CARS - Earnings call 4 2023

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Operator

Good morning and welcome to Cars.com Inc.'s fourth Quarter and Full Year 2023 Earnings Conference Call. This call is being recorded and a live webcast and accompanying slides can be found at investor@cars.com. An archive of the webcast will be available at cars.com investor relations website. I'd now like to turn the call over to Robbin Randolph, Director of Investor Relations. Thank you. ahead. go Please

Robbin Moore-Randolph

start the XXXX greater morning thank to in Q&A. and Alex call Quarter joining It's me and us. Full with Sonia from CEO; Morning our quarter Jain, We'll you you business to pleasure this With Call. welcome XXXX Fourth detail our Alex finish the my Vetter, with results will Year and CFO. everyone, Conference for are Cars.com and year, our then financial highlights fourth outlook. the full Sonia by discussing will discuss along Inc.'s

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

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

more risk in SEC most We I'll the assume factors including update forward-looking to refer to our any the our information, call is statements.Now recently turn those of included in available XXK our Alex. website. please filings, filed over on For section the IR no to obligation

Alex Vetter

our solutions. grew of We fourth and strategy digital quarter and across we quarter our was XXXX experience, our executed sequentially media full solid another as industry. and performance, We welcome strong delivered enable call. Robbin growth revenue a to our to Thank appraisal marketplace, of you, XXXX and guidance. trade earnings year exceeding year on

X% the year-over-year. ARPD increase a million resulting revenue, X% $XXX For in in year grew

in OEM XX% dealer revenue and with and year representing significant a rebounding than reoccurring which also network.XXXX ended XX,XXX more $XXX retail adjusted customers our media the our we EBITDA, marked strong supports interest a of was margin, progress. model Our year strategic million,

meaningful continued that our drive on and in executed we partners advanced team innovation strategy and platform growth. invest Our further initiatives for both to consumers to

we do for differentiated platform us of growth actively our integration technology our The subscription for our of also to provider. the acquisition how fourth technology win well in of For and revenue expanded marketplace nearly data.During EBITDA.We're into and capabilities. everything underscores technology, Cars.com in packages, adjusted with customers our subscription continued will a by This and leverage we underway. the And our opting footprint repackaged new about a under with customers higher solutions simplified XXXX, leading a geographic and powerful platform drive it combination helping and resulted to enabling commitment journey. that is customers quarter, them Media, XX% partners, of them drive on to united customer and we the selling Cars Canada teams throughout BXB marketplace commerce automotive cars. easier package business to introduced with digital making tier reinforcing both consulting Commerce, our simplifying seamlessly brands buying This audience, the DXC

report differentiate experience. and retail dealer improve Our dealers experience their helps

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more For the conducted than XXX,XXX quarter, of dealers increase. XX% sequential appraisals

experience. improving to and dealers buy and Our inventory maximize the while efficiently customer technology sell helping enables profits quickly and

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is momentum Our strong.

We are for our connected over and unlocking results growing and empowering and to on our the demand top and more details consumers growth.Now platform solid for call outlook, our turn XXXX Sonia. I'll both bottom-line customers,

Sonia.

Sonia Jain

months margins quarterly X% $XXX the participant Media OEMs quarter $XX X year-over-year portion EBITDA QX of performance National million, a of model by increased the and prior launches, sequentially. OEM grew increased guidance. year-over-year, in budgets. to Thank advertising $XXX license the you, and Other year to the year-end grew another their revenue growth year, and Notably, revenue up year strong significantly with $X that over early for to marketplace production, was ended revenue increased National X% growth.Our compared throughout to million. invested with OEM X% delivered planned which revenue also XX% revenue of by prior indicative driven revenue expiration a and expired down million increased agreement non-cash adjusted Alex. expenses. XXXX.Turning XX new a of exceeded as the of and balance X% up due compared the to of year-over-year dealer was increase to we revenue, the list and our DXC approximately prior reaching our AccuTrade year-over-year We that revenue, the X% OEM Including consecutive million the robust year quarter, the sequentially year. Revenue

