10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2024


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

Commission File Number: 001-37869

Cars.com Inc.

(Exact Name of Registrant as Specified in its Charter)


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

300 S. Riverside Plaza, Suite 1000

Chicago, Illinois 60606

(Address of principal executive offices)

(312) 601-5000

Registrant’s telephone number, including area code


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

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

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

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

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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

As of May 2, 2024, the registrant had 66,116,556 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements:	2
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to the Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II.	OTHER INFORMATION	23
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	25
Signatures		26

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Cars.com Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


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

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

Cars.com Inc.

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)


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

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

Cars.com Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


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

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

Cars.com Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


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

     
    Preferred Stock

    Common Stock

    Additional
Paid-In

    Accumulated

    Accumulated
Other
Comprehensive

    Stockholders'

SEC Form 10-Q filed by Cars.com Inc.