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What changed in Cars.com Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cars.com Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+287 added−326 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Cars.com Inc.'s 2025 10-K

287 paragraphs added · 326 removed · 233 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeEstablished in 1998, we have a history of empowering shoppers with the data, resources and digital tools needed to make informed buying decisions and seamlessly connect with automotive retailers. Our premier automotive marketplace, Cars.com enables dealerships and OEMs with innovative solutions and data-driven intelligence to better reach and influence our 26 million average monthly ready-to-buy shoppers, ultimately increasing inventory turn.
Biggest changeWe also equip dealerships and OEMs with innovative solutions and data-driven intelligence to better reach and influence our 26 million average monthly shoppers. Not only does our marketplace drive ready-to-buy customers to the dealership, we believe our interconnected ecosystem of products also allows dealerships to operate more efficiently by facilitating a faster and easier car buying and selling experience.
Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at https://investor.cars.com as soon as reasonably practicable after we file such material with, or furnish it to, the U.S.
Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as well as proxy statements and amendments to those reports are available free of charge at https://investor.cars.com as soon as reasonably practicable after we file such material with, or furnish it to, the U.S.
In order to attract and retain exceptional talent in pursuit of our mission to simplify everything about 6 buying and selling cars, we offer competitive benefits, including market-competitive compensation, an Employee Stock Purchase Plan, a virtual first work environment, healthcare, paid time off, parental leave, adoption assistance, retirement benefits, tuition assistance, volunteer hours, employee skills development and leadership development.
In order to attract and retain exceptional talent in pursuit of our mission to simplify everything about buying and selling cars, we offer competitive benefits, including market-competitive compensation, an Employee Stock Purchase Plan, a virtual first work environment, healthcare, paid time off, parental leave, adoption assistance, retirement benefits, tuition assistance, volunteer hours, employee skills development and leadership development.
Our digital solutions products may also be subject to laws and regulations governing accessibility, intellectual property ownership, obscenity, libel and privacy among other issues.
Our digital solutions products may also be subject to laws and regulations governing accessibility, intellectual property ownership, obscenity, libel, privacy and AI among other issues.
Competition for OEMs. We compete for a share of OEMs' total marketing budgets which include traditional media, such as television, radio, print media, and billboards, as well as digital media, such as media sites, other marketplaces, search engines and social media sites, among others. We compete for advertising spend based on the marketing ROI that our products provide.
We compete for a share of OEMs' and other advertisers total marketing budgets which include traditional media, such as television, radio, print media, and billboards, as well as digital media, such as media sites, other marketplaces, search engines and social media sites, among others. We compete for advertising spend based on the marketing ROI that our products provide.
We compete for consumer visits with other online automotive marketplaces, OEM websites, free listing services, general search engines, social media and dealer websites. We compete for shopper traffic primarily on the basis of the quality of our consumer experience.
We compete for consumer visits with other online automotive marketplaces, OEM websites, free listing services, general search engines, generative AI chat engines, social media and dealer websites. We compete for shopper traffic primarily on the basis of the quality of our consumer experience.
At Cars Commerce, we recognize the value of a workforce with varied backgrounds, opinions, perspectives and personal and professional experiences. As a result, we strive to foster a culture of inclusion that ensures our workplace appreciates the views and ideas of all.
We recognize the value of a workforce with varied backgrounds, opinions, perspectives and personal and professional experiences. As a result, we strive to foster a culture of inclusion that ensures our workplace appreciates the views and ideas of all.
Cars Commerce also monitors employee satisfaction and engagement by conducting periodic surveys that are reviewed and, when appropriate, acted upon by our executive management team and shared with our Board of Directors. These surveys are an important way for us to identify areas where we can improve.
We also monitor employee satisfaction and engagement by conducting periodic surveys that are reviewed and, when appropriate, acted upon by our executive management team and shared with our Board of Directors. These surveys are an important way for us to identify areas where we can improve.
Our asset light business model drives significant net operating cash flow, in excess of $125.0 million in each of the last three years, resulting in substantial liquidity and financial flexibility, which enables us to invest in innovation, pursue strategic growth opportunities and maintain a healthy balance sheet with modest leverage. Strong, experienced management team.
Our asset light business model drives significant net operating cash flow, in excess of $135.0 million in each of the last three years, resulting in substantial liquidity and financial flexibility, which enables us to invest in innovation, pursue strategic growth opportunities and maintain a healthy balance sheet with modest leverage. Competition.
We compete for various areas of dealers’ budget including with offline customer acquisition channels, software and solutions spend, other online automotive marketplaces, dealers’ own customer acquisition efforts on search engines and other internet sites that attract consumers searching for vehicles.
We compete for dealers’ marketing budget with offline customer acquisition channels, software and solutions spend, other online automotive marketplaces, dealers’ own customer acquisition efforts on search engines and 3 other internet sites that attract consumers searching for vehicles.
Cars Commerce is focused on simplifying car buying and selling by eliminating complexity and increasing transparency throughout the local retail experience, where sales and service are best facilitated. The Cars Commerce platform brings our industry leading marketplace together with innovative digital and media solutions to create frictionless shopping experiences for consumers and our customers.
We are focused on simplifying car buying and selling by eliminating complexity and increasing transparency throughout the local retail experience, where sales and service are best facilitated. Our platform brings our industry leading marketplace together with innovative digital and media solutions which we believe creates frictionless shopping experiences for consumers and our customers.
Key products include: o Website creation and platform hosting. Our Dealer Inspire website hosting and related solutions make automotive retail faster, easier and smarter from search to signature. Built on a customizable platform and designed with user behavior data, we believe our websites are set apart by the advanced technologies that drive modern consumers toward purchase decisions.
These website hosting and related solutions transform automotive retail processes by making them faster, easier and smarter from search to signature. Built on a customizable platform and designed with user behavior data, we believe our websites are set apart by the advanced technologies that drive modern consumers toward purchase decisions.
Human Capital. The foundation of Cars Commerce’s business is our employees. As of December 31, 2024, Cars Commerce had approximately 1,800 full-time, part-time, seasonal and temporary employees. Cars Commerce is committed to the highest standards of integrity, inclusion and responsible business practices.
Human Capital. The foundation of our business is our employees. As of December 31, 2025, we had approximately 1,700 full-time, part-time, seasonal and temporary employees. We are committed to the highest standards of integrity, inclusion and responsible business practices.
We complement our marketplace products with digital solutions, including websites and trade-in and appraisal technology, and media offerings powered by our exclusive in-market media network. For example, website hosting customers that also have a marketplace subscription get approximately 40% more connections to their website, in addition to the associated marketplace leads they receive, as compared to those without marketplace.
We complement our marketplace products with digital solutions, including websites and trade and appraisal technology, in-market media solutions. For example, U.S. website customers that also have a marketplace subscription see approximately 45% more connections to their website, in addition to 1 the associated marketplace leads they receive, as compared to those without marketplace.
Cars Social allows dealers to target and serve native advertisements displaying real-time inventory to in-market car shoppers on Facebook and Instagram by leveraging our valuable audience data. This solution is also available to OEMs. o VIN Performance Media.
Cars Social enables dealers, OEMs and other national advertisers to target and serve native advertisements displaying real-time inventory to in-market car shoppers on Facebook, Instagram and other social media platforms by leveraging our valuable audience data. o VIN Performance Media.
Consumers are challenged with makes, models and trim-levels and opaque, yet negotiable prices, and gaps in the online-to-offline shopping experience, all of which add complexity to an often overwhelming decision-making process. Shoppers are seeking a more streamlined, simplified automotive retail experience. Cars Commerce helps car shoppers cut through the clutter with products designed to reduce friction from search to signature.
Consumers are challenged with makes, models and trim-levels, opaque, yet negotiable prices, and gaps in the online-to-offline shopping experience, all of which add complexity to an often overwhelming decision-making process. Shoppers desire a more streamlined, simplified and trustworthy automotive retail experience.
Importantly, we believe that many of the tools we have built for consumers, particularly those that support financing and trade-in valuation, help our dealer customers and OEMs by providing them with more qualified, ready-to-transact leads and reducing points of friction that can often arise in the purchase journey. Industry Dynamics.
Importantly, we believe that many of the tools we have built for consumers, particularly those that support trade-in valuation, benefit our dealer customers and OEMs by enhancing consumer trust and reducing points of friction that can often arise in the purchase journey. Industry Dynamics.
When one of our OEM partners purchased a prominent advertising sponsorship, we observed increased consumer engagement on Cars.com (searches and vehicle page views), traffic to their dealers' websites, and a 3 double digit lift in conversions on those dealer websites during the sponsorship period. The product suite for dealers includes four turnkey solutions: o Cars Social.
For example, when an OEM partner purchased a prominent advertising sponsorship in 2025, we observed increased consumer engagement on Cars.com (searches and vehicle page views), traffic to the OEM's dealers' websites, and a double-digit lift in conversions on those dealer websites during the sponsorship period. Our media solutions include: o Cars Social.
Our integrated platform helps sellers expand their consumer influence and engagement across the entire purchasing journey, ultimately increasing sales, creating operational efficiencies and improving profitability.
We believe our solutions seamlessly connect buyers and sellers wherever they are in their vehicle shopping journey. Our integrated platform helps sellers expand their consumer influence and engagement across the entire purchasing journey, ultimately increasing sales, creating operational efficiencies and improving profitability.
Especially when it is hard. • Be Open to All - We encourage open-minded communication because we know diverse thinking yields better outcomes. We welcome new ideas, respect differences and open the floor to all voices.
Especially when it is hard. 4 • Be Open to All - We encourage open-minded communication because we know diverse thinking yields better outcomes. We welcome new ideas, respect differences and open the floor to all voices. We believe our highly innovative and collaborative teams are one of our biggest differentiators and the most important investment we can make.
Dealers and OEMs value our marketplace for the opportunity to connect with our in-market audience of 26 million average monthly users in 2024, and to improve their marketing and operational efficiency with our suite of solutions.
Our platform provides local dealers, OEMs, dealer groups and auto-adjacent companies a variety of digital and media solutions to improve their marketing and operational efficiency. Dealers and OEMs particularly value our marketplace for the opportunity to connect with our in-market audience of 26 million average monthly users in 2025.
We believe the marketplace is critical to the pretail experience, allowing OEMs and dealers to merchandise their inventory to our 26 million average monthly shoppers each month in 2024. Importantly, approximately 60% of our traffic comes to us organically, allowing us to provide our customers with a truly complementary and unduplicated audience.
We enabled dealers and OEMs to professionally merchandise their inventory to our 26 million average monthly shoppers in 2025. Importantly, the majority of our traffic comes to us organically so that we provide our customers with a truly complementary and unduplicated audience.
A powerful suite of brands delivering integrated digital and media solutions that enable our platform strategy. Our Cars Commerce suite of brands includes integrated marketplace, retailing and media solutions that define our platform strategy and make us essential to the automotive industry. We believe our solutions seamlessly connect buyers and sellers wherever they are in their vehicle shopping journey.
A powerful suite of brands delivering integrated digital and media solutions that enable our platform strategy. Our suite of brands includes our flagship Cars.com integrated marketplace, digital retailing and media solutions that define our platform strategy and make us essential to the automotive industry.
Not only does our audience power our marketplace packages, they are also key to our ability to efficiently grow and scale our media solutions that allow customers to target in-market shoppers and strengthen our digital solutions. In 2024, we had 26 million average monthly unique visitors that visited our marketplace a total of over 600 million times.
Our audience powers our integrated platform strategy. Not only does our audience power our marketplace packages, they are also key to our ability to efficiently grow and scale our media solutions that allow customers to target in-market shoppers and strengthen our digital solutions.
Customer concentration is also limited and each month, we generate an average monthly revenue per dealer of over $2,400 during the fourth quarter from across our over 19,200 dealers.
We generate approximately 80% of our revenue via subscription-based solutions, creating a dependable recurring revenue stream across our diversified mix of marketplace subscription advertising packages, digital solutions, and media. Our customer concentration is also limited, as each month, we generate an average monthly revenue per dealer of over $2,400 during the fourth quarter from across our approximately 19,500 dealers.
Our direct competitors are online automotive marketplaces, such as CarGurus, AutoTrader and TrueCar. We also compete with other automotive websites, such as CARFAX, Edmunds and Kelley Blue Book. Additionally, we compete with platforms, such as internet search engines, online dealerships, social media marketplaces and online consumer marketplaces. Competition for Consumers.