year-over-year On G&A earn-out expenses total $XXX It $X million $XXX associated $XXX the prior to $XXX partial value associated in $XX revenue exceeding increase XX% margin specifically million, year-over-year million. our operating primarily $X quarter, for was XXX is compared through worth year-over-year. operating EBITDA were EBITDA media year and runs to were the Revenue OEM $XX the basis, the the moving XX% our with million prior growth that is a BXB by initiatives, of DXC and increased or than million acquisitions, million, was net in National related increased a of per year. the noting sales. approximately points unlike The macro quarter due revenue adjusted factors. consideration income with significant to changes operating year our Sequentially, our ago, our adjusted higher For fair million investment marketplace million to strength marketing and CreditIQ our expenses, our people, at The contingent million and to AccuTrade. a XXXX AccuTrade, change customers in X% due driver CreditIQ ago. to guidance. $X.XX of repackaging totaled pullback compared offset expenses primarily lower $XXX million driven an to softness from our quarter a $X continued brand, and attributable a by million the basis continued AccuTrade, revenue, X% the launch and in our investments and revenue income in $XX amortization environmental in full is X% to to the or in totaled per up $X.XX $X support share National depreciation year revenue, year. websites, diluted Commerce.Net largely prior million.Now increase Dealer and million $XX Cars to or was primarily in OEM or for insurance in or diluted performance. Adjusted XXXX expanded compared our share in and

primarily related year On basis, approximately operating agreement.Turning is sales marketing to non-cash to This particularly higher year. compared the million expenses prior an expenses, expenses related and $XXX million $XXX down and driven by was adjusted total operating employee aforementioned in product $XX and compensation were AccuTrade were Full revenue last other year. expenses. largely compared million, and increased technology. to the in million Additionally, $X.X to

we've depreciation In product expense development amortization accelerated up also and investments, year-over-year. technology addition, as and was

both Commerce higher go-to-market In $X.XX a year. the and income deferred addition compared portion or the as Possibilities year-over-year full year.Now recorded $X.XX marketing Cars compared per or year $XXX in per was allowance $XXX our the prior our the or invested EBITDA Current million tax of BXB assets income to compensation, turning significant $XX brand to we to that year $XXX in was XX.X% launch key the to in related diluted expenses metrics. the also release Cars.com were with and million million XXXX. of revenue diluted slightly XX.X% campaign the valuation in or brand.Net totaled share net consumer was for to for million of primarily for of Adjusted a of revenue our Company's prior year the share

customers XX,XXX quarter we the compared sunset of ended our new of for impacts experienced dealers, with some and we Media initiative the count to customers customers in XX,XXX of digital our dealer customer XXXX. variance marketplace the of XXXX dealer the DXC dealer While and the related to added quarter repackaging through XXX dealer acquisition third

working. grew our include by to and higher our digital driven in or see, X% dealer to decision platform more the strategic marketplace platform $X,XXX of you is of solutions. of increased $XXX offering can adoption As strategy packages ARPD our tiers

our them. Our customers platform through enhanced customer to value engaged is to tech large we ability delivery.As and higher improving deliver and audience the strategy drives by both our ultimately an value company, lifetime to value a retention audience-driven ARPD critical provide our

XXXX, $XXX compared the business quarter, conversion. compared quarter.Our generates the to we attractive prior model monthly And strategy, creative balanced business, the changes in shares free $X to driven which total a the offset strategy partially capital the increase of of maintaining to while an year. and X.X year, were million, all the a visitors $XXX cash modest by capital, Net shares X% $XX a operating million $X For strong nearly to investments at of flow flow X% allocation enables totaled visits, for unique by outstanding delivered average XX acquisition cash value million return consistently and increase million.Our in year. the the primarily by profile higher EBITDA execute favorable cash for year. or to million capital XXX Free us we million taxes prior financial leverage. thoughtful of million adjusted includes working in was cash shareholders, an start million increase repurchased In provided activities asset-light

