Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the CARS Fourth Quarter 2022 Earnings Conference Call. This call is being recorded, and a live webcast and the accompanying slides can be found at investor.cars.com. An archive of the webcast will be available at CARS’s Investor Relations website.

I'd now like to turn the call over to Robbin Moore-Randolph, Director of Investor Relations.

Robbin Moore-Randolph

Good morning, everyone, and thank you for joining us. welcome the to XXXX fourth pleasure call. conference my you CARS to quarter It's morning Vetter, are, CFO. this me With Alex CEO; Jain, Sonia

Alex finish then the quarter discussing detail, along financial will from XXXX greater with start fourth outlook. Q&A. our the We'll results business in and call will Sonia highlights year, with discuss the our full by

measures, Alex, statements Before I of which our draw forward-looking and your our description to be presentation. non-GAAP turn the can financial I'd call in found attention like over definition the to and to

the We presentation. risks will non-GAAP non-GAAP earnings our free financial Any to operating including be and most our today, and financial cash release EBITDA appendix measures subject press of in GAAP and and measures forward-looking adjusted margin, the tables be discussing comparable included expenses, these uncertainties. are certain adjusted can directly EBITDA, with of statements in the flow. Reconciliation measure adjusted found

included refer is our For available please which to our more IR in filings, on XX-K, statements. including website. in SEC the information, forward-looking no section to most filed update obligation assume those of risk our recently We the any factors

Now over call turn Alex. to I'll the

Alex Vetter

and XXXX our a welcome that many. fourth Thank you, lenders an help and XXXX in as full strong year environment consumers, challenged our Robbin, we and earnings year quarter business of to for marked call. growth dealers, OEMs

launch the strategic Accu-Trade advantage Our with recently the successful of platform integration investments strengthened CreditIQ our and demonstrated of most

of revenue for full XXXX, $XXX revenue delivering saw year-over-year. the As of a increase million an result, growth in accelerated quarter each we year, of X%

margin. at strong was XX% EBITDA adjusted $XXX million, also representing Our a

milestone to strong our Before XXXX the diving anniversary. want details XXth marks CARS I into recognize of the that performance, of significant

strength trusted business category-leading expanded are durability industry The listings and innovative audience and model solutions local this to and drive drives our We focus brand, through success incredibly and successfully combination our vehicle Our strategy. digital recognized platform our solutions. automotive what a on testament retail. empowering of sales is team, our our highly talented to in beyond profitability

the have their XXXX, and consumer later, over strategy. user-generated the Dealer reputation. enhanced local build our we Inspire, catalyst to Two on was acquiring the today, million we And expanded solution submitted years media solutions In DealerRater, our reviews, retailers acquisition online marketplace. for our enabling of XX content by which technology

targeted Social We sellers buying scale to and most robust leveraged the digital acquisitions period. solutions. today from developed and and recently, the OEM XXXX shoppers with through fastest-growing Cars.com media us we of our relationships and Social, shoppers connects revenue appraisal Cars in-market technology tech the for first-party the trading rich social websites for launched Also dealers further customers. solution. doubled to our video over than is solution first with X,XXX ad business Dealer significant It XXXX, And deliver in and to industry's platforms. which giving leverages and media capabilities Inspire Accu-Trade empowered we way CreditIQ during OEMs fuel, same data share X,XXX has vehicle gains and and deep audience financing more our Cars delivered in and the paves which of financing, with of advertising the the market

our These ARPD user XX% grow helped than visits with industry combined our the years. Our integrated to elevating strategic with while increase execution over marketplace the experience enhancements investments, team's last more helped by our expanded capabilities. focused footprint, five have double-digits platform and

disciplined we support and audience execute to strategy. billion. expanded $XX from investments quarter also platform engagement and brand, to will of our We're century to this our a proud billion TAM make has over we as of and differentiated progress, Importantly, $XX celebrate innovation, strong continue

and QX our Now, let's to back turn year full results.

