that was declared effective by the SEC on May 15, 2017 (the “Registration Statement on Form 10”). On May 31, 2017, we made a $650 million cash transfer to TEGNA, and TEGNA completed the Separation through a pro rata distribution to its stockholders of all of the outstanding shares of our common stock. Our common stock began trading “regular way” on the New York Stock Exchange on June 1, 2017. Each holder of TEGNA common stock received one share of our common stock for every three shares of TEGNA common stock held on May 18, 2017, the record date for the distribution. TEGNA structured the distribution to be tax-free to its U.S. stockholders for U.S. federal income tax purposes.

In connection with the Separation and prior to the distribution, we entered into various agreements to effect the Separation and provide a framework for our relationship with TEGNA after the Separation and distribution. These agreements include a separation and distribution agreement, a transition services agreement, a tax matters agreement and an employee matters agreement. These agreements provide for the allocation between Cars.com and TEGNA of the assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) of TEGNA and its subsidiaries attributable to periods prior to, at and after the Separation and govern the relationship between Cars.com and TEGNA subsequent to the completion of the Separation. A summary of these agreements can be found in our Registration Statement on Form 10.

In connection with the Separation and distribution, on May 30, 2017, we adopted several compensation and benefit plans, including the Cars.com Inc. Omnibus Incentive Compensation Plan (the “Omnibus Plan”). A summary of each of these plans can be found in the Registration Statement on Form 10. At the time of the distribution, we issued equity awards under the Omnibus Plan as a result of the conversion of certain outstanding share-based awards previously granted by TEGNA into awards denominated in our shares in accordance with the terms of the separation and distribution agreement and the employee matters agreement we entered into with TEGNA.

~~Description of business~~. Cars.com is a leading online destination that helps car shoppers and owners navigate every turn of car ownership. A pioneer in automotive classifieds, the Company has evolved into one of the largest digital automotive platforms, connecting consumers with local dealers across the country anytime, anywhere. Through trusted expert content, on-the-lot mobile app features, millions of new and used vehicle listings, a comprehensive set of research tools and the largest database of consumer reviews in the industry, Cars.com helps shoppers buy, sell and service their vehicles. Cars.com properties include DealerRater®, Auto.com™, PickupTrucks.com™ and NewCars.com®. The Company was founded in 1998 and is headquartered in Chicago, Illinois.

~~Basis of Presentation~~. On August 1, 2016, TEGNA purchased 100% of DealerRater, a leading automotive dealer review website. DealerRater was included in the distribution to Cars.com as part of the Separation. The accompanying financial statements combine the activity for the acquired business from the date of acquisition and reflect the application of push down accounting. The accompanying interim financial statements are derived from the historical accounting records of TEGNA and present our financial position, results of operations and cash flows as of the periods presented as if we were a separate entity. These interim financial statements are presented in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”"SEC") for interim financial statements. Accordingly, ~~the interim financial statements do not include all~~certain information and ~~footnotes~~footnote disclosures normally included in ~~annual~~ financial statements prepared in accordance with U.S. ~~GAAP.~~

Since TEGNA’s acquisition of Cars.com, LLC in 2014, Cars.com, LLC has primarily operated as a standalone entity within TEGNA’s broader corporate organization. The historical financial statements include allocations of certain TEGNA corporate expenses. Such costs primarily include insurance and other general corporate overhead expenses and were allocated based on either the actual costs incurred,GAAP have been condensed or Cars.com, LLC’s headcount relative to TEGNA’s consolidated headcount. The historical allocated corporate costs, through the Separation, were $0 million and $2.5 million during the three and nine months ended September 30, 2017, respectively, and $0.3 million and $0.5 million during the three and nine months ended September 30, 2016, respectively. Our management believes that such allocations are reasonable. These allocated expenses relateomitted pursuant to the ~~various services that have historically been provided to Cars.com, LLC by TEGNA. However, such expenses may not be indicative~~rules and regulations of the actual level of expense that would have been incurred by Cars.com, LLC if it had operated as an independent, publicly-traded company prior to the Separation or the costs expected to be incurred in the future.

settled through equity contributions or distributions at the time the transactions were recorded. The accumulated net effect of intercompany transactions between either (i) us and TEGNA or (ii) us and TEGNA affiliates are included in “TEGNA’s investment, net.” The total net effect of these intercompany transactions is reflected in the CondensedSEC. These Consolidated ~~and Combined~~Financial Statements ~~of Cash Flows as financing activities.~~

~~These interim financial statements~~ should be read in conjunction with the audited ~~annual~~consolidated financial statements and the notes thereto ~~as of and~~ for the year ended December 31, ~~2016~~2023, which are included in ~~our Registration Statement~~the Company's Annual Report on Form ~~10. These interim financial statements follow~~10-K as filed with the ~~same~~SEC on February 22, 2024 (the "December 31, 2023 Financial Statements").

The significant accounting policies ~~and methods~~used in ~~their application as~~preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the ~~most recent audited financial statements.~~December 31, 2023 Financial Statements. In the opinion of management, the ~~interim financial statements reflect~~Consolidated Financial Statements contain all adjustments ~~(all of which are~~(consisting of a normal, ~~and~~ recurring nature)~~, which are~~ necessary to present fairly the Company's financial position, results of operations, ~~and~~ cash flows and changes in stockholders' equity as of the dates and for the ~~interim periods.~~

~~NOTE 2~~

~~Summary~~periods indicated. The unaudited results of ~~significant accounting policies~~

~~See Note 2, “Summary of significant accounting policies” in Part I, Item 13 of our Registration Statement on Form 10 for a discussion of Cars.com’s significant accounting policies.~~

~~Recent accounting pronouncements~~

~~The Financial Accounting Standards Board (the “FASB”) amended the FASB Accounting Standards Codification and created a new Topic 606,~~ ~~Revenue from Contracts with Customers.~~ Under the amendment, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The required adoption date of the standard is January 1, 2018. The two permitted transition methods are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown; and the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. We will adopt the standard using the modified retrospective method. Our primary source of revenue is through the sale of online subscription advertising products to car dealerships. We currently do not expect the standard to have a material impact on this revenue stream, which will continue to be recognized primarily on a straight-line basis over the contract term as the service is provided to our customers.

~~In January 2016, the FASB issued Accounting Standards Update No. 2016-01,~~ ~~Financial Instruments—Overall~~ (Subtopic 825-10). This guidance amended several elements surrounding the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation) to be measured at fair value with changes in fair value recognized in Net income. The new guidance is effective for us beginning in the first quarter of 2018. We are currently evaluating the effect this new guidance will have on our financial statements and related disclosures.

~~In February 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 842,~~ ~~Leases~~. This guidance related to leases which will require lessees to recognize assets and liabilities on the Condensed Consolidated and Combined Balance Sheets for leases with lease terms of more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current U.S. GAAP—which requires only capital leases to be recognized on the Condensed Consolidated and Combined Balance Sheets—the new guidance will require both types of leases to be recognized on the Condensed Consolidated and Combined Balance Sheets. The new guidance is effective for us beginning in the first quarter of 2019 and will be adopted using a modified retrospective approach. We are currently evaluating the effect it is expected to have on our financial statements and related disclosures.

~~In June 2016, the FASB issued Accounting Standards Update No. 2016-13,~~ ~~Financial Instruments—Credit Losses (Topic 326).~~ This guidance related to the measurement of credit losses on financial instruments. The new guidance changes the way credit losses on accounts receivable are estimated. Under current U.S. GAAP, credit losses on trade accounts receivable are recognized once it is probable that such losses will occur. Under the new guidance, we will be required to estimate credit losses based on the expected amount of future collections which may result in earlier recognition of allowance for doubtful accounts. The new guidance is effective for public companies beginning in the first quarter of 2020 and will be adopted using a modified retrospective approach. We are currently evaluating the effect this new guidance will have on our financial statements and related disclosures.

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment.~~ ~~This guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today’s goodwill~~

impairment test) to measure a goodwill impairment charge. Instead, companies will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the impairment test). The standard has tiered effective dates, starting in 2020. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. We are currently evaluating the effect this new guidance will have on our financial statements and related disclosures.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~Compensation—Stock Compensation (Topic 718).~~ This guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will allow the Company to make certain changes to awards without accounting for them as modifications and does not change the accounting for modifications. The new guidance should be applied prospectively and is effective for us beginning in the first quarter of 2018. We are currently evaluating the effect this new guidance will have on our financial statements and related disclosures.

~~NOTE 3~~

~~Goodwill and other intangible assets and liabilities~~

~~The following table displays goodwill, indefinite-lived intangibles and amortizable intangible assets at September 30, 2017 and December 31, 2016 (in thousands):~~

Gross

Accumulated
Amortization

Net

September 30, 2017

Goodwill

$
788,107

$
—

$
788,107

Indefinite-lived intangibles:

Trade name

872,320

—

872,320

Amortizable intangible assets:

Customer relationships

814,240

(189,090
)

625,150

Acquired software

71,700

(31,069
)

40,631

Trade name

9,800

(953
)

8,847

Non-compete agreements

2,860

(1,716
)

1,144

Content library

2,100

(1,225
)

875

Total amortizable intangible assets

900,700

(224,053
)

676,647

Total

$
2,561,127

$
(224,053
)

$
2,337,074

December 31, 2016

Goodwill

$
788,107

$
—

$
788,107

Indefinite-lived intangibles:

Trade name

872,320

—

872,320

Amortizable intangible assets:

Customer relationships

814,240

(140,788
)

673,452

Acquired software

71,700

(22,798
)

48,902

Trade name

9,800

(340
)

9,460

Non-compete agreements

2,860

(1,287
)

1,573

Content library

2,100

(438
)

1,662

Total amortizable intangible assets

900,700

(165,651
)

735,049

Total

$
2,561,127

$
(165,651
)

$
2,395,476

We also have an intangible liability related to unfavorable wholesale contracts that Cars.com, LLC entered into as part of the acquisition by TEGNA in October 2014. The unfavorable contracts liability at September 30, 2017 and December 31, 2016 was $50.4 million and $69.3 million, respectively. Liabilities that will be amortized in the next twelve months are recorded in accrued liabilities, with the remainder recorded in unfavorable contracts liability on the Condensed Consolidated and Combined Balance Sheets. Amortization of the liability is recognized as wholesale revenue on the Consolidated and Combined Statements of Income and was $6.3 million and $18.9 million in the three and nine months ended September 30, 2017 and 2016, respectively.

~~NOTE 4~~

~~Investments~~

We have a 21% ownership interest in RepairPal, Inc. (“RepairPal”), an online marketplace offering consumers a price estimator for car repairs and an ability to research repair shop reviews. We account for our investment under the cost method. While we believe that we have the ability to exercise significant influence, it has been determined that our investment is not substantially similar to common stock on the acquisition date because it has a substantive liquidation preference over RepairPal’s common stock. This factor precludes us from accounting for the investment under the equity method.

In May 2016, we purchased $2.2 million of convertible debt issued by RepairPal. The debt accrues interest at an annual rate of 7% and matures in May 2018. The debt converts into shares of preferred stock upon the earlier of May 2018 or the date on which RepairPal raises proceeds of at least $5 million through a single or series of related transactions related to any sale of preferred stock.

The aggregate carrying amount of the investment at September 30, 2017 and December 31, 2016 was $9.4 million and $9.3 million, respectively. We record these amounts in investments and other assets on the Condensed Consolidated and Combined Balance Sheets. No events or circumstances have occurred in the three and nine months ended September 30, 2017 that required us to estimate the fair value of the investment.

~~NOTE 5~~

~~Income taxes~~

Prior to the Separation, Cars.com LLC was a multi-member LLC that is considered to be a partnership for U.S. income tax purposes. Multi-member LLCs are generally considered flow-through entities and therefore not subject to federal, state, or local income taxes. Effective with the Separation, the Company established a corporate legal entity structure that is subject to U.S. corporate income tax on a stand-alone basis post-Separation. Income tax expense was $13.0 millionoperations for the three months ended ~~September 30, 2017, compared~~March 31, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024.

Use of Estimates. The preparation of the accompanying Consolidated Financial Statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

Reclassifications. Certain prior year balances have been reclassified to conform to the current year presentation.

Principles of Consolidation. The accompanying Consolidated Financial Statements include the accounts of Cars.com Inc. and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation.

NOTE 2. Revenue

Revenue Summary. The Company's Consolidated Statements of Income provide disaggregated revenue information that reflects the nature, timing, amount and uncertainty of cash flows related to the Company's revenue. Substantially all revenue was generated and located within the U.S. The Company's disaggregated revenue information is as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Dealer	$	161,815	$	149,843
OEM and National		15,307		13,543
Other		3,054		3,682
Total revenue	$	180,176	$	167,068

Cars.com Inc.

Notes to the Consolidated Financial Statements (continued)

(Unaudited)

NOTE 3. Business Combinations

D2C Acquisition. On November 1, 2023, the Company acquired all of the outstanding stock of D2C Media Inc. and EZResults Inc. (collectively, the "D2C Acquisition"), a leading provider of website and digital advertising solutions in Canada for $79.8 million total purchase consideration.

The Company expensed as incurred total acquisition costs of $0.1 million during the quarter ended March 31, 2024. These costs were recorded in General and administrative expenses in the Consolidated Statements of Income.

