Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 26, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Trading Symbol | CARS | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Cars.com Inc. | |
Entity Central Index Key | 0001683606 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-37869 | |
Entity Tax Identification Number | 81-3693660 | |
Entity Address, Address Line One | 300 S. Riverside Plaza | |
Entity Address, Address Line Two | Suite 1000 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 601-5000 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock Shares Outstanding | 66,229,411 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 49,085 | $ 31,715 |
Accounts receivable, net | 118,285 | 107,930 |
Prepaid expenses | 13,537 | 8,377 |
Other current assets | 8,429 | 605 |
Total current assets | 189,336 | 148,627 |
Property and equipment, net | 44,005 | 45,218 |
Goodwill | 102,856 | 102,856 |
Intangible assets, net | 649,074 | 707,088 |
Deferred tax assets, net | 97,490 | 48 |
Investments and other assets, net | 20,427 | 21,033 |
Total assets | 1,103,188 | 1,024,870 |
Current liabilities: | ||
Accounts payable | 18,703 | 18,230 |
Accrued compensation | 21,057 | 19,316 |
Current portion of long-term debt, net | 18,062 | 14,134 |
Other accrued liabilities | 73,143 | 54,332 |
Total current liabilities | 130,965 | 106,012 |
Noncurrent liabilities: | ||
Long-term debt, net | 429,679 | 458,249 |
Other noncurrent liabilities | 59,534 | 76,179 |
Total noncurrent liabilities | 489,213 | 534,428 |
Total liabilities | 620,178 | 640,440 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred Stock at par, $0.01 par value; 5,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 0 | 0 |
Common Stock at par, $0.01 par value; 300,000 shares authorized; 66,189 and 66,287 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 662 | 662 |
Additional paid-in capital | 1,500,428 | 1,511,944 |
Accumulated deficit | (1,018,080) | (1,128,176) |
Total stockholders' equity | 483,010 | 384,430 |
Total liabilities and stockholders' equity | $ 1,103,188 | $ 1,024,870 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 66,189,000 | 66,287,000 |
Common stock, shares outstanding | 66,189,000 | 66,287,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenue: | |||||
Total revenue | $ 174,333 | $ 164,595 | $ 509,577 | $ 485,675 | |
Operating expenses: | |||||
Cost of revenue and operations | 31,077 | 28,828 | 91,287 | 86,084 | |
Product and technology | 25,297 | 21,425 | 74,354 | 65,849 | |
Marketing and sales | 60,186 | 53,615 | 176,636 | 165,364 | |
General and administrative | 17,785 | 17,694 | 53,738 | 51,465 | |
Depreciation and amortization | 25,670 | 23,134 | 74,381 | 70,688 | |
Total operating expenses | 160,015 | 144,696 | 470,396 | 439,450 | |
Operating income | 14,318 | 19,899 | 39,181 | 46,225 | |
Nonoperating expense: | |||||
Interest expense, net | (7,777) | (8,501) | (24,171) | (26,878) | |
Other (expense) income, net | (3,902) | (13,387) | 1,204 | (13,233) | |
Total nonoperating expense, net | (11,679) | (21,888) | (22,967) | (40,111) | |
Income (loss) before income taxes | 2,639 | (1,989) | 16,214 | 6,114 | |
Income tax (benefit) expense | (1,852) | 952 | (93,882) | (830) | |
Net income (loss) | [1] | $ 4,491 | $ (2,941) | $ 110,096 | $ 6,944 |
Weighted-average common shares outstanding: | |||||
Basic | 66,773 | 67,680 | 66,820 | 68,775 | |
Diluted | 68,508 | 67,680 | 68,199 | 70,023 | |
Earnings (loss) per share: | |||||
Basic | [1] | $ 0.07 | $ (0.04) | $ 1.65 | $ 0.1 |
Diluted | [1] | $ 0.07 | $ (0.04) | $ 1.61 | $ 0.1 |
Dealer | |||||
Revenue: | |||||
Total revenue | $ 157,116 | $ 145,395 | $ 460,268 | $ 429,798 | |
OEM and National | |||||
Revenue: | |||||
Total revenue | 14,549 | 14,909 | 40,494 | 44,227 | |
Other | |||||
Revenue: | |||||
Total revenue | $ 2,668 | $ 4,291 | $ 8,815 | $ 11,650 | |
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | [1] | $ 4,491 | $ (2,941) | $ 110,096 | $ 6,944 |
Other comprehensive income (loss), net of tax: | |||||
Foreign currency translation adjustments | 0 | (717) | 0 | (717) | |
Reclassification of Accumulated other comprehensive loss on interest rate swap into Net income (loss) | 0 | 0 | 0 | 2,002 | |
Total other comprehensive income (loss) | 0 | (717) | 0 | 1,285 | |
Comprehensive income (loss) | $ 4,491 | $ (3,658) | $ 110,096 | $ 8,229 | |
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | ||
Balance at Dec. 31, 2021 | $ 398,020 | $ 692 | $ 1,544,712 | $ (1,145,382) | $ (2,002) | ||
Balance, Shares at Dec. 31, 2021 | 69,170,000 | ||||||
Net Income (Loss) | 4,340 | 4,340 | |||||
Other comprehensive income, net of tax | 1,202 | 1,202 | |||||
Repurchases of common stock(shares) | (338,000) | ||||||
Repurchases of common stock (value) | (5,000) | $ (3) | (4,997) | ||||
Shares issued in connection with stock-based compensation plans, net | (7,696) | $ 9 | (7,705) | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | 971,000 | ||||||
Stock-based compensation | 5,221 | 5,221 | |||||
Balance at Mar. 31, 2022 | 396,087 | $ 698 | 1,537,231 | (1,141,042) | (800) | ||
Balance, Shares at Mar. 31, 2022 | 69,803,000 | ||||||
Balance at Dec. 31, 2021 | 398,020 | $ 692 | 1,544,712 | (1,145,382) | (2,002) | ||
Balance, Shares at Dec. 31, 2021 | 69,170,000 | ||||||
Net Income (Loss) | [1] | 6,944 | |||||
Balance at Sep. 30, 2022 | 376,527 | $ 668 | 1,515,014 | (1,138,438) | (717) | ||
Balance, Shares at Sep. 30, 2022 | 66,850,000 | ||||||
Balance at Mar. 31, 2022 | 396,087 | $ 698 | 1,537,231 | (1,141,042) | (800) | ||
Balance, Shares at Mar. 31, 2022 | 69,803,000 | ||||||
Net Income (Loss) | 5,545 | 5,545 | |||||
Other comprehensive income, net of tax | 800 | 800 | |||||
Repurchases of common stock(shares) | (1,717,000) | ||||||
Repurchases of common stock (value) | (18,309) | $ (17) | (18,292) | ||||
Shares issued in connection with stock-based compensation plans, net | 858 | $ 1 | 857 | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | 158,000 | ||||||
Stock-based compensation | 6,407 | 6,407 | |||||
Balance at Jun. 30, 2022 | 391,388 | $ 682 | 1,526,203 | (1,135,497) | |||