XX of ranked monthly monthly average X% more For million one visitor of number the Cars.com to to all unique visitors, in prior delivered an we Due audience, continue and competitors. unique than XXXX, traffic Throughout efficiently compared generate tracking. was our year. of increase our brand we strong organic comScore's the an year, to

our our our visits of across increasingly of Dealer And our Inspire within benefit websites, for strength high The audience our The from intent combined powers Cars.com hundreds million to and our evidenced plan of demand the shoppers adoption visits platform. customers. this XX% year-over-year generate cycle growth and months dealers in millions activates six where by solutions purchase to XXX all growing of product virtuous annual ARPD. immediate with of

market throughout website prioritize Inspire cars with more finished XXX,XXX over from year, also XXX connected stores. win the websites adding more customers more efficiently. Accu-Trade is either at dealers sourcing used to Demand total year and the strong the digitally their or for physically vehicles We in than year-end. bringing during business appraised than continue dealers as our share X,XXX the customers and Dealer year, Accu-Trade website for We XXX to their

empowering X,XXX to Dealer our technology, on preapproved asset-light on instantly an enabler, focused while the generated retail to also retailers have Cars.com more last dealer, consumers more being cars in Unlike cars on remaining who XX,XXX Inspire and marketplace launching shoppers instant others, dealers for software-driven. of Leveraging launching offers directly and than Since valuation control proprietary than May. buy compete and remains CreditIQ, vehicle since get the we our with mile website. enabled

and enhancing of CreditIQ adoption with are soft addition functionality applications further the as payment. continues, consumer by Dealer of we Shop credit piloting

experience launched platform reports personalized dealership the We our to experience. enable the strengthen than satisfaction introduce entire drive dealers dealer that to retail solutions consumer scores on offers across compete identifying continue improvements which and price. We other report, and recently dimensions

retail Group but not experience. experience quick strengthen action store been identify of said areas customers that customer take insights Jack business to Weinzierl of marketplace make overall our review us We has the will snapshot of Automotive of only allows from Boardwalk retention, believe feedback positive. to improvement and dimensions on Early our the key improve experience better critical our consumer us a and these automotive experience our the gives better. also but

with the large dealer grew increase the value despite year As XXX from of dealers, operational we internal customers cancellations own We delivery, an digital to from XX,XXX a stemming result year. prior compared challenges. our customers, ended their strong of

to challenges and X% and this with production delayed and of headwind prior with the the by fourth the we quarter growth grew growth Even $XX quarter continued OEM each in in year. revenue model our year, launches, culminating ARPD compared the accelerated year-over-year

solutions profitability and working. our is strategy Traffic robust. remains scaling Our are strong, remain cash flow and free

mixed, and chain broader the is to other supply outlook due Looking ahead, industry factors. macroeconomic

pent-up approximately levels, production driven anticipated still and by releases. forecasted over improving X% year-over-year, consumer increase demand However, new vehicle sales are including XX car to new

to also car New the listings They daily are prior average in year. increased XX% our compared marketplace. rising

However, below pre-COVID they the XX% than remain period. more

car dynamics That these our and used said, posture dealers. the support outlook and OEM supply-demand margins Given remains of for to we in our national robust conservative some continue believe dynamics revenue. and healthy, we OEMs, remain market for cautious will

XX Over has of business essential, our years, proven regardless be to the the past inventory cycle.

industry better platform. the we the shifts are digital experience, transition to and our the this partner evolve retail connected compete as Additionally, optimal solutions with empower to to

our customers, summary, continues exceptional value and company strategy our In create for shareholders. to

industry and drive lead We growth our have opportunities tremendous profitable forward. to further

to quarter, outlook. full to like our year call fourth the I'd turn the over discuss and financial Sonia for XXXX to Now, results

Sonia?

Sonia Jain

million. strong quarter and grew a reached Alex. an Revenue driven to XXXX quarter compared $XXX revenue by year. X% $XXX year. increase you, was grew fourth revenue, year-over-year the Performance to Thank growth X% in also each prior dealer million, was of which

lower for quarter revenue inventory launches, as national reflects has continued X% and OEM been prior the the $XX which challenges was shortages. lower advertising well production delays impacted new by OEM than budget, year. as in Performance million, and model

expenses. to Moving

This $XXX to million the operating increase investments, we sales prior product were For $XXX On expenses million, total staff launches. new by year. support adjusted in X% increased to basis, was or primarily due to as our the $X operating compared higher added quarter, an expenses million year-over-year.

debt elevated debt low Travel higher, somewhat after latter XXXX. also expense the and bad and particularly were bad in entertainment

launch our expenses the and Additionally, product products. to development Accu-Trade CreditIQ and of due technology and acquisition, increased

