Despite a continued vehicle shortage, Cars.com reported modest revenue growth and a significant addition of new dealer customers for the first quarter of 2022.

But with earnings per share of $.06 missing Wall Street expectations of $.39, Cars.com’s share price was down about 8% in morning trading Thursday.

The company posted Q1 revenue of $158.2 million, up 3% year on year. Net income of $4.3 million compared to Q1 2021’s $5.3 million.

The company managed growth despite depressed car production due to chip shortages, which saw ad revenue from car makers slide 16% year on year. As Cars.com CEO Alex Vetter explained, “They don’t have product to push.”  

However, used-car inventory is growing to healthy levels, and helped the company grow its website customers to 5,500, up 800 from a year ago, the firm said.

The company admitted that new customers were paying less for Cars.com’s core marketplace subscriptions. However, customers are spending more on the company’s website tools and FUEL in-market video product, resulting in a 1% year-on-year increase in average revenue per dealer to $2,291.

Cars.com reported average monthly visits to its marketplace were down 5% year on year, while average monthly unique visitors were up 2%.

The company was enthused about Accu-Trade, acquired earlier this year, which lets dealers trade cars with other dealers, buy cars from customers and estimate pricing based on vehicle-specific data.

Accu-Trade is Cars.com’s answer to CarGurus’s CarOffer, which more than doubled the company’s bottom line in Q4.

Cars.com added 200 new dealer accounts during the recent NADA trade show, with most sign-ups being for Accu-Trade. “It was an absolute homerun on that front,” Vetter remarked.

Vetter described Accu-Trade as a multi-faceted product that can save dealers $10,000 per month in fees from multiple vendors. “There’s no reason every dealer in the country wouldn’t want Accu-Trade,” Vetter said.

Cars started marketing it on a pilot, subscription basis in March, and Vetter said, “We’re intentionally being somewhat disruptive on pricing.” But he didn’t yet have revenue numbers to share. 

It was a similar story for Cars.com’s newly acquired CreditIQ, which lets car shoppers arrange financing and pre-qualify for loans online. Vetter said Cars.com was in talks with every major lender in the country, but that it was too soon to discuss results.

Cars.com predicts slightly accelerated growth for the current quarter of 4%, but double-digit growth in Q4 as market conditions normalize. For the year, the company reiterated its forecast of 6% to 8% annual growth.

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