X.Xx $XXX of authorization.Total of As in XX, remains we squarely X.Xx. million, range net million leverage our XXXX, have December on Xx at year-end our remaining was $XXX our repurchase outstanding target the of to debt middle of share and

and cash ample revolver liquidity capacity.Now of We and million our million, million includes which guidance. to equivalents cash at $XX $XXX of turning have $XXX

by full experienced to revenue from ongoing initiative. our X%. advertising XXXX and revenue reflected anticipate quarter suite adoption the has some but dealer historically year, platform, fourth X% to with expect we seasonality of up to for is year production, and Market improving. our in-market coupled OEM strong and valuable than dealer expect revenue model of to cautious rising another more in-market reflects With first we inventory, year-over-year, it dealer acquisition, our OEM ever. deliver which $XXX our guidance of are to consumer, in growth. the period is of the still $XXX full launches, first of also continued which revenue are repackaging X% a DXC of impact our National a be increased marketplace conditions driven revenue and the We backdrop, to new expected solutions growth the X%, growth continued the quarter.For as With growth or to of that OEM solutions year-over-year adoption deliver million products, million quarter of in

margins make of XX% we we XX%. different. to first make As support timing Recall, usually that strategic marketing the be is in no quarter sales industry higher And investments seasonally quarter first our and we for in-person the events. anticipate the to EBITDA due in growth, investments and adjusted continue XXXX to between

overall, to to course We range approximately $XX anticipate between delivering to full over XX%. slightly for year EBITDA expected execution. adjusted to taxes value $XX we the for year strong focused Q&A. I'd are deliver and our the Capital customers, are are expenditures for to free cash $XX ahead, of that, open consumers, XX% growth.In anticipate and we sustained delivering improve million, expect call and increase results and summary, delivered margins million another XXXX shareholders.And well-positioned Cash expected our margins like between by the driven looking Operator. of the and with flow for And to we million. year year

Operator

[Operator Instructions] from Gupta Your first of question comes the JPMorgan. from line Rajat

Rajat Gupta

had how count, Any you on or I product the a X% like-for-like RPD give of price Could more well. first much X% be what Congrats mix? the revenue that How granularity on dealer little helpful. XXXX have I question much breakup OEM, quarter is revenue versus versus would good increases et follow the just a granularity is guidance, guidance. on the just just a cetera? more up. as to us

Sonia Jain

Rajat, I can, see little little let's a color more giving by start if it's it Sonia. and Maybe I'll bit. helps a

of things the guidance of acquisition that's into factored One our is full year the DXC.

our in companies in some Canada, revenue So faster integrate captured endorsements also lumpiness leveraging while with National saw combined the business continue we're to QX new between We we business, in get spend over to that on with portion just on terms little that our And bought changed. a you Canadian we a may a QX, bit sales that their model then OEMs OEM of quarters, to and OEM inventory efforts launches, in has more how QX performance been AccuTrade exist of really of several business to in in think of revenue. from excited expansion. expect that of we'll rising, EV strong and in that recall, X be last months We're of positive go full just along XXXX, sort year there lastly means releases terms acquisition that that's X budget, and the in November positive consumer kind which the benefit if XXXX, of about. levels really anything our revenue, good I don't of of and business that require education.And dealer

product of really an that we talking about our Our trying the have on products a and At was and ARPD positive is as Media. we VIN focus think of there just continued have NADA, that do organic basis, we grow the lot interest in we the just on to ability penetration. Alex media to Performance saw given suite really new

really In AccuTrade. interest addition, lot in strong of we saw a

in from Ford. may we it noticed have You endorsement got

have lot used excited the other are a that's that car of We volatility partner given to us, there. out of particularly OEMs with pricing some

of optimistic all we see our and are growth generally So across for business. about trajectory the XXXX lines of

Rajat Gupta

on dealer just was count, it maybe a DXC then what more would've excluding that down than little we I sequentially And the Media, expected. noticed

customers? about talked mentioned on that pressure think we of in peers in the any embedded about your side from are that you some on And the in essentially dealers of also kind side have no in that of continued -- you well those like And What's of change digital the XXXX? platform of guidance One independent the digital to presentation terms expecting seeing should how are like dealer implications? just Curious, your of terms things. car on for as behavior used you curious, you anymore. in XXXX

