Cars.com ended 2023 with a quarter of profitable revenue growth thanks to increased sales to existing dealer customers and the addition of new dealers through a Canadian acquisition.

Revenue in Q4 2023 came to $179.6 million, up 7% year-over-year, while net income was $8.3 million versus $10.3 million a year earlier.

For all of 2023, revenue was $689.2 million, up 5% y-o-y, and net income was $118.4 million compared to $17.2 million in 2022.

Dealer subscriptions, the company’s main source of revenue, grew 8% y-o-y, driven by continued growth in software and marketing sales, and a successful effort in 2023 to get more customers on higher subscription tiers. 

The company achieved a 24% y-o-y increase in ad sales to car makers, a part of business that has finally bounced back from pandemic production setbacks. Car-maker revenue was up 11% from Q3 to Q4.

Car.com’s top line also benefited from software sales from D2C Media, a Montreal-based company acquired this past fall for an initial outlay of $76 million. Without D2C’s contribution, the Q4 y-o-y revenue boost would have been 5% instead of 7%, the company said.

Average monthly unique visitors to Cars.com during Q4 were 24.3 million, down slightly from 24.6 million in Q4 2022.

Monthly average revenue per dealer was $2,523, up 7% y-o-y.

Dealer customers numbered 19,504 at the end of December, up by 789 from September 30. Without the addition of D2C Media’s 950 customers, the company would have seen net customer attrition.

“Our focus on simplifying everything about buying and selling cars enabled us to continue to deliver value for consumers, dealers, and OEMs, supporting our twelve consecutive quarters of year-over-year profitable revenue growth,” Cars.com CEO Alex Vetter wrote in the Q4 earnings announcement. “We begin 2024 well-positioned to continue building on this momentum, unlocking new growth opportunities and driving commerce for the auto industry.”

For Q1 2024, Cars.com predicted revenue between $179 million and $181 million, representing y-o-y growth of 7% to 8%. For the full year, the company anticipated growth from 2023 of 6% to 8%.

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