As part of the D2C Acquisition, the Company may be required to pay a cash earnout of up to an additional CAD$35.0 million (approximately USD$25.9 million as of March 31, 2024). The payment is not included in the total purchase consideration and is deemed compensation expense, as the potential cash compensation is to former equity holders who became employees and will be forfeited if employment is terminated prior to the end of the earnout period. The amount to be paid will be determined by the acquired business’ future achievement of certain revenue-related financial targets through December 31, 2025 and expensed over each performance period. The Company may expense up to CAD$15.0 million (approximately USD$11.1 million as of March 31, 2024) associated with the remaining portion of the earnout for each of the years ending December 31, 2024 and 2025.

Preliminary Purchase Price Allocation. The preliminary fair values assigned to the tangible and intangible assets acquired and liabilities assumed were determined based on management’s estimates and assumptions, as well as other information compiled by management, including third-party valuations that utilize customary valuation procedures and techniques, such as the multi-period excess earnings and the relief of royalty methods. The preliminary fair values of all assets acquired and liabilities assumed are subject to change within the one-year measurement period. The preliminary D2C Acquisition purchase price allocation is as follows (in thousands):


	Preliminary Acquisition-date Fair Value
Cash consideration	$	79,841

Cash and cash equivalents	$	3,673
Accounts receivable		4,640
Other assets acquired (1)		1,378
Identified intangible assets (2)		38,967
Total assets acquired		48,658
Accounts payable and accrued liabilities		(1,698	)
Other liabilities assumed (3)		(815	)
Deferred tax liabilities, net		(8,558	)
Total liabilities assumed		(11,071	)
Net identifiable assets		37,587
Goodwill		42,254
Total purchase consideration	$	79,841

(1) Other assets acquired primarily consists of property and equipment, operating lease right of use assets and other prepaid expenses.

(2) Preliminary information regarding the identifiable intangible assets acquired is as follows:

(3) Other liabilities assumed primarily consists of operating lease right of use liabilities and income taxes payable.

Cars.com Inc.

Notes to the Consolidated Financial Statements (continued)

(Unaudited)

A reconciliation of cash consideration to Payment for acquisitions, net of cash acquired related to the D2C Acquisition in the Consolidated Statements of Cash Flows as of December 31, 2023 is as follows (in thousands):


Cash consideration	$	79,841
Less: Cash acquired		(3,673	)
Total payment for D2C Media, net	$	76,168

Goodwill. In connection with the D2C Acquisition, the Company recorded goodwill in the amount of $42.3 million, which is primarily attributable to expected sales growth from existing and future customers, product offerings, technology and the value of the acquired assembled workforce. All of the goodwill is considered non-deductible for income tax ~~expense of $0.5 million for~~purposes.

The D2C Acquisition would have had an immaterial impact on the same period of the prior year. The prior year income tax expense represents only two months of DealerRater activity as DealerRater was acquired on August 1, 2016. The effective income tax rate, expressed by calculating the income tax expense as a percentage of income before income taxes, was 38.3%Company’s Consolidated Financial Statements for the three months ended ~~September 30, 2017 and differed from the U.S. federal statutory rate primarily due to state income taxes.~~ March 31, 2023.

NOTE 4. Fair Value Measurements

Income tax expense was $15.8 million for the nine months ended September 30, 2017, based upon four months of Cars.com, LLC information and nine months of DealerRater information, compared to income tax expense of $0.5 million for the same period of the prior year. The prior year income tax expense represents only two months of DealerRater activity as DealerRater was acquired on August 1, 2016. The effective income tax rate, expressed by calculating the income tax expense as a percentage of income before income taxes, was 17.8% for the nine months ended September 30, 2017 and differed from the U.S. federal statutory rate primarily due to pre-Separation income generated by a flow-through entity not subject to federal, state or local income taxes.

~~With the implementation of the post-Separation legal entity structure, the Company was required to record deferred tax assets and~~Company's liabilities for temporary differences between financial accounting and tax reporting. Accordingly, the Company recorded $267 million of net deferred tax liability associated with the outside basis difference in the Cars.com, LLC flow-through entity with the offset recorded in TEGNA’s investment net. Separately, the Company recorded $8 million of net deferred tax asset associated with the DealerRater corporate entity during 2017.

To achieve a tax qualified Employee Share Purchase Program (“ESPP”), participating employees of Cars.com, LLC must be employed by an entity taxed as a C corporation. Consequently, in October 2017, Cars.com, LLC prospectively changed its corporate structure to convert from being taxed as a partnership to being taxed as a C corporation. As a result of the change in corporate structure, Cars.com, LLC was also required to change its reporting of deferred tax assets and liabilities. This reporting change results in a $69 million non-cash write-off of the deferred tax liability associated with non-deductible goodwill which Cars.com, LLC will record through a credit to income tax expense in the fourth quarter of 2017.

~~NOTE 6~~

~~Long-term incentive plan~~

In June 2001, we established a long-term incentive plan (“LTIP”). Under the plan, at our discretion, we may designate employees to participate and may make annual contributions to the participants’ account. In the nine months ended September 30, 2017, we contributed $0.3 million. For full-year 2016, we contributed $0.6 million. The total amount contributed by us is marked to market quarterly and any unrealized gains (losses) are recognized in other income, net on the Consolidated and Combined Statements of Income. Management will not make any new contributions to the LTIP subsequent to the Separation.

~~Under this plan, deferred compensation expense was not material in the three months ended September 30, 2017~~and $0.3 million in the nine months ended September 30, 2017, and $0.2 million and $0.7 million in the three and nine months ended September 30, 2016, respectively. The deferred compensation liability was $2.0 million and $3.1 million at September 30, 2017 and December 31, 2016, respectively.

~~NOTE 7~~

~~Fair value measurement~~

~~We measure and record certain assets at fair value in the accompanying financial statements. U.S. GAAP establishes a fair value hierarchy for those instruments~~ measured ~~at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels:~~

~~Level 1—~~	~~Quoted market prices in active markets for identical assets or liabilities;~~

~~Level 2—~~	~~Inputs other than Level 1 inputs that are either directly or indirectly observable; and~~

~~Level 3—~~	~~Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use.~~

~~Financial assets that are carried~~ at fair value on a recurring basis consisted of the following (in thousands):


			Fair value measurement at reporting date
	Total as of March 31, 2024		Level 1		Level 2		Level 3
Contingent consideration	$	56,212	$	—	$	—	$	56,212
Total	$	56,212	$	—	$	—	$	56,212


			Fair value measurement at reporting date
	Total as of December 31, 2023		Level 1		Level 2		Level 3
Contingent consideration	$	61,408	$	—	$	—	$	61,408
Total	$	61,408	$	—	$	—	$	61,408

The roll-forward of the Level 3 contingent consideration from December 31, 2023 is as follows (in thousands):


	As of December 31, 2023		Payment of Contingent Consideration			Fair Value Adjustment (1)		As of March 31, 2024
Contingent consideration	$	61,408	$	(7,750	)	$	2,554	$	56,212

(1)

Fair value adjustments on contingent considerations are reflected within Other (expense) income, net in the ~~balance sheet consist~~Consolidated Statements of ~~marketable securities held as LTIP investments.~~Income.

The ~~following table presents~~Company reviews and reassesses the LTIP investments carried at fair value as of September 30, 2017 and December 31, 2016, by category on the Condensed Consolidated and Combined Balance Sheets in accordance with the valuation hierarchy defined above (in thousands):

Fair value measurement as of September 30, 2017

Level 1

Level 2

Level 3

Total

Assets:

Mutual funds

$
1,687

$
—

$
—

$
1,687

Fixed income fund

606

Total investments at fair value

$
2,293

Fair value measurement as of December 31, 2016

Level 1

Level 2

Level 3

Total

Assets:

Mutual funds

$
2,228

$
—

$
—

$
2,228

Fixed income fund

1,031

Total investments at fair value

$
3,259

Fair value for mutual funds is measured using Level 1 inputs and quoted market prices at the reporting date multiplied by the quantity held. Our fixed income fund investment consists of a commingled fund for which quoted market prices are not available. Theestimated fair value of contingent consideration liabilities at each reporting period and the ~~investment represents~~updated fair value could differ materially from the ~~net asset~~initial estimates. The Company recorded a contingent consideration liability at its estimated fair value ~~as provided by~~at the ~~trustee.~~

~~In addition to the financial instruments listed~~date of acquisition based on expected future payment. The Company measures contingent consideration recognized in ~~the table above, we hold other financial instruments, including cash and cash equivalents, receivables and accounts payable. The carrying amounts for these balances approximated their fair values.~~

~~Certain assets and liabilities are measured~~connection with acquisitions at fair value on a ~~nonrecurring~~recurring basis using significant unobservable inputs classified as Level 3 inputs. The fair value measurement has one significant input of projected financial information. Significant increases or decreases to this input in isolation could result in a significantly higher or lower liability. Ultimately, the liability will be equivalent to the amount paid, and ~~therefore, not included in~~ the tables above. These assets include goodwill and intangible assets and result as acquisitions occur. The amounts assigned to intangible assets and goodwill as they relate to our acquisitions are based on our best estimate of the fair value. We use an independent valuation specialist to assist in determiningdifference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings. Payments of contingent consideration reduce the ~~identified intangible assets at acquisition.~~ corresponding liability, which was recorded upon acquisition and measured on a recurring basis as discussed above.

The ~~fair value~~Company's contingent consideration obligations arise from acquisitions that involve a potential future payment of consideration that is contingent upon the ~~significant identified intangible assets~~achievement of certain financial or operational metrics. The contingent consideration is ~~generally estimated using a combination~~classified on the Consolidated Balance Sheets based on expected payment dates. As of ~~an income approach using~~March 31, 2024, $16.4 million and $39.8 million were included within Other accrued liabilities and Other noncurrent liabilities on the ~~discounted cash flow analysis~~Consolidated Balance Sheets, respectively. As of December 31, 2023, $25.8 million and ~~market approach using~~$35.6 million were included within Other accrued liabilities and Other noncurrent liabilities on the guideline public company analysis, which represents a Level 3 fair value measurement. The income approach includes a forecast of direct revenues and costs associated with the respective intangible assets and charges for economic returns on tangible and intangible assets utilized in cash flow generation. The market approach also uses forecasted revenue and earnings, as well as comparable public company trading values. Net cash flows attributable to the identified intangible assets are discounted to their present value at a rate commensurate with the perceived risk.

~~NOTE 8~~

~~Share appreciation rights plan~~

Effective as of January 1, 2012, we established a Share Appreciation Rights Plan (the "SAR Plan"). Eligible participants received a number of stock appreciation rights annually that entitle the employee to receive the appreciation in the fair market value of a share from the date of grant up to a specified date or dates plus an amount equal to the distributions per share. Awards granted in a given year vest to the participant over a three-year period. Benefits paid under the SAR Plan were made in cash, not common stock, at the end of the three-year vesting period from the original grant date. ExpenseConsolidated Balance Sheets, respectively. For information related to the ~~SAR Plan has been recorded~~contingent consideration agreements, see Note 3 (Business Combinations) in Part II, Item 8., "Financial Statements and Supplementary Data", of the Company's Annual Report on Form 10-K for the year ended

Cars.com Inc.

Notes to the Consolidated Financial Statements (continued)

(Unaudited)

December 31, 2023 as filed with the SEC on February 22, 2024. The Company expects to make the remaining payments on the contingent consideration in 2024 and 2025.

NOTE 5. Debt

As of March 31, 2024, the Company was in compliance with the covenants under its debt agreements. The Company’s borrowings are limited by its Senior Secured Leverage Ratio and Consolidated Interest Coverage Ratio, among other factors, which are calculated in accordance with the ~~accounting standards for share-based~~Company's Credit Agreement, and were 0.4x and 6.3x, respectively, as of March 31, 2024.

Term Loan. As of March 31, 2024, the outstanding principal amount under the Term Loan was $45.0 million and the interest rate in effect was 7.4%. During the three months ended March 31, 2024, the Company made $10.0 million in Term Loan payments. ~~Due~~

Revolving Loan. As of March 31, 2024, $195.0 million was available to borrow under the Revolving Loan. The Company had $35.0 million of outstanding borrowings as of March 31, 2024 and had no payments or drawdowns on the Revolving Loan during the three months ended March 31, 2024.

Fourth Amendment to the ~~cash settlement at~~Credit Agreement. In the ~~end~~second quarter of 2023, the Company entered into an amendment (the "Fourth Amendment") to the Credit Agreement. The Fourth Amendment, among other things, memorializes certain terms of the ~~performance period,~~Credit Agreement to replace the ~~awards were~~relevant benchmark provisions from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") and makes certain other conforming and mechanical changes. This amendment also included a more favorable credit spread adjustment. Except as modified by the Fourth Amendment, the existing terms of the Credit Agreement remain in effect.

Fifth Amendment to the Credit Agreement. On May 6, 2024, the Company entered into an amendment to the Credit Agreement. For further information, see Note 11 (Subsequent Event) below.

Senior Unsecured Notes. In October 2020, the Company issued $400.0 million aggregate principal amount of 6.375% Senior Unsecured Notes due in 2028. Interest on the notes is due semi-annually on May 1 and November 1.