Net the Adjusted the EBITDA products. $X.X than offset totaled partially the operating $XX support our to XX.X% the increased net compared million quarter to prior higher in of Adjusted the million, line margin the for sale new million, prior reflects prior year. growth, revenue across income the quarter with a year. and investment organization $X for for was in EBITDA EBITDA quarter $XX.X development, by our the million launch was loss of Adjusted and was year.

pulling or turn to with take the increase results, review of our I XX,XXX our trends. key and Before I'd operating to a quarter an ended XXX We metrics have to moment like customers, full would XX dealer year compared the on from but year, back X% virtual stemming not basis. digital customers struggling sequentially, locations. cancellation, for listings lower sequential to a dealers, from Dealer if prior the increased

earlier cancellations were impacted Recall, in by large digital we dealer. from XXXX another

cancellations Excluding X% our digital was growth these dealer year-over-year. from customer dealers,

of a dealer testament value as a additions customer with Looking was and quarter retention It XXXX. to at marketplace customer delivery our environment. continued in particularly in whole, lean highest quarter this we current pleased the rates, our are base strong is very the inventory fourth our

ARPD, solutions. fueled X,XXX our the $ other continued our in to driver $XX adoption quarter, by of of key increased fourth by revenue

XX% compared solid revenue year. mentioned, had grew Inspire Alex prior As another Dealer quarter, and the to

focused to on website customers, package continue While we grow increasingly growing to value and expect also we are ARPD. our

is audience Underpinning and the unique platform and engaged our of our high-quality ability for strength consistently dealers an traffic generate to OEMs.

to year. quarter, visits, delivered we For had unique compared visitors average as million XXX prior monthly XX million the and both X% increasing the

expenses technology our $XXX which Adjusted sales were Total million was compared $XX higher and to dealer to million, moving full higher compared totaled last and last compared the year. reflects performance. expenses operating million Revenue the were both X% million product to costs. year, year. to $XXX for were and year prior marketing revenue $XXX million Now, operating year and XXXX up $XXX

costs increased our we sales compensation as new expense support Our to staff product launches. higher added due to

made with marketing additional events, our like had products and customer investments new expenses the of associated return incurred awareness we also higher We in-person raise of to NADA. as costs

support Our entire marketing platform. investments our

earlier, first-party mentioned solutions. Social. data Alex like supports FUEL As solutions also Car and audience media our investments our strengthen our digital These

cash customers investment is offers. increasingly instant and qualified our in the applications reviews, in a Consumers reading It investment lead well Cars.com who Cars.com an as an completing credit in and writing are marketplace. dealer not becoming An visit marketing platform. for investment just is requesting our as more

lower acquisition, expenses and and Product increased, the by support and and primarily Accu-Trade of also These offset increases launch amortization. depreciation technology products. to partially were development CreditIQ

Moving to cash flow.

leveraged all debt. down paying acquire make our and acquisitions the while During generation to shares, cash internal integrate our year, and value-accretive investments, we strong repurchase

compared lower to the $XXX provided cash prior to decline carry free cash activities due million flow by in related $X year. and of tax operating This was the year primarily one-time of million XXXX received first Net back a the NOL. million million, the $XXX to was income totaled refund for quarter $XX

we improved fixed Of X million squarely X.X range senior our at $XXX the our to XX% total in outstanding back notes With associated debt, XXXX. all times. we acquisition of During to are total XX, times repaid million maturing to of our compared target X.X debt to of Accu-Trade our XXXX, pay $XXX now rate of and the debt debt leverage X.XX September the year, as down, million $XX nearly X.X we're of and times, within paying our bringing with net or is year-end. this,

capital enabled generation allocation to balanced us cash a Our strategy, flow which capital shareholders. includes to strong returning execute

of repurchased shares year. we million XXXX, of outstanding at X% the the shares start total or During X.X

which of two authorization, repurchase our December we million left. As on $XXX XX, has years have remaining share XXXX,