Alex Vetter

inventory lower will available And spill not this attributable into new you dealer is think over cars take the and the fast, first the dealers QX. I profitability or they industry, business. I've the of number not wasn't in but levels see our proven in to largely these revisit where times The concerns cut it's it they our selling a as they ads, environment I softer or win organic market, tenure general And to trends, and strong of used all, macro I with the reactive that be we're a cycle back. when where regarding period current price because in Well, of seeing tell cars, a wish space. that of on what net tends And concentration that organic of a then dramatically seen traffic even our in in QX it my we then happens. we our good of should traffic we've behavior them the stance in whether trends. back too and expenses concentration the blink bring our dealers that traffic, do news lot short-term terms of

I good help think working that with view, strong, you it's on forecasts dealers because of news the good stuff. environment.So healthy we but our full that at we're feel profitability feeling. dealers coming technology feeling year look broader out on panicked directly from, is this for this and that are know so are we're solutions about current I year is The dealers the now bulk very are some when concerns about choppiness growth the where actually right the

halo And a yes, effect sold, slower but once the has and sales it's sell for a effect so, whole get cycle a those it stickiness solutions in we to platform. our solutions,

big the so be And those would headlines.

just echo at our business what some dealer community peers. I in the finally, car don't of business, the side heavily franchise of community. we bulk look of the think Sonia the dealer is the independent I index our also like new We said, like

well. And some new that move us for them footing looking strong media think can as us so that cars gives they at heading are into this I those also help year. And solutions

Rajat Gupta

or but that. use many that's about left, change? are anything I know expect changed just curious side, to dealers the digital on digital you there And not independent

Alex Vetter

in anybody We're certainly the downside any sell be needing exposure not that those to deliver or noted, cars be back buy expecting to And needs segments business. growth believe you so operations. auto current upside. we come in generally we dealers to but have should or order in to And trying as to industry our those that none I platform, our of those the have not we're don't there a in guide. to driver be sell our mean, I that's with counts,

Operator

D.A. of question, Thomas light on the next your Davidson. council from White And

Thomas White

on off first entity, OEM, the guess OEM guess, OEM the the in I up I and of you component quarter. XX% said National

remind us you balance of like think can for XXXX? kind do on and that when of slightly bigger Alex, the fully then think we OEM can And or I spending, advertisers continuing about picture we a kind you the I cut that insurance of that trajectory guess kind maybe Sonia lap revenues little of grow also grew a growth of products one, of to just grew less 'XX of the when in about your you are bit up talk these in traffic? X%. dependent Can the you said you beyond and year, last that kind kind excess business some traffic ability build years X% traffic of as on

Sonia Jain

Maybe sort that -- the component. I'll thank insurance Tom. you for take the Maybe on questions, I'll first one of

as spiked issue I think of sort of really the that at an beginning XXXX.

So to some large extent, we should be lapping of those challenges.

the I think that as QX do like we in But based has that OEM of their and use business. forward. just timing a growth and spend the see to to investment more saw we wouldn't necessarily As you of advertising. and rate the outlook it QX OEMs, phasing in really promising releases, the side on come do going timing of to XXXX, the investment I run year-over-year We look National sometimes comes think in when XXXX

Alex Vetter

echo Yes, that. and I

If look headwinds. and you the OEM total at past the business dealer revenue we've quarters, the been revenue for growing the XX despite steadily

our and revenue, traffic don't or come websites. dependence. more between think dependent traffic solutions bulk coincidental And of a dealer-inspire like have has growth such AccuTrade our These non-traffic through so in I revenue a correlation is the because

outrunning so a we've years been now growth. with for And National declines growth in few ARPD the strong and dealer