Fair Value. The Company's debt is classified as ~~a liability~~Level 2 in the fair value hierarchy and ~~remeasured each reporting period at~~the fair ~~value. Cars.com recorded a liability~~value is measured based on comparable trading prices, ratings, sectors, coupons and maturities of ~~$1.1 million~~similar instruments. The approximate fair value and ~~$10.8 million~~ related ~~to its SAR Plan on its Condensed Consolidated and Combined Balance Sheets at September 30, 2017~~carrying value of the Company's outstanding indebtedness, as of March 31, 2024 and December 31, ~~2016, respectively.~~2023 were as follows (in millions):


	March 31, 2024		December 31, 2023
Fair value	$	467.0	$	470.9
Carrying value		480.0		490.0

NOTE 6. Commitments and Contingencies

~~No stock appreciation rights were granted to employees during the three and nine months ended September 30, 2017. Management does not expect to issue any new grants subsequent to the Separation.~~

~~NOTE 9~~

~~Commitments, contingent liabilities and other matters~~

~~Commitments~~

In May 2016, we entered into a new lease of office space in Chicago, Illinois. The lease extends through June 2031 and monthly rental payments under the lease escalate by 2.5% each year throughout the lease. Total minimum payments throughout the remaining life of the lease are $56.8 million.

~~Litigation~~

~~We and our subsidiaries are parties from~~From time to time, the Company and its subsidiaries may become involved in actions, claims, suits or other legal ~~and~~or administrative proceedings ~~involving matters incidental to our~~arising in the ordinary course of business. These matters, whether pending, threatened or unasserted, if decided adversely to Cars.com or settled, may result in liabilities material to our consolidated financial position, results of operation or cash flows. We recordThe Company records a liability when ~~we believe~~it believes that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. ~~We evaluate,~~The Company evaluates, at least quarterly, developments in its ~~legal matters~~commitments and contingencies that could affect the amount of liability that has been previously accrued and ~~make~~makes adjustments as appropriate. Significant judgment is required to determine both the probability and the estimated amount. In the opinion of management, the Company is not currently involved in any pending or threatened litigation or claim that if determined adversely against the Company, individually or in the aggregate, would have a material adverse impact on the Company’s financial position, results of operations or cash flows.

NOTE 7. Stockholders' Equity

~~NOTE 10~~

~~Debt – term loan and revolving credit facility~~

On ~~May 31, 2017, we and certain~~February 24, 2022, the Company announced that its Board of ~~our domestic wholly-owned subsidiaries (the “Guarantors”) entered into~~Directors authorized a Credit Agreement (the “Credit Agreement”) with the lenders named therein. The Credit Agreement matures on May 31, 2022 and includes (a) revolving loan commitments in an aggregate principal amount ofthree-year share repurchase program to acquire up to ~~$450~~$200 million ~~(of which up~~of the Company's common stock. The Company may repurchase shares from time to ~~$25 million~~time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements. The timing and amounts of any purchases under the share repurchase program will be based on market conditions and other factors, including price. The repurchase program may be suspended or discontinued at any time and does not obligate the Company to repurchase any specific amount or number of shares. The Company funds the share repurchase program principally with cash from operations. During the three months ended March 31, 2024, the Company repurchased and subsequently retired 0.5 million shares for

Cars.com Inc.

Notes to the Consolidated Financial Statements (continued)

(Unaudited)

$9.5 million at an average price paid per share of $17.83. During the three months ended March 31, 2023, the Company repurchased and subsequently retired 0.4 million shares for $7.2 million at an average price paid per share of $17.38.

NOTE 8. Stock-Based Compensation

Restricted Share Units ("RSUs"). RSUs represent the right to receive unrestricted shares of the Company’s common stock at the time of vesting, subject to any restrictions as specified in the ~~form~~individual holder’s award agreement. RSUs are subject to graded vesting, generally ranging between one and three years and the fair value of ~~letters of credit at our request) and (b) term loans in an aggregate principal amount of $450 million. Interest~~the RSUs is equal to the Company's common stock price on the ~~borrowings under~~date of grant. RSU activity for the ~~Credit Agreement~~three months ended March 31, 2024 is ~~payable~~as follows (in thousands, except for weighted-average grant date fair value):


	Number of RSUs			Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2023 (1)		3,725		$	15.67
Granted		1,668			16.94
Vested and delivered		(1,283	)		15.70
Forfeited		(85	)		15.64
Outstanding as of March 31, 2024 (1)		4,025		$	16.19

(1)

Includes 358 RSUs that were vested, but not yet delivered.

Performance Share Units ("PSUs"). PSUs represent the right to receive unrestricted shares of the Company’s common stock at the time of vesting. The fair value of the PSUs is equal to the Company’s common stock price on the date of grant. Expense related to PSUs is recognized when the performance conditions are probable of being achieved. The percentage of PSUs that shall vest will range from 0% to 200% of the number of PSUs granted based on the ~~London Interbank Offered Rate or~~Company’s future performance related to certain revenue and adjusted earnings before interest, income taxes, depreciation and amortization targets over a three-year performance period. These PSUs are subject to cliff vesting after the ~~alternate base rate,~~end of the respective performance period. PSU activity for the three months ended March 31, 2024 is as ~~defined~~follows (in thousands, except for weighted-average grant date fair value):


	Number of PSUs		Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2023		512	$	15.66
Granted		282		16.94
Vested and delivered		—		—
Forfeited		—		—
Outstanding as of March 31, 2024		794	$	16.12

Stock Options. Stock options represent the right to purchase shares of the Company’s common stock at the time of vesting, subject to any restrictions as specified in the ~~Credit Agreement, in either case plus an applicable margin~~individual holder’s award agreement. Stock options are subject to three-year cliff vesting and ~~fees which, after~~expire 10 years from the ~~second full fiscal quarter following~~grant date. Stock option activity for the ~~closing~~three months ended March 31, 2024 is as follows (in thousands, except for weighted-average grant date ~~is based upon our total net leverage ratio. On May 31, 2017, we borrowed $675 million to fund a $650 million cash payment to TEGNA immediately prior~~fair value and weighted-average remaining contractual term):


	Number of Options		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		1,067	$	6.28		6.98	$	9,096
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Outstanding as of March 31, 2024		1,067	$	6.28		6.73	$	7,186
Exercisable as of March 31, 2024		804	$	5.27		6.33	$	6,631

Cars.com Inc.

Notes to the distribution, to pay fees and expenses related to the Separation and to fund working capital. The term loan requires quarterly amortization payments which commenced on September 30, 2017. In the third quarter of 2017, we made $5.6 million of term loan quarterly amortization payments and voluntarily paid down $45 million on the revolving loan. As of September 30, 2017, the Company had $624.4 million of debt outstanding and $270 million available under the revolving loan. Debt issuance costs were $5.7 million at September 30, 2017 and are being amortized over the term of the Credit Agreement.Consolidated Financial Statements (continued)

(Unaudited)

~~On October 31, 2017, we voluntarily paid down an additional $25 million on the revolving loan.~~

NOTE 9. Earnings Per Share

The obligations under the Credit Agreement are guaranteed by the Guarantors and the Company and the Guarantors secured their respective obligations under the Credit Agreement by granting liens in favor of the agent on substantially all of their assets. The terms of the Credit Agreement include representations and warranties, affirmative and negative covenants (including certain financial covenants) and events of default that are customary for credit facilities of this nature. A summary of the Credit Agreement can be found in our Registration Statement on Form 10.

~~NOTE 11~~

~~Earnings per share~~

Basic earnings per share is calculated by dividing ~~net~~Net income by the weighted-average number of shares of the Company's common stock outstanding. Diluted earnings per share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under ~~equity-based~~stock-based compensation plans, unless the inclusion of such shares would have an anti-dilutive impact.

As part of the AccuTrade acquisition, the Company may pay up to $15.0 million of the contingent consideration in shares of the Company's common stock at a future date. Those potential shares have been excluded from the computations below because they are contingently issuable shares, and the contingency to which the issuance relates was not met at the end of the reporting period. The ~~total shares outstanding on May 31, 2017, the date~~computation of ~~Separation, was 71.6 million. The total number of shares outstanding at that date is being utilized for the calculation of both basic and diluted earnings~~Earnings per share ~~for the three and nine months ended September 30, 2016,~~is as ~~no equity-based awards were outstanding prior to the Separation date.~~

~~The computations of our basic and diluted earnings per share are set forth below~~follows (in thousands, except per share ~~amounts)~~data):

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net income

$
20,988

$
51,845

$
72,685

$
127,564

Basic weighted-average shares outstanding

71,699

71,588

71,693

71,588

Effect of dilutive share-based compensation awards

68

—

70

—

Diluted weighted-average shares outstanding

71,767

71,588

71,763

71,588

Earnings per share, basic

$
0.29

$
0.72

$
1.01

$
1.78

Earnings per share, diluted

$
0.29

$
0.72

$
1.01

$
1.78


	Three Months Ended March 31,
	2024		2023
Net income	$	784	$	11,479
Basic weighted-average common shares outstanding		66,318		66,530
Effect of dilutive stock-based compensation awards (1)		973		1,217
Diluted weighted-average common shares outstanding		67,291		67,747
Earnings per share, basic	$	0.01	$	0.17
Earnings per share, diluted		0.01		0.17

(1)

There were 1,416 and 554 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended March 31, 2024 and 2023, respectively, as their inclusion would have had an anti-dilutive effect.

NOTE 1210. Income Taxes

~~Share-based~~

Deferred Tax Asset and Valuation Allowance. Prior to June 30, 2023, the Company concluded a valuation allowance was required against its deferred tax assets. In reaching this conclusion, in accordance with U.S. GAAP, the Company evaluated all available evidence, both positive and negative, and determined that the Company’s history of recent losses, primarily due to the goodwill and indefinite-lived intangible asset impairments, was significant negative evidence to require a valuation allowance. Therefore, the Company recorded a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized in future periods. At each reporting date, the Company evaluates the realizability of its deferred tax assets to determine whether a valuation allowance is warranted.

As of June 30, 2023, the Company evaluated all available evidence and determined that the Company's recent performance and future projections enabled the Company to release a significant portion of the Company's valuation allowance that was previously recorded. There was no change to the Company’s position or valuation allowance balance during the three months ended March 31, 2024.

Effective Tax Rate. The effective income tax rate, expressed by calculating the Income tax expense as a percentage of income before income tax, differed from the statutory federal income tax rate of 21%, primarily due to the tax benefits realized on stock-based compensation, ~~plans~~as well as tax credits, partially offset by the tax impact of non-deductible contingent consideration and earnouts.

NOTE 11. Subsequent Event

InOn May ~~2017,~~6, 2024, the Company amended and extended its existing Credit Agreement which resulted in a new $350.0 million Revolving Loan due in 2029. Upon closing, the Company borrowed $80.0 million on the new Revolving Loan to pay off and extinguish the existing Term Loan and Revolving Loan balances. Additionally, as part of this amendment, the SOFR floor was removed and the financial covenant leverage test changed to Net Senior Secured Leverage from Senior Secured Leverage, among other things, as defined in Exhibit 10.1, Fifth Amendment to Credit Agreement in Part II, Item 6., "Exhibits" of this Quarterly Report on Form 10-Q.

Note About Forward-Looking Statements

This report 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, global supply chain shortages, fluctuating fuel prices, rising interest rates, inflation and other factors we think are appropriate. Such forward-looking statements are based on estimates and assumptions that, while considered reasonable by the Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. While the Company 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 only view such comparisons as historical data. 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 report. Factors that might cause such differences include, but are not limited to:

•

Our business is subject to risks related to the larger automotive ecosystem, including consumer demand, direct-to-consumer sales models and other macroeconomic issues.

•

Market acceptance of and influence over certain of our products and services is concentrated with a limited number of automobile OEMs and dealership associations and we may not be able to maintain or grow these relationships.

•

Dealer closures or consolidation among dealers or OEMs could reduce demand for, and negatively affect the pricing of, our marketing and solutions offerings, thereby leading to decreased earnings.

•

Our business depends on our strong brand recognition, and any failure to maintain, protect and enhance our brands could hurt our ability to retain or expand our base of consumers, dealers and customers, and our ability to increase the frequency with which consumers, dealers and customers use our services.

•

Our increased operations in Canada involve risks that may differ from, or are in addition to, our domestic operational risks.

•

We rely in part on Internet search engines and mobile application stores to drive traffic to the Cars.com ~~Board~~properties and increase downloads of ~~Directors approved~~our mobile applications. If the ~~Omnibus Plan.~~ Cars.com properties and mobile applications fail to appear prominently in these search results, traffic to the Cars.com properties and mobile applications would decline and our business, results of operations or financial condition may be materially and adversely affected.

•

We rely on in-house content creation and development to drive organic traffic to the Cars.com properties and mobile applications.

•

Certain of our third-party service providers are highly regulated financial institutions, and the federal and state laws related to financial services could have a direct or indirect materially adverse effect on our business.

•

Our business may be affected by climate change, including physical risks and regulatory changes that may increase our operating costs and impact our ability to deliver services to our customers.

•

Expectations relating to environmental, social and governance considerations expose Cars Commerce to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business.

•

We participate in a highly competitive market, and pressure from existing and new competitors may materially and adversely affect our business, results of operations or financial condition.