We compete with other companies to attract consumers and customers to our marketplace, digital experience, trade and appraisal, and media solutions. Our direct competitors are online automotive marketplaces, such as CarGurus, AutoTrader and TrueCar. We also compete with other automotive websites, such as CARFAX, Edmunds and Kelley Blue Book.
We believe our marketplace functions as a definitive resource for car shoppers. We are known for the depth and scale of our listings and reviews, with over 2.7 million vehicle listings and over 13 million consumer reviews as of December 31, 2024. In addition, our expert editorial reviews and news and research publications aid shoppers in their purchase journey.
We are known for the depth and scale of our listings and reviews, as evidenced by our over 4.6 million monthly unique VINs and over 16 million consumer reviews as of December 31, 2025. In addition, our expert editorial content, including news and research publications, aid shoppers in their purchase journey.
We strive to comply with industry standards and all applicable laws, policies, legal obligations relating to privacy and data protection. We are also subject to our privacy policies and privacy-related obligations to third parties. To operate in this highly regulated environment, we have developed our products and services with a view toward appropriately managing our regulatory risk compliance.
To operate in this highly regulated environment, we have developed our products and services with a view toward appropriately managing our regulatory risk compliance.
As an audience-driven technology company, Cars Commerce is focused on helping our customers, primarily dealers, drive profitable vehicle sales. More recently dealers have experienced compressed margins, as well as improved supply and market normalization. Additionally, during this time, consumer expectations on their digital purchase journey have only increased.
As an audience-driven technology company, we are focused on helping our customers, primarily automotive dealerships, drive profitable vehicle sales. Consumer expectations on their digital purchase journey have only increased.
We believe we are 2 the first truly integrated platform, providing a comprehensive suite of sales-oriented products and solutions that support dealers' local retail operations. Products. Our interconnected platform is organized around four core capabilities: Marketplace, Digital Experience, Trade & Appraisal and Media. • Marketplace. Central to our platform is Cars.com, the most recognized automotive marketplace brand.
Our interconnected product suite is organized around four core capabilities: Marketplace, Digital Experience, Media Solutions and Trade & Appraisal. • Marketplace. Central to our platform is Cars.com, the most recognized automotive marketplace brand, which we believe serves a critical role as a trusted and neutral third-party marketplace connecting consumers, dealers and OEMs to drive automotive retail at scale.
VIN Performance Media utilizes advanced machine-learning to automatically optimize all aspects of the media campaign, including audience targeting, real-time inventory, and ad placement across search, social, and display. By improving traffic to dealer vehicle details pages, VIN Performance Media increases the inventory turn rate. o In-Market Video and In-Market Display.
VIN Performance Media utilizes advanced machine-learning to optimize all aspects of a media campaign, including audience targeting, real-time inventory and ad placement across search, social, and display. o In-Market Video. In-Market Video provides OEMs and dealers with the opportunity to pinpoint serious, ready-to-buy shoppers geographically on their screen of choice via social media platforms, streaming apps and connected TV.
The strength of our products and solutions has attracted over 19,200 franchise and independent dealer customers across the U.S. and Canada to our platform. The majority of our dealer customers subscribe to the Cars.com marketplace and increasingly, they are 1 leveraging more of our platform to power their local retail operations.
The strength of our products and solutions has attracted approximately 19,500 franchise and independent dealer customers across the U.S. and Canada to our platform. Approximately 80% of our dealer customers subscribe to either the Cars.com marketplace or the marketplace and additional interconnected solutions, with our remaining customers subscribing to standalone digital website solutions.
As a result, dealers seeking to build a sustainable advantage are investing more in their websites and technology solutions to drive operational efficiency while supporting shoppers in their preferred purchase channels (i.e., online, offline or both).
As a result, some dealers seek to invest more in their websites and technology solutions to drive operational efficiency, while supporting shoppers in their preferred purchase channels (i.e., online, in person or both). We believe we are the first truly integrated marketplace-centric platform, providing a comprehensive suite of sales-oriented products and solutions that support dealers' local retail operations. Products.
Overall, our consumer experience is focused on reducing friction, improving speed and delivering powerful results through pricing, financing, comparison shopping, research and communication tools that empower shoppers. For Customers. Our platform offers local dealers, OEMs, dealer groups and auto-adjacent companies a variety of products and solutions.
We also allow consumers to better understand cost of ownership from the convenience of their home with financing tools and vehicle trade-in values. Overall, our consumer experience is focused on reducing friction and improving speed to purchase through pricing, comparison shopping, research and communication tools that empower shoppers. For Customers.
In-Market Video provides OEMs and dealers with the opportunity to pinpoint serious, ready-to-buy shoppers geographically on their screen of choice via social media platforms, streaming apps and connected TV. This targeted approach drives high advertising efficiency for customers and compares favorably to the high-cost broadcast television solutions that dealers and OEMs have historically relied on.
This targeted approach drives high advertising efficiency for customers and compares favorably to the high-cost broadcast television solutions that dealers and OEMs have historically relied on. • Trade & Appraisal. AccuTrade helps dealers manage inventory life-cycle from appraisal to exit to maximize dealer profitability.
We have made strategic technology and marketing investments to deliver what we believe is the industry’s most qualified car shopping audience. Our audience powers our integrated platform strategy.
For instance, dealers that subscribe to our trade and appraisal tools as well as our Cars.com marketplace have approximately 70% more marketplace leads, in addition to their Instant Offer leads. A high-quality audience, at scale, enables our industry-leading platform. We have made strategic technology and marketing investments to deliver what we believe is the industry’s most qualified car shopping audience.
We compete primarily on the basis of the return on investment ("ROI") 5 to the customer that our marketplace and our other solutions provide. We believe we are in a favorable market position due to our platform advantage utilizing our highly engaged, large, in-market consumer audience, resulting in high quality connections we provide to dealers, resulting in an attractive ROI.
We compete primarily on the basis of the return on investment ("ROI") to the customer that our marketplace, solutions and data insights provide in the form of increased profitability and improved inventory turn time. We leverage our expansive, engaged audience and proprietary data to maintain a distinct competitive advantage.
Today, we host the digital storefronts (websites) for approximately 7,600 dealers in the U.S. and Canada. o Digital retailing solutions. Our digital retailing product suite is focused on bringing omnichannel commerce to the automotive industry at scale by simplifying the online to in-store process for dealers and buyers.
Today, we host the digital storefronts (websites) for approximately 7,700 dealers in the U.S. and Canada. • Media Solutions. Our exclusive automotive media solutions enable local and national customers alike to reach proven in-market consumers.
According to a recent Cars.com survey, approximately 83% of our audience is in-market to buy a car, compared to a fraction of the general population. The average time for a shopper to purchase a car is approximately two months; however, approximately 50% of the Cars.com audience plans to buy within 30 days.
Over the past 25 years, we have made more than half a billion connections between car shoppers and sellers. According to a recent Cars.com survey, over 80% of our audience is in-market to buy a car, compared to a fraction of the general population.
AccuTrade uses real-time market data and diagnostic scans to determine the right trade-in offer for every VIN in minutes, increasing dealer access to high quality used vehicle inventory and improving dealer profitability through reconditioning loss avoidance and operations efficiency, and while creating transparency for the consumer in the trade-in process, which is often a point of friction.
Gross profit begins at the time of appraisal by leveraging retail and wholesale demand data and diagnostic scans to determine the right trade-in offer for a VIN in minutes. Through this solution, dealers gain access to high quality used vehicle inventory and experience improved profitability by avoiding reconditioning costs of approximately $800 on average per vehicle acquisition.
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Item 1. Business. Cars Commerce is an audience-driven technology company empowering the automotive industry. We aim to simplify everything about car buying and selling with powerful products, solutions and machine learning model-driven artificial intelligence technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations.
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Item 1. Business. Cars.com Inc. (NYSE:CARS) is a trusted audience-powered and data-driven technology platform that simplifies buying and selling cars. The flagship Cars.com marketplace connects millions of consumers to dealerships across the U.S., powering the car buying experience with artificial intelligence ("AI") shopping tools and comprehensive vehicle reviews and content.
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The Cars Commerce platform is organized around four industry-leading brands: our flagship automotive marketplace and dealer reputation site Cars.com, award-winning digital retail technology and marketing services from Dealer Inspire, essential trade-in and appraisal technology from AccuTrade and exclusive in-market media solutions from the Cars Commerce Media Network.
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Our interconnected ecosystem of products enables dealers and OEMs to sell more cars by efficiently leveraging our marketplace, dealer websites, trade and appraisal tools and proprietary in-market media solutions. Learn more at www.carscommerce.inc. Our premier automotive marketplace, Cars.com, empowers shoppers with the data, resources and digital tools they need to make informed buying decisions and seamlessly connect with automotive retailers.
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We have further invested in building innovative products and solutions that we believe help future-proof dealerships with more efficient operations, a faster and easier car buying process, and connected digital experiences that sell and service more vehicles. Today, we provide a full suite of integrated platform capabilities that drive ready-to-buy car shoppers to the dealership.
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We help car shoppers cut through the noise with AI-powered features designed to move them confidently from search to signature. We believe our marketplace functions as a definitive resource for car shoppers.
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We also include features like Instant Finance to help consumers better understand their total cost of ownership, including financing fees. With over 30% of car shoppers also seeking to sell their vehicle, Instant Offer allows them to understand the value of their vehicle before leaving the comfort of their home.
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We offer dealers packages that include reputation management technology and digital financing tools, with additional functionality like media solutions, for our upper-tier packages. Notably, dealers purchasing these upper-tier packages typically experience a double-digit improvement in leads per listing. We continue to add new consumer features, such as Carson TM , to our marketplace.
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Additionally, dealers that have an active AccuTrade solution with marketplace have approximately 90% more marketplace and Instant Offer leads.
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Carson TM , which launched in 2025, provides consumers with an AI-powered natural language search experience. Shoppers utilizing Carson TM generate two times more leads than other shoppers. • Digital Experience. We operate dealer websites in both the U.S. and Canada as an endorsed website provider by substantially all OEMs.
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Our marketplace packages include reputation management technology and digital financing tools, and dealers using our upper-tier packages experienced a double-digit improvement in inventory turn time. For subscribing dealers, AccuTrade’s Instant Offer is directly integrated into the Cars.com experience, giving them access to in-market consumers who are ready to trade-in their vehicle for a new one.
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Whether on or off our Cars.com related properties, OEMs and dealers advertising with our media solutions experience increased consumer engagement as seen throughout the digital shopping experience.
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We also have Your Garage as a feature of Cars.com, allowing consumers to add and save vehicles to their virtual Garage and track the Cars.com Market Value of their current vehicle. Cars.com Market Value leverages our retail demand data to help consumers identify the best time to sell or trade-in their vehicle. • Digital Experience.
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AccuTrade's rich dataset then determines the best retail or wholesale exit strategy for each vehicle. The dealer can choose to retail the vehicle on our Cars.com marketplace or wholesale their vehicle on DealerClub.
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The Cars.com marketplace audience is often driven directly into the retail experience through our platform's websites and solutions. Our industry-leading brand Dealer Inspire is a preferred provider with nearly every OEM in the United States. Dealer Inspire websites and technology include integrated reviews, AI-powered chat tools, instant financing and vehicle acquisition technology.
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And for dealers choosing to wholesale the vehicle, we have a click-to-list option to DealerClub, the first reputation-based, dealer-to-dealer digital auction that brings trust to wholesale auctions via transparent pricing and buyer and seller reviews. 2 We believe this helps minimize arbitration disputes and title issues, ultimately improving overall profitability per wholesale transaction. Our Strengths and Competitive Advantages.
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In 2023, we acquired D2C Media Inc. ("D2C Media"), a leading automotive technology and digital solutions provider in Canada. D2C Media also serves dealer customers with website, media services and other technology solutions that help dealers increase sales velocity and measure impact.
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In 2025, we had 26 million average monthly unique visitors that visited our marketplace a total of over 600 million times. Leveraging industry-leading brand recognition, we capture the majority of our traffic organically. Cars.com serves as a premier consumer resource, combining expert editorial content with easy-to-use tools such as Best Match™ and Carson™.
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Our Conversations product is built to connect in-market car buyers with sellers — wherever, whenever and however they want to shop. Conversations turns chats into customers by leveraging AI technology, live video chat capabilities and 24/7 managed chat support to instantly respond to all incoming messages. Our Online Shopper solution enables e-commerce transactions for dealers.
