Cars.com Inc. (CARS) shares are soaring 14.12% in Thursday's trading session, following the company's impressive third-quarter 2025 financial results that significantly outperformed analyst expectations. The online automotive marketplace operator reported strong earnings and revenue growth, driven by successful strategic initiatives and technological advancements.
The company's adjusted earnings per share came in at $0.48, more than tripling the analyst consensus estimate of $0.15. This represents a 17.07% increase from the $0.41 per share reported in the same period last year. Revenue for the quarter reached $182 million, slightly above the expected $181.4 million and marking a 1.07% year-over-year increase. Cars.com's net income for the quarter was $7.7 million, while adjusted EBITDA hit $54.6 million.
Cars.com's strong performance can be attributed to several key factors. The company's marketplace repackaging strategy has been particularly successful, boosting Premium subscribers by 60% year-over-year. Additionally, the introduction of AI-powered features, such as the Carson AI search assistant, has doubled vehicle listing views, enhancing visitor engagement. The company also reported a 2% year-over-year growth in dealer revenue, driven by increased adoption of website and appraisal products. Looking ahead, Cars.com reaffirmed its full-year adjusted EBITDA margin guidance of 29% to 31% and continues to anticipate low-single digit revenue growth for the second half of 2025. The company remains committed to its share repurchase program, having bought back $64 million in stock year-to-date, aligning with its $70 to $90 million target for the full year.
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