•

We compete with other consumer automotive websites and mobile applications and other digital content providers for share of automotive-related digital display advertising spending and may be unable to maintain or grow our base of advertising customers or increase our revenue from existing customers.

•

If we do not adapt to automated buying strategies, our display advertising revenue could be adversely affected.

•

We may face difficulties in developing and launching new solution offerings or growing our complementary offerings that help automotive brands and dealers create enduring customer relationships.

•

Strategic acquisitions, investments and partnerships could pose various risks, including integration risks, increase our leverage, dilute existing stockholders and significantly impact our ability to expand our overall profitability.

•

The ~~Omnibus Plan provides~~value of our assets or operations may be diminished if our information technology systems fail to perform adequately.

•

Our business is dependent on keeping pace with advances in technology. If we are unable to keep pace with advances in technology, consumers and customers may stop using our services and our revenue may decrease.

•

We rely on third-party service providers for many aspects of our business, including inventory information and sales of our product through social media, and interruptions in the services or data they provide or any failure to maintain these relationships could harm our business.

•

We rely on technology systems’ availability and ability to prevent unauthorized access. If our security and resiliency measures fail to prevent incidents, it could result in damage to our reputation, incur costs and create liabilities.

•

We rely on third-party services to track and calculate certain of our key metrics, including unique visitors and traffic and any errors or interruptions in the services or data they provide or any failure to maintain these relationships could harm our business.

•

If the use of third-party cookies or other tracking technologies is rejected by Internet browsers or service providers or users, restricted, blocked, or subject to unfavorable laws or regulations, the amount of Internet user information would decrease, which may harm our business and operating results.

•

Our ability to attract and retain customers depends on our ability to collect and use data and develop tools to enable us to effectively deliver and accurately measure advertisements on our platform.

•

Uncertainty exists in the application and interpretation of various laws and regulations related to our business, including privacy laws. New privacy concerns or laws or regulations applicable to our business, or the expansion or interpretation of existing laws and regulations that apply to our business, could reduce the effectiveness of our offerings or subject us to use restrictions, licensing requirements, claims, judgments and remedies including sales and use taxes, other monetary liabilities and limitations on our business practices, and could increase administrative costs.

•

Misappropriation or infringement of our intellectual property and proprietary rights, enforcement actions to protect our intellectual property and claims from third parties relating to intellectual property could materially and adversely affect our business, results of operations or financial condition.

•

We have a limited history of operating with a virtual first workforce and the long-term impact on our financial results and business operations is uncertain.

•

Our ability to operate effectively could be impaired if we fail to attract and retain our key employees.

•

Adverse results from litigation or governmental investigations could impact our business practices and operating results.

•

The value of our existing goodwill and intangible assets may become impaired depending upon future operating results.

•

We cannot assure our stockholders that our share repurchase program will enhance long-term stockholder value and stock repurchases, if any, could increase the volatility of the price of our common stock and will diminish our cash reserves.

•

We do not expect to pay any cash dividends for the ~~granting~~foreseeable future.

•

Your percentage of ~~stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares~~ownership in the Company may be diluted in the future.

•

Certain provisions of our Amended and ~~other equity-based~~Restated Certificate of Incorporation, By-laws and ~~cash based awards~~Delaware law may discourage takeovers and limit our ability to use, acquire, or develop certain competing businesses.

•

Our Amended and Restated Certificate of ~~Cars.com.~~

~~Prior to~~Incorporation designates the Separation and distribution from TEGNA, certain Cars.com employees received TEGNA RSUs based on TEGNA common stock. Due to the spin-off from TEGNA, all outstanding TEGNA RSUs granted in 2016 or later held by certain Cars.com employees following the Separation or certain former employeesstate courts of the ~~Cars.com~~State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us and our directors and officers.

•

Our business ~~were converted into an award denominated~~could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our common stock.

•

Our debt agreements contain restrictions that may limit our flexibility in ~~shares~~operating our business.

•

Increases in interest rates could increase interest payable under our variable rate indebtedness.

•

Our debt levels could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, inhibit us from making beneficial acquisitions, adversely impact our ability to implement

our capital allocation strategy and prevent us from making debt service payments. In addition, changing or increasing interest rates, including the rates under our debt agreements, could adversely affect our business or financial condition.

For a detailed discussion of ~~Cars.com common stock,~~these 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, 2023, as filed with the ~~number~~SEC on February 22, 2024 and our other filings filed with the SEC. Forward-looking statements speak only as of ~~shares~~the date they are made, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statement. The forward-looking statements in this report are intended to be subject to the ~~award adjusted in a manner intended to preserve the aggregate intrinsic value of the original TEGNA RSUs award as measured immediately before and immediately after the Separation.~~

The Company granted approximately 13,000 and 265,000 RSUs during the three and nine months ended September 30, 2017, respectively, at a weighted-average share price of $26.55 and $25.85, respectively.

~~The table below presents information related to share-based compensation (in thousands):~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Share-based compensation expense

$
1,012

$
—

$
1,493

$
—

September 30, 2017

December 31, 2016

Unrecognized share-based compensation

$
11,054

$
—

~~The unrecognized share-based compensation is expected to be recognized over a weighted-average period of 3.1 years.~~

~~NOTE 13~~

~~Related party transactions~~

We are party to a commercial agreement with TEGNA, who was considered a related party through the Separation date of May 31, 2017. Related party revenue earned from this agreement was $0 million and $3.4 million for the three and nine months ended September 30, 2017, respectively, and $2.1 million and $6.3 million for the three and nine months ended September 30, 2016, respectively. The commercial agreement with TEGNA is still effective after the Separation.

Prior to the Separation and distribution, TEGNA utilized a centralized approach to cash management and the financing of its operations, providing funds to its subsidiaries as needed. These transactions were recorded in “TEGNA’s investment, net” when advanced. Accordingly, none of TEGNA’s cash and cash equivalents were assigned to us in TEGNA’s financial statements. Cash and cash equivalents in our Condensed Consolidated and Combined Balance Sheets represent cash held locally by us.

Equity in the Condensed Consolidated and Combined Balance Sheets represents the accumulated balance of transactions between us and TEGNA, our paid-in-capital, and TEGNA’s interest in our cumulative retained earnings, and are presented within “TEGNA’s investment, net.” The amounts comprising the accumulated balance of transactions between us and TEGNA and TEGNA affiliates include (i) the cumulative net assets attributed to us by TEGNA and TEGNA affiliates and (ii) the cumulative net advances to TEGNA representing our cumulative funds swept (net of fundingsafe harbor protection provided by ~~TEGNA and TEGNA affiliates to us) as part of~~ the ~~centralized cash management program. See Note 1 of this report for additional information.~~federal securities laws.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations

The following discussion and analysis of our business, financial condition, ~~and~~ results of operations and quantitative and qualitative disclosures should be read in conjunction with our ~~unaudited condensed consolidated~~Consolidated Financial Statements and ~~combined financial~~related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis also contains forward-looking statements and ~~related notes.~~should be read in conjunction with the disclosures and information contained in "Note About Forward-Looking Statements" in this Quarterly Report on Form 10-Q. The financial information discussed below and included elsewhere in this ~~report~~Quarterly Report on Form 10-Q may not necessarily reflect ~~what our financial condition, results of operations and cash flow would have been had we been a stand-alone company during the applicable periods presented or~~ what our financial condition, results of operations and cash flows may be in the ~~future~~.future.

References in this discussion and analysis to ~~“Cars.com,” the “Company,” “we,” “us,” “our”~~"we," "us," "our," "Cars Commerce" and similar terms refer to Cars.com Inc. and its subsidiaries, collectively, unless the context indicates otherwise.

Business Overview

Cars Commerce is an audience-driven technology company empowering the automotive industry. We simplify everything about car buying and selling with powerful products, solutions and AI-driven technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations. The Cars Commerce platform is organized around four industry-leading brands: our flagship automotive marketplace and dealer reputation site Cars.com, ~~is a leading online destination that helps car shoppers~~award-winning digital retail technology and ~~owners navigate every turn of car ownership. A pioneer in automotive classifieds,~~marketing services from Dealer Inspire, essential trade-in and appraisal technology from AccuTrade, and exclusive in-market media solutions from the Company has evolved into one of the largest digital automotive platforms, connecting consumers with local dealers across the country anytime, anywhere. Through trusted expert content, on-the-lot mobile app features, millions of new and used vehicle listings, a comprehensive set of research tools and the largest database of consumer reviews in the industry, Cars.com helps shoppers buy, sell and service their vehicles. Cars.com properties include DealerRater®, Auto.com™, PickupTrucks.com™ and NewCars.com®. The Company was founded in 1998 and is headquartered in Chicago, Illinois.Cars Commerce Media Network.

Overview of Results

~~The following table presents some of the Company’s key financial metrics for each of the periods indicated:~~


	Three Months Ended March 31,
(in thousands)	2024		2023
Revenue	$	180,176	$	167,068
Net income		784		11,479

Three Months Ended September 30,

Nine Months Ended September 30,

In thousands (except % amounts)

2017

2016

2017

2016

Revenues

$
159,899

$
162,295

$
469,697

$
471,434

Net income

20,988

51,845

72,685

127,564

Retail revenue as % of total revenue

74
%

74
%

74
%

73
%
Wholesale revenue as % of total revenue

26
%

26
%

26
%

27
%

~~Separation from TEGNA~~

On September 7, 2016, TEGNA Inc. (“TEGNA”), our former parent company, announced its plan to separate its digital automotive marketplace business, including Cars.com, LLC, the principal entity through which TEGNA’s digital automotive marketplace business has historically been operated, and DMR Holdings, Inc. (“DealerRater”), a leading automotive dealer review website, from its other digital businesses (the “Separation”). The Separation occurred on May 31, 2017 by means of a spin-off of a newly formed company named Cars.com Inc., which now owns the digital automotive marketplace business. We filed a Registration Statement on Form 10 relating to the Separation with the U.S. Securities and Exchange Commission (the “SEC”) on May 5, 2017, that was declared effective by the SEC on May 15, 2017 (the “Registration Statement on Form 10”). On May 31, 2017, we made a $650 million cash payment to TEGNA, and TEGNA completed the Separation through a pro rata distribution to its stockholders of all of the outstanding shares of our common stock. Our common stock began trading “regular way” on the New York Stock Exchange on June 1, 2017. Each holder of TEGNA common stock received one share of our common stock for every three shares of TEGNA common stock held on May 18, 2017, the record date for the distribution. TEGNA structured the distribution to be tax-free to its U.S. stockholders for U.S. federal income tax purposes.

~~Company History~~

On August 1, 2016, TEGNA purchased 100% of DealerRater, a leading automotive dealer review website. DealerRater was included in the distribution to Cars.com, Inc. as part of the Separation. The accompanying financial statements combine the activity for the acquired business from the date of acquisition and reflect the application of push down accounting. The accompanying interim financial statements are derived from the historical accounting records of TEGNA and present our financial position, results of operations and cash flows as of the periods presented as if we were a separate entity. These interim financial statements are presented in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial statements. Accordingly, the interim financial statements do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S. GAAP.

Since TEGNA’s acquisition of Cars.com, LLC in 2014, Cars.com, LLC has primarily operated as a standalone entity within TEGNA’s broader corporate organization. The historical financial statements include allocations of certain TEGNA corporate expenses. Such costs primarily include insurance and other general corporate overhead expenses and were allocated based on either the actual costs incurred, or Cars.com, LLC’s headcount relative to TEGNA’s consolidated headcount. The historical allocated corporate costs, through the Separation, were $0 million and $2.5 million during the three and nine months ended September 30, 2017, respectively, and $0.3 million and $0.5 million during the three and nine months ended September 30, 2016, respectively. We believe that such allocations are reasonable. These allocated expenses relate to the various services that have historically been provided to Cars.com, LLC by TEGNA. However, such expenses may not be indicative of the actual level of expense that would have been incurred by Cars.com, LLC if it had operated as an independent, publicly-traded company or the costs expected to be incurred in the future.

All of our internal intercompany accounts have been eliminated. All significant intercompany transactions between either (i) us and TEGNA or (ii) us and TEGNA affiliates have been included within the financial statements and are considered to be effectively settled through equity contributions or distributions at the time the transactions were recorded. The accumulated net effect of intercompany transactions between either (i) us and TEGNA or (ii) us and TEGNA affiliates are included in “TEGNA’s investment, net.” The total net effect of these intercompany transactions is reflected in the Condensed Consolidated and Combined Statements of Cash Flows as financing activities.

~~Factors Affecting Our Performance~~

Our continued success will depend in part on our ability to address and successfully manage challenges, both specific to our business and in the digital advertising marketplace generally. In the near term, we may experience compressed margins as a result of the transition from a wholly-owned subsidiary of TEGNA to an independent publicly traded company. In particular, the transition requires us to build out our internal infrastructure and support functions, through recruiting and hiring managers and employees to strengthen our legal, treasury, accounting, tax, investor relations and other similar functions. Similarly, we will face ongoing public company costs, including those related to an independent board of directors, compliance with regulatory and stock exchange requirements, and increased auditing and insurance fees. Further, the indebtedness we incur in connection with the Separation will reduce our free cash flow and may limit our ability to make strategic acquisitions. We expect to manage these incremental costs and the associated increased risk by focusing on operating efficiency and continued growth in our business to drive profit margins and generate cash flow.