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The average time for a shopper to purchase a car is approximately two months, and approximately 60% of the Cars.com audience plans to buy within the next two months. Asset light business model with a diversified revenue base, attractive cash flow and strong balance sheet.
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This feature also allows shoppers to add finance and insurance products and aftermarket accessories, and to checkout, for delivery or pick-up in just three easy steps.
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We also compete with dealer software and marketing services providers such as Cox Automotive and DealerOn. Additionally, we compete for consumer audience with platforms, such as internet search engines, generative AI chat engines, online dealerships, social media marketplaces and online consumer marketplaces. • Competition for Consumers.
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Instant Finance enables shoppers to digitally secure instant vehicle financing, while our dealer customers are empowered with the ability to utilize the lenders of their choice at no cost to the dealer. • Trade & Appraisal.
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We believe by connecting well-informed consumers with dealers through these insights, we ensure a superior ROI that is both consistent and measurable. • Competition for OEMs and other advertisers.
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AccuTrade leverages retail and wholesale data and onboard diagnostic scanner data to automatically adjust the vehicle value based on the specific vehicle being analyzed, with approximately 30% greater accuracy than legacy valuation providers. It quickly delivers a tailored, consumer-facing condition report that provides transparency to consumers while saving dealers an average of approximately $700 in reconditioning costs per vehicle.
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The duration of the protection afforded to our intellectual property depends on the type of property in question and the laws and regulations of the relevant jurisdiction. We protect our intellectual property rights by relying on federal, state and common law rights, including registration in the U.S. and applicable foreign jurisdictions.
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AccuTrade's consumer website application is seamlessly integrated into Cars.com and dealer websites, allowing consumers to obtain instant and transparent cash offers for their specific VINs. • Cars Commerce Media Network.
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We strive to comply with industry standards and all applicable laws, regulations, policies, and legal obligations relating to privacy and data protection (including those imposed by comprehensive state consumer privacy laws, which are constantly evolving and increasing in number). We are also subject to our privacy policies and privacy-related obligations to third parties.
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A commerce media network created exclusively for automotive, Cars Commerce Media Network allows local and national customers alike to reach proven in-market and in-context consumers to accelerate the path to purchase. When OEMs advertise with Cars Commerce Media Network, we see impact throughout the consumer digital shopping experience.
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Our In-Market Display products enable dealers and OEMs to extend their reach and efficiently access our large audience of in-market car shoppers. The geographically targeted advertising served on our Cars.com website and mobile app enables our customers to increase brand awareness and promote inventory. Our Strengths and Competitive Advantages.
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Customers who subscribe to our Cars.com marketplace and Dealer Inspire website experience are providing consumers with a more integrated experience across pretail and retail, leading to more than a higher lead close rate, reflecting the interoperability and benefits of our platform. A high-quality audience, at scale, enables our industry-leading platform.
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We generate the majority of our traffic organically as a trusted resource for customers through our high-quality content, including editorial and consumer reviews and suite of easy-to-use consumer facing tools such as Best Match. Over the past 25 years, we have made more than half a billion connections between car shoppers and sellers.
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Asset light business model with a diversified revenue base, attractive cash flow and strong balance sheet. We generate approximately 80% of our revenue via subscription, creating a dependable recurring revenue stream across our diversified mix of marketplace 4 subscription advertising packages, digital solutions, and media.
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We have an experienced management team that has a demonstrated track record of delivering results. The team also brings unique experience driving innovation and digital transformation and unlocking value for customers while modernizing established industries. Our Long-Term Growth Strategy.
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We have five primary drivers to grow our business: continue to create the most engaged in-market audience, grow our dealer customers, unlock the cross-sell, transform our OEM relationships and create platform advantages. • Grow the industry's most engaged shopping audience.
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With approximately 26 million average monthly unique visitors and over 600 million visits per year, we have one of the industry’s largest and most engaged in-market audience. Our industry-leading brand and high quality content allow us to generate approximately 60% of our audience organically.
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This reduces our reliance on search engine marketing and provides our dealers with access to an audience that cannot be easily duplicated. Shoppers interact with our platform in many ways, including researching vehicles, writing dealer reviews, securing qualified financing and obtaining instant offers for their trade-in vehicles.
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We believe continued investments in consumer engagement will create more qualified leads for our customers, thereby increasing our attribution and ultimately resulting in growth in customers and increased product adoption and retention. • Grow our network of dealer customers. We have a significant opportunity to grow our base of dealer customers.
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While we have a substantial dealer customer base of over 19,200, there are approximately 40,000 dealerships nationwide, providing us with ample room for growth domestically and geographically by expanding our presence in Canada through the D2C Media acquisition. • Expand our relationship with dealers through greater adoption of our platform.
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We operate in the large and growing automotive advertising and technology market. Dealers are investing more in media and digital solutions, particularly those that allow them to turn inventory faster and more efficiently. Our integrated platform helps sellers expand their consumer influence and engagement across the entire purchasing journey, ultimately increasing sales, creating operational efficiencies and improving profitability.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

84 edited+25 added−17 removed132 unchanged
Biggest changeIf our anticipated transaction synergies do not fully materialize and/or the AccuTrade or CreditIQ businesses fails to continue to grow at the rate we expect, our revenue and business would be harmed. 12 On November 1, 2023, we acquired D2C Media, a leading automotive technology and digital solutions provider in Canada and on January 23, 2025, we acquired Dealer Club, Inc.
Biggest changeOn November 1, 2023, we acquired D2C Media, a leading automotive technology and digital solutions provider in Canada and on January 23, 2025, we acquired Dealer Club, Inc. ("DealerClub"), an emerging dealer-to-dealer digital wholesale auction platform. As part of the acquisitions, we must integrate two previously independently operated businesses.
In addition, we could be subject to evolving laws and regulatory standards that impose data use obligations, data breach notification requirements, specific data security obligations, restrictions on solicitation or other consumer privacy-related requirements. • Data Protection (Internal): We process and store company information that may be considered sensitive or valuable intellectual property in the normal operations of human resources, finance, legal, marketing, software development, product management, mergers and acquisitions and other business functions.
In addition, we could be subject to evolving laws and regulatory standards that impose data use obligations, data breach notification requirements, specific data security obligations, restrictions on solicitation and use or other consumer privacy-related requirements. • Data Protection (Internal): We process and store company information that may be considered sensitive or valuable intellectual property in the normal operations of human resources, finance, legal, marketing, software development, product management, mergers and acquisitions and other business functions.
If the use of third-party cookies or other tracking technologies is rejected by Internet browsers or service providers or users, restricted, blocked, or subject to unfavorable laws or regulations, the amount of Internet user information would decrease, which may harm our business and operating results.
If the use of third-party cookies or other tracking technologies is rejected by Internet browsers or service providers or users, restricted or blocked, or subject to unfavorable laws or regulations, the amount of Internet user information would decrease, which may harm our business and operating results.
Our indebtedness could also have other important consequences with respect to our ability to manage and grow our business successfully, including the following: • it may limit our ability to borrow money for our working capital, capital expenditures, strategic initiatives, acquisitions or other purposes; • it may make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under our credit agreement and our other indebtedness; • a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness and so will not be available for other purposes; • it may limit our flexibility in planning for, or reacting to, changes in our operations or business, or in taking advantage of strategic opportunities; • at times we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • it may make us more vulnerable to downturns in our business or the economy; • it may restrict us from making strategic acquisitions or divestitures, introducing new technologies or exploiting business opportunities; and • along with the financial and other restrictive covenants in the documents governing our indebtedness, among other things, may limit our ability to borrow additional funds, make acquisitions or capital expenditures, acquire or dispose of assets or take certain of the actions mentioned above, or adversely impact our ability to implement our capital allocation strategy (which includes paying dividends on our common stock), any of which could restrict our operations and business plans.
Our indebtedness could also have other important consequences with respect to our ability to manage and grow our business successfully, including the following: • it may limit our ability to borrow money for our working capital, capital expenditures, strategic initiatives, acquisitions or other purposes; 18 • it may make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under our credit agreement and our other indebtedness; • a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness and so will not be available for other purposes; • it may limit our flexibility in planning for, or reacting to, changes in our operations or business, or in taking advantage of strategic opportunities; • at times we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • it may make us more vulnerable to downturns in our business or the economy; • it may restrict us from making strategic acquisitions or divestitures, introducing new technologies or exploiting business opportunities; and • along with the financial and other restrictive covenants in the documents governing our indebtedness, among other things, may limit our ability to borrow additional funds, make acquisitions or capital expenditures, acquire or dispose of assets or take certain of the actions mentioned above, or adversely impact our ability to implement our capital allocation strategy (which includes paying dividends on our common stock), any of which could restrict our operations and business plans.
In addition, complaints or negative publicity about our business practices and culture, including our solutions, technologies, sales practices, management team, employees, our marketing and advertising campaigns, our compliance with applicable laws and regulations, the 8 integrity of the data that we provide to consumers, data privacy and security issues, third-party content and conduct on websites, customer service and other aspects of our business could diminish confidence in and the use of our services.
In addition, complaints or negative publicity about our business practices and culture, including our solutions, technologies, sales practices, management team, employees, our marketing and advertising campaigns, our compliance with applicable laws and regulations, the integrity of the data that we provide to consumers, data privacy and security issues, third-party content and conduct on websites, customer service and other aspects of our business could diminish confidence in and the use of our services.
Further, perceived uncertainties as to our future direction, including uncertainties related to the composition of our Board of Directors, may lead to the perception of instability or a change in the direction of our business, which may be exploited by our competitors, cause concern to current or potential customers, result in the loss of potential business opportunities, make it more difficult to attract and retain qualified employees and/or affect our relationships with vendors, customers and other third parties.
Further, perceived uncertainties as to our future direction, including uncertainties related to the composition of our Board of Directors, may lead to the 17 perception of instability or a change in the direction of our business, which may be exploited by our competitors, cause concern to current or potential customers, result in the loss of potential business opportunities, make it more difficult to attract and retain qualified employees and/or affect our relationships with vendors, customers and other third parties.
In addition, if these third-party service providers were to cease operations, temporarily or permanently, face financial distress or other business disruption or increase their fees, or if our relationship with these providers were to deteriorate, we could suffer increased costs and delays in our 13 ability to provide our products to consumers and customers until a comparable provider is identified or until we develop replacement technology or operations.
In addition, if these third-party service providers were to cease operations, temporarily or permanently, face financial distress or other business disruption or increase their fees, or if our relationship with these providers were to deteriorate, we could suffer increased costs and delays in our ability to provide our products to consumers and customers until a comparable provider is identified or until we develop replacement technology or operations.
If we cannot continue to develop and improve our advertising tools in a timely fashion, those tools are unreliable, or the measurement results are inconsistent with customer goals, our advertising revenue could be adversely affected. 15 Developers may release additional technology that further inhibits our ability to collect data that allows us to measure the effectiveness of advertising on our platform.
If we cannot continue to develop and improve our advertising tools in a timely fashion, those tools are unreliable, or the measurement results are inconsistent with customer goals, our advertising revenue could be adversely affected. Developers may release additional technology that further inhibits our ability to collect data that allows us to measure the effectiveness of advertising on our platform.
If our security and resiliency measures fail to prevent incidents, it could result in damage to our reputation, incur costs and create liabilities. Like other technology-based businesses, our platform may be subject to attacks from computer viruses, break-ins, phishing attacks, ransomware attacks, unauthorized use, attempts to overload services with denial-of-service and other attacks.
If our security and resiliency measures fail to prevent incidents, it could result in damage to our reputation, incur costs and create liabilities. 12 Like other technology-based businesses, our platform may be subject to attacks from computer viruses, break-ins, phishing attacks, ransomware attacks, unauthorized use, attempts to overload services with denial-of-service and other attacks.
Additionally, if our products or services are determined not to comply with relevant regulatory requirements, we or our partners could be subject to possibly significant civil and criminal penalties, including fines, or the award of significant damages in class action or civil litigation, as well as orders interfering with our ability to continue providing our products and services in certain jurisdictions.
Additionally, if our products or services are determined not to comply with relevant regulatory requirements, we or our partners could be subject to possibly significant civil and criminal penalties, including fines, or the award of significant damages in class action or civil litigation, as well as orders interfering with our ability to continue providing our products and services in certain 8 jurisdictions.
