Cars.com Inc. Q1 FY2026 earnings call

Toby discussed delivering on financial commitments, taking immediate cost actions to identify $25 to $30 million of recurring annualized operating cost savings, leveraging existing assets and data to launch new features like AI integrations for authentic AI platforms and Conversational Carson. Sonia discussed revenue in line with expectations, adjusted EBITDA beating guidance, detailed cost breakdown including product and technology, marketing and sales, general and administrative expenses, and focus on product integration and innovation to drive marketplace-centric strategy.

Q1 revenue was $180.2 million, up 1% year-over-year, toward the high end of guidance. Adjusted EBITDA was $51 million, up slightly year-over-year, with adjusted EBITDA margin of 28.3% exceeding guidance by over a full percentage point. Dealer revenue growth was driven by enhanced value delivery across websites and marketplace, with dealer account growth up 140 customers year-over-year. OEM and national revenue was down $2 million year over year. Operating expenses were $163.6 million, down 5% year over year, with adjusted operating expenses at $145.9 million, down 6% year-over-year.

Second quarter revenue growth is expected to be flat to up 2% year over year. Second quarter adjusted EBITDA margin is expected to be between 28% and 29%. Full year 2026 guidance: flat to 2% revenue growth and adjusted EBITDA margin of 29% to 30%.

Includes questions from Tom White on AI and AccuTrade, Rahat Gupta on MCP integration and OEM national guidance, Marvin Fong on solutions business and repackaging, Gary Pastapina on cost savings and sales bundling, Navitan on website business and organic traffic, Joe Spack on OPEX trends and dealership spending, Doug Arthur on website management, with corresponding answers from Toby and Sonia