Balance, Shares at Jun. 30, 2022 | 68,244,000 | ||||||
Net Income (Loss) | (2,941) | [1] | (2,941) | ||||
Other comprehensive income, net of tax | (717) | (717) | |||||
Repurchases of common stock(shares) | (1,433,000) | ||||||
Repurchases of common stock (value) | (16,678) | $ (14) | (16,664) | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | 39,000 | ||||||
Stock-based compensation | 5,475 | 5,475 | |||||
Balance at Sep. 30, 2022 | 376,527 | $ 668 | 1,515,014 | (1,138,438) | $ (717) | ||
Balance, Shares at Sep. 30, 2022 | 66,850,000 | ||||||
Balance at Dec. 31, 2022 | $ 384,430 | $ 662 | 1,511,944 | (1,128,176) | |||
Balance, Shares at Dec. 31, 2022 | 66,287,000 | 66,287,000 | |||||
Net Income (Loss) | $ 11,479 | 11,479 | |||||
Repurchases of common stock(shares) | (413,000) | ||||||
Repurchases of common stock (value) | (7,174) | $ (4) | (7,170) | ||||
Shares issued in connection with stock-based compensation plans, net | (9,797) | $ 10 | (9,807) | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | 976,000 | ||||||
Stock-based compensation | 6,049 | 6,049 | |||||
Balance at Mar. 31, 2023 | 384,987 | $ 668 | 1,501,016 | (1,116,697) | |||
Balance, Shares at Mar. 31, 2023 | 66,850,000 | ||||||
Balance at Dec. 31, 2022 | $ 384,430 | $ 662 | 1,511,944 | (1,128,176) | |||
Balance, Shares at Dec. 31, 2022 | 66,287,000 | 66,287,000 | |||||
Net Income (Loss) | [1] | $ 110,096 | |||||
Balance at Sep. 30, 2023 | $ 483,010 | $ 662 | 1,500,428 | (1,018,080) | |||
Balance, Shares at Sep. 30, 2023 | 66,189,000 | 66,189,000 | |||||
Balance at Mar. 31, 2023 | $ 384,987 | $ 668 | 1,501,016 | (1,116,697) | |||
Balance, Shares at Mar. 31, 2023 | 66,850,000 | ||||||
Net Income (Loss) | 94,126 | 94,126 | |||||
Repurchases of common stock(shares) | (532,000) | ||||||
Repurchases of common stock (value) | (9,992) | $ (5) | (9,987) | ||||
Shares issued in connection with stock-based compensation plans, net | 728 | $ 2 | 726 | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | 159,000 | ||||||
Stock-based compensation | 7,608 | 7,608 | |||||
Balance at Jun. 30, 2023 | 477,457 | $ 665 | 1,499,363 | (1,022,571) | |||
Balance, Shares at Jun. 30, 2023 | 66,477,000 | ||||||
Net Income (Loss) | 4,491 | [1] | 4,491 | ||||
Repurchases of common stock(shares) | (344,000) | ||||||
Repurchases of common stock (value) | (6,429) | $ (4) | (6,425) | ||||
Shares issued in connection with stock-based compensation plans, net | $ 1 | (1) | |||||
Shares issued in connection with stock-based compensation plans, net, Shares | 56,000 | ||||||
Stock-based compensation | 7,491 | 7,491 | |||||
Balance at Sep. 30, 2023 | $ 483,010 | $ 662 | $ 1,500,428 | $ (1,018,080) | |||
Balance, Shares at Sep. 30, 2023 | 66,189,000 | 66,189,000 | |||||
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Cash flows from operating activities: | |||
Net Income (Loss) | [1] | $ 110,096 | $ 6,944 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||
Depreciation | 16,367 | 11,833 | |
Amortization of intangible assets | 58,014 | 58,855 | |
Amortization of Accumulated other comprehensive loss on interest rate swap | 0 | 2,362 | |
Changes in fair value of contingent consideration | (1,280) | 13,360 | |
Stock-based compensation | 20,930 | 17,103 | |
Deferred income taxes | (98,821) | 676 | |
Provision for doubtful accounts | 2,117 | 1,047 | |
Amortization of debt issuance costs | 2,303 | 2,440 | |
Amortization of deferred revenue related to Accu-Trade Acquisition | (883) | (3,092) | |
Other, net | 640 | 279 | |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (12,472) | (7,532) | |
Prepaid expenses and other assets | (13,073) | (7,279) | |
Accounts payable | 473 | 2,882 | |
Accrued compensation | 1,741 | (7,885) | |
Other liabilities | 5,428 | (702) | |
Net cash provided by operating activities | 91,580 | 91,291 | |
Cash flows from investing activities: | |||
Payments for acquisitions, net of cash acquired | 0 | (64,770) | |
Capitalization of internally developed technology | (14,838) | (13,147) | |
Purchase of property and equipment | (737) | (1,252) | |
Net cash used in investing activities | (15,575) | (79,169) | |
Cash flows from financing activities: | |||
Proceeds from Revolving Loan borrowings | 0 | 45,000 | |
Payments of long-term debt | (26,250) | (17,500) | |
Payments for stock-based compensation plans, net | (9,069) | (6,838) | |
Repurchases of common stock | (23,316) | (39,933) | |
Net cash used in financing activities | (58,635) | (19,271) | |
Net increase (decrease) in Cash and cash equivalents | 17,370 | (7,149) | |
Cash and cash equivalents at beginning of period | 31,715 | 39,069 | |
Cash and cash equivalents at end of period | 49,085 | 31,920 | |
Supplemental cash flow information: | |||
Cash paid for income taxes | 17,107 | 741 | |
Cash paid for interest and swap | $ 16,806 | $ 19,041 | |
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |||||
Pay vs Performance Disclosure | ||||||||||||
Net Income (Loss) | $ 4,491 | [1] | $ 94,126 | $ 11,479 | $ (2,941) | [1] | $ 5,545 | $ 4,340 | $ 110,096 | [1] | $ 6,944 | [1] |
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | NOTE 1. Description of Business and Summary of Significant Accounting Policies Description of Business. Cars.com Inc. d/b/a Cars Commerce (the "Company" or "Cars Commerce") is an audience-driven technology company empowering the automotive industry. The Cars Commerce platform spans pretail, retail and post-sale activities, and is organized around the Company’s four industry-leading brands: Cars.com, Dealer Inspire, Accu-Trade, and Cars Commerce Media Network. Cars Commerce simplifies car buying and selling by eliminating complexity and increasing transparency throughout the local retail experience, where sales and service are best facilitated. Basis of Presentation. These accompanying unaudited interim consolidated financial statements (“Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, which are included in the Company's Annual Report on Form 10-K as filed with the SEC on February 23, 2023 (the “December 31, 2022 Financial Statements”). The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2022 Financial Statements. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company's financial position, results of operations, cash flows and changes in stockholders' equity as of the dates and for the periods indicated. The unaudited results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. 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. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 2. Revenue Revenue Summary . In the table below (in thousands), revenue is disaggregated by major products and services. The Company only has one reportable segment; therefore, further disaggregation is not applicable at this time. Three Months Ended September 30, Nine Months Ended September 30, Major products and services 2023 2022 2023 2022 Subscription advertising and digital solutions $ 142,627 $ 135,433 $ 419,896 $ 403,112 Display advertising 26,845 22,699 74,323 64,607 Pay per lead 2,269 2,381 6,780 6,927 Other 2,592 4,082 8,578 11,029 Total revenue $ 174,333 $ 164,595 $ 509,577 $ 485,675 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 3. Business Combinations Accu-Trade Acquisition. On March 1, 2022, the Company acquired certain of the assets and assumed certain liabilities of Accu-Trade, LLC; Accu-Trade Canada, LLC; Galves Market Data; and Headstart Logistics, LLC d/b/a MADE Logistics (collectively, “Accu-Trade”), which provides dealers with VIN-specific vehicle valuation and appraisal data, instant offer capabilities and logistics technology (the “Accu-Trade Acquisition”). The Company expensed as incurred total acquisition costs of $ 2.0 million, of which zero and $ 1.1 million were recorded during the nine months ended September 30, 2023 and 2022, respectively. These costs were recorded in General and administrative expenses in the Consolidated Statements of Income (Loss). Purchase Price Allocation. The 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 Accu-Trade Acquisition purchase price allocation is as follows (in thousands): Acquisition-date Cash consideration $ 64,663 Other consideration (1) 5,300 Contingent consideration (2) 23,936 Total purchase consideration $ 93,899 Assets acquired (3) $ 1,595 Identified intangible assets (4) 15,679 Total assets acquired 17,274 Total liabilities assumed (5) ( 235 ) Net identifiable assets 17,039 Goodwill 76,860 Total purchase consideration $ 93,899 (1) In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and was amortized into Other revenue on the Consolidated Statements of Income (Loss) over the one-year contract term. The revenue related to the non-cash consideration of $ 0.9 million and $ 3.1 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, respectively. As of the end of the first quarter of 2023, this agreement has ended. (2) As part of the Accu-Trade Acquisition, the Company may be required to pay additional consideration to the former owners based on the achievement of certain financial targets. The Company has the option to pay consideration in cash or certain amounts in stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, of which a maximum of $ 15.0 million could be in stock, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation. This amount represents the estimated fair value at the time of the acquisition. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). (3) Assets acquired primarily consist of accounts receivable. (4) Information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Weighted-Average Amortization Period Acquired software $ 12,926 5 Trade name 1,446 10 Customer relationships 1,307 7 Total $ 15,679 (5) Total liabilities assumed primarily consist of accounts payable. In connection with the Accu-Trade Acquisition, the Company recorded goodwill in the amount of $ 76.9 million, which is primarily attributable to sales growth from existing and future technology, product offerings, customers and the value of the acquired assembled workforce. All of the goodwill is considered deductible for income tax purposes. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 4. Fair Value Measurements The Company's liabilities measured at fair value on a recurring basis consisted of the following (in thousands): Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 54,591 $ — $ — $ 54,591 Total $ 54,591 $ — $ — $ 54,591 Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 55,871 $ — $ — $ 55,871 Total $ 55,871 $ — $ — $ 55,871 The roll-forward of the Level 3 contingent consideration from December 31, 2022 is as follows (in thousands): As of Fair Value (1) As of Contingent consideration $ 55,871 $ ( 1,280 ) $ 54,591 (1) Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of Income (Loss). The Company's contingent consideration obligations arise from arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of certain financial metrics or lender market share. The contingent consideration is classified on the Consolidated Balance Sheets based on expected payment dates. As of September 30, 2023, $ 23.0 million and $ 31.6 million were included within Other accrued liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets, respectively. As of December 31, 2022, $ 9.4 million and $ 46.5 million were included within Other accrued liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets. The Company reviews and reassesses the estimated fair value of contingent consideration liabilities at each reporting period and the updated fair value could differ materially from the initial estimates. The Company measures contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The fair value is measured based on a Monte Carlo simulation or a scenario-based method, depending on the earnout objective. The fair value measurement includes the following significant inputs: volatility and projected financial information. Significant increases or decreases to any of these inputs in isolation could result in a significantly higher or lower liability. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings. As of September 30, 2023, other than projected financial information, volatility was the only significant input and assumption in the contingent consideration valuations. The volatility input ranged from 26 % to 45 %. The Company expects to make payments on the contingent consideration in 2024 and 2025. For more information relating to contingent consideration, see Note 3 (Business Combinations ). |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 5. Debt As of September 30, 2023, the Company was in compliance with the covenants under its debt agreements. Term Loan. As of September 30, 2023, the outstanding principal amount under the Term Loan was $ 55.0 million and the interest rate in effect was 7.4 %. During the nine months ended September 30, 2023, the Company made $ 11.3 million in Term Loan payments. Revolving Loan. As of September 30, 2023, $ 230.0 million was available to borrow under the Revolving Loan. The Company paid down $ 15.0 million and had zero drawdowns on the Revolving Loan during the nine months ended September 30, 2023. 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 Company's Credit Agreement, and were 0.3 x and 5.8 x, respectively, as of September 30, 2023. Fourth Amendment to the Credit Agreement. In the 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 Credit Agreement to replace the 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. Senior Unsecured Notes. In October 2020, the Company issued $ 400.0 million aggregate principal amount of 6.375 % Senior Unsecured Notes due 2028. Interest on the notes is due semi-annually on May 1 and November 1. Fair Value. The Company's debt is classified as Level 2 in the fair value hierarchy and the fair value is measured based on comparable trading prices, ratings, sectors, coupons and maturities of similar instruments. The approximate fair value and related carrying value of the Company's outstanding indebtedness, as of September 30, 2023 and December 31, 2022 were as follows (in millions): September 30, 2023 December 31, 2022 Fair value $ 417.9 $ 435.4 Carrying value 455.0 481.3 |
Interest Rate Swap
Interest Rate Swap | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap | NOTE 6. Interest Rate Swap The interest rate on borrowings under the Company’s Term Loan and Revolving Loan is floating and, therefore, subject to fluctuations. In order to manage the risk associated with changes in interest rates on its borrowing under the Term Loan and Revolving Loan prior to the October 2020 refinancing, the Company entered into an interest rate swap (the “Swap”) effective December 31, 2018. Under the terms of the Swap, the Company was locked into a fixed rate of interest of 2.96 % plus an applicable margin, as defined in the Company’s Credit Agreement, on a notional amount of $ 300 million until May 31, 2022. Although the Swap was initially designated as a cash flow hedge of interest rate risk, hedge accounting was discontinued in June 2020. The loss on the hedge that was recorded in Accumulated other comprehensive loss at that time was amortized into Interest expense, net in the Consolidated Statements of Income (Loss) ratably over the remaining term of the Swap. The Swap expired on May 31, 2022 and, as such, is no longer recorded on the Consolidated Balance Sheets. During the nine months ended September 30, 2023 and 2022, zero and $ 2.4 million, respectively was reclassified from Accumulated other comprehensive loss and recorded in Interest expense, net. During the nine months ended September 30, 2022, the Company made payments of $ 3.3 million related to the Swap and $ 0.4 million was reclassified as a tax benefit from Accumulated other comprehensive loss into Income tax (benefit) expense on the Consolidated Statements of Income (Loss). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7. Commitments and Contingencies From time to time, the Company and its subsidiaries may become involved in actions, claims, suits or other legal or administrative proceedings arising in the ordinary course of business. The Company records a liability when it believes that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, at least quarterly, developments in its commitments and contingencies that could affect the amount of liability that has been previously accrued and 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. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 8. Stockholders' Equity 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. 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 nine months ended September 30, 2023, the Company repurchased and subsequently retired 1.3 million shares for $ 23.6 million at an average price paid per share of $ 18.30 . During the nine months ended September 30, 2022, the Company repurchased and subsequently retired 3.5 million shares for $ 40.0 million at an average price paid per share of $ 11.47 . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9. 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 individual holder’s award agreement. RSUs are subject to graded vesting, generally ranging between one and three years and the fair value of the RSUs is equal to the Company's common stock price on the date of grant. RSU activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2022 3,771 $ 12.88 Granted 1,823 16.69 Vested and delivered ( 1,667 ) 10.65 Forfeited ( 118 ) 15.61 Outstanding as of September 30, 2023 (1) 3,809 $ 15.60 (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 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 end of the respective performance period. PSU activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2022 245 $ 14.78 Granted 267 16.47 Vested and delivered — — Forfeited — — Outstanding as of September 30, 2023 512 $ 15.66 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 individual holder’s award agreement. Stock options are subject to three-year cliff vesting and expire 10 years from the grant date. Stock option activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value and weighted-average remaining contractual term): Number of Options Weighted-Average Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding as of December 31, 2022 1,067 $ 6.28 7.98 $ 4,296 Granted — — — — Exercised — — — — Forfeited — — — — Outstanding as of September 30, 2023 1,067 $ 6.28 7.23 $ 6,844 Exercisable as of September 30, 2023 513 $ 2.80 6.47 $ 5,882 There were no stock options granted during the nine months ended September 30, 2023. The fair value of the stock options granted during the nine months ended September 30, 2022 are estimated on the grant date using the Black-Scholes option pricing model, using the following assumptions: 2022 Risk-free interest rate 2.21 % Weighted-average volatility 65.22 % Dividend yield 0 % Expected years until exercise 6.5 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 10. Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing Net income (loss) by the weighted-average number of shares of the Company's common stock outstanding. Diluted earnings (loss) per share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans, unless the inclusion of such shares would have an anti-dilutive impact. As part of the Accu-Trade 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 computation of Earnings (loss) per share is as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) (1) $ 4,491 $ ( 2,941 ) $ 110,096 $ 6,944 Basic weighted-average common shares outstanding 66,773 67,680 66,820 68,775 Effect of dilutive stock-based compensation awards (2) 1,735 — 1,379 1,248 Diluted weighted-average common shares outstanding 68,508 67,680 68,199 70,023 Earnings (loss) per share, basic (1) $ 0.07 $ ( 0.04 ) $ 1.65 $ 0.10 Earnings (loss) per share, diluted (1) 0.07 ( 0.04 ) 1.61 0.10 (1) The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). (2) There were 282 and 3,581 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2023 and September 30, 2022, respectively, and 282 and 2,027 potential common shares excluded for the nine months ended September 30, 2023 and September 30, 2022, respectively, as their inclusion would have had an anti-dilutive effect. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11. Income Taxes 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. During the three months ended September 30, 2023, the Company also released a portion of the remaining valuation allowance. Effective Tax Rate. The effective income tax rate, expressed by calculating the Income tax (benefit) expense as a percentage of income before income tax, substantially differed from the statutory federal income tax rate of 21 %, primarily due to the release of a significant portion of the Company's valuation allowance of $ 103.3 million as of December 31, 2022. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 12. Subsequent Event On November 1, 2023, the Company acquired all of the outstanding equity of D2C Media Inc., a Canadian business that is a leading provider of website and digital advertising solutions in Canada. The Company paid CA$ 105 million in cash (USD $ 76 million) at closing, which was funded by a combination of cash on hand and borrowings under the Company’s existing revolving credit facility. In addition, the Company may pay up to an additional CA$ 35 million (approximately USD $ 25 million as of November 1, 2023) in performance based consideration based on the achievement of certain financial thresholds. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. These accompanying unaudited interim consolidated financial statements (“Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, which are included in the Company's Annual Report on Form 10-K as filed with the SEC on February 23, 2023 (the “December 31, 2022 Financial Statements”). The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2022 Financial Statements. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company's financial position, results of operations, cash flows and changes in stockholders' equity as of the dates and for the periods indicated. The unaudited results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. |
Use of Estimates | 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 | 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. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Sales Channel and Major Products and Services | Revenue Summary . In the table below (in thousands), revenue is disaggregated by major products and services. The Company only has one reportable segment; therefore, further disaggregation is not applicable at this time. Three Months Ended September 30, Nine Months Ended September 30, Major products and services 2023 2022 2023 2022 Subscription advertising and digital solutions $ 142,627 $ 135,433 $ 419,896 $ 403,112 Display advertising 26,845 22,699 74,323 64,607 Pay per lead 2,269 2,381 6,780 6,927 Other 2,592 4,082 8,578 11,029 Total revenue $ 174,333 $ 164,595 $ 509,577 $ 485,675 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Schedule of Accu-Trade Acquisition Purchase Price Allocation | Acquisition-date Cash consideration $ 64,663 Other consideration (1) 5,300 Contingent consideration (2) 23,936 Total purchase consideration $ 93,899 Assets acquired (3) $ 1,595 Identified intangible assets (4) 15,679 Total assets acquired 17,274 Total liabilities assumed (5) ( 235 ) Net identifiable assets 17,039 Goodwill 76,860 Total purchase consideration $ 93,899 (1) In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and was amortized into Other revenue on the Consolidated Statements of Income (Loss) over the one-year contract term. The revenue related to the non-cash consideration of $ 0.9 million and $ 3.1 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, respectively. As of the end of the first quarter of 2023, this agreement has ended. (2) As part of the Accu-Trade Acquisition, the Company may be required to pay additional consideration to the former owners based on the achievement of certain financial targets. The Company has the option to pay consideration in cash or certain amounts in stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, of which a maximum of $ 15.0 million could be in stock, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation. This amount represents the estimated fair value at the time of the acquisition. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). (3) Assets acquired primarily consist of accounts receivable. (4) Information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Weighted-Average Amortization Period Acquired software $ 12,926 5 Trade name 1,446 10 Customer relationships 1,307 7 Total $ 15,679 (5) Total liabilities assumed primarily consist of accounts payable. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Company's Liabilities Measured at Fair Value on a Recurring Basis | The Company's liabilities measured at fair value on a recurring basis consisted of the following (in thousands): Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 54,591 $ — $ — $ 54,591 Total $ 54,591 $ — $ — $ 54,591 Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 55,871 $ — $ — $ 55,871 Total $ 55,871 $ — $ — $ 55,871 |
