Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| In summary, we delivered strong results for 2023 driven by our focused execution |
| Our reoccurring revenue model supports our strong adjusted EBITDA, which was $195 million, representing a 28% margin, and we ended the year with more than 19,500 dealer customers and rebounding OEM interest in our retail media network |
| 2023 was a strong year of growth as we executed on our strategy to enable our industry |
| Our momentum is strong |
| And looking ahead, we are well-positioned to deliver sustained value for consumers, customers, and our shareholders |
| And so I think we have demonstrated that we have a great formula for value capture and delivery |
| And so we’ve been outrunning the declines in National for a few years now with strong dealer growth and ARPD growth |
| This underscores our differentiated platform with a powerful combination of audience, technology, and data |
| But we think 2024 has a really promising outlook when it comes to the OEM and National side of the business |
| We had another year of double-digit year-over-year revenue growth associated with that portion of the business |
| And I think that gives us some strong footing heading into this year |
| This resulted in nearly 70% of repackaged marketplace customers opting for a higher tier subscription package that will drive continued growth in both revenue and adjusted EBITDA |
| The good news with our strong traffic trends, our organic concentration or our traffic concentration on organic traffic, we’ve proven that we win a lot of these dealers back even when they do blink because of the current trends |
| Our dealer experience report helps dealers improve and differentiate their retail experience |
| We are growing demand for our connected platform and empowering our consumers and customers, unlocking both top and bottom-line growth |
| We ended the year with robust Q4 revenue growth and adjusted EBITDA margins that exceeded our guidance |
| And as you have seen with our Dealer Inspire business, we were able to secure endorsements from all OEMs, and that does help dealers narrow the field of vendors that they would be willing to consider |
| Including the 2 months of D2C Media revenue, revenue increased 5% year-over-year, and we delivered our 12 consecutive quarter of year-over-year revenue growth |
| Importantly, we had a record year for customer submitted reviews, now totaling more than 13 million, we continue to have the largest number of reviews in the industry, cementing our leadership position and reputation management |
| At NADA, we saw a lot of really positive interest in our new media product as Alex was just talking about VIN Performance Media |
| Our strong quarterly performance was driven by dealer revenue, which grew 8% year-over-year to $161 million |
| While many marketplaces are solely focused on used cars, our new car content and expert insights coupled with improving new car inventory best position us to help OEMs and dealers stimulate demand and move inventory |
| We saw some positive performance in that business in Q4 that we’re really excited about |
| We’re also positive on OEM and National revenue |
| Revenue grew sequentially throughout the year, reaching $180 million for the quarter, a 7% increase over the prior year |
| So, I think we have got a number of ways that we keep our audience healthy and strong |
| We delivered another quarter of solid performance, exceeding our guidance |
| OEM and National revenue also increased to $15 million, up 8% compared to the prior year and up 6% sequentially |
| And to further our advantage, Cars.com has the number one most downloaded auto marketplace app where organic traffic increased 10% year-over-year |
| Best thing in our brand, generating great content and leveraging our editorial expertise, I’m pleased to report that we set a new all-time company record for total traffic in 2023 reaching 615 million visits, a 5% increase from the prior year |
| Statement |
|---|
| OEM and National revenue was $56 million or 5% lower compared to the prior year |
| But I will tell you that like increasingly on a go-forward basis, as we continue to integrate products across the platform, being really precise on that number, becomes a little bit more challenging as we continue to focus on cross-selling |
| One of your peers talked about some continued pressure on the independent used car dealer side of things |
| Used cars scarcity is also increasing with used vehicle listings down 4% compared to the prior year, indicating increased volatility in the used car market this year |
| Additionally, other revenue was down approximately $4.5 million, primarily related to the aforementioned non-cash AccuTrade agreement |
| And then just on the dealer count, I noticed that excluding D2C Media, it was down sequentially maybe a little more than what we would’ve expected |
| And what I will tell you is that Q4 tends to be a softer period in terms of dealer net ads, and then we’re seeing that spill over into Q1 |
| And I think it’s largely attributable to the macro environment where profitability concerns regarding the price of used cars, lower inventory levels available in the market, new cars not selling as fast, and dealers take a general reactive stance where they cut expenses dramatically in the short-term and then revisit whether or not they should bring them back |
| Other revenue was down approximately $2 million compared to the prior year due to the planned expiration of a non-cash AccuTrade license agreement with another marketplace participant that expired in early 2023 |
| First of all, the demise of the cookies have been talked about for years, and I think it’s proving to move a lot slower than a lot of the early projections in terms of when it would actually crumble, but we do see it as a tailwind for us |
| And so, yes, it’s a slower sales cycle to sell in our solutions, but once we get those solutions sold, it has a halo effect and a stickiness effect for the whole platform |
| And so those would be the big headlines |
| So to large extent, we should be lapping some of those challenges |
| The strength in our OEM revenue was offset by continued softness in National revenue, largely related to a significant pullback from our insurance customers due to macro and environmental factors |
| As used car inventory becomes more constrained and used car profits come under pressure, it’s more important than ever for dealers to reduce their dependence on the expensive auctions and source cars more cost effectively |
| And with used cars scarcity of being a predominant theme this year, we know that auction prices are going to go up |
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