$XXX available with on $XX and revolver our Overall, strong our million liquidity cash hand. million on of remains

in of trust that You can judicious be continue the to we capital. our will deployment

turning guidance. our Now to

year Our a of to give us foundation growth. diversified solid another revenue deliver streams profitable

deliver to revenue $XXX revenue $XXX to million We or first to quarter growth X%. million of of X% year-over-year expect

quarter advertising a relative continued year. revenue Our lower of by digital the to first quarter pullback fourth OEM outlook spend national last assumes in dealers and

continued by to chain signals supply ahead, across continues the driven Looking there challenges. industry, be automotive largely mixed

near-term term. is in range This in calls which less environment, for While X%. full a longer to growth, our wider visibility is guidance, X% year-over-year certainty of we this but have solid there current year reflected with revenue

revenue of Accu-Trade reflects continued of dealer the digital in by in Our full and acquisition dealer year growth continued guidance softness. the lapping expectation March the strong tempered

inventory We also year, impacts advertising persist our the spend. throughout will expect levels lower which customers'

average the in down to of marketplace increases recent our despite listing of Recall, the on million vehicle remained $X.X compared listings XX% first daily as XXXX. Overall, quarter

Our constrained higher growth a expectations would be less inventory in environment.

our of strong a and have profile, approach and disciplined incremental margin maintained EBITDA we consistent that pleased adjusted investments. to I'm reflective allocation capital

strong new approach Our typically ROI-driven even us like which to enabled upfront we to require and maintain prior as CreditIQ, launch. has Accu-Trade investment products scale margins to investing

backdrop, With to again and expect be we the margins quarter margins over a And to approaching adjusted with course that exit of XX%. as for anticipate first quarter year once fourth EBITDA and to the the XX% margin the we anticipate improve between XX%. XXXX of

make and this in the the due of Recall, sales seasonally quarter year events investments in-person we to in and is exception. typically timing no marketing higher industry first

yet Capital expenditures and to of the related which year are approximately deliver period. expected the another free $XX XXXX of strong range we Still, million and taxes we million, and XXXX for cash includes million, expect $XX year cash to between to payments $XX expect flow. both

us innovate of the reflects delivering the growth. profitable financial better performance our making We and In value-accretive entered while integrated to flexibility continue customers, and value and summary, platform, investments create which XXXX for long-term enables solid to with shareholders. our consumers serve strength

With the call Q&A. that, open like to I'd for Operator? up

Operator

Thank with you. D.A. [Operator first Davidson. Instructions] Tom today question And will White come our from

Tom White

about are you for and engagement vehicles. in customer the kind pressure you for are one I if holding interest the of Sonia Alex hoping could maybe Two, guidance. could, demand Nice maybe for How the I guys seeing taking telling what for you and the of was user my on face rising Alex, inflationary Thanks end up, the trends that maybe Great. characterize year, just guys. kind of rates. of, that's underlying question. one

healthy, are growth uniques quarter guys and suggest X% just is the what in know, you pretty would customer You in but demand curious traffic seeing?

Thank And drive X% in to on if is improve the of you guidance, from quarter, X% year to revenue the of inventories slowdown the X% only levels the next X% quarters? kind year. would then, you. spend a help what kind business of over over the current the Sonia to growth Can for OEM the us and likely for balance just first few understand

Alex Vetter

positivity judicious Tom. organic Look, of have we to with is and We're Sure, allowing for regarding joining seeing Thanks into on demand be user lot persistent continue media. our the trends trends, side, more us us. a which XXXX. experienced those paid

see we market, strong, particularly the side. so And car healthy on used a

think I a are interest. of demand lot also pent-up we seeing for EV

of market, climb those to with of importantly, search models. the lot consumer to more products and Our coming introduction traffic in continues makes a new but interest

we're And so strong seeing to and we feel lead delivery really flow value customers. and front-footed, our

year. through in the as hope We that importantly, and have their And persists inventory wide limited they geographically users can the drives are with last first half available just of year vehicles it they to this saw to search reside on backyard. don't naturally supply, because we marketplaces that

year our And strong into so partly contributed I that's to last forward think trends year. traffic and this what carry

Sonia Jain

picking Yes. up And maybe guidance then on the question.

outlook QX about growth. are with X% excited X% really our We to

just lap levels more year right? our an for challenging to even be but it increasing, the when the at end this look visibility take in way Yes, environment. or opening to and of further inventory tends current As does those XXXX, compare have highlight we build our of we little and time of of off longer-term back been to have back landed a QX base, in I that the in subscription go again, XXXX a to extremely even to going low subscriptions. tried sort of you remarks, So to long business, back where to bit benefit

end of in reflected So, really range. what's I the the think that's low

we growth our expecting back take continued strong full dealer look the coming look that a from -- But if revenue. to overall, year, get to at

things that maybe sort out are temper there of a that bit. call two little I I would think

figure aware, a I there think, number our out softness pullback works their they own dealers out business, as who you're of seen what them. for in are best been experiencing We've on model digital there, some side. have as