On August 1, 2016, TEGNA purchased 100% of DealerRater, a leading automotive dealer review website. DealerRater was included in the distribution to Cars.com, Inc. as part of the Separation. Cars.com’s financial results for the three and nine months ended September 30, 2017 include three and nine months of DealerRater activity, respectively. Cars.com’s financial results for both the three and nine months ended September 30, 2016 includes two months of DealerRater activity.

Key Operating Metrics

We regularly review a number of key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make operating and strategic decisions. ~~The following table presents certain of these key metrics.~~Key Operating Metrics are as follows (in thousands, except for Dealer Customers, Monthly Average Revenue Per Dealer and percentages):

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Traffic (Visits)

101,698,000

102,723,000

311,612,000

321,577,000

Dealer Customers

21,307

21,743

21,307

21,743

Average Vehicle Listings

4,869,000

4,614,000

4,956,000

4,698,000


	Three Months Ended March 31,
	2024		2023		% Change
Traffic		171,438		164,782		4	%
Average Monthly Unique Visitors		28,332		28,478		(1	)%



	March 31, 2024		March 31, 2023		% Change			December 31, 2023		QoQ % Change
Dealer Customers		19,381		19,186		1	%		19,504		(1	)%
Monthly Average Revenue Per Dealer	$	2,505	$	2,386		5	%	$	2,523		(1	)%

Average Monthly Unique Visitors ("UVs") and Traffic ~~(Visits)~~("Visits").UVs and Traffic ~~(Visits) and our ability to generate traffic~~ are ~~key~~fundamental to our business. Tracking our traffic performance is a critical measure. Traffic to the Cars.com network of websites and mobile apps provides value to our advertisers in terms of audience, awareness, consideration and conversion. In addition to tracking traffic volume and sources, we monitor activity on our properties, allowing us to innovate and refine our consumer-facing offerings. Traffic is an internal metric representing the number of visits to Cars.com desktop and mobile properties (web browser and apps). Visits refer to the number of times visitors accessed Cars.com properties during the period, no matter how many visitors make up those visits. Traffic (Visits) numbers provide an indicationThey are indicative of our consumer ~~reach.~~reach and the level of engagement consumers have with our platform. Although our consumer ~~reach~~engagement does not directly result in revenue, we believe our ability to reach ~~diverse demographic audiences~~in-market car shoppers is attractive to our dealers, OEMs and national ~~advertisers.~~ customers and a primary reason they do business with us. We believe we have achieved audience scale as measured by UVs and Traffic, and we drive increased Traffic through a combination of continued growth in UVs and higher repeat visitation and engagement. Traffic increases can result in increased impressions, clicks and other connections that we can ultimately monetize through our products and services.

~~Dealer Customers~~

We define UVs in a given month as the number of distinct visitors that engage with our platform during that month. Visitors are identified when a user first visits an individual Cars.com property on an individual device/browser combination or installs one of our mobile apps on an individual device. If a visitor accesses more than one of our 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). ~~Our value to consumers tracks~~We measured UVs and Traffic via Adobe Analytics through the year ended December 31, 2023. As of January 1, 2024, we now measure UVs and Traffic via RudderStack, which we believe better aligns to our ~~ability~~product and technology platform and provides improved visibility into our UVs and Traffic. Prior period UVs and

Traffic information has not been recast, as it is impracticable to ~~showcase~~do so. These metrics do not include traffic to Dealer Inspire or D2C Media websites.

UVs declined modestly for the three months ended March 31, 2024. We believe that though consumer demand remains strong, there is less urgency to purchase vehicles given rising new vehicle inventory ~~of our dealer~~levels, continued elevated prices and ~~Original Equipment Manufacturer (“OEM”) customers. The larger~~higher interest rates. During the ~~advertiser base,~~three months ended March 31, 2024, Traffic increased 4%, primarily driven by the ~~more inventory~~shift to RudderStack and ~~options that are available for~~higher repeat visitation, partially offset by the reduced consumer urgency.

~~consumers to review.~~

Dealer Customers. Dealer Customers ~~represents the car~~represent dealerships using our 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. Beginning with the quarter ended December 31, 2023, this key operating metric includes D2C Media.

Dealer Customers increased 1% from March 31, 2023. The changein year-over-year dealer customers was primarily due to the inclusion of 950 D2C Media customers as of December 31, 2023, offset by the anticipated churn from our 2023 marketplace repackaging initiative and a pull back by digital dealers in previous quarters.

Dealer Customers decreased 1% from December 31, 2023. The changefrom December 31, 2023 is primarily due to higher cancellations of marketplace customers which we believe is influenced by higher flooring expense for our dealer customers as well as the impact of continued higher interest rates.

Monthly Average ~~Vehicle Listings.~~ ~~Our value to consumers tracks to~~Revenue Per Dealer ("ARPD"). We believe that our ability to ~~showcase~~grow ARPD is an indicator of the ~~inventory~~value proposition of our ~~dealer and OEM customers.~~platform. We define ARPD as Dealer revenue, excluding digital advertising services, during the period divided by the monthly average number of Dealer Customers during the same period. Beginning December 31, 2023, this key operating metric includes D2C Media.

For the three months ended March 31, 2024, ARPD increased 5% compared to the three months ended March 31, 2023. The ~~more vehicle listings that are available for consumers~~increase from March 31, 2023 was primarily driven by the marketplace repackaging initiative, including the adoption of higher tier packages, slightly offset by the inclusion of D2C Media customers, who have a lower ARPD.

For the three months ended March 31, 2024, ARPD decreased 1% compared to ~~review,~~ the ~~more traffic we attract and~~three months ended December 31, 2023. The decrease from December 31, 2023 was primarily driven by the ~~higher the consumer engagement. Average Vehicle Listings represents the daily average~~impact of ~~vehicles listed for sale on Cars.com properties. The daily average is calculated on a monthly basis and averaged~~one additional month of D2C Media for the ~~reporting period.~~three months ended March 31, 2024.

Factors Affecting Our Performance. Our business is impacted by changes in the larger automotive ecosystem, including supply and demand for new and used vehicle inventory, supply chain disruptions, semiconductor shortages, vehicle acquisition cost, vehicle retail prices, electric vehicle adoption, employee retention and changes related to automotive advertising, among other macroeconomic factors including inflation and interest rates. Changes in vehicle sales volumes in the United States and Canada also influence OEMs’ and dealerships’ willingness to increase investments in technology solutions and automotive marketplaces like Cars.com and could impact our pricing strategies and/or revenue mix.

Our long-term success will depend in part on our ability to continue to execute our platform strategy including continuing to create the most engaged in-market audience, growing our dealer customers, expanding our relationship with dealers through greater adoption of our platform, unlocking the cross-sell, transforming our OEM relationships and creating platform advantages. We believe our core strategic strengths, including our powerful family of brands, growing high-quality audience and suite of digital solutions for advertisers, including AI-based tools, will assist us as we navigate a rapidly changing automotive environment. Additionally, we are focused on equipping our customers with digital solutions to enable them to compete in an environment in which an increasing number of car-buying customers are shopping online. These solutions include online chat, vehicle financing, appraisal and valuation, instant guaranteed offer capabilities and logistics technology. The foundation of our continued success is the value we deliver to customers, and we believe that our large audience of in-market car shoppers and innovative solutions deliver significant value to our customers.

Results of Operations

~~Third Quarter 2017~~

Three Months Ended March 31, 2024 Compared to ~~Third Quarter 2016~~Three Months Ended March 31, 2023

~~The following table sets forth our selected statement~~


	Three Months Ended March 31,
(In thousands, except percentages)	2024			2023			$ Change			% Change
Revenue:
Dealer	$	161,815		$	149,843		$	11,972			8	%
OEM and National		15,307			13,543			1,764			13	%
Other		3,054			3,682			(628	)		(17	)%
Total revenue		180,176			167,068			13,108			8	%
Operating expenses:
Cost of revenue and operations		29,962			29,795			167			1	%
Product and technology		28,085			24,101			3,984			17	%
Marketing and sales		59,163			58,297			866			1	%
General and administrative		22,857			18,304			4,553			25	%
Depreciation and amortization		27,365			24,042			3,323			14	%
Total operating expenses		167,432			154,539			12,893			8	%
Operating income		12,744			12,529			215			2	%
Nonoperating expense:
Interest expense, net		(8,321	)		(8,244	)		(77	)		1	%
Other (expense) income, net		(3,603	)		8,239			(11,842	)	***%
Total nonoperating expense, net		(11,924	)		(5	)		(11,919	)	***%
Income before income taxes		820			12,524			(11,704	)		(93	)%
Income tax expense		36			1,045			(1,009	)		(97	)%
Net income	$	784		$	11,479		$	(10,695	)		(93	)%

*** Not meaningful

Dealer revenue. Dealer revenue is typically subscription-oriented and consists of ~~operations for each of the periods indicated:~~

Three Months Ended September 30,

Increase

In thousands (except % amounts)

2017

2016

(Decrease)

% Change

Revenues:

Direct revenue

$
82,504

$
84,651

$
(2,147
)

(3
)%
National advertising revenue

32,002

31,214

788

3
%
Other revenue

4,319

3,963

356

9
%
Retail revenue

118,825

119,828

(1,003
)

(1
)%
Wholesale revenue

41,074

42,467

(1,393
)

(3
)%
Total revenues

159,899

162,295

(2,396
)

(1
)%
Operating expenses:

Product support, technology and operations

36,598

32,469

4,129

13
%
Marketing and sales

50,733

48,670

2,063

4
%
General and administrative

11,606

7,738

3,868

50
%
Affiliate revenue share

2,121

2,162

(41
)

(2
)%
Amortization of intangible assets

19,467

19,088

379

2
%
Total operating expenses

120,525

110,127

10,398

9
%
Operating income

39,374

52,168

(12,794
)

(25
)%
Nonoperating (expense) income:

Interest (expense) income, net

(5,431
)

41

(5,472
)

***%

Other income, net

64

88

(24
)

(27
)%
Total nonoperating (expense) income, net

(5,367
)

129

(5,496
)

***%

Income before income taxes

34,007

52,297

(18,290
)

(35
)%
Provision for income taxes

13,019

452

12,567

***%

Net income

$
20,988

$
51,845

$
(30,857
)

(60
)%

~~***~~

~~Not meaningful~~

~~Revenues~~

~~Retail Revenue—Direct. Direct revenue represents online subscription~~marketplace, digital solutions, including website solutions and AccuTrade and media products sold ~~by Cars.com sales teams~~ to ~~our local automotive~~ dealer customers and includes DealerRater products which we acquired in August 2016. Automotive dealer customers purchase advertising packages to market their vehicle inventory and other aspects of the dealership, such as the service department. Directcustomers. Dealer revenue is our largest revenue stream, representing ~~52%~~90% of total revenue for the ~~third quarter of 2017. Direct~~three months ended March 31, 2024 and 2023. Dealer revenue ~~for the third quarter of 2017 decreased 3% as~~increased $12.0 million or 8% compared to the ~~year-ago period reflecting a decline~~three months ended March 31, 2023, primarily driven by the incremental revenue related to the D2C Media acquisition, growth in ~~average~~digital experience revenue, ~~per dealer, partially offset by an increase in average dealer count.~~including our website creation and hosting, and our marketplace repackaging initiative.

~~Retail Revenue—~~

OEM and National ~~Advertising~~.revenue. OEM and National ~~advertising~~ revenue largely consists of Cars Commerce Media Network products, including display advertising and other solutions sold to OEMs, advertising agencies, automotive dealer associations and ~~OEMs as well as leads sold to OEMs. Banner display ads are placed throughout the Cars.com websites~~auto adjacent businesses, including insurance companies. OEM and ~~apps.~~ National ~~advertising~~ revenue ~~represented 20%~~represents 8% of total revenue for the ~~third quarter of 2017.~~three months ended March 31, 2024 and 2023. OEM and National ~~advertising~~ revenue ~~for the third quarter of 2017 rose 3%~~increased $1.8 million or 13%, driven by OEM spending to raise consumer awareness, as ~~compared~~on-the lot inventory continues to ~~the year-ago period mainly due to increased lead volume sold to OEMs.~~increase.

~~Retail Revenue—~~

Other. revenue. Other revenue ~~includes~~primarily consists of revenue ~~from (1)~~related to vehicle listing data sold to ~~third-parties, (2) new-car leads sold to third-parties~~third parties and ~~(3) products such as Sell It Yourself/For Sale By Owner.~~pay per lead products. Other revenue ~~represented~~represents 2% of total revenue for

the ~~third~~three months ended March 31, 2024 and 2023. Other revenue decreased $0.6 million or 17%, primarily due to the expiration in the first quarter of ~~2017. Other~~2023 of the AccuTrade license agreement entered into as part of the acquisition.