Schedule Of Contingent Consideration | The roll-forward of the Level 3 contingent consideration from December 31, 2022 is as follows (in thousands): As of Fair Value (1) As of Contingent consideration $ 55,871 $ ( 1,280 ) $ 54,591 (1) Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of Income (Loss). |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Approximate Fair Value and Related Carrying Value of the Company's Outstanding Indebtedness | The approximate fair value and related carrying value of the Company's outstanding indebtedness, as of September 30, 2023 and December 31, 2022 were as follows (in millions): September 30, 2023 December 31, 2022 Fair value $ 417.9 $ 435.4 Carrying value 455.0 481.3 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of RSU Activity | RSU activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2022 3,771 $ 12.88 Granted 1,823 16.69 Vested and delivered ( 1,667 ) 10.65 Forfeited ( 118 ) 15.61 Outstanding as of September 30, 2023 (1) 3,809 $ 15.60 (1) Includes 358 RSUs that were vested, but not yet delivered. |
Summary of PSU Activity | PSU activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2022 245 $ 14.78 Granted 267 16.47 Vested and delivered — — Forfeited — — Outstanding as of September 30, 2023 512 $ 15.66 |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2023 is as follows (in thousands, except for weighted-average grant date fair value and weighted-average remaining contractual term): Number of Options Weighted-Average Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding as of December 31, 2022 1,067 $ 6.28 7.98 $ 4,296 Granted — — — — Exercised — — — — Forfeited — — — — Outstanding as of September 30, 2023 1,067 $ 6.28 7.23 $ 6,844 Exercisable as of September 30, 2023 513 $ 2.80 6.47 $ 5,882 |
Summary of Fair Value of Stock Options Granted are Estimated Using Black Scholes Option Pricing Model | The fair value of the stock options granted during the nine months ended September 30, 2022 are estimated on the grant date using the Black-Scholes option pricing model, using the following assumptions: 2022 Risk-free interest rate 2.21 % Weighted-average volatility 65.22 % Dividend yield 0 % Expected years until exercise 6.5 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Earnings (Loss) Per Share | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) (1) $ 4,491 $ ( 2,941 ) $ 110,096 $ 6,944 Basic weighted-average common shares outstanding 66,773 67,680 66,820 68,775 Effect of dilutive stock-based compensation awards (2) 1,735 — 1,379 1,248 Diluted weighted-average common shares outstanding 68,508 67,680 68,199 70,023 Earnings (loss) per share, basic (1) $ 0.07 $ ( 0.04 ) $ 1.65 $ 0.10 Earnings (loss) per share, diluted (1) 0.07 ( 0.04 ) 1.61 0.10 (1) The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). (2) There were 282 and 3,581 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2023 and September 30, 2022, respectively, and 282 and 2,027 potential common shares excluded for the nine months ended September 30, 2023 and September 30, 2022, respectively, as their inclusion would have had an anti-dilutive effect. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Percentage of ownership by the company | 100% |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - Segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Number of reportable segment | 1 | 1 | 1 | 1 |
Revenue - Summary of Revenue Di
Revenue - Summary of Revenue Disaggregated by Sales Channel and Major Products and Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 174,333 | $ 164,595 | $ 509,577 | $ 485,675 |
Subscription Advertising And Digital Solutions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 142,627 | 135,433 | 419,896 | 403,112 |
Display Advertising [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 26,845 | 22,699 | 74,323 | 64,607 |
Pay Per Lead [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,269 | 2,381 | 6,780 | 6,927 |
Other Major Product And Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 2,592 | $ 4,082 | $ 8,578 | $ 11,029 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 01, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 102,856 | $ 102,856 | ||
Accu-Trade Acquisition | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, transaction costs | 0 | $ 1,100 | $ 2,000 | |
Goodwill | $ 76,900 | $ 76,860 |
Business Combinations - Schedul
Business Combinations - Schedule of Accu-Trade Acquisition Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 01, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Identified intangible assets | $ 15,679 | |||
Goodwill | $ 102,856 | $ 102,856 | ||
Accu-Trade Acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 64,663 | |||
Other consideration | [1] | 5,300 | ||
Contingent consideration | [2] | 23,936 | ||
Total purchase consideration | 93,899 | |||
Assets acquired | [3] | 1,595 | ||
Identified intangible assets | [4] | 15,679 | ||
Total assets acquired | 17,274 | |||
Total liabilities assumed | [5] | (235) | ||
Net identifiable assets | 17,039 | |||
Goodwill | 76,860 | $ 76,900 | ||
Total consideration | $ 93,899 | |||