Tom, can sustain healthy have expecting there's believe because us production there generally the Like we've it's new opportunity for a the got healthy levels.We're sustain we're returned, increased seeing got brand, we OEM traffic car Now XXXX. that we interest our not levels traffic levels, traffic think the forming we've our I solutions. the content, in to picture in here. big gains

the our traffic calls up up ringing the the stores. through that we highlighted are the report value the just in credit as tighten retailers to to for there, the dealer dots capturing clearly we're delivering phone of like. dealer better always just we'd Like we dealer things like that value directly is and into performance, fact, delivering the amount websites, need In more don't experience CRMs, of the funnel getting that goals dealers showing on all it's the which the conversion why connect as the because value we're is call

Thomas White

advantages. elaborate one of you just I one, Alex, the could pillars, about a kind slip just think bit Maybe I talking on you're last it meant what growth in. X Could more you unlocking platform if you there? when mentioned

Alex Vetter

I there's X things. I point so more our more looking One, and we're create Sure. leverage for they're trying fewer to for partners, and tech. connected dealer mean, think solutions

Cars.com clearly dealers When want when here infrastructure to it's we thread. able leveraging deliver out product the about want be or efficiencies we So that and we you're slide operating specifically we of as really a lay common to to, we're those solutions on more to backbone referring efficiencies, well. costs at to say a giving internal platform But power our that driving is dealers. lower and that because it the

various then up our to of Commerce or AWS inside as in our business. agreements backend really sell of we customers, our all teams times investors was know, opposed Cars and solutions teams the turnaround Consolidating to towards our Slack to find we our you vendors the another.And and the sales finally to in part beginning so year, platforms. from various started getting one operations, like for of can Cars integrating we tightening with That leverage for cross-sell As our point rebrand earnest able enterprise-wide last Commerce DXC capabilities consolidating dozens sales is right? be There are deliver faster our create can for that and accounts things cases company use opportunities where for consolidating synergy for platform. or negotiating preferred support teams the

Operator

on Naved next B. question line And of Riley Khan from Securities. your comes the

Naved Khan

the thinking Media. or on, XXXX Maybe that I questions add just A from second that how marketing question the I of XXXX Performance couple your be And should grow I VIN activities, as on of is and sort how have me. should spending about relative to not? about on just think

in aggressive. guidance? So this the in was annual NADA terms from pretty in demo you at What of are contribution show your baking

Sonia Jain

a think I some I increases think in asking were expect anything expense about, on see of which marketing I marketing basis, in year-over-year think expense, terms modest don't particularly you dramatic. but to Well, we

as focused be elevate consumer. both deliver also that minds to continue dealer in to We continuing elevating engaged as well on and think and audience trying then be OEM and continue on how the to partners, the focused to our to to the consumer of about brand dealer our

think question VIN second Performance on I Media? your was

Naved Khan

right. That's

Sonia Jain

very kind word, We guess a of it's prior launched for that. done have pilot lack at NADA. just that it into baked better I small provided. a the We've we've to really We guidance of

making and of roll going dealers throughout about little that benefit in to the are us. bit in of extension that media with it as the So some to buy you the is an think year, should already existing a ways

guide. our into baked it's numbers, our to benefit a be it'll So

Naved Khan

'XX, spending, And so question ad versus first as should Sonia, of on change how 'XX your my I to on think really just or it percentage that? revenue, answer a shouldn't about the in so clarify

Sonia Jain

in Yes, we've consistent it's pretty think revenue -- stay so ballpark. same pretty it'll of and a been basis now, percentage I that on

Operator

your comes Kunal from on line Madhukar the of question And UBS. next

Kunal Madhukar

into, A a ruled gets that you you is cookie the quickly One couple be from don't that proportion how talked significant the NADA, organic may of and that world for. don't your going to pay out, breakfast at me. traffic direct know list investor but about on how comes need we

how So you've loyalty on the question of AccuTrade kind capitalize the second of can And consumers you help the to on? that built brand, and side. intend on you us the understand

similar that the was was on the dealerships. of have to seems apparent from things everybody help their one of cars show with a NARA getting or to used kind cars So offering used dealers

other should use and use and what why service them versus multiple a So stops using AccuTrade you dealer some services? from