Cost of revenue and operations. Cost of revenue and operations expense primarily consists of costs related to processing dealer vehicle inventory, product fulfillment, pay per lead products and compensation costs for the ~~third quarter~~product fulfillment and customer service teams. Cost of ~~2017 increased 9% as compared to the year-ago period mainly due to an increase in volume of data sales~~revenue and ~~higher lead volume sold to third-party lead resellers.~~

~~Wholesale Revenue. Wholesale revenue~~operations expense represents ~~the wholesale fees paid to Cars.com for online subscription products sold by affiliates. Wholesale revenue represented 26%~~17% and 18% of total revenue for the ~~third quarter~~three months ended March 31, 2024 and 2023, respectively. Cost of ~~2017. Wholesale revenues for the third quarter of 2017 decreased 3% as compared to the year-ago period reflecting a decline in average dealer count, partially offset by an increase in average~~ revenue ~~per dealer.~~

~~Expenses~~

~~Product support, technology~~ and operations. was essentially flat.

Product and technology.The product ~~support~~ team creates and manages consumer and ~~dealer-facing products~~customer-facing innovation and ~~editorial content (i.e. vehicle reviews, “Best of Awards”~~consumer and ~~video content pertinent to consumers). Primary costs include compensation and content license fees for third-party content such as vehicle specifications.~~customer experience. The technology team ~~builds consumer and dealer products~~develops and supports ~~the Cars.com website~~our products, websites and mobile apps. ~~Technology expenses include~~Product and technology expense includes compensation ~~staff augmentation~~costs, consulting and ~~outsourced development, hardware/~~contractor costs, hardware and software maintenance, software licenses ~~data center~~ and other infrastructure costs. ~~Operations includes product fulfillment, customer service, traffic acquisition costs related~~Product and technology expense represents 16% and 14% of total revenue for the three months ended March 31, 2024 and 2023, respectively. Product and technology expense increased, primarily due to ~~our pay-per-lead products~~higher compensation, including stock-based compensation, and third-party costs, such as inventory processing, photo/video maintenance and trackable phone numbers to support our customers. Product support, technology and operations expenses increased 13% in the third quarter of 2017 as compared to the year-ago period due to the higher volume of our pay-per-lead product sales and the acquisition of DealerRater in August 2016. Product support, technology and operations expense represents 23% of revenue for the third quarter of 2017 compared with 20% for the third quarter of 2016.including licenses.

Marketing and sales. Marketing and sales ~~expenses~~expense primarily ~~consist~~consists of traffic and lead acquisition costs, ~~(including search engine management~~performance and ~~other online marketing), TV advertising and production of ad creative, market research, sales~~brand marketing, trade events, ~~and~~ compensation costs and travel for ~~our~~the marketing, sales ~~support~~ and sales ~~teams. Marketing and sales expenses increased 4% in the third quarter of 2017~~support teams, as ~~compared~~well as bad debt expense related to the ~~year-ago period due to higher spend in brand marketing, partially offset by savings resulting from elimination of third-quarter sales meetings.~~allowance for doubtful accounts. Marketing and sales expense represents ~~32%~~33% and 35% of total revenue for the ~~third quarter~~three months ended March 31, 2024 and 2023, respectively. Marketing and sales expense slightly increased, primarily due to incremental costs related to the addition of ~~2017 compared with 30% for~~ the ~~third quarter of 2016.~~D2C Media business.

General and administrative. General and administrative ~~expenses~~expense primarily ~~consist~~consists of ~~salaries, benefits and incentive~~ compensation costs for ~~our~~certain of the executive, finance, legal, human resources, facilities and other administrative employees. In addition, ~~depreciation,~~general and administrative expense includes office space rent, legal, ~~and~~ accounting ~~services,~~and other professional services, ~~share-based compensation for all~~transaction-related costs, severance, transformation and other ~~eligible Company employees, transaction related~~exit costs ~~restructuring costs,~~and costs related to the ~~corporate headquarters office relocation and~~ write-off ~~and loss on assets are included in general and administrative expenses.~~of assets. General and administrative ~~expenses increased $3.9 million, or 50%, in the third quarter~~expense represents 13% and 11% of 2017 as compared to the year-ago period mainly due to $0.5 million in non-recurring items which is composed of $0.3 million related to the Separation from TEGNA and $0.2 million related to the corporate headquarters office relocation. In addition, $2.5 million of the increase in general and administrative costs is related to the incremental cost of being a public company, $0.6 million of the increase is due to share-based and deferred compensation awards and $0.4 million of the increase is due to additional depreciation expense in the third quarter of 2017 as compared to the year-ago period.

~~Amortization of intangibles~~. As a result of TEGNA’s acquisition of Cars.com, LLC in October 2014 and the acquisition of DealerRater in August 2016, we recorded amortizable intangible assets for customer relationships, acquired software, trade-names, non-compete agreements and a content library. This expense category reflects the amortization of these assets.

~~Interest (expense) income, net~~. During the three months ended September 30, 2017, interest expense was $5.5 million related to our new Credit Agreement (the “Credit Agreement”) entered into in connection with the Separation. The Company did not have any interest expensetotal revenue for the three months ended ~~September 30, 2016.~~

~~Provision for income taxes.~~ During the three months ended September 30, 2017, the tax provision was $13.0 million, or an effective rate of 38.3%. Effective with the Separation, the Company established a corporate legal entity structure that is subjectMarch 31, 2024 and 2023, respectively. General and administrative expense increased, primarily due to ~~U.S. corporate income tax on a stand-alone basis post-Separation. The Company recorded $0.5 million of income tax expense for the three months ended September 30, 2016. See Note 5~~incremental costs related to the ~~financial statements~~addition of the D2C Media business, including the compensation expense related to the D2C Media earnout. For information related to the D2C Media earnout, see Note 3 (Business Combinations) to the accompanying Consolidated Financial Statements included in Part I, Item 11., "Financial Statements" of this ~~report for~~Quarterly Report on Form 10-Q.

Depreciation and amortization. Depreciation and amortization expense increased, primarily due to depreciation and amortization on additional ~~information~~assets acquired and the amortization of intangible assets related to ~~income taxes.~~

~~First Nine Months 2017 Compared to First Nine Months 2016~~

~~The following table sets forth our selected statement of operations for each of~~ the ~~periods indicated:~~

Nine Months Ended September 30,

Increase

In thousands (except % amounts)

2017

2016

(Decrease)

Change

Revenues:

Direct revenue

$
249,412

$
248,579

$
833

0
%
National advertising revenue

85,379

83,221

2,158

3
%
Other revenue

11,989

11,213

776

7
%
Retail revenue

346,780

343,013

3,767

1
%
Wholesale revenue

122,917

128,421

(5,504
)

(4
)%
Total revenues

469,697

471,434

(1,737
)

(0
)%
Operating expenses:

Product support, technology and operations

106,479

98,381

8,098

8
%
Marketing and sales

160,246

160,275

(29
)

(0
)%
General and administrative

42,305

23,277

19,028

82
%
Affiliate revenue share

6,837

6,264

573

9
%
Amortization of intangible assets

58,402

55,416

2,986

5
%
Total operating expenses

374,269

343,613

30,656

9
%
Operating income

95,428

127,821

(32,393
)

(25
)%
Nonoperating (expense) income:

Interest (expense) income, net

(7,160
)

53

(7,213
)

***%

Other income, net

199

142

57

40
%
Total nonoperating (expense) income, net

(6,961
)

195

(7,156
)

***%

Income before income taxes

88,467

128,016

(39,549
)

(31
)%
Provision for income taxes

15,782

452

15,330

***%

Net income

$
72,685

$
127,564

$
(54,879
)

(43
)%

~~***~~

~~Not meaningful~~

~~Revenues~~

~~Retail Revenues—Direct. Direct revenue is our largest revenue stream, representing 53% of total revenue for the first nine months of 2017. Direct revenue for the nine months ended September 30, 2017 was flat~~D2C Media acquisition, partially offset by certain assets being fully depreciated and amortized as compared to the ~~year-ago period primarily reflecting an increase in average dealer count, partially offset by a decrease in average revenue per dealer.~~prior-year period.

~~Retail Revenues—National Advertising~~

Interest expense, net. ~~National advertising revenue represented 18% of total revenue for the first nine months of 2017. National advertising revenue for the nine months ended September 30, 2017 increased 3% as~~Interest expense, net was essentially flat compared to the ~~year-ago period mainly due to increased lead volume sold to OEMs.~~

~~Retail Revenues—Other~~. Other revenue represented 3% of total revenue for the first nine months of 2017. Other revenue for the nine months ended September 30, 2017 increased 7%, as compared to the year-ago period mainly due to increased lead volume sold to third-party lead resellers and higher volume of data sales.

~~Wholesale Revenues~~. Wholesale revenue represented 26% of total revenue for the first nine months of 2017. Wholesale revenues for the nine months ended September 30, 2017 decreased 4% as compared to the year-ago period reflecting a decline in average dealer count, partially offset by an increase in average revenue per dealer.

~~Expenses~~

~~Product support, technology and operations~~. Product support, technology and operations expenses increased 8% in the first nine months of 2017 as compared to the year-ago period due to the higher volume of our pay-per-lead product sales and the

acquisition of DealerRater in August 2016. Product support, technology and operations expense represents 23% of revenue for the nine months ended September 30, 2017 compared with 21% for the nine months ended September 30, 2016.

~~Marketing and sales~~. Marketing and sales expenses remained flat in the first nine months of 2017 as compared to the year-ago period driven by an increase in brand marketing, offset by a decline in sales expense. Marketing and sales expense represents 34% of revenue for the nine months ended September 30, 2017 compared with 34% for the nine months ended September 30, 2016.

~~General and administrative~~. General and administrative expenses increased $19 million, or 82%, in the first nine months of 2017 as compared to the year-ago period mainly due to $11.7 million in non-recurring items which is composed of $5 million related to the Separation from TEGNA, $3.6 million related to the corporate headquarters office relocation, $1.7 million related to costs associated with the separation of certain employees and $1.4 million due to the write-off or loss on certain assets disposed of in the first nine months of 2017. In addition, $5.3 million of the increase in general and administrative costs is related to the incremental cost of being a public company, $1.8 million of the increase is due to additional depreciation expense in the first nine months of 2017 as compared to the year-ago period primarily related to the acceleration of depreciation of assets in our former corporate headquarters location and $0.4 million of the increase is due to share-based and deferred compensation awards.

~~Affiliate revenue share. Affiliate revenue share costs increased 9% in the first nine months of 2017 as compared to the year-ago period primarily due to more dealer customers subject to revenue share.~~

~~Interest (expense) income, net. During the nine months ended September 30, 2017, interest expense was $7.3 million~~prior year period. For information related to our ~~new Credit Agreement entered into in connection with the Separation. The Company did not have any interest expense for the nine months ended September 30, 2016.~~

~~Provision for income taxes.~~ During the nine months ended September 30, 2017, the tax provision was $15.8 million, or an effective rate of 17.8%. Effective with the Separation, the Company established a corporate legal entity structure that is subject to U.S. corporate income tax on a stand-alone basis post-Separation. Tax expense for the period is based upon four months of Cars.com, LLC information and nine months of DealerRater information. The Company recorded $0.5 million of income tax expense for the nine months ended September 30, 2016. Seedebt, see Note 5 (Debt) to the ~~financial statements~~accompanying Consolidated Financial Statements included in Part I, Item 11., "Financial Statements" of this ~~report for additional~~Quarterly Report on Form 10-Q.

Other (expense) income, net. Other (expense) income, net changed primarily due to the change in the fair value of contingent consideration associated with the CreditIQ and AccuTrade acquisitions and the impact of foreign exchange rates. For more information related to ~~income taxes.~~

contingent consideration, see the Liquidity and Capital Resources

~~Prior~~ section below and Note 4 (Fair Value Measurements) to the ~~Separation, we had access~~accompanying Consolidated Financial Statements included in Part I, Item 1., "Financial Statements" of this Quarterly Report on Form 10-Q.

Income tax expense. The effective income tax rate differed from the statutory federal income tax rate of 21%, primarily due to ~~TEGNA’s program~~the tax benefits realized on stock-based compensation, as well as tax credits, partially offset by the tax impact of ~~maintaining bank revolving~~non-deductible contingent consideration and earnouts.

Liquidity and Capital Resources

Overview. Our primary sources of liquidity are cash flows from operations, available cash reserves and borrowing capacity available under our credit ~~availability as a component of our liquidity. Following the Separation, we will no longer participate in capital management with TEGNA and our ability to fund our future~~facilities. Our positive operating cash ~~needs will depend on our ongoing ability to generate and raise cash in the future.~~

~~Our operations have historically generated strong positive cash~~ flow, ~~which,~~ along with our ~~term loan and credit facility described below, we believe~~Revolving Loan, provide adequate liquidity to meet our ~~requirements,~~business needs for the next 12 months and beyond, including those for investments, debt service, share repurchases, contingent consideration payments and strategic acquisitions. However, our ability to maintain adequate liquidity in the future is dependent upon a number of factors, including our revenue, our ability to contain costs, including capital expenditures, and to collect accounts receivable and various other macroeconomic factors, many of which are beyond our direct control.

~~On May~~We may also seek to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our strategy. If we need to access the capital markets, there can be no assurance that financing may be available on attractive terms, if at all. As of March 31, ~~2017, we~~2024, Cash and ~~certain~~cash equivalents were $31.4 million and including our undrawn Revolving Loan, our total liquidity was $226.4 million.