Acquisitions may result in our assumption of unexpected liabilities, the integration of separate organizations, the unanticipated incompatibility of systems and operating methods, negative impacts on employee morale and performance as a result of job changes and reassignments, unforeseen difficulties in operating businesses we have not operated before and the diversion of management’s attention from the operation of our core business.
Acquisitions may result in our assumption of unexpected liabilities, the integration of separate organizations, the 10 unanticipated incompatibility of systems and operating methods, negative impacts on employee morale and performance as a result of job changes and reassignments, unforeseen difficulties in operating businesses we have not operated before and the diversion of management’s attention from the operation of our core business.
In addition, if we experience a significant decrease in advertising spending by OEMs or other national customers for any reason, our revenue will decrease and our business, results of operations or financial condition may be materially and adversely affected. 11 If we do not adapt to automated buying strategies, our display advertising revenue could be adversely affected.
In addition, if we experience a significant decrease in advertising spending by OEMs or other national customers for any reason, our revenue will decrease and our business, results of operations or financial condition may be materially and adversely affected. If we do not adapt to automated buying strategies, our display revenue could be adversely affected.
These market characteristics are intensified by the emerging nature of the market and the fact that many companies are expected to introduce new products and services in the near future. If we are unable to adapt to changing technologies, our business, results of operations or financial condition may be materially and adversely affected.
These market characteristics are intensified by the emerging nature of the market and the fact that many companies 11 are expected to introduce new products and services in the near future. If we are unable to adapt to changing technologies, our business, results of operations or financial condition may be materially and adversely affected.
Failure to protect sensitive company information or 14 intellectual property may result in loss of competitive advantage, reputation damage, direct and indirect costs and other liabilities. Failure to protect material financial information including financial performance and merger and acquisition data could also subject us to liabilities imposed by federal and state regulatory agencies or courts.
Failure to protect sensitive company information or intellectual property may result in loss of competitive advantage, reputation damage, direct and indirect costs and other liabilities. Failure to protect material financial information including financial performance and merger and acquisition data could also subject us to liabilities imposed by federal and state regulatory agencies or courts.
Our Amended and Restated Certificate of Incorporation provides that, unless our Board of Directors otherwise determines, the state courts of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former directors or officers to us or to our stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty; any action asserting a claim against us or any of our current or former directors or officers arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL") or our Amended and Restated Certificate of Incorporation or Bylaws; any action asserting a claim relating to or involving us that is governed by the internal affairs doctrine; or any action asserting an "internal corporate claim" as such term is defined in the DGCL.
Our Amended and Restated Certificate of Incorporation provides that, unless our Board of Directors otherwise determines, the state courts of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former directors or officers to us or to our stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty; any action asserting a claim against us or any of our current or former directors or officers arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL") or our Amended and Restated Certificate of Incorporation or By-laws; any action asserting a claim relating to or involving us that is governed by the internal affairs doctrine; or any action asserting an "internal corporate claim" as such term is defined in the DGCL.
Substantially all of our revenue is generated from subscription products offered to automotive dealers, OEMs and other customers in or adjacent to the automotive industry. Our business may be negatively affected during times of low automobile sales, low dealer inventory due to production shortages or delays and high unemployment.
Substantially all of our revenue is generated from subscription products offered to automotive dealers and other customers in or adjacent to the automotive industry. Our business may be negatively affected during times of low automobile sales, low dealer inventory due to production shortages or delays and high unemployment.
Subject to certain exceptions, these covenants restrict our ability and the ability of our subsidiaries to, among other things: • permit liens on current or future assets, • enter into certain corporate transactions, • incur additional indebtedness, • make certain payments or distributions, 19 • dispose of certain property, • prepay or amend the terms of other indebtedness, and • enter into transactions with affiliates.
Subject to certain exceptions, these covenants restrict our ability and the ability of our subsidiaries to, among other things: • permit liens on current or future assets, • enter into certain corporate transactions, • incur additional indebtedness, • make certain payments or distributions, • dispose of certain property, • prepay or amend the terms of other indebtedness, and • enter into transactions with affiliates.
We expect that Internet technologies and software products and services may be increasingly subject to third-party infringement claims as the number of competitors in our industry segment grows and the functionality of products in different industry segments overlaps. Our ability to 16 compete depends upon our proprietary systems and technology.
We expect that Internet technologies and software products and services may be increasingly subject to third-party infringement claims as the number of competitors in our industry segment grows and the functionality of products in different industry segments overlaps. Our ability to compete depends upon our proprietary systems and technology.
We compete with other consumer automotive websites and mobile applications and other digital content providers for share of automotive-related digital display advertising spending and may be unable to maintain or grow our base of advertising customers or increase our revenue from existing customers.
We compete with other consumer automotive websites and mobile applications and other digital content providers for share of automotive-related digital advertising spending and may be unable to maintain or grow our base of advertising customers or increase our revenue from existing customers.
These additional expenditures may materially and adversely affect our future results of operations, whether directly through increasing future overhead or indirectly by forcing us to pass on these additional costs to our customers, making our solutions less competitive.
These additional expenditures may materially and adversely affect our future results of operations, 14 whether directly through increasing future overhead or indirectly by forcing us to pass on these additional costs to our customers, making our solutions less competitive.
The loss of the services of any of our key employees or the failure to attract or replace qualified employees may have a material and adverse effect on our business. Adverse results from litigation or governmental investigations could impact our business practices and operating results.
The loss of the services of any of our key employees or the failure to attract or replace qualified employees may have a material and adverse effect on our business. 15 Adverse results from litigation or governmental investigations could impact our business practices and operating results.
Expanding the business will depend, in part, on our ability to maintain the consumer and customer trust in our solutions and services and the quality and integrity of the listings and other content found on the Cars.com sites and mobile applications.
Expanding the business will depend, in part, on our ability to maintain the consumer and customer trust in our solutions and services and the quality 6 and integrity of the listings and other content found on the Cars.com sites and mobile applications.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value 16 of our common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
In November 2021, we acquired the stock of CreditIQ, Inc., a privately held, automotive financial technology ("fintech") platform that provides instant online loan screening and approvals to facilitate online car buying.
In November 2021, we acquired the stock of CreditIQ, Inc., a privately held, automotive financial technology platform that provides instant online loan screening and approvals to facilitate online car buying.
Further, if OEMs continue to transition to e-commerce and direct-to-consumer sales models to grow their market penetration, consumer demand for our platform could be materially adversely affected with consumers shifting from our platform to an OEM-based platform. 7 In addition, a decrease in market demand caused by longer vehicle ownership , self-driving technology, ride sharing, transportation networks and other fundamental changes in transportation could impact the demand for new and used automobiles.
Further, if OEMs continue to transition to e-commerce and direct-to-consumer sales models to grow their market penetration, consumer demand for our platform could be materially adversely affected with consumers shifting from our platform to an OEM-based platform. 5 In addition, a decrease in market demand caused by longer vehicle ownership , self-driving technology, ride sharing, transportation networks and other fundamental changes in transportation could impact the demand for new and used automobiles.
A number of economic and market conditions drive changes in automobile sales, including disruptions in the new automobile supply chain, the availability and prices of new and used automobiles, unemployment and inflation levels, availability of affordable financing, fluctuations in the cost of fuel, consumer confidence and other factors affecting demand for vehicles, government shutdowns, political unrest or uncertainty, the occurrence of contagious disease or illness, barriers to trade, new OEM entrants into markets and other global economic conditions.
A number of economic and market conditions drive changes in automobile sales, including disruptions in the new automobile supply chain, consumer demand for new vehicle models, the availability and prices of new and used automobiles, unemployment and inflation levels, availability of affordable financing, fluctuations in the cost of fuel, consumer confidence and other factors affecting demand for vehicles, government shutdowns, political unrest or uncertainty, the occurrence of contagious disease or illness, barriers to trade, new OEM entrants into markets and other global economic conditions.
Although the automotive retail industry is fragmented, a relatively small number of OEMs, dealership associations and major dealership groups and their program administrators exert significant influence over the market acceptance of certain automotive products and services due to their concentrated purchasing activity, the visibility of their endorsement or recommendation of specific products and services, their provision of co-operative advertising money to dealers and OEMs' ability to define technical standards and certifications and marketing guidelines.
Although the automotive retail industry is fragmented, a relatively small number of OEMs, dealership associations and their program administrators exert significant influence over the market acceptance of certain automotive products and services due to their concentrated purchasing activity, the visibility of their endorsement or recommendation of specific products and services, their provision of co-operative advertising money to dealers and OEMs' ability to define technical standards and certifications and marketing guidelines.
We believe that maintaining and increasing the strong recognition of the Cars Commerce brands, including Cars.com, is critical to our future success. Our brand drives traffic to our websites and applications. Our brand also attracts a large base of in-market car shoppers by offering credible and easy-to-understand information from other consumers and experts regarding new and used vehicle listings.
We believe that maintaining and increasing the strong recognition of our brands, including Cars.com, is critical to our future success. Our brand drives traffic to our websites and applications. The Cars.com brand attracts a large base of in-market car shoppers by offering credible and easy-to-understand information from experts and other consumers regarding new and used vehicle listings.
Even without a determination that our products or services fall within the scope of these laws or regulations, if any of our current or prospective partners is uncertain about the applicability of those laws and regulations to our business, the partners may terminate their business with us, or we could have difficulty attracting new partners, which would adversely affect our future growth.
Even without a determination that our products or services fall within the scope of these laws or regulations, if any of our current or prospective partners are uncertain about the applicability of those laws and regulations to our business, the partners may terminate their business with us, or we could have difficulty attracting new partners, which would adversely affect our future growth.
Risks Related to Environmental Laws and Climate Change Impacts Our business may be affected by climate change, including physical risks and regulatory changes that may increase our operating costs and impact our ability to deliver services to our customers. Climate change poses both physical and transitional risks to Cars Commerce, which may affect our operations, financial performance and reputation.
Risks Related to Environmental Laws and Climate Change Impacts Our business may be affected by climate change, including physical risks and regulatory changes that may increase our operating costs and impact our ability to deliver services to our customers. Climate change poses both physical and transitional risks to our business, which may affect our operations, financial performance and reputation.
Your percentage of ownership in the Company may be diluted in the future. In the future, your percentage ownership in Cars Commerce may be diluted because of equity awards that we will be granting to our directors, officers and employees or otherwise as a result of equity issuances for acquisitions or capital market transactions.
Your percentage of ownership in the Company may be diluted in the future. In the future, your percentage ownership in the Company may be diluted because of equity awards that we will be granting to our directors, officers and employees or otherwise as a result of equity issuances for acquisitions or capital market transactions.
We provide consumers the ability to adjust their settings with respect to the use and deployment of third-party cookies on their devices. The most commonly used Internet browsers—Chrome, Firefox and Safari—allow Internet users to modify their browser settings to block third-party cookies.
We provide consumers the ability to adjust their settings with respect to the use and deployment of third-party cookies on their devices. The most commonly used Internet browsers—Chrome, Firefox and Edge—allow Internet users to modify their browser settings to block third-party cookies.
In addition, instead of using Cars Commerce solutions, OEMs may begin to require that consumers and dealerships use OEM-created solutions which could also materially reduce the adoption or retention of our products and services.
In addition, instead of using our solutions, OEMs may begin to require that consumers and dealerships use OEM-created solutions which could also materially reduce the adoption or retention of our products and services.
In February 2025, our Board of Directors authorized a share repurchase program to acquire up to $250.0 million of our common stock over a three-year period. Under the share repurchase program, Cars Commerce can repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and regulations.
In February 2025, our Board of Directors authorized a share repurchase program to acquire up to $250.0 million of our common stock over a three-year period. Under the share repurchase program, we can repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and regulations.
The Internet and electronic commerce are characterized by rapid technological change, changes in consumer and customer requirements and expectations, frequent new service and product introductions incorporating new technologies, including mobile applications, generative artificial intelligence and the emergence of new industry standards and practices that could render our existing sites, mobile applications and technology obsolete.
The Internet and electronic commerce are characterized by rapid technological change, changes in consumer and customer requirements and expectations, frequent new service and product introductions incorporating new technologies, including mobile applications, generative AI and the emergence of new industry standards and practices that could render our existing sites, mobile applications and technology obsolete.
Decreased traffic from in-house content could also result in increased spend in paid channels, which would result in higher sales and marketing expenses. Further, the increased adoption of generative artificial intelligence for content creation may impact how consumers value our editorial content and their need for our marketing services.