[1] In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and was amortized into Other revenue on the Consolidated Statements of Income (Loss) over the one-year contract term. The revenue related to the non-cash consideration of $ 0.9 million and $ 3.1 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, respectively. As of the end of the first quarter of 2023, this agreement has ended. As part of the Accu-Trade Acquisition, the Company may be required to pay additional consideration to the former owners based on the achievement of certain financial targets. The Company has the option to pay consideration in cash or certain amounts in stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, of which a maximum of $ 15.0 million could be in stock, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation. This amount represents the estimated fair value at the time of the acquisition. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). Assets acquired primarily consist of accounts receivable. Information regarding the identifiable intangible assets acquired is as follows: Total liabilities assumed primarily consist of accounts payable. |
Business Combinations - Sched_2
Business Combinations - Schedule of Accu-Trade Acquisition Purchase Price Allocation (Parenthetical) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Mar. 01, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Business Acquisition [Line Items] | ||||
Amortization of deferred revenue | $ 883 | $ 3,092 | ||
Identified intangible assets | $ 15,679 | |||
Acquired software | ||||
Business Acquisition [Line Items] | ||||
Identified intangible assets | $ 12,926 | |||
Weighted-average amortization period (in years) | 5 years | |||
Trade name | ||||
Business Acquisition [Line Items] | ||||
Identified intangible assets | $ 1,446 | |||
Weighted-average amortization period (in years) | 10 years | |||
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Identified intangible assets | $ 1,307 | |||
Weighted-average amortization period (in years) | 7 years | |||
Accu-Trade Acquisition | ||||
Business Acquisition [Line Items] | ||||
Preliminary fair value of the license | 6,500 | 6,500 | ||
Cash | $ 1,200 | |||
Amortization of deferred revenue | 900 | $ 3,100 | ||
Preliminary fair value difference | 5,300 | |||
License fee | $ 6,500 | |||
Revenue targets for contingent consideration performance period | 3 years | |||
Additional cash consideration required to be paid to former owners of acquired business | $ 63,000 | |||
Potentional contingent consideration to be paid in stock | $ 15,000 | |||
Identified intangible assets | [1] | $ 15,679 | ||
[1] Information regarding the identifiable intangible assets acquired is as follows: |
Fair Value Of Measurements - Sc
Fair Value Of Measurements - Schedule of Company's Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 54,591 | $ 55,871 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 54,591 | 55,871 |
Total | 54,591 | 55,871 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 54,591 | 55,871 |
Total | $ 54,591 | $ 55,871 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Of Contingent Consideration (Details) - Level 3 $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, Beginning | $ 55,871 | |
Contingent consideration fair value adjustment | (1,280) | [1] |
Contingent consideration, Ending | $ 54,591 | |
[1] Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of Income (Loss). |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Volatility | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration, volatility range | 26 | |
Volatility | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration, volatility range | 45 | |
Other Accrued Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 23 | $ 9.4 |
Other Noncurrent Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 31.6 | $ 46.5 |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Millions | 9 Months Ended | ||
Oct. 30, 2020 USD ($) | Sep. 30, 2023 USD ($) | Oct. 31, 2020 | |
Line Of Credit Facility [Line Items] | |||
Net Leverage Ratio | 5.8 | ||
Debt instrument, covenant description | 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 Company's Credit Agreement, and were 0.3x and 5.8x, respectively, as of September 30, 2023. | ||
6.375% Senior Unsecured Notes Due 2028 | |||
Line Of Credit Facility [Line Items] | |||
Proceeds from issuance initial public offering | $ 400 | ||
Interest rate on debt issued | 6.375% | ||
Debt instrument, payment terms | Interest on the notes is due semi-annually on May 1 and November 1. | ||
Term Loan | |||
Line Of Credit Facility [Line Items] | |||
Line of credit | $ 55 | ||
Effective interest rate | 7.40% | ||
Repayment of loan | $ 11.3 | ||
Revolving Credit Facility | |||
Line Of Credit Facility [Line Items] | |||
Senior secured leverages ratio | 0.3 | ||
Repayment of loan | $ 15 | ||
Amount available to borrow | $ 230 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Outstanding indebtedness, Carrying value | $ 429,679 | $ 458,249 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Outstanding indebtedness, Fair value | 417,900 | 435,400 |
Outstanding indebtedness, Carrying value | $ 455,000 | $ 481,300 |
Interest Rate Swap - Additional
Interest Rate Swap - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative [Line Items] | ||
Reclassified from accumulated other comprehensive (loss) into Interest expense, net | $ 0 | $ (2.4) |
Reclassified from accumulated other comprehensive (loss) into income tax (benefit) expense | (0.4) | |
Swap | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative [Line Items] | ||
Fixed rate of interest | 2.96% | |
Notional amount | $ 300 | |
Payments related to fair value | $ 3.3 |
Stockholders' Equity Additional
Stockholders' Equity Additional Information (Details) - Common Stock [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | ||
Feb. 24, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stockholders Equity [Line Items] | |||
Share repurchase program, duration | 3 years | ||
Stock Repurchase Program, Authorized Amount | $ 200 | ||
Share purchased and retired | 1.3 | 3.5 | |
Share purchased and retired, amount | $ 23.6 | $ 40 | |
Stock Purchased Average Price Per Share | $ 18.3 | $ 11.47 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Award vesting period | 3 years |