QX I last think of that started in about year. talking we

March, is and our have Accu-Trade in factors as those continue are impact experience. digital dealers guidance of derisk year-over-year And think effectively we're to our to you beginning about then the going the trying to also in little an to bit so which a And acquisition likely is lapping challenges growth. for

to as mentioned, levels, the on customers, who lower of may our takes continued I want for the on range, is we trying little downsides getting inventory be put again, some into advertising upsides obviously, and lower And that's pressure derisked. that finally, the so to bit a the business. a budgets forecast provide both something end that But range of not more around growth built our account,

Tom White

Maybe helpful. follow-up. Super great. just one quick That's

in ramp, we EBITDA of the or like, On seems kind sort as we think similar I press a year. the evolve flat a described kind very margin on may basis it margins year-over-year to mean, you of think about sort guys last baseline, of being of it XXXX release, can should otherwise?

Sonia Jain

the general, that revenue they In some which think difficult return OEM they're of predict, I we the simply of will. is the is visibility, is why similarly provided No, that evolving way bit longer-term did last Again, yes, in caveat year. guidance little they to to discussion. a higher-margin

Tom White

Okay. Thanks, guys. it. Appreciate

Operator

And with Research. come from question Prestopino Gary your next will Barrington

Gary Prestopino

of they're dealers their still further are mean, digital what's because business I know, just existence? that all questions everyone. guess couple into we'd with morning, of are the like running can us, these here. dealers. But with do assuming for good Hey, I you that still these understand going of have digital you just models? from of some cancellations issues I on in how A many to And dealers

Sonia Jain

Yes.

yes, answer cancellations further in coming do So the short expect we is, QX.

this factors in. and Our the the guidance year both full for quarter

Gary Prestopino

Okay.

Sonia Jain

to though we the were been the seen for cancellations digital traditional of despite growth I year-over- digital have fact overall continues not would have dealers cancels we in important customers, extremely experiencing from experiencing with strong, X% that what's dealers, year-over-year that dealer dealer year think if base like dealer customers. growth X% instead be is the we to in know

Alex Vetter

right. That's

Gary Prestopino

Right. you what in just would going of digital listing any are the they in-house could do not that. then, There's basically solutions. of idea terms to nothing just can services? an of assume buying of digital those, want happen about buying forward. And high-end marketplace They're I get most I the have dealers, they right? these

Alex Vetter

Right, Gary.

Gary Prestopino

The average not is that revenue impact to dealer per great.

Alex Vetter

subscription marketplace counts. impacting really only It's our Correct.

Gary Prestopino

Okay.

Alex Vetter

most … and build of technologies there. They Air TV in-house. their

Gary Prestopino

Okay.

-- came -- what you maybe there? talk of little So for made bit some terms NADA, that? are could observations the just solutions, out you from were maybe things then, about in just elaborate a basically you like that? Cars.com the technology of What on Alex, -- asking and the you Can dealers of

Alex Vetter

Dallas, from one Sure, Gary. Well, of trade got in we show. and big just the is heralded of the the show of industry cars, publications being back most hits the

we're absolutely our on Our with performing. booth the doing new interested their that marketplace packed was giving experience innovations them feedback on the in report, dealers how are with stores

And now is heard them. lot then, have for dealers also that their from Accu-Trade this enough of the game changing in counterparts a interests

we what and had buy more doing we're more into dealers leaning far means. so And efficiently, to cars help alternative through them

of was lot We days. and And couple it of X,XXX talked in of well. a as period to was a over there show. so, fun a just And large, dealers by successful a very

Gary Prestopino

Okay. digital in terms But still very they're … interested solutions, in

Alex Vetter

the like … felt my Gary, mean, a a than most doubt, show. car of think, more NADA convention was take that Without a software I I

Gary Prestopino

Yeah.

Alex Vetter

advent digital trying solutions. towards were there to …companies

As we've here, peer ahead of way led group. you our know,

count demonstrate us they And dealers on prowess, competitors DNA our to that's digital try the so but and here. as can leader know we're that seeing their

Gary Prestopino

you. Thank Okay.