Indebtedness. As of ~~our domestic wholly-owned subsidiaries (the “Guarantors”) entered into a Credit Agreement with~~March 31, 2024, the ~~lenders named therein. The Credit Agreement matures on May 31, 2022 and includes (a) revolving loan commitments in an~~outstanding aggregate principal amount of our indebtedness was $480.0 million, at an average interest rate of 6.6%, including $400.0 million of outstanding principal under the bonds, which carries an interest rate of 6.375%, $45.0 million of outstanding principal under the Term Loan which had an interest rate of 7.4% and $35.0 million of outstanding principal under the Revolving Loan which had an interest rate of 7.4%.

During the three months ended March 31, 2024, we made $10.0 million in mandatory Term Loan payments. As of March 31, 2024, $195.0 million was available to borrow under the Revolving Loan. Our borrowings are limited by our Senior Secured Leverage Ratio and Consolidated Interest Coverage Ratio, in addition to other factors. Calculated in accordance with our Credit Agreement, these ratios were 0.4x and 6.3x as of March 31, 2024, respectively. For further information, see Note 5 (Debt) to the accompanying Consolidated Financial Statements included in Part I, Item 1., "Financial Statements" of this Quarterly Report on Form 10-Q.

In conjunction with the credit agreement amendment discussed in Subsequent Event below, all outstanding debt as of March 31, 2024 is now classified as noncurrent on the Consolidated Balance Sheet.

Share Repurchase Program.On February 24, 2022, we announced that our Board of Directors authorized a three-year share repurchase program to acquire up to ~~$450~~$200.0 million ~~(of which up to $25 million~~of our common stock. The repurchase program may be suspended or discontinued at any time and does not obligate us to repurchase any specific amount or number of shares. We may repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements, and subject to our blackout periods. We intend to fund the ~~form~~share repurchase program principally with cash from operations. During the three months ended March 31, 2024, we repurchased and subsequently retired 0.5 million shares for $9.5 million at an average price paid per share of ~~letters~~$17.83.

Contingent Consideration and Earnout. The fair value as of ~~credit at~~March 31, 2024 for the ~~request~~contingent consideration related to the CreditIQ and AccuTrade acquisitions was $56.2 million.

Within the next twelve months, we expect to pay $19.8 million of the ~~Company)~~potential contingent consideration and ~~(b) term loans in~~D2C Media earnout amounts discussed below. During the three months ended March 31, 2024, we paid $7.8 million related to contingent consideration which reduced the corresponding liability.

The contingent consideration associated with the CreditIQ Acquisition is based on two achievement objectives, including an ~~aggregate principal~~earnings-related metric and lender market share. The actual amount ~~of $450 million. Interest on the borrowings under the Credit Agreement is payable~~to be paid will be based on the ~~London Interbank Offered Rate (“LIBOR”) or~~acquired business’ future performance to be attained over a three-year performance period through December 2024.

The contingent consideration associated with the ~~alternate base rate, as defined in the Credit Agreement, in either case plus an applicable margin and fees which, after the second full fiscal quarter following the closing date,~~AccuTrade acquisition is based ~~upon our total net leverage ratio. Borrowings under~~on achievement of an earnings-related metric. For the ~~Credit Agreement were used~~AccuTrade contingent consideration, we have the option to ~~fund~~pay consideration in cash or certain amounts in stock, which may result in a variable number of shares being issued in accordance with a calculation based on future share prices. The actual amount to be paid will be based on the ~~payment~~acquired business’ future performance to be attained over a three-year performance period through February 2025.

As part of the D2C Media Acquisition, we may be required to pay additional cash consideration to certain former owners who are now employees of Cars Commerce based on the achievement of a ~~cash payment~~revenue performance metric. The amount to ~~TEGNA immediately prior~~be paid will be determined by the acquired business’ future achievement of certain revenue-related financial targets through December 31, 2025 and expensed over each performance period. We may expense up to CAD$15.0 million (approximately USD$11.1 million as of March 31, 2024) associated with the ~~distribution, to pay fees~~remaining portion of the earnout for each of the years ending December 31, 2024 and ~~expenses~~2025.

For information related to the ~~Separation~~contingent consideration and ~~distribution~~earnout, see Note 3 (Business Combination) and ~~related transactions. The term loan requires quarterly amortization payments which commenced on September 30, 2017. In~~Note 4 (Fair Value Measurements) to the third quarter of 2017, we made $5.6 million of term loan quarterly amortization payments and voluntarily paid down $45 million on the revolving loan. As of September 30, 2017, the Company had $624.4 million of debt outstanding and $270 million available under the revolving loan. Debt issuance costs were $5.7 million at September 30, 2017 and are being amortized over the term of the Credit Agreement.

~~On October 31, 2017, we voluntarily paid down an additional $25 million on the revolving loan.~~

~~The obligations under the Credit Agreement are guaranteed by the Guarantors and the Company and the Guarantors secured their respective obligations under the Credit Agreement by granting liens~~accompanying Consolidated Financial Statements included in favor of the agent on substantially all of their assets. The terms of the Credit Agreement include representations and warranties, affirmative and negative covenants (including certain financial covenants) and events of default that are customary for credit facilitiesPart I, Item 1., "Financial Statements" of this ~~nature. A summary of the Credit Agreement can be found in our Registration Statement~~Quarterly Report on Form ~~10.~~

~~The tax matters agreement that TEGNA~~10-Q and ~~Cars.com entered into prior to the distribution included restrictions that may limit our ability to pursue certain strategic transactions or other transactions that we may believe to be~~Note 3 (Business Combinations) in the best interests of our stockholders or that might increase the value of our business. Under the tax matters agreement, for the two-year period following the distribution, Cars.com is prohibited, except in certain circumstances, from: entering into any transaction resulting in the acquisition of all or a portion of its stock or assets, whether by merger or otherwise; merging, consolidating or liquidating; issuing equity securities beyond certain thresholds; repurchasing its capital stock beyond certain thresholds; and ceasing to actively conduct its business. See Part II, Item ~~1A, “Risk Factors”~~8., "Financial Statements and Supplementary Data", of ~~this report~~our Annual Report on Form 10-K for ~~additional information.~~the year ended December 31, 2023 as filed with the SEC on February 22, 2024.

Cash Flows. Details of our cash flows are ~~included in the table below:~~as follows (in thousands):

Nine Months Ended September 30,

In thousands of dollars

2017

2016

Net cash provided by operating activities

$
147,196

$
140,436

Net cash used in investing activities

(27,631
)

(124,533
)
Net cash used in financing activities

(101,033
)

(11,283
)
Net change in cash and cash equivalents

$
18,532

$
4,620


	Three Months Ended March 31,
	2024			2023			Change
Net cash provided by (used in):
Operating activities	$	33,468		$	28,141		$	5,327
Investing activities		(6,013	)		(5,371	)		(642	)
Financing activities		(35,203	)		(35,647	)		444
Effect of exchange rate changes on Cash and cash equivalents		(87	)		—			(87	)
Net change in Cash and cash equivalents	$	(7,835	)	$	(12,877	)	$	5,042

~~Net cash flow from~~Operating Activities. Cash provided by operating activities ~~was $147.2 million in~~for the ~~first nine~~three months ~~of 2017 as compared~~ended March 31, 2024 increased primarily due to ~~the year-ago period of $140.4 million. This increase is due to~~Net income after non-cash adjustments, partially offset by changes in working capital primarily due to the timing of the settlement of costs in accrued liabilities and the collection of accounts receivable, as well as cash received from tenant improvement allowances. These increases were mostly offset by lower net income in the first nine months of 2017 as compared to the ~~year-ago period.~~three months ended March 31, 2023.

~~Net~~

Investing Activities. The increase in cash used in investing activities was ~~$27.6 million in~~primarily due to increased purchases of property and equipment.

Financing Activities. During the ~~first nine~~three months of 2017 as compared to the year-ago period of $124.5 million. 2017 investing activities were all capital expenditures, of which $19.8 million related to the corporate headquarters office relocation. Netended March 31, 2024, cash used in ~~investing activities in 2016 were primarily due to $114.9 million of cash used to acquire DealerRater.~~

~~Net cash used for~~ financing activities was ~~$101.0 million~~primarily related to debt repayments, repurchases of common stock, tax payments made in connection with the ~~first nine~~vesting of certain equity awards and payments of contingent consideration. During the three months ~~of 2017 as compared to the year-ago period of $11.3 million. Prior to the Separation,~~ended March 31, 2023, cash used ~~for~~in financing activities was related to ~~transactions~~debt repayments, repurchases of common stock and tax payments made in connection with ~~TEGNA. TEGNA utilized a centralized approach~~the vesting of certain equity awards. For information related to ~~cash management~~our debt, repurchases of common stock and contingent consideration, see Note 4 (Fair Value Measurements), Note 5 (Debt) and Note 7 (Stockholders' Equity) to the ~~financing~~accompanying Consolidated Financial Statements included in Part I, Item 1., "Financial Statements" of ~~its operations. Under~~ this ~~centralized cash management program, we provided funds~~Quarterly Report on Form 10-Q.

Commitments and Contingencies. For information related to ~~TEGNA~~commitments and ~~vice versa until~~contingencies, see Note 6 (Commitments and Contingencies) to the ~~distribution. Accordingly, the net cash flow between us and TEGNA is presented as a financing activity and resulted~~accompanying Consolidated Financial Statements included in ~~a $69.2 million cash outflow in 2017. In the third quarter~~Part I, Item 1., "Financial Statements" of 2017, we made $5.6 million of term loan quarterly amortization payments and voluntarily paid down $45 million of revolving loan commitments. In addition, during 2017 we made a $650 million cash transfer to TEGNA, and TEGNA completed the Separation through a pro rata distribution to its stockholders of all of the outstanding shares of our common stock. We borrowed $675 million to fund the cash transfer to TEGNA and provide additional working capital.this Quarterly Report on Form 10-Q.

Off-Balance Sheet ~~Arrangements~~

Arrangements. We do not have any material off-balance sheet arrangements.

~~Effects~~Subsequent Event. On May 6, 2024, we amended and extended our existing Credit Agreement which resulted in a new $350.0 million Revolving Loan due in 2029. Upon closing, we borrowed $80.0 million on the new Revolving Loan to pay off and extinguish the existing Term Loan and Revolving Loan balances. Additionally, as part of ~~Inflation~~this amendment, the SOFR floor was removed and ~~Changing Prices and Other Matters~~the financial covenant leverage test changed to Net Senior Secured Leverage from Senior Secured Leverage, among other things, as defined in Exhibit 10.1, Fifth Amendment to the Credit Agreement in Part II, Item 6., "Exhibits" of this Quarterly Report on Form 10-Q.

~~Our results of operations and financial condition have not been significantly affected by inflation.~~

Critical Accounting Policies. For information related to critical accounting policies, see "Critical Accounting Policies

~~See~~ and Estimates" in Part I,II, Item ~~1, “Management’s~~7., "Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations-Critical Accounting Policies and Estimates” in~~Operations", of our ~~Registration Statement~~Annual Report on Form ~~10.~~

10-K for the year ended December 31, 2023 as filed with the SEC on February 22, 2024 and see Note ~~About Forward-Looking Information~~

~~This report contains certain forward-looking statements regarding business strategies, market potential, future financial performance~~1 (Description of Business and other matters. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements.” The matters discussedSummary of Significant Accounting Policies) to the accompanying Consolidated Financial Statements included in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Cars.com management and is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed 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 Cars.com’s control.

~~Important factors that could cause actual results or events to differ materially from those anticipated include, among others, those set forth under~~ Part I, Item ~~1A, Risk Factors,” and Part I, Item 2, “Management’s Discussion and Analysis~~1., "Financial Statements" of ~~Financial Condition and Results of Operations,” and~~this Quarterly Report on Form 10-Q. During the ~~following:~~ three months ended March 31, 2024, there have been no changes to our critical accounting policies.

~~competitive pressures~~

Recent Accounting Pronouncements. There were no significant new accounting pronouncements applicable to us in the ~~markets in which Cars.com operates and innovation by Cars.com’s competitors;~~period.