Options expiration period | 10 years |
RSUs | Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Award vesting period | 1 year |
RSUs | Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Award vesting period | 3 years |
PSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units performance period | 3 years |
PSUs | Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units vesting percentage | 0% |
PSUs | Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units vesting percentage | 200% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of RSU Activity (Details) - RSUs shares in Thousands | 9 Months Ended | |
Sep. 30, 2023 $ / shares shares | ||
Number of Share Units | ||
Share Units, Outstanding as of December 31, 2022 | shares | 3,771 | |
Share Units, Granted | shares | 1,823 | |
Share Units, Vested and Delivered | shares | (1,667) | |
Share Units, Forfeited | shares | (118) | |
Share Units, Outstanding as of September 30, 2023 | shares | 3,809 | [1] |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Outstanding as of December 31, 2022 | $ / shares | $ 12.88 | |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 16.69 | |
Weighted-Average Grant Date Fair Value, Vested and Delivered | $ / shares | 10.65 | |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 15.61 | |
Weighted-Average Grant Date Fair Value, Outstanding as of September 30, 2023 | $ / shares | $ 15.6 | [1] |
[1] Includes 358 RSUs that were vested, but not yet delivered. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Parenthetical) (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2023 shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs vested but not yet delivered | 358 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of PSU Activity (Details) - PSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Share Units | |
Share Units, Outstanding as of December 31, 2022 | shares | 245 |
Share Units, Granted | shares | 267 |
Share Units, Vested and Delivered | shares | 0 |
Share Units, Forfeited | shares | 0 |
Share Units, Outstanding as of September 30, 2023 | shares | 512 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Outstanding as of December 31, 2022 | $ / shares | $ 14.78 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 16.47 |
Weighted-Average Grant Date Fair Value, Vested and Delivered | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Outstanding as of September 30, 2023 | $ / shares | $ 15.66 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Share Units, Outstanding as of December 31,2022 | 1,067 | |
Share Units, Granted | 0 | |
Share Units, Exercised | 0 | |
Share Units, Forfeited | 0 | |
Share Units, Outstanding as of September 30, 2023 | 1,067 | 1,067 |
Share Units, Exercisable as of September 30, 2023 | 513 | |
Weighted- Average Grant Date Fair Value, Outstanding as of December 31, 2022 | $ 6.28 | |
Weighted- Average Grant Date Fair Value, Granted | 0 | |
Weighted Average Grant Date Fair Value, Exercised | 0 | |
Weighted- Average Grant Date Fair Value, Forfeited | 0 | |
Weighted- Average Grant Date Fair Value, Outstanding as of September 30, 2023 | 6.28 | $ 6.28 |
Weighted- Average Grant Date Fair Value, Exercisable as of September 30, 2023 | $ 2.8 | |
Weighted-Average Remaining Contractual Term, Outstanding | 7 years 2 months 23 days | 7 years 11 months 23 days |
Weighted-Average Remaining Contractual Term, Exercisable as of September 30, 2023 | 6 years 5 months 19 days | |
Aggregate Intrinsic Value, Outstanding | $ 6,844 | $ 4,296 |
Aggregate Intrinsic Value, Exercisable as of September 30, 2023 | $ 5,882 |
Stock-Based Compensation - Su_5
Stock-Based Compensation - Summary of Fair Value of Stock Options Granted are Estimated Using Black Scholes Option Pricing Model (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Risk-free interest rate | 2.21% |
Weighted-average volatility | 65.22% |
Dividend yield | 0% |
Expected years until exercise | 6 years 6 months |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Accu-Trade Acquisition | |
Business Acquisition [Line Items] | |
Potentional contingent consideration to be paid in stock | $ 15 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||||||
Earnings Per Share [Abstract] | |||||||||||||
Net income (loss) | $ 4,491 | [1] | $ 94,126 | $ 11,479 | $ (2,941) | [1] | $ 5,545 | $ 4,340 | $ 110,096 | [1] | $ 6,944 | [1] | |
Basic weighted-average common shares outstanding | 66,773 | 67,680 | 66,820 | 68,775 | |||||||||
Effect of dilutive stock-based compensation awards | [2] | 1,735 | 0 | 1,379 | 1,248 | ||||||||
Diluted weighted-average common shares outstanding | 68,508 | 67,680 | 68,199 | 70,023 | |||||||||
Earnings per share, basic | [1] | $ 0.07 | $ (0.04) | $ 1.65 | $ 0.1 | ||||||||
Earnings per share, diluted | [1] | $ 0.07 | $ (0.04) | $ 1.61 | $ 0.1 | ||||||||
[1] The increase in Net income (loss), and basic and diluted earnings (loss) per share for the nine months ended September 30, 2023 is primarily related to the release of a significant portion of the Company's valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments . For more information, see Note 11 (Income Taxes). There were 282 and 3,581 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2023 and September 30, 2022, respectively, and 282 and 2,027 potential common shares excluded for the nine months ended September 30, 2023 and September 30, 2022, respectively, as their inclusion would have had an anti-dilutive effect. |
Earnings Per Share - Computat_2
Earnings Per Share - Computation of Earnings (Loss) Per Share (Parenthetical) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Potential common shares excluded from diluted weighted-average shares outstanding | 282 | 3,581 | 282 | 2,027 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21% | |
Deferred Tax Assets, Valuation Allowance | $ 103.3 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Nov. 01, 2023 - Subsequent Event Member $ in Millions, $ in Millions | USD ($) | CAD ($) |
Subsequent Event [Line Items] | ||
Cash consideration | $ 76 | $ 105 |
Additional payment | $ 25 | $ 35 |