Alex Vetter

of think absence First when to lot talked it's slower as crumble, actually tailwind lot but for us. all, our first-party of move right a it have XX% the network proving and of market of cookies terms in brands I of have to which do of projections are been of tracking is The now. years, early money a have of any got we shoppers. cookie in being more technology retail and our prevalent them original of market would spend about media see peer the audience more than the audiences, we is solely nearly largest car that's in that undecided, in of a demise the it all for group

and companies more that directly third-party factors having noted but to the your like, to said, the which of lot you like we in that's they're those organically collapse in before cookie direct traffic, wow the rolled then are trade organic the things them then is average generate brand to and send always long so those generate favor worth spend shopping we coming you our of market or brand. conversion once them going developing Well, that do Cars.com, on brands Garage, what and programs our updates first-party we Your our in now in use years.And their car to what weaken their only register one loyalty? of rates technology consumers platform call a is because car our relationship also solutions And recommend with market, those car we in real-time allows having with inferred to or for out as the several and naturally every point, in of can the and To with brands with to marketplaces. audiences, do synonymous so opportunity U.S. who a the is consumer

growth.And our traffic that that and are audience so a ways healthy capture I and a of I XX we've have value demonstrated years, we've after setting strong. a we keep great that got So It's formula think testament records for still think we we for number delivery.

Your dealer-to-dealer buyers, sellers, of of And buyers. solution. some second no tons them question no XX yes, I than have everybody there Many Others the platforms. challenge no assertion less about notion that because are was trading would AccuTrade have, different that of inventory. a and has similar have tons

lot tend a cars. to network leads not what you've And side, all wholesale is of buying the then marketplaces digital that is. have so cash platforms a selling That instant not And AccuTrade about dealers got effect. true got on you've offer these to

your of Both directly are than this the our appraisals We to at that hours cars If dealers minutes. customers. also the $X,XXX and the And When We tied giving of fees hefty also their from of generic know tune own give vehicle. saving with we dealers much ability the a is their in year, those the service at valuation of customers advantageous walk buying XXXX prices of power more it's know buy vehicle scarcity is private buy the cars, AccuTrade, so cars used lane yes, can store are are power customers you you from their auction precise in predominant the and hundreds transportation don't that look own auction being to fees. sold of going month, off you the money. This ranges. AccuTrade, to up. seller speeding give health tons cars And in fees we but to cost directly are source opportunities trade-in, Cars.com auction. go from a to we the from which technology per marketplace, contrasted website.And is to and can considering theme backyard. a It's

the AccuTrade is an the see absolute it's we that industry, out dealers in bottom said we to So what top think the changer have line. and both AccuTrade game their differentiate vast and have from adopted of

Operator

comes Instructions] the line question Your from next Huber Doug Arthur of [Operator Research. from

Douglas Arthur

quarter Sonia, the of Dealer system? dealers Inspire did about number of terms you mention in in growth the in and anything

Sonia Jain

of another increasingly the year-over-year basis, to as that precise becomes to I'll focus you as But tell more associated think with we really products challenging don't growth the like we on revenue continue growth. the go-forward platform, being on across I that double-digit I cross-selling. business. a gave bit a We of continue integrate had on number year that portion little

I we of mentioned have includes, through In DXC. may to with be and X,XXX, website acquired customers, terms ended that the year customers clear, about total includes think Alex

Douglas Arthur

Right.

So that's fourth the in XXX quarter.

the Okay. Because given was X,XXX. number QX think I management out for had website you on

Sonia Jain

X,XXX.

Douglas Arthur

sorry. X,XXX,

Okay.

tougher harp growth to mean the very slow a little comps the as this, did on in strong fourth it or I Inspire? trajectory at don't bit So a Dealer the on quarter get continued

Sonia Jain

part DXC also of quarter so continued like this dealer, the DI ago largely maybe out quarters kind talked Dealer of it growth we've particularly terms bump are We've our bringing And one-time but all couple DXB a secured going about saw fourth in Inspire that there. there's we onto launches. to the like to add platform. from we're of addition new continue at Yes, and as of the websites that a little the business, then both and website in endorsements

get website's a adding also folks levels you up that with go in not the help of a package ARPD. customers is cadence upselling, change can though them Inspire Dealer show whereas the on win we're business them of So as that their the drive cross-selling, after because focused options bit pace added which, And if XXX going customers, the business. getting is little it's to to very we're moving more that big up suddenly piece you features would and