Decreased traffic from in-house content could also result in increased spend in paid channels, which would result in higher sales and marketing expenses. Further, the increased adoption of generative AI for content creation may impact how consumers value our editorial content and their need for our marketing services.
For more information, see Note 7 (Debt) to the accompanying 20 Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Item 1B. Unresolved Staff Comments. None.
For more information, see Note 6 (Debt) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Item 1B. Unresolved Staff Comments. None.
If Internet search engines or mobile application download stores modify their search algorithms, or if new developments in technology continue to evolve, such as generative artificial intelligence, in each case, in ways that negatively impact traffic to the Cars Commerce sites or Cars.com mobile applications, or if the search engine or mobile application store optimization efforts of our competitors are more successful than our own efforts, overall growth in our consumer base could slow or the consumer base could decline.
If Internet search engines or mobile application download stores modify their search algorithms, or if new developments in technology continue to evolve, such as generative AI, in each case, in ways that negatively impact traffic to the Company's sites or Cars.com mobile applications, or if the search engine or mobile application store optimization efforts of our competitors are more successful than our own efforts, overall growth in our consumer base could slow or the consumer base could decline.
Cars Commerce conducted a climate risk assessment to better understand the types of climate-related risks that are most salient for our business. This assessment reviewed our exposure to these risks as well as the systems in place to manage these risks.
We conducted a climate risk assessment to better understand the types of climate-related risks that are most salient for our business. This assessment reviewed our exposure to these risks as well as the systems in place to manage these risks.
Although we believe that our resiliency planning and security controls are appropriate to our exposures to system outages, service interruptions, security incidents and breaches, there is no guarantee that these plans and controls will prevent all such incidents.
Although we believe that our resiliency planning and security controls are appropriate to our exposures to system outages, service interruptions, cybersecurity incidents and threats, there is no guarantee that these plans and controls will prevent all such incidents.
Our operations may be subject to adoption, expansion or interpretation of various laws and regulations, and compliance with these laws and regulations may require us to obtain licenses at an undeterminable and possibly significant expense.
Our operations may be subject to adoption, expansion or interpretation of various laws and regulations, and compliance with these laws and regulations may be challenging and could even require us to obtain licenses at an undeterminable and possibly significant expense.
Failure to protect consumer or customer data or to provide consumers or customers with appropriate notice of our privacy practices, could negatively impact our reputation and competitive position, and could result in litigation with third parties, and liabilities imposed by federal and state regulatory agencies or courts.
Failure to protect consumer or customer data, to comply with applicable laws or regulations or to provide consumers or customers with appropriate notice of our privacy practices, could negatively impact our reputation and competitive position, and could result in litigation with third parties, and liabilities imposed by federal and state regulatory agencies or courts.
Certain provisions of our Amended and Restated Certificate of Incorporation, By-laws and Delaware law may discourage takeovers and limit our ability to use, acquire, or develop certain competing businesses. Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws contain certain provisions that may discourage, delay or prevent a change in our management or control over Cars Commerce.
Certain provisions of our Amended and Restated Certificate of Incorporation, By-laws and Delaware law may discourage takeovers and limit our ability to use, acquire, or develop certain competing businesses. Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws contain certain provisions that may discourage, delay or prevent a change in our management or control over the Company.
While we have grown our programmatic revenue, are developing new programmatic ad products, and are redesigning our ad delivery technology stack, we may not adapt quickly enough and may lose display advertising revenue as a result.
While we are developing new programmatic ad products and have redesigned our ad delivery technology stack, we may not adapt quickly enough and may lose display advertising revenue as a result.
Future equity financings could also decrease our earnings per share and the benefits derived from such new ventures or acquisitions might not outweigh or exceed their dilutive effect.
Future equity financings could also decrease our net income per share and the benefits derived from such new ventures or acquisitions might not outweigh or exceed their dilutive effect.
Any attack or disruption could negatively impact our ability to attract new consumers, dealers or customers and could deter current consumers, dealers or customers from using our solutions, or subject us to lawsuits, regulatory fines or other action or liability. • Availability: We rely on technology systems’ availability to deliver services to consumers, dealers, OEMs, employees and partners.
Any cybersecurity threat, incident or disruption could negatively impact our ability to attract new consumers, dealers or customers and could deter current consumers, dealers or customers from using our solutions, or subject us to lawsuits, regulatory investigations and fines or other action or liability. • Availability: We rely on technology systems’ availability to deliver services to consumers, dealers, OEMs, employees and partners.
Such awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.
Such awards will have a dilutive effect on our net income per share, which could adversely affect the market price of our common stock.
Additionally, Cars Commerce is exposed to foreign currency risk, primarily from its investments in its subsidiaries that operate in Canada. Our ability to successfully operate in Canada requires significant resources, given the different languages, cultures, legal systems and commercial infrastructures. Increased operations in Canada involve risks that could impact our operations and affect our business and potential growth.
Additionally, we are exposed to foreign currency risk, primarily from its investments in its subsidiaries that operate in Canada. Our ability to successfully operate in Canada requires resources, given the different languages, cultures, legal systems and commercial infrastructures. Increased operations in Canada involve risks that could impact our operations and affect our business and potential growth.
If the Cars Commerce sites and mobile applications fail to appear prominently in these search results, traffic to the Cars.com properties and mobile applications would decline and our business, results of operations or financial condition may be materially and adversely affected. We depend, in part, on Internet search engines such as Google to drive traffic to the Cars Commerce sites.
If the Company's sites and mobile applications fail to appear prominently in these search results, traffic to the Cars.com properties and mobile applications would decline and our business, results of operations or financial condition may be materially and adversely affected. 7 We depend, in part, on Internet search engines to drive traffic to the Company's sites.
We rely on in-house content creation and development to drive organic traffic to the Cars Commerce sites and mobile applications. 9 We rely on our in-house editorial content team to continually develop content that is useful and of interest to consumers to drive organic traffic to the Cars.com properties and mobile applications.
We rely on our in-house editorial content team to continually develop content that is useful and of interest to consumers to drive organic traffic to the Cars.com properties and mobile applications.
Increases in interest rates could increase interest payable under our variable rate indebtedness. Approximately 13.0% of our outstanding indebtedness as of December 31, 2024 includes variable rate indebtedness under our financing arrangements. As a result of this indebtedness, we are subject to interest rate risk.
Increases in interest rates could increase interest payable under our variable rate indebtedness. Approximately 12.1% of our outstanding indebtedness as of December 31, 2025 includes variable rate indebtedness under our financing arrangements. As a result of this indebtedness, we are subject to interest rate risk.
Our goodwill and other intangible assets were approximately $729.0 million as of December 31, 2024, representing approximately 66% of our total assets. We evaluate our goodwill and other intangible assets to determine whether all or a portion of their carrying values may no longer be recoverable, in which case a charge to earnings may be necessary.
Our goodwill and other intangible assets were approximately $694.3 million as of December 31, 2025, representing approximately 65% of our total assets. We evaluate our goodwill and other intangible assets to determine whether all or a portion of their carrying values may no longer be recoverable, in which case a charge to earnings may be necessary.
Increased restriction of the use of third-party cookies and other tracking technologies and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, could limit our ability to effectively retain existing customers or acquire new customers, reduce the efficacy of our off-site marketing solutions and consequently, materially adversely affect our business, financial condition and operating results.
Increased restriction of the use of third-party cookies and other tracking technologies and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, as well as business decisions made in response to litigation risks associated with the use of certain tracking technologies and practices, could limit our ability to effectively retain existing customers or acquire new customers, reduce the efficacy of our off-site marketing solutions and consequently, materially adversely affect our business, financial condition and operating results.
For example, our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws, collectively: • authorize the issuance of preferred stock that could be used by our Board of Directors to thwart a takeover attempt; • provide that vacancies on our Board of Directors, including vacancies resulting from an enlargement of our Board of Directors, may be filled only by a majority vote of directors then in office; • place limits on which stockholders may call special meetings of stockholders, and limit the actions that may be taken at such meeting; • prohibit stockholder action by written consent; and • establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our stockholders. 18 These provisions could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of stockholders may consider such proposal, if effected, desirable.
For example, our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws, collectively: • authorize the issuance of preferred stock that could be used by our Board of Directors to thwart a takeover attempt; • provide that vacancies on our Board of Directors, including vacancies resulting from an enlargement of our Board of Directors, may be filled only by a majority vote of directors then in office; • place limits on which stockholders may call special meetings of stockholders, and limit the actions that may be taken at such meeting; • prohibit stockholder action by written consent; and • establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our stockholders.
If we are unable to keep pace with advances in technology, consumers and customers may stop using our services and our revenue may decrease.
Our business is dependent on keeping pace with advances in technology. If we are unable to keep pace with advances in technology, consumers and customers may stop using our services and our revenue may decrease.
For example, when a consumer searches for the make and model of a specific automobile or a generic phrase, such as "automobile prices," using an Internet search engine, we rely on a high organic search ranking of the Cars Commerce sites in these search results to drive consumer traffic.
For example, when a consumer searches for the make and model of a specific automobile or a generic phrase, such as "used cars for sale near me," using an Internet search engine, we rely on a high organic search ranking of the Cars.com site in these search results to drive consumer traffic.
Any purchases under the share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
In addition, state, federal and international governmental authorities continue to evaluate the privacy implications inherent in the use of cookies and other tracking technologies and have enacted or are considering enacting laws or regulations that could significantly restrict the ability of companies to use third-party cookies and other online tracking technologies.
In addition, state, federal and international governmental authorities continue to evaluate the privacy implications inherent in the use of cookies and other tracking technologies and have enacted or are considering enacting laws or regulations that could significantly restrict the ability of companies to use third-party cookies and other online tracking technologies, such as those that require recognition of universal opt-out mechanisms like the Global Privacy Control.
The failure to complete an upgrade or enhancement as planned, or an unexpected result of a technology upgrade, could affect the security or availability of our products and services and could lead to loss of traffic, customers and revenue. Our business is dependent on keeping pace with advances in technology.
The failure to complete an upgrade or enhancement as planned, or an unexpected result of a technology upgrade, could affect the security or availability of our products and services and could lead to loss of traffic, customers and revenue.
Any failure, or perceived failure, by Cars Commerce to achieve its goals, further its initiatives, adhere to its public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against Cars Commerce and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Any failure, or perceived failure, by the Company to achieve our goals, further its initiatives, adhere to its public statements, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Although the shift in advertising spending away from traditional advertising methods to digital advertising methods provides greater opportunity for us, competition to capture share of the total digital automotive advertising spend has increased and may continue to increase due to the attractive projected growth of digital automotive advertising spend, low barriers to entry in the online automotive marketplace and related digital automotive advertising markets.
Competition to capture share of the total digital automotive advertising spend has increased and may continue to increase due to the attractive projected growth of digital automotive advertising spend, low barriers to entry in the online automotive marketplace and related digital automotive advertising markets.
However, our ability to maintain these high search result rankings is not fully within our control. For example, our competitors’ search engine optimization efforts may result in their websites receiving a higher search result page ranking than us, or Internet search engines could revise their methodologies in a way that would adversely affect our search result rankings.
For example, our competitors’ search engine optimization efforts may result in their websites receiving a higher search result page ranking than us, or Internet search engines could revise their methodologies with or without knowledge in a way that would adversely affect our search result rankings.
If the third parties are unable or unwilling to provide data or services, restrict our use of data, experience difficulty meeting our requirements or standards, or revoke or fail to renew our licenses or partnerships, we could have difficulty operating key aspects of our business.
If the third parties bundle competing functionality into their core offerings, restrict access to APIs or integrations, are unable or unwilling to provide data or services, modify licensing terms, increase pricing, restrict our use of data, experience difficulty meeting our requirements or standards, or revoke or fail to renew our licenses or partnerships, we could have difficulty operating key aspects of our business.
In addition, to the extent that any of our competitors have existing relationships with dealers or OEMs for marketing or data analytics solutions, those dealers and automobile manufacturers may be unwilling to partner or continue to partner with us.
In addition, to the extent that any of our competitors have existing relationships with dealers or OEMs for marketing or data analytics solutions, those dealers and automobile manufacturers may be unwilling to partner or continue to partner with us. 9 In addition, if any of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could materially and adversely affect our ability to compete effectively.