~~increased closures or consolidation among automobile dealers or other events which may adversely affect business operations of major customers and/or depress their level of advertising;~~

~~macroeconomic trends and conditions;~~

~~economic downturns leading to a weak automotive market or a decrease in online and mobile advertising or consumer demand for new and used cars;~~

~~the ability of Cars.com to anticipate market needs and develop new and enhanced products and services to meet those needs, and its ability to successfully monetize them;~~

~~potential disruption or interruption of Cars.com’s operations due to accidents, extraordinary weather events, civil unrest, political events, terrorism or cyber security attacks;~~

~~an inability to realize benefits or synergies from acquisitions of new businesses or dispositions of existing businesses or to operate businesses effectively following acquisitions or divestitures;~~

~~the ability to attract and retain employees;~~

~~the ability to adequately protect intellectual property;~~

~~reliance on third-party service providers;~~

~~rapid technological changes and frequent new product introductions prevalent in the markets in which Cars.com competes;~~

volatility in financial and credit markets which could affect Cars.com’s ability to raise funds through debt or equity issuances and otherwise affect Cars.com’s ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;

~~reliance on the performance of counterparties to affiliation agreements to generate wholesale advertising revenues, and the potential underperformance of these counterparties;~~

~~the ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to Cars.com’s business;~~

~~adverse outcomes in proceedings with governmental authorities or administrative agencies;~~

~~any other than temporary decline in operating results and enterprise value that could lead to non-cash goodwill, other intangible asset, investment or property, plant and equipment impairment charges;~~

~~Cars.com’s expectations regarding the time during which it will be an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012;~~

~~Cars.com’s inability to engage in certain corporate transactions following the Separation;~~

~~any failure to realize expected benefits from the Separation; and~~

~~other uncertainties relating to general economic, political, business, industry, regulatory and market conditions.~~

There may be other factors, some of which are beyond Cars.com’s control, that may cause our actual results to differ materially from the forward-looking statements contained in this report. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. The forward-looking statements contained in this report speak only as of the date of this report. Except as may be required by law, Cars.com undertakes no obligation to modify or revise any forward-looking statement to reflect new information, events or circumstances occurring after the date of this report.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, see "Quantitative and Qualitative Disclosures About Market ~~risk represents~~Risk," in Part II, Item 7A., of our Annual Report on Form 10-K for the ~~risk of loss that may affect our financial position due to adverse changes in financial market prices and rates. We are exposed~~year ended December 31, 2023, as filed with the SEC on February 22, 2024. Our exposures to market ~~risks related to changes in interest rates.~~

~~Interest Rate Risk~~

A substantial portion of our debt facilities bear interest at floating rates, based on LIBOR or the alternate base rate, as defined in the Credit Agreement. Accordingly, we are exposed to fluctuations in interest rates. We manage our interest rate exposure by monitoring the effects of market changes in interest rates. Based on the value of our indebtedness at September 30, 2017, a 100-basis point increase in interest rates would result in a corresponding increase in our interest expense of $6.2 million annually.

~~Foreign Currency Exchange Risk~~

~~Historically, as our operations and sales have been primarily in the United States, we~~risk have not faced any significant foreign currency risk. With the acquisition of DealerRater in August 2016, Cars.com acquired a limited number of Canadian customers, some of which are billed in Canadian dollars. Any foreign currency exchange rate fluctuations have been and are anticipated to be immaterial. If we plan for additional international expansion, our risks associated with fluctuation in currency rates will become greater, and we will continue to reassess our approach to managing this risk.changed materially since December 31, 2023.

Item 4. Controls and Procedures

Disclosure Controls and ~~Procedures~~

Procedures. Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this ~~report.~~Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide ~~only~~ reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.~~To assist management, we have established an internal audit function to verify and monitor our internal controls and procedures.~~ ~~Our internal control system is supported by written policies and procedures, contains self-monitoring mechanisms and is audited by the internal audit function.~~

Changes in Internal Control Over Financial ~~Reporting~~

Reporting. During the period covered by this ~~report,~~Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in ~~Exchange Act~~ Rules 13a-15(f) and 15d-15(f) under the ~~Securities~~ Exchange ~~Act of 1934)~~Act).

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

For ~~a description of our material pending~~information relating to legal proceedings, ~~please refer to~~see Note ~~9, “Commitments, contingent liabilities~~6 (Commitments and ~~other matters” of the Notes~~Contingencies) to the ~~Unaudited Condensed~~accompanying Consolidated ~~and Combined~~ Financial Statements included in Part I, Item 11., "Financial Statements" of this ~~report, which is incorporated herein by reference.~~Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

Our business and the ownership of our common stock are subject to a number of risks and uncertainties which could materially affect our business, financial condition, results of operations and future results, including those described in Part I, Item ~~1A, “Risk Factors”~~1A., "Risk Factors" in our ~~Registration Statement~~Annual Report on Form ~~10, which could materially affect our business, results of operations, financial condition and future results.~~10-K for the year ended December 31, 2023 as filed with the SEC on February 22, 2024. There have been no material changes from the risk factors described in our ~~Registration Statement~~Annual Report on Form ~~10.~~10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities by Issuer

None.

Purchases of Equity Securities by Issuer

Our stock repurchase activity for the three months ended March 31, 2024 is as follows:


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (3)
January 1 through January 31, 2024		135,250	$	17.75		135,250	$	117,324
February 1 through February 29, 2024		184,730		18.30		184,730		113,944
March 1 through March 31, 2024		212,655		17.47		212,655		110,229
		532,635				532,635

(1)

The total number of shares purchased and subsequently retired and the average price paid per share reflects shares purchased pursuant to the share repurchase program. Our stock repurchases may occur through open market purchases or pursuant to a Rule 10b5-1 trading plan.

(2)

On February 24, 2022, the Company announced that its Board of Directors authorized a three-year share repurchase program to acquire up to $200 million of the Company's common stock. The Company may repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements, and subject to the Company's blackout periods. The timing and amounts of any purchases under the share repurchase program will be based on market conditions and other factors including price. The repurchase program may be suspended or discontinued at any time and does not obligate the Company to repurchase any dollar amount or particular amount of shares.

(3)

The amounts presented represent the remaining Board of Directors’ authorized value to be spent after each month's repurchases.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Insider Adoption or Termination of Trading Arrangements

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended March 31, 2024, as such terms are defined under Item 408(a) of Regulation S-K.

Item 6. Exhibits

Exhibit Index


Exhibit Number		Description
3.1**		Amended and Restated Certificate of Incorporation of Cars.com Inc. (incorporated by reference to Exhibit 3.1 of Cars.com Inc.’s Form 8-K filed on June 5, 2017, File No. 001-37869).
31.13.2*		Amended and Restated Bylaws of Cars.com Inc. (incorporated by reference to Exhibit 3.2 of Cars.com Inc.’s Form 8-K filed on October 23, 2018, File No. 001-37869).
10.1*		Fifth Amendment to Credit Agreement dated as of May 6, 2024 among Cars.com Inc., each lender from time to time party thereto, the other parties thereto and JPMorgan Chase Bank N.A., as administrative agent.
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934, as ~~Adopted Pursuant~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934, as ~~Adopted Pursuant~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance ~~Document.~~Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema ~~Document.~~With Embedded Linkbase Document
~~101.CAL~~104		Cover page formatted as Inline XBRL ~~Taxonomy Extension Calculation Linkbase Document.~~and contained in Exhibit 101
~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~
~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document.~~
~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

* Filed herewith.

** Previously filed.

*	~~Filed herewith.~~

~~SIGNATURES~~SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	~~Company Name~~Cars.com Inc.

Date: ~~November 8, 2017~~May 9, 2024	By:	/s/ T. Alex Vetter
		T. Alex Vetter
		~~President and~~ Chief Executive Officer

Date: ~~November 8, 2017~~May 9, 2024	By:	/s/ ~~Becky A. Sheehan~~Sonia Jain
		~~Becky A. Sheehan~~Sonia Jain
		Chief Financial Officer


Delaware	81-3693660
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	CARS	New York Stock Exchange


Large accelerated filer	☐☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
~~Non-accelerated filer~~	☒ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐

Emerging growth company	☒		☐


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	September 30, 2017			December 31, 2016
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	27,428		$	8,896
Accounts receivable, less allowance of $3,437 and $3,527, respectively		93,077			98,303
Prepaid expenses and other current assets		18,298			12,342
Total current assets		138,803			119,541
Property and equipment
Cost		61,783			37,190
Less accumulated depreciation		(20,908	)		(16,729	)
Net property and equipment		40,875			20,461
Intangible and other assets
Goodwill		788,107			788,107
Intangible assets, less accumulated amortization of $224,053 and $165,651, respectively		1,548,967			1,607,369
Investments and other assets		11,172			11,788
Total assets	$	2,527,924		$	2,547,266
Liabilities and equity
Current liabilities
Accounts payable	$	6,787		$	7,844
Current portion of long-term debt		21,162			—
Accrued liabilities		69,137			64,140
Total current liabilities		97,086			71,984
Noncurrent liabilities
Deferred incentive plans		1,677			3,913
Unfavorable contracts liability		25,185			44,085
Long-term debt		597,468			—
Deferred tax liability		282,504			8,325
Other noncurrent liabilities		17,532			1,674
Total noncurrent liabilities		924,366			57,997
Total liabilities		1,021,452			129,981
Commitments and contingent liabilities
Stockholders' equity
TEGNA's investment, net		—			2,417,285
Common Stock at par, $0.01 par value; authorized 300,000,000 shares; issued and outstanding 71,625,405 shares at September 30, 2017; no shares authorized, issued and outstanding at December 31, 2016		716			—
Additional paid-in capital		1,480,932			—
Retained earnings		24,824			—
Total stockholders' equity		1,506,472			2,417,285
Total liabilities and stockholders' equity	$	2,527,924		$	2,547,266

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Revenues:
Retail	$	118,825		$	119,828	$	346,780		$	343,013
Wholesale^(a)		41,074			42,467		122,917			128,421
Total		159,899			162,295		469,697			471,434
Operating expenses:
Product support, technology and operations		36,598			32,469		106,479			98,381
Marketing and sales		50,733			48,670		160,246			160,275
General and administrative		11,606			7,738		42,305			23,277
Affiliate revenue share		2,121			2,162		6,837			6,264
Amortization of intangible assets		19,467			19,088		58,402			55,416
Total		120,525			110,127		374,269			343,613
Operating income		39,374			52,168		95,428			127,821
Nonoperating (expense) income:
Interest (expense) income, net		(5,431	)		41		(7,160	)		53
Other income, net		64			88		199			142
Total nonoperating (expense) income, net		(5,367	)		129		(6,961	)		195
Income before income taxes		34,007			52,297		88,467			128,016
Provision for income taxes		13,019			452		15,782			452
Net income	$	20,988		$	51,845	$	72,685		$	127,564
Earnings per share, basic	$	0.29		$	0.72	$	1.01		$	1.78
Weighted-average common shares outstanding, basic		71,699			71,588		71,693			71,588
Earnings per share, diluted	$	0.29		$	0.72	$	1.01		$	1.78
Weighted-average common shares outstanding, diluted		71,767			71,588		71,763			71,588

	Gross		Accumulated Amortization			Net
September 30, 2017
Goodwill	$	788,107	$	—		$	788,107
Indefinite-lived intangibles:
Trade name		872,320		—			872,320
Amortizable intangible assets:
Customer relationships		814,240		(189,090	)		625,150
Acquired software		71,700		(31,069	)		40,631
Trade name		9,800		(953	)		8,847
Non-compete agreements		2,860		(1,716	)		1,144
Content library		2,100		(1,225	)		875
Total amortizable intangible assets		900,700		(224,053	)		676,647
Total	$	2,561,127	$	(224,053	)	$	2,337,074
December 31, 2016
Goodwill	$	788,107	$	—		$	788,107
Indefinite-lived intangibles:
Trade name		872,320		—			872,320
Amortizable intangible assets:
Customer relationships		814,240		(140,788	)		673,452
Acquired software		71,700		(22,798	)		48,902
Trade name		9,800		(340	)		9,460
Non-compete agreements		2,860		(1,287	)		1,573
Content library		2,100		(438	)		1,662
Total amortizable intangible assets		900,700		(165,651	)		735,049
Total	$	2,561,127	$	(165,651	)	$	2,395,476

	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands (except % amounts)	2017			2016			2017			2016
Revenues	$	159,899		$	162,295		$	469,697		$	471,434
Net income		20,988			51,845			72,685			127,564
Retail revenue as % of total revenue		74	%		74	%		74	%		73	%
Wholesale revenue as % of total revenue		26	%		26	%		26	%		27	%

	Three Months Ended September 30,					Increase
In thousands (except % amounts)	2017			2016		(Decrease)			% Change
Revenues:
Direct revenue	$	82,504		$	84,651	$	(2,147	)		(3	)%
National advertising revenue		32,002			31,214		788			3	%
Other revenue		4,319			3,963		356			9	%
Retail revenue		118,825			119,828		(1,003	)		(1	)%
Wholesale revenue		41,074			42,467		(1,393	)		(3	)%
Total revenues		159,899			162,295		(2,396	)		(1	)%
Operating expenses:
Product support, technology and operations		36,598			32,469		4,129			13	%
Marketing and sales		50,733			48,670		2,063			4	%
General and administrative		11,606			7,738		3,868			50	%
Affiliate revenue share		2,121			2,162		(41	)		(2	)%
Amortization of intangible assets		19,467			19,088		379			2	%
Total operating expenses		120,525			110,127		10,398			9	%
Operating income		39,374			52,168		(12,794	)		(25	)%
Nonoperating (expense) income:
Interest (expense) income, net		(5,431	)		41		(5,472	)	***%
Other income, net		64			88		(24	)		(27	)%
Total nonoperating (expense) income, net		(5,367	)		129		(5,496	)	***%
Income before income taxes		34,007			52,297		(18,290	)		(35	)%
Provision for income taxes		13,019			452		12,567		***%
Net income	$	20,988		$	51,845	$	(30,857	)		(60	)%

	Nine Months Ended September 30,
In thousands of dollars	2017			2016
Net cash provided by operating activities	$	147,196		$	140,436
Net cash used in investing activities		(27,631	)		(124,533	)
Net cash used in financing activities		(101,033	)		(11,283	)
Net change in cash and cash equivalents	$	18,532		$	4,620

Preliminary Acquisition-Date Fair Value
(in thousands)

Amortization Period
(in years)

Customer relationships

Acquired software

Trade name