Douglas Arthur

sequentially obviously Is a I looked X%, although on actually lower. very DXC it the mean up that guess I impact? ARPD, solid, And little

Sonia Jain

it. at would've been of X%. Got Yes. basically We sort

come If in you slightly adjusted out a with ARPD. lower DXC, just they

Operator

next Research. your Prestopino line comes from And question from Barrington the of Gary

Gary Prestopino

how up Couple of have what amount or Sonia, questions. CreditIQ, of signed year-end? by for dealers CreditIQ Alex now many

Alex Vetter

We have on get exact an back to to you number.

know, top our As folded CreditIQ solutions the you packages. we into tier

say So ofâ€¦ I north would

Sonia Jain

XX,XXX. over It's

Alex Vetter

was north XX,XXX. but going it's say north of of I to XX, XX,XXX,

Gary Prestopino

dealers this tier about for terms opted And of had of higher point? then repackaging, marketplace you a at in this said XX%

Sonia Jain

XX%. over Yes,

Gary Prestopino

Is needle get that of to this at going you're move that think you the think higher? point, about peak you to or where at, there's room still

Alex Vetter

premium dealers on the of terms In or? packages

Gary Prestopino

Yes. tier Yes. packages? That are up higher for opting

Alex Vetter

very faster the I premium our mean, that it's of dealers participate I turn that clear tiers. us rate significantly in is at than basic think to tiers dealers Yes, inventory the

is see I for dealers a us with that demonstrate yes, us, So continue they when more to improved. path to their spend to business

in, I that run marketplace Performance just At Media rolling continue group dealers new as who's do. premium think solutions with which we create VIN further our maybe to like additional will tier tier that that And time, dealer top only out versus I buy, all same more spend. so their will are the

both, guess for Gary, would be the growth there's point. so I And

we a spending, the cohort mean can't that the grow in are so they it too. And XX% might doesn't still dealers that but lowest of always have of

Gary Prestopino

kind in of where And Alex, was different big up sales sales, was at nicely, off that OEM behavior a were basically then XXXX, a offered XXXX, company moves what dealer know the trough to 'XX, mass that very services it pretty the Was it maybe, period the over years go ago, it's than were a or the for and into sales is where point? it auto more company in we 'XX car in that of and time? the real what but behavior ramp with I increase in coming 'XX, going slow

Alex Vetter

is sophistication I Boy, industry because higher. would the by of it's so say present the changed. hard to compare past with the digital particularly, has Gary, much significantly the level

we than far so in were today. we are And doing more earlier education periods those

what as to engaging ones educate, shift only the now is companies, automakers of can us, years. in think for have the as to, were EV And is now you steam. OEM tell is that used it cars moved and level I will more mouth that had are vehicles inbound today you with also quickly now a the by much than to, but and sideline car opposed interest from the that exciting interest tailwind, to previously in consolidating of I hello, has fully other me, to stores much the out not that prior public buying word on because some do that that that inbound auction, the dealerships. from dealers AccuTrade were of are particularly upfronts think they the my to gaining acquiring the is digital aren't go and always I dealers and I for the more selling solutions is our We've been happening. what's me also feel as

groups leverage synergy they're and them more that large ability you something bread doing and lot are so butter generate regional their to know, confidence from a gives or And as chains. our in those And dealer acquisitions.