In addition, some stakeholders may disagree with Cars Commerce’s goals and initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where environmental, social and governance focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Stakeholders also may have very different views on where environmental, social and governance focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
However, our ability to maintain high, non-paid search result rankings in mobile application stores is not fully within our control.
However, our ability to maintain these high search result rankings is not fully within our control.
In addition, although we use technology designed to block low quality traffic, we may not be able to prevent all such traffic, and such technology may have the effect of blocking some valid traffic. Further, consumers may have the ability to change privacy settings and opt-out of certain features, which could reduce the quality of data we receive.
In addition, although we use technology designed to block low quality traffic, we may not be able to prevent all such traffic, and such technology may have the effect of blocking some valid traffic.
A reduction in the number of automobiles purchased by consumers could adversely affect automobile dealers and car manufacturers and consequently lead to reduced spending on our digital marketing services and solution offerings. Further, OEM production shortages, supply chain disruptions and inventory shortfalls could adversely impact automobile dealers and also reduce spending on our digital marketing services and solution offerings.
Further, OEM production shortages, supply chain disruptions and inventory shortfalls could adversely impact automobile dealers and also reduce spending on our digital marketing services and solution offerings.
The timing and amounts of any purchases under the share repurchase program is dependent upon a variety of factors, including market conditions, price, regulatory requirements and other corporate considerations, as determined by Cars Commerce’s Board of Directors and management. The share repurchase program may be extended, suspended or discontinued at any time.
As of February 23, 2026, we repurchased approximately $76.2 million of our common stock under the current program. The timing and amounts of any future purchases under the share repurchase program is dependent upon a variety of factors, including market conditions, price, regulatory requirements and other corporate considerations, as determined by our Board of Directors and management.
In addition, OEMs, dealers and other customers rely on our innovative digital marketing services and solution offerings to drive results in their businesses. To grow our business, we must maintain, protect and enhance our brands.
The Cars.com website and its consumer audience is the starting point of our business flywheel. Dealers, OEMs, and other customers rely on the strength of the Cars.com brand and the brand recognition of our innovative digital marketing services and solutions offerings to drive results for their businesses. To grow our business, we must maintain, protect and enhance our brands.
Techniques used to disable or degrade service or gain unauthorized access to systems or data change frequently and may not be recognized until damage is detected. We maintain cyber risk insurance, but this insurance may not be sufficient to cover all losses from any future disruption, security incident or breach.
Techniques used to disable or degrade service or gain unauthorized access to systems or data change frequently and may not be recognized until damage is detected.
Such provisions could also make it more difficult for third parties to remove and replace the members of our Board of Directors. Moreover, these provisions may inhibit increases in the trading price of our common stock that may result from takeover attempts or speculation.
Moreover, these provisions may inhibit increases in the trading price of our common stock that may result from takeover attempts or speculation.
Any future evaluations requiring an asset impairment charge for goodwill or other intangible assets would adversely affect future reported results of operations and stockholders’ equity, although such charges would not affect our cash flow. 17 Risks Relating to our Common Stock We cannot assure our stockholders that our share repurchase program will enhance long-term stockholder value and stock repurchases, if any, could increase the volatility of the price of our common stock and will diminish our cash reserves.
Risks Relating to our Common Stock We cannot assure our stockholders that our share repurchase program will enhance long-term stockholder value and stock repurchases, if any, could increase the volatility of the price of our common stock and will diminish our cash reserves.
("DealerClub"), an emerging dealer-to-dealer digital wholesale auction platform. As part of the acquisitions, we must integrate two previously independently operated businesses. We may have difficulty addressing possible differences in corporate culture, management philosophies, businesses, processes and systems, or inconsistencies in standards, controls, procedures, practices, policies and compensation.
We may have difficulty addressing possible differences in corporate culture, management philosophies, businesses, processes and systems, or inconsistencies in standards, controls, procedures, practices, policies and compensation.
For these and other reasons, our traffic and unique visitor metrics may not accurately reflect the number of people actually using our platform. Our measures of traffic and other key metrics may differ from estimates published by third parties (other than those whose data we use to calculate our key metrics) or from similar metrics of our competitors.
Our measures of traffic and other key metrics may differ from estimates published by third parties (other than those whose data we use to calculate our key metrics) or from similar metrics of our competitors. We continually seek to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy.
Cars Commerce makes statements about its environmental, social and governance goals and initiatives through information provided on its website, press releases and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and are impacted by factors that may be outside our control.
Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and are impacted by factors that may be outside our control. In addition, some stakeholders may disagree with our goals and initiatives and the focus of stakeholders may change and evolve over time.
Expectations relating to environmental, social and governance considerations expose Cars Commerce to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business. 10 Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to our business, including climate change and greenhouse gas ("GHG") emissions, human capital and diversity, equity and inclusion.
Some investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to our business, including climate change and greenhouse gas ("GHG") emissions, human capital and diversity, equity and inclusion. We make statements about our environmental, social and governance goals and initiatives through information provided on our website, press releases and other communications.
If our audience, customers and stockholders do not perceive our metrics to be accurate representations, or if we discover material inaccuracies in our metrics, our reputation may be harmed. Risks Related to Data Privacy and Security We rely on technology systems’ availability and ability to prevent unauthorized access.
We may revise or cease reporting metrics if we determine such metrics are no longer accurate or appropriate measures of our performance. If our audience, customers and stockholders do not perceive our metrics to be accurate representations, or if we discover material inaccuracies in our metrics, our reputation may be harmed.
If unsuccessful, we may be subject to preliminary and permanent injunctive relief and monetary damages, which may be trebled in the case of willful infringements. General Risks We have a limited history of operating with a virtual first workforce and the long-term impact on our financial results and business operations is uncertain.
If unsuccessful, we may be subject to preliminary and permanent injunctive relief and monetary damages, which may be trebled in the case of willful infringements. General Risks Our ability to operate effectively could be impaired if we fail to attract and retain our key employees.
We rely in part on Internet search engines and mobile application stores to drive traffic to the Cars Commerce sites and increase downloads of our mobile applications.
If we are unable to effectively manage the operational, competitive, regulatory and reputational risks associated with AI, our business, financial condition and results of operations could be materially and adversely affected. We rely in part on Internet search engines and mobile application stores to drive traffic to the Company's sites and increase downloads of our mobile applications.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Information Security Team is composed of skilled professionals with relevant information and cybersecurity education, certifications and experience. The Information Security Team coordinates with the Cars Commerce Information Security Governance Committee, comprised of senior business leaders who support Cars Commerce’s Information Security Management System based on their area of expertise.
Biggest changeThe Information Security Team coordinates with the Information Security Governance Committee, comprised of senior business leaders who support our Information Security Management System based on their area of expertise. Our Information Security Team, in conjunction with the Information Security Governance Committee, assesses and manages material risks from cybersecurity threats and provides management direction and support for information security.
The Information Security Team then creates a Security Incident Response Team ("SIRT") which, depending on the incident, is comprised of cybersecurity staff, Systems and Network Engineers, the Chief Technology Officer and the Chief Legal Officer, or other stakeholders as appropriate. The SIRT investigates and manages the impact of cybersecurity incidents in accordance with the security incident response procedures. Report.
The Information Security Team then creates a Security Incident Response Team ("SIRT") which, depending on the incident, is comprised of cybersecurity staff, Systems and Network Engineers, the Chief Technology Officer and the Chief Legal Officer, or other stakeholders as appropriate. The SIRT investigates and manages the impact of cybersecurity incidents in accordance with the cybersecurity incident response procedures. 19 Report.
Following the conclusion of a security investigation, the SIRT prepares a report for the Information Security Governance Committee, as appropriate. The report includes information about the incident, details about the response and includes recommendations to prevent similar security events from occurring in the future.
Following the conclusion of a cybersecurity investigation, the SIRT prepares a report for the Information Security Governance Committee, as appropriate. The report includes information about the incident and, details about the response and includes recommendations to prevent similar cybersecurity events from occurring in the future.
Cars Commerce management provides the Audit Committee with regular updates at least quarterly regarding the effectiveness of Cars Commerce’s overall cybersecurity program and other cybersecurity related matters, which may include, Cars Commerce’s inherent cybersecurity risks, updates on recent cybersecurity threats and incidents, policies and practices, industry trends, regulatory developments, threat environment and vulnerability assessments and specific and ongoing efforts to prevent, detect and respond to internal and external cybersecurity threats.
Our management provides the Audit Committee with regular updates at least quarterly regarding the effectiveness of our overall cybersecurity program and other cybersecurity related matters, which may include, our inherent cybersecurity risks, updates on recent cybersecurity threats and incidents, policies and practices, industry trends, regulatory developments, threat environment and vulnerability assessments and specific and ongoing efforts to prevent, detect and respond to internal and external cybersecurity threats.
As of the date of this Report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, Cars Commerce, including our business strategy, results of operations or financial condition.
As of the date of this Report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations or financial condition.
However, there can be no assurance that our cybersecurity prevention and mitigation efforts have been or will continue to prevent possible cybersecurity threats or whether a cybersecurity threat could have a material adverse 21 effect on our business strategy, results of operations or financial condition. See "Risks Related to Technology" in "Risk Factors" of this Report.
However, there can be no assurance that our cybersecurity prevention and mitigation efforts have been or will continue to prevent possible cybersecurity threats or whether a cybersecurity threat could have a material adverse effect on our business strategy, results of operations or financial condition. See "Risks Related to Technology" in "Risk Factors" of this Report. Third-Party Service Providers.
When detected, suspected cybersecurity threats are escalated to the Information Security Team (as described below) in various ways based on the nature of the cybersecurity incident, including but not limited to system engineer escalation, the Cars Commerce helpdesk and in-house and third-party security tools.
When detected, suspected cybersecurity threats or incidents are escalated to the Information Security Team (as described below) in various ways based on the nature of the cybersecurity incident, including but not limited to system engineer escalation, our helpdesk and in-house and third-party security tools.
Cars Commerce employees are also responsible for reporting any suspected cybersecurity or information security event that they observe or experience as soon as possible, by either contacting the Cars Commerce helpdesk, or the Information Security Team directly.
Our employees are also responsible for reporting any suspected cybersecurity or information security event that they observe or experience as soon as possible, by either contacting the Company's helpdesk, or the Information Security Team directly.
As a result, Cars Commerce has implemented an information security management system (the "ISMS") designed to protect our infrastructure from potential threats and to allow us to assess, identify and manage material risks from cybersecurity threats as described in more detail below.
As a result, we have implemented an information security management system (the "ISMS") designed to protect our infrastructure from potential threats and to allow us to assess, identify and manage material risks from cybersecurity threats as described in more detail below.
Item 1C. Cybersecurity . Risk Management and Strategy. The cybersecurity program at Cars Commerce is part of our enterprise risk management program. At Cars Commerce, we believe cybersecurity risk management is of the utmost importance.
Item 1C. Cybersecurity . Risk Management and Strategy. The cybersecurity program is part of our enterprise risk management program. We believe cybersecurity risk management is of the utmost importance.
Cars Commerce has developed security incident response procedures to (1) assess cybersecurity incidents, (2) identify and implement containment measures, (3) preserve evidence, (4) log response activities and (5) determine corrective actions to prevent similar incidents. Respond and Manage.
We have developed security incident response procedures to (1) assess cybersecurity incidents, (2) identify and implement containment measures, (3) preserve evidence, (4) log response activities and (5) determine corrective actions to prevent similar incidents. Respond and Manage.
We use several methods to identify cybersecurity events, including, but not limited to, security alert tools, log monitoring by systems engineers working on operational incidents that are later determined to be security incidents, or suspicious activity reported directly by employees.
We use several methods to identify cybersecu rity threats and incidents, i ncluding, but not limited to, security alert tools, log monitoring by systems engineers working on operational incidents that are later determined to be security incidents, or suspicious activity reported directly by employees.
The Chair of the Audit Committee informs the Board of the outcome of these meetings through updates presented to the Board at regularly scheduled Board meetings. At the management level, our CEO provides general management, oversight and mitigation of Cars Commerce’s risk. Our Chief Technology Officer and Senior Vice President of Information Security manage Cars Commerce’s Information Security function.
The Chair of the Audit Committee informs the Board of the outcome of these meetings through updates presented to the Board at regularly scheduled Board meetings. Our Chief Technology Officer and Senior Vice President of Information Security manage our Information Security function and team . Our Chief Technology Officer has served in this role since 2025.