Operator

will question Fong Marvin come BTIG. next Our today from with

Marvin Fong

beginning. Alex, digital there taking I my were build maybe Thanks like the the X% to for you've talking you dealers. on thought, what questions. congratulations morning. And I years, a since on excluding -- know, the been about, Good XX growth

that you acceleration? was or with share prior have with of I an that could us quarters, a then, consistent quarters what kind And been So, prior X% follow-up. was has in a

Alex Vetter

Well, revenue quarter each XXXX. growth accelerated throughout

Sonia Jain

Yeah.

growth. to you are on had the digital I referring the they think, comments about dealer and Marvin, customer impact dealers made I

Marvin Fong

that, gear Yeah. you I the was if Like, you quarter impact digital the year-over-year. X% dealers, up excluded of think it said growth, … the in

Sonia Jain

…year-over-year.

Marvin Fong

was the sense basis you've of exclude quarters I as a on seen to dealers? just prior trying an get same digital in from that what improvement you

Sonia Jain

not One I terms QX Oh from Well, of in our only that, from -- strongest say, I similar but quarter answering adds experiencing of of overall I'm dealer I'm growth some our year. is the some is if don't marketplace think correctly, bear in digital question prior started, to exclude digital there's you thing the of speaking, in cancellation. mind generally really anything we've was sorry, cancellations would years. these your if dealers. QX

Marvin Fong

for And a Inspire much. Inspire, problem. then No though there Dealer was in like it so you. didn't Dealer dealer looks growth on pickup the Got even substantial the rise as count

first per much could you quarter-over-quarter. I throughout kind it second much. historically, so question part, year. down looks -- it the part of just and rose builds -- dealer why There's revenue just not to is just, break So think that like the down my of up kind of revenue the the then And

So new level for you XXXX? build in the should the fourth the consider we that you quarter that of baseline off saw can revenue

Sonia Jain

for new that we from QX. in it to launch growth helps So always continuing there of pickup a QX websites. Obviously, were are couple sequential to that drivers year-over-year

products I on are that package up signing and to the focus together. for the think you've how can just we about also can website, heard efforts bundle value overall between we our what us add-ons -- dealers talk

focus QX. factored also that's definitely saw in we has this increased into And ours as pricing So the grow that that continue growth been business. a of to something you

digital the business, say to continues continued then seen within I business overall what we business, Dealer we've folks would finally, DI. growth buoy have aware, are I call And of Inspire. this in momentum is also sits think advertising that that on And most advertising the which

in base to there we number me slightly relative of for some use are think a elevated in those how contributing. should maybe that factors be revenue QX growth don't revenue as if our assuming the -- the you to would So think any in what one-time business I want makes the not the about future, this that for sense. are make items particular, go-forward

Marvin Fong

Yeah.

right. speaking Accu-Trade. perspective. a more could one I just You're I was another if in sneak on from And dollar

quarter; XXX dealers XXX. had last think it's you about I now

takes Just to you dealers how count. you're have it pipeline pipeline about activate do actually know, time that in might reflecting feel you actual the more there? your I the than in

So just maybe of on we growth should can comment for the Accu-Trade? XXXX you Thank kind trajectory you. on expect

Alex Vetter

Yeah.

to So, connect your questions. to Marvin, I'm going

first see part foremost, despite reason that I Accu-Trade a think big and growth, in and the loss dealer of our is and ARPD the ARPD of count that. digital our grew strong strategy for you'll certainly numbers solution and dealers, is chief we that

been very The dealer has here engagement strong.

wanted that a expenditures know, spending are on website, shift on dealers have curbing got to value, that we dealers to for softer onboarding, net just signed in to QX, how dealers in-store. Accu-Trade them understood do where we QX their be up, that to year-end. more showed the really tends you As for the make appraisals in new because see did And sure dealer

with And invested to so utilization and dealers successful. in we've being help talent

you we're trend the healthy pipeline of fastest-growing that our just got, and average at revenue dealer, through as it's is -- that per Our anticipating our a revenue And within and line Accu-Trade here strong. XXXX. to item continue if look we've streams one

Sonia Jain

topics the do as the that is NADA how have it and in they two or now I would stores, part own. one they just of that our came talking up set one regularly of tried they shift dealers, dealerships of broader solutions may to it add, about with

are seeing interest So engagement. fantastic really I think we and

something more oriented is with and appraisals year bit been I consumers marketplace. the our year. towards XXX,XXX partial like think IPO of Alex shared That's offering, little which our over numbers, some even it's to for a coming a the

I in seen tremendous May. also think We've there. activity it launched

on I dealers driving a to more continuing then is customers create and there of evangelism, the which out of platform to pipeline to execute bring that both engagement the combination we it's think, have. dealer So to of going the the best product,

Marvin Fong

That's Alex color perfect. it. Sonia. Thanks so for and Appreciate much

Alex Vetter

Thank you, Marvin.

Operator

question with [Operator Barrington Instructions] Prestopino take from follow-up We now will a Research. Gary

Gary Prestopino

just the advertising I national to Yes. ask want revenue. about

looking Sonia actually I in that right? is kind very to for of be similar think you QX to you're -- said, QX it --

Sonia Jain

it No, QX we expect QX. down versus be in to

Gary Prestopino

Okay. Down

Sonia Jain

reasons starting bit reasons for of be the that of -- for that's to part we year it. cautious it's with more couple footing OEMs did see some couple and we a little down sequentially. why A do going of a -- -- the of We think

The other you can struggling that OEM is, last as experiences handful with from claim a thing companies by And us. we national they've work within insurance gone do cycle little -- of do have through in also that this line, us that for advertising and been a imagine, bit through. they've their

those QX other two impacting are So factors

Gary Prestopino

as go that has there that the using a not be the or to have a that much in we you going if where go mechanism where are as OEMs going would in on but Okay, past. about was to to it said, to this $XXX,XXX Would increase something industry year going puts the they forward, had anticipate starts we're vehicle -- sequentially, basis if changed that, up it build. out, as secular as I

Sonia Jain

right? So as increase, increase new inventory cycle. will to do lot launches time that model the levels advance to catch ever uptick, as do take in start specifically think I But as inventory an to anyone does anticipated, continued on market, levels, actually well -- their slower the seeing to they than up it which planning be come we has

past. excited that number happening versus while terms of our just we we're see down about considerably what point out the of in marketplace on I again, still And recent listings, it's

going this revenue build a as No one time. thought It's back there I to And needs national. has. that to back it so is come will But and long take last think OEM happen. to shortage do as in no, going chip is

Alex Vetter

this -- for the minimis trends largely will our year. And the full then be we it's are but loaded of but has year improving, going impact guidance. And be see out. a which de to second Gary, the it is That in do back half on full year

sets up it So for nice XXXX.

Gary Prestopino

you Thank Okay.

Operator

And with your Doug comes today question next Research. Arthur Huber from

Doug Arthur

good Hey, morning.

if just Accu-Trade I'm just there's count customer on different this down of going being you sort on digital dealer vectors of seems ads here. sequentially. wondering because Sonia, Dealer like a dealers, Inspire ads, it dealers, can traditional disentangle number

help that. can wondering with I'm So if just you me

Sonia Jain

Yes.

what not you experienced QX. dealer additions is for that Overall, in So been I customer cancellations think positive. we can our have tell if dealer that would I digital

And been up, really would that's driver. marketplace not cancellations. primary those So the also if have for

Doug Arthur

Okay.

a pretty significant So number basically. then, it's

Sonia Jain

as dealers based digital a of dealer in. really when connected on the to is we experiences. virtual manage they Accu-Trade that their sort mind about in group size think bear of can you Yes, locations cross-platform how being Accu-Trade large want add participate the and they And like geographies of

So ads not increase dealer our count. going those to necessarily are Accu-Trade

Doug Arthur

helpful. That's Okay.

Okay. Thank you very much.

Alex Vetter

Doug. you, Thank

Operator

[Operator questions like are further for the no turn to call Alex this at back time. to I'd Instructions] Better closing There remarks.

Alex Vetter

everybody interest investor we'll today. very Thank you throughout JPMorgan want our thank on X, engagements for Cars. much participate you. I posted call. in joining keep Thank XXXX. on that And your we'll other for and you This to to March in mention concludes We want Yield the us Conference High

Operator

today's conference this for call. attending. Thank conclude And does you

Cars.com (CARS) 23 Feb 232022 Q4 Earnings call transcript