Gary Prestopino

lastlyâ€¦ just then And

Alex Vetter

I'd Those you say I are periods about what to see the would differences, from the are talked say trends, that big the top today. those I

Gary Prestopino

have Ford does to lastly, help with And What for anything by AccuTrade? this the do really do Or that with you of more sell to dealer endorsement to AccuTrade. have Ford just to do prepare endorsement -- product? do to you then just into with uptake

Alex Vetter

in more Ford. funds who to the to dealer really dealers helps can't us use environment that any co-op back. It this say, it point to Well, cut from spend because trying I are allows I'm available to for the

removes take rate to I the us, an coming it off go of it we a dealers going gives I huge Gary, objection, as price volumes as So reason table. price do at that have to not to objection lot us the change sales it's else of think think. because the Ford going an that but to above not all in sense we're

Gary Prestopino

that when gives co-op of or not end incentive, up what you for? AccuTrade is do you share? this paying So Ford something public Can make they can percentage that

Alex Vetter

I is this No, but we allocations their nominal. nominal, Ford's disclose mean, dealers, don't to

Operator

Fong And question Marvin next [Operator comes the line of Instructions] your BTIG. from from

Marvin Fong

then the of should how that Apologies, curve, think should I and missed be guide full to now in EBITDA XX% the the I part your question, just or calling more wins? a should a year just or as it we adjusted for did to normal of And FordDirect adoption build on burst curious prepared margin. we sort it endorsement follow-up quarter noting think but platform, X, remarks, second a the XXXX have of of next in client the about gradual adoption about that you're addition shop

foresee it's that's past guess firm and above one is the ever that's margin do growth? you a we've XX% margin. sort continued seen the that for you this breaking that the curious, and the of similar drives do margin in But just I line that top think So the or appropriate of few strong years very guys

Alex Vetter

a questions. So for couple of thanks comments the there, and

a nascent to I various and entry, not have a tons selected market people team should the of to the AccuTrade, offerings of stages its selection affirmation the FordDirect look homework think and right? and AccuTrade product of due fully more you think us. did understood as in of of diligence power Ford I at that's lot the

were would it help that achieve from you've that just dealers narrow the their we think I secure I this of with OEM their being And and and OEMs think our now shouldn't first so that dealers are And the as we seen business, to field Dealer digitally. last all the able what that to willing they to Inspire because foremost And asked be consider. OEMs, help many does more dealers validation of be help is they most. believe will endorsement do more vendors endorsements also

the months the do and the sales year that is have I certainly hardest things on grow. invest I at educate think of mostly than picking right so will out our benefit rates platform is it I that more affirmation have that for growth, Ford I'd customers.I it as mean, to add in I capital stewards I guide, don't think summer and add most look And dealers as there's about the accelerate of we the still to currently of it opportunity this affirmation.Yes, what our as hope this and But invest will that education why have thing second to value. there, in dealers job get we but would a a we of we tons is ton think know to because to as the generate will it opportunity to them. areas our of windfall

positioning XX%? want the over could over always keep so the business for to business term. get And we But sustained growth the mid-to-long Sure.

balance business you or don't set harvest continuing Sonia I that. know, up for add it's growth. sustained a if so to to the And between anything

Sonia Jain

only is the we progress mean, I seeing on add think margins. are thing would I I

delivered progress. we've to If to gave the the year, last that you're margin you year, QX guide look at adjusted honestly full relative see for we that given the guide on starting or EBITDA even what we for

to a grow do this profitable to continue we think ultimately business I want way. in

in to numbers. is But think how drive incremental you margins. think business, are investments through that come around the I short-term there growth making in long-term the you the and about the question long-term starting see in growth profitable to So business improvement

Operator

further to Please now Mr. ahead. I'll There Vetter, at turn Alex over question go time. are no the CEO. this call

Alex Vetter

share February I as upcoming February to going We're of their and continue we're these JPMorgan Minneapolis you investor Commerce. XX, of on Research. in website. look story available interest events many of going Details the just going to recording breakfast host wanted the our part Miami. High to in at on section our about everybody well for our as Barrington as conference in notes, be our thank Yield with to XX, Quick forward Cars IR is IR to NADA at of investor meetings And seeing to we're engagements. on events

great you and have and a insights as well.This report, there download call we've concludes posted thank also You our can our industry for today, day. which

Operator

Thank this and gentlemen, for conclude Ladies today. Thank you. does for participating. our you conference all

disconnect. all may You

Cars.com (CARS) 22 Feb 242023 Q4 Earnings call transcript