Our employees are the first line of defense against cybersecurity incidents. As such, employees receive annual security awareness training to understand the behaviors and technical requirements necessary to protect information. We also conduct annual phishing awareness exercises to educate employees to recognize and report suspicious activity.
In addition we engage with third parties to contribute and provide independent evaluation of our existing cybersecurity practices. Protect. Our employees receive annual security awareness training to understand the behaviors and technical requirements necessary to protect information. We also conduct annual phishing awareness exercises to educate employees to recognize and report suspicious activity. Assess.
In addition to in-house assessments, we engage with security and technology vendors to assess our information security and cybersecurity program and test our technical capabilities, including conducting penetration testing. We conduct risk assessments and audits to identify new risks and include any newly identified risks in remediation planning, as well as confirming that previously identified risks have been remediated.
In addition to in-house assessments, we engage with security and technology vendors to assess our information security and cybersecurity program and test our technical capabilities, including conducting penetration testing.
The Board of Directors provides strategic guidance regarding Cars Commerce’s overall risk oversight, including identification, management and mitigation of risk. The Board has delegated direct cybersecurity and information security risk oversight to the Audit Committee.
We manage third-party service provider cybersecurity risks through contract management, evaluation of applicable security control assessments and third-party risk assessment processes. Governance. The Board of Directors provides strategic guidance regarding our overall risk oversight, including identification, assessment, managem ent and mitigation of risk. The Board has delegated direct cybersecurity and information security risk oversight to the Audit Committee.
The ISMS supports the security safeguards that are designed to protect the confidentiality, integrity, availability, and contractual compliance of the Cars.com Inc. (d/b/a Cars Commerce, Inc.) entities, which include Cars.com LLC, Accu-Trade, LLC, CreditIQ, LLC, DealerRater.com LLC and Dealer Inspire Inc. which is inclusive of the In-Market Video and NewCars brands.
The ISMS supports the security safeguards that are designed to protect the confidentiality, integrity, availability and contractual compliance of the Company, which includes the solutions and brands related to AccuTrade, Cars.com Marketplace, Cars Commerce Media Network, CreditIQ, D2C Media, Dealer Club and Dealer Inspire.
Removed
In addition, we engage with external resources to contribute to, and provide independent evaluation of, our existing cybersecurity practices. As a result, in 2023, Cars Commerce engaged an independent auditor to conduct an audit of the ISMS, and Cars Commerce completed the certification to meet International Organization for Standardization 27001 requirements for the above-stated entities.
Added
We conduct risk assessments and audits to identify new risks and include any newly identified risks in remediation planning, as w ell as to confirm that previously identified risks have been remediated. Identify.
Removed
In October 2024, Cars successfully completed its ISO 27001 surveillance audit. In November 2023, Cars Commerce, through its subsidiary, completed the acquisition of D2C Media. During the due diligence, Cars Commerce completed an evaluation of its cybersecurity risk management process and plans to integrate D2C Media into the ISO 27001 certification process. Protect.
Added
Prior to joining the Company, he served as Chief Technology Officer of Envoy and previously held the same role at OpenTable and oversaw security in both of these roles. Our Senior Vice President of Information Security has served in this role since 2024.
Removed
We also use a combination of tools and in-house technologies to protect Cars Commerce, our employees and our customers, including but not limited to using only SOC 2 compliant hosting providers, anti-malware software, intrusion prevention systems, network and web application firewalls, multi-factor authentication, encryption, and remote access via virtual private network ("VPN") software. Assess.
Added
Prior to joining the Company, he served as Chief Information Security Officer at Boomi and previously held the same role at Ancestry.com. The Information Security Team is composed of skilled professionals with relevant information and cybersecurity education, certifications and experience.
Removed
Identified risks are included in a central risk register and assigned an overall risk score. Risk levels are assigned based on a number of factors, including the nature of the risk and likelihood of exploitation. Lastly, we create remediation plans to bring unacceptable risks to an acceptable level. Identify.
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The SEC adopted rules requiring the disclosure of material cybersecurity incidents. To ensure compliance with the SEC requirement, Cars Commerce has a review process to determine whether the impact of a cybersecurity threat is material and requires disclosure of the cybersecurity incident.
Removed
In compliance with the SEC rule and Cars Commerce’s process, if such a cybersecurity incident occurs and the appropriate representatives from the Information Security Governance Committee determine that the cybersecurity incident is material, Cars Commerce will make the appropriate disclosures in a Current Report on Form 8-K within the required timeframe. Governance.
Removed
Cars Commerce’s Information Security Team, in conjunction with the Information Security Governance Committee, assesses and manages material risks from cybersecurity threats and provides management direction and support for information security. Working together the teams initiate and control the implementation and operation of information security within Cars Commerce.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe hereby incorporate by reference Note 10 (Commitments and Contingencies) to the Consolidated Financial Statements included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. None. 22 PART II
Biggest changeWe hereby incorporate by reference Note 8 (Commitments and Contingencies) to the Consolidated Financial Statements included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. None. 20 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 22 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. [Reserved] 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 20 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe repurchase program may be suspended or discontinued at any time and does not obligate us to repurchase any dollar amount or particular amount of shares. (3) The amounts presented represent the remaining Board of Directors’ authorized value to be spent after each month's repurchases. Dividends.
Biggest changeThe share repurchase program may be suspended or discontinued at any time and does not obligate us to repurchase any dollar amount or particular amount of shares. (3) The amounts presented represent the remaining dollar amount of shares of our common stock that may be repurchased under the share repurchase program at the end of each month. Dividends.
The following graph shows the cumulative total stockholder return for our common stock for each of the last five fiscal years ended December 31, 2024. The graph also shows the cumulative returns of Standard and Poor’s ("S&P") SmallCap 600 Index and Research Data Group’s ("RDG") Internet Composite Index, both of which we are a member.
The following graph shows the cumulative total stockholder return for our common stock for each of the last five fiscal years ended December 31, 2025. The graph also shows the cumulative returns of Standard and Poor’s ("S&P") SmallCap 600 Index and Research Data Group’s ("RDG") Internet Composite Index, both of which we are a member.
In addition, the terms of our credit facilities contain restrictions on our ability to declare and pay cash dividends on our capital stock. 23 Recent Sales of Unregistered Securities. None. Use of Proceeds from Registered Securities. None.
In addition, the terms of our credit facilities contain restrictions on our ability to declare and pay cash dividends on our capital stock. 21 Recent Sales of Unregistered Securities. None. Use of Proceeds from Registered Securities. None.
The comparison assumes $100 was invested on December 31, 2019 in our common stock and each index. Purchases of Equity Securities by Issuer.
The comparison assumes $100 was invested on December 31, 2020 in our common stock and each index. Purchases of Equity Securities by Issuer.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the NYSE under the symbol "CARS." Based on reports by our transfer agent for our common stock, as of February 20, 2025, there were 3,914 holders of record of our common stock. Cumulative Stockholder Return Graph.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the NYSE under the symbol "CARS." Based on reports by our transfer agent for our common stock, as of February 23, 2026, there were 3,644 holders of record of our common stock. Cumulative Stockholder Return Graph.
Our stock repurchases may occur through open market purchases or through privately negotiated transactions. (2) In February 2022, our Board of Directors authorized a three-year share repurchase program to acquire up to $200.0 million of our common stock that expires on February 21, 2025.
Our stock repurchases may occur through open market purchases or through privately negotiated transactions. (2) On February 27, 2025, we announced that our Board of Directors authorized a three-year share repurchase program to acquire up to $250.0 million of our common stock.
Our share repurchase activity for the three months ended December 31, 2024 is as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (3) October 1 through October 31, 2024 365,532 $ 15.85 365,532 $ 78,245 November 1 through November 30, 2024 257,566 18.38 257,566 73,511 December 1 through December 31, 2024 152,357 19.46 152,357 70,546 775,455 775,455 (1) The total number of shares purchased and subsequently retired and the average price paid per share reflects shares purchased pursuant to the share repurchase program.
Our share repurchase activity for the three months ended December 31, 2025 is as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (3) October 1 through October 31, 2025 643,214 $ 11.04 643,214 $ 188,770 November 1 through November 30, 2025 613,983 11.28 613,983 181,843 December 1 through December 31, 2025 643,364 12.45 643,364 173,831 1,900,561 1,900,561 (1) The total number of shares purchased and subsequently retired and the average price paid per share reflects shares purchased pursuant to the share repurchase program.
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In February 2025, our Board of Directors authorized a three-year share repurchase program to acquire up to $250.0 million of our common stock that expires on February 24, 2028.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2024 Compared to Year Ended December 31, 2023 (In thousands, except percentages) 2024 2023 $ Change % Change Revenue: Dealer $ 640,722 $ 621,661 $ 19,061 3 % OEM and National 65,894 55,904 9,990 18 % Other 12,536 11,618 918 8 % Total revenue 719,152 689,183 29,969 4 % Operating expenses: Cost of revenue and operations 124,332 122,205 2,127 2 % Product and technology 113,931 99,584 14,347 14 % Marketing and sales 231,502 235,471 (3,969 ) (2 )% General and administrative 88,707 76,807 11,900 15 % Depreciation and amortization 107,182 101,000 6,182 6 % Total operating expenses 665,654 635,067 30,587 5 % Operating income 53,498 54,116 (618 ) (1 )% Nonoperating expense: Interest expense, net (32,197 ) (32,425 ) 228 (1 )% Other income (expense), net 40,562 (3,586 ) 44,148 *** Total nonoperating income (expense), net 8,365 (36,011 ) 44,376 *** Income before income taxes 61,863 18,105 43,758 *** Income tax expense (benefit) 13,675 (100,337 ) 114,012 *** Net income $ 48,188 $ 118,442 $ (70,254 ) (59 )% *** Not meaningful Dealer revenue .
Biggest changeWe believe our core strategic strengths, including our Cars.com brand, growing high-quality audience and suite of digital solutions for dealers and OEMs, including AI-based tools, will assist us as we navigate a rapidly changing automotive environment. 24 Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 (In thousands, except percentages) 2025 2024 $ Change % Change Revenue: Dealer $ 644,053 $ 640,722 $ 3,331 1 % OEM and National 65,305 65,894 (589 ) (1 )% Other 13,881 12,536 1,345 11 % Total revenue 723,239 719,152 4,087 1 % Operating expenses: Cost of revenue and operations 123,328 124,332 (1,004 ) (1 )% Product and technology 117,330 117,875 (545 ) (0 )% Marketing and sales 239,365 232,280 7,085 3 % General and administrative 91,124 83,985 7,139 9 % Depreciation and amortization 91,842 107,182 (15,340 ) (14 )% Total operating expenses 662,989 665,654 (2,665 ) (0 )% Operating income 60,250 53,498 6,752 13 % Nonoperating expense: Interest expense, net (30,382 ) (32,197 ) 1,815 (6 )% Other income, net 4,438 40,562 (36,124 ) (89 )% Total nonoperating (expense) income, net (25,944 ) 8,365 (34,309 ) *** Income before income taxes 34,306 61,863 (27,557 ) (45 )% Income tax expense 14,254 13,675 579 4 % Net income $ 20,052 $ 48,188 $ (28,136 ) (58 )% *** Not meaningful Dealer revenue .
This discussion and analysis also contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in "Note About Forward-Looking Statements" and "Risk Factors" in this Annual Report on Form 10-K.
This discussion and analysis also contains forward-looking statements and should be read in conjunction with the disclosures and information contained in "Note About Forward-Looking Statements" and "Risk Factors" in this Annual Report on Form 10-K.
We regularly review a number of key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make operating and strategic decisions.
Key Operating Metrics We regularly review a number of key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make operating and strategic decisions.
Traffic is driven by a combination of UVs visiting our properties and repeat visitation and engagement. We monetize impressions, clicks and other connections that result from traffic to our site via our products and services. We define UVs in a given month as the number of distinct visitors that engage with our platform during that month.
Traffic is driven by a combination of UVs visiting our properties, repeat visitation and engagement. We monetize impressions, clicks and other connections that result from traffic to our site via our products and services. We define UVs in a given month as the number of distinct visitors that engage with our platform during that month.
Our business is impacted by changes in the larger automotive ecosystem, including supply and demand for new and used vehicle inventory, global supply chain and information systems disruptions, semiconductor and raw material shortages, vehicle acquisition cost, vehicle retail prices, the rate of electric vehicle adoption, employee retention and changes related to automotive advertising, among other macroeconomic factors including the political environment, inflationary pressures, tariffs and prevailing interest rates.
Our business is impacted by changes in the larger automotive ecosystem, including supply and demand for new and used vehicle inventory, global supply chain and information systems disruptions, semiconductor and raw material shortages, vehicle acquisition cost, vehicle retail prices, the rate of electric vehicle adoption, employee retention and changes related to automotive advertising, among other macroeconomic factors including the political environment, inflationary and affordability pressures, tariffs and prevailing interest rates.
We account for a customer arrangement when we and the customer have an approved contract that specifies the rights and obligations of each party and the payment terms, and we believe it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the services that will be provided to the customer.
We account for a customer arrangement when we and the customer have an approved and signed contract that specifies the rights and obligations of each party and the payment terms, and we believe it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the services that will be provided to the customer.
During the year ended December 31, 2024, cash used in financing activities was primarily related to repurchases of common stock, debt repayments, payments of contingent consideration and tax payments made in connection with the vesting of certain equity awards.
During the year 27 ended December 31, 2024, cash used in financing activities was primarily related to repurchases of common stock, debt repayments, payments of contingent consideration and tax payments made in connection with the vesting of certain equity awards.
For information related to recent accounting pronouncements, see Note 2 (Significant Accounting Policies) to the Consolidated Financial Statements included in Part II, Item 8., “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For information related to recent accounting pronouncements, see Note 2 (Significant Accounting Policies) to the Consolidated Financial Statements included in Part II, Item 8., “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 29
If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. If an impairment is identified, the asset is written down to fair value as required. CreditIQ Contingent Consideration.
If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. If an impairment is identified, the asset is written down to fair value as required. Contingent Consideration.
Uncertain tax positions that relate to deferred tax assets are recorded against deferred tax assets; otherwise, uncertain tax 32 positions are recorded as either a current or noncurrent liability in the Consolidated Balance Sheets.
Uncertain tax positions that relate to deferred tax assets are recorded against deferred tax assets; otherwise, uncertain tax positions are recorded as either a current or noncurrent liability in the Consolidated Balance Sheets.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The comparison of the 2023 results with 2022 can be found under the heading "Year Ended December 31, 2023 Compared to Year Ended December 31, 2022" in "Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our 2023 Form 10-K, which comparison is incorporated by reference herein.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The comparison of the 2024 results with 2023 can be found under the heading "Year Ended December 31, 2024 Compared to Year Ended December 31, 2023" in "Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our 2024 Form 10-K, which comparison is incorporated by reference herein.
If the impressions or click-throughs delivered are less than the amount invoiced to the customer, the difference is recorded as deferred revenue and recognized as revenue when earned. We recognize revenue related to 31 these services at the point in time the service is provided.
We recognize revenue as the impressions or click-throughs are delivered. If the impressions or click-throughs delivered are less than the amount invoiced to the customer, the difference is recorded as deferred revenue and recognized as revenue when earned. We recognize revenue related to these services at the point in time the service is provided. Other Revenue.
See Note 14 (Income Taxes) to the Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Recent Accounting Standards.
See Note 12 (Income Taxes) to the Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Recent Accounting Standards.
Excluded from these amounts are the non-cash amortization of debt issuance and other costs related to indebtedness. (2) Interest payments for variable rate debt were calculated using interest rates as of December 31, 2024. (3) Other obligations represent commitments under certain vendors and other contracts.
Excluded from these amounts are the non-cash amortization of debt issuance and other costs related to indebtedness. (2) Interest payments for variable rate debt were calculated using interest rates as of December 31, 2025. (3) Other obligations represent commitments under certain vendors and other contracts. Commitments and Contingencies.
We may repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements, and subject to our blackout periods. We intend to fund the share repurchase program principally with cash from operations. Contingent Consideration and Earnout.
We may repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements, and subject to our blackout periods. We intend to fund the share repurchase program principally with cash from operations.
Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings within Other expense, net on the Consolidated Statements of Income. Income Taxes. We account for income taxes according to the asset and liability method.
Ultimately, the liability was equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid was recognized in earnings within Other income (expense), net in the Consolidated Statements of Income. Income Taxes. We account for income taxes according to the asset and liability method.
For more information, see Note 14 (Income Taxes) to the Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
For more information, see Note 12 (Income Taxes) to the accompanying Consolidated Financial Statements included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Marketing and sales expense primarily consists of traffic and lead acquisition costs, performance and brand marketing, trade events, compensation costs and travel for the marketing, sales and sales support teams, as well as bad debt expense related to the allowance for doubtful accounts.
Marketing and sales expense primarily consists of traffic and lead acquisition costs, performance and brand marketing, trade events, compensation costs and travel for the marketing, sales and sales support teams, severance costs and bad debt expense related to the allowance for doubtful accounts.
General and administrative expense primarily consists of compensation costs for certain of the executive, finance, legal, human resources, facilities and other administrative employees. In addition, general and administrative expense includes the cost of office space, legal, accounting and other professional services, transaction-related costs, severance, transformation and other exit costs and costs related to the write-off of assets.
General and administrative expense primarily consists of compensation costs for certain executive, finance, legal, human resources, facilities and other administrative employees. In addition, general and administrative expense includes the cost of office space, legal, accounting and other professional services, transaction-related costs, severance costs and transformation and other exit costs.
If a visitor accesses more than one of our web properties or apps or uses more than one device or browser, each of those unique property/browser/app/device combinations counts toward the number of UVs. Traffic is defined as the number of visits to Cars.com desktop and mobile properties (responsive sites and mobile apps).
If a visitor accesses more than one of our web properties or apps or uses more than one device or browser, each of those unique property/browser/app/device combinations counts toward the number of UVs. Traffic is defined as the number of 23 visits to Cars.com desktop and mobile properties (responsive sites and mobile apps). We measure UVs and Traffic via RudderStack.
Under this method, deferred income tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying value and tax basis of assets and liabilities, as measured by current enacted tax rates.
Under this method, deferred income tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying value and tax basis of assets and liabilities, as well as tax attribute carryforwards, as measured by enacted tax rates.
Actual results could differ significantly from those estimates. We believe the following discussion addresses our most critical accounting policies, which are those that are important to the presentation of our financial condition and results of operations and require management’s most subjective and complex judgments. Revenue Recognition.
We believe the following discussion addresses our most critical accounting policies, which are those that are important to the presentation of our financial condition and results of operations and require management’s most subjective and complex judgments. Revenue Recognition.
OEM and National revenue largely consists of Cars Commerce Media Network products, including display advertising and other solutions sold to OEMs, advertising agencies, automotive dealer associations and auto adjacent businesses, including insurance companies. OEM and National revenue represented 9% and 8% of total revenue for the years ended December 31, 2024 and 2023, respectively.
OEM and National revenue largely consists of media solutions products, including display advertising and other solutions sold to OEMs, advertising agencies, automotive dealer associations and auto adjacent businesses, including insurance companies. OEM and National revenue represented 9% of total revenue for both the years ended December 31, 2025 and 2024.
As a result, on February 24, 2025, our Board of Directors authorized a new three-year share repurchase program to acquire up to $250.0 million of our common stock. The repurchase program may be suspended or discontinued at any time and does not obligate us to repurchase any specific amount or number of shares.
On February 27, 2025, we announced that our Board of Directors had authorized a three-year share repurchase program to acquire up to $250.0 million of our common stock. The repurchase program may be suspended or discontinued at any time and does not obligate us to repurchase any specific amount or number of shares.
Product and technology. The product team creates and manages consumer and customer-facing innovation and consumer and customer experience. The technology team develops and supports our products, websites and mobile apps. Product and technology expense includes compensation costs, consulting and contractor costs, hardware and software maintenance, software licenses and other infrastructure costs.
The product team creates and manages consumer and customer-facing innovation and consumer and customer experience. The technology team develops and supports our products, websites and mobile apps. Product and technology expense includes compensation costs, consulting and contractor costs, hardware and software maintenance, software licenses, other infrastructure costs, costs related to the write-off of assets and severance costs.
Year Ended December 31, (In thousands) 2024 2023 2022 Revenue $ 719,152 $ 689,183 $ 653,876 Net income (1) 48,188 118,442 17,206 (1) Net income for the year ended December 31, 2023 is primarily related to the release of a significant portion of our valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments.
Overview of Results Year Ended December 31, (In thousands) 2025 2024 2023 Revenue $ 723,239 $ 719,152 $ 689,183 Net income (1) 20,052 48,188 118,442 (1) Net income for the year ended December 31, 2023 is primarily related to the release of a significant portion of our valuation allowance for deferred tax assets that had been recorded as a result of the 2020 goodwill and indefinite-lived intangible asset impairments.
Other income (expense), net changed primarily due to the change in the fair value of contingent consideration associated with the AccuTrade and CreditIQ acquisitions and the $10.8 million gain on the sale of our RepairPal, Inc. ("RepairPal") equity investment.
Other income, net. Other income, net changed primarily due to the change in the fair value of contingent consideration associated with the Accu-Trade, LLC and CreditIQ, Inc. acquisitions and the $10.8 million gain on the sale of our RepairPal, Inc.
Dealer revenue is typically subscription-oriented and consists of marketplace, digital experience, including website solutions and AccuTrade, and media products sold to dealer customers. Dealer revenue is our largest revenue stream, representing 89% and 90% of total revenue for the years ended December 31, 2024 and 2023, respectively.
Dealer revenue is typically subscription-oriented and consists of marketplace, digital experience, including website solutions, trade and appraisal and media products sold to dealer customers. Dealer revenue is our largest revenue stream, representing 89% of total revenue for both the years ended December 31, 2025 and 2024.
Changes in vehicle sales volumes in the United States and Canada also influence OEMs’ and dealerships’ willingness to increase investments in technology solutions and automotive marketplaces like Cars.com and could impact our pricing strategies and/or revenue mix.
Changes in vehicle sales volumes in the United States and Canada also influence OEMs’ and dealerships’ willingness to increase investments in marketing spend and technology solutions and could impact our pricing strategies and/or revenue mix.
For information related to our debt, repurchases of common stock and contingent consideration, see Note 4 (Fair Value Measurements), Note 7 (Debt) and Note 11 (Stockholders' Equity) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Contractual Obligations.
For information related to our debt and repurchases of common stock see Note 6 (Debt) and Note 9 (Stockholders' Equity) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Contractual Obligations.
For more information on the sale of our RepairPal equity investment, see Note 2 (Significant Accounting Policies) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Income tax expense (benefit) .
For more information on the sale of our RepairPal equity investment, see Note 2 (Significant Accounting Policies) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Income tax expense . Our effective income tax rate increased to 41.5% from 22.1% in the prior-year period.
Therefore, the subscription packages and add-on products are combined as a single performance obligation, and we recognize the related revenue ratably as the services are provided over the contract term. o We also provide certain non-subscription digital advertising services to dealer customers. We recognize revenue related to these services at the point in time the service is provided.
Therefore, our other subscription packages and add-on products are combined as a single performance obligation, and we recognize the related revenue ratably as the services are provided over the contract term. • Other Media Solutions. We also provide certain non-subscription digital advertising services to dealer customers.
Dealer revenue consists of marketplace, digital solutions, including website solutions and AccuTrade and media products sold to dealer customers, and is typically subscription-oriented in nature. Further information related to Dealer revenue in the Consolidated Statements of Income is as follows: • Marketplace . Our primary source of revenue is through the sale of marketplace subscription advertising packages to dealer customers.
Dealer revenue consists of marketplace, digital experience, including website solutions, vehicle acquisition and media products sold to dealer customers, and is typically subscription-oriented in nature. Further information related to Dealer revenue in the Consolidated Statements of Income is as follows: • Subscription Based Products .
For more information related to the earnout and contingent consideration, see Note 3 (Business Combinations) and Note 4 (Fair Value Measurements) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Commitments and Contingencies.
For more information related to the acquisition see Note 3 (Business Combinations) to the accompanying Consolidated Financial Statements included in Part II, Item 8,. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. 25 Marketing and sales .
For more information, see Note 9 (Leases) in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Cash Flows.
For information related to the earnouts, see Note 3 (Business Combinations) in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Cash Flows.
Our positive operating cash flow, along with our Revolving Loan, provide adequate liquidity to meet our business needs for the next 12 months and beyond, including those for investments, debt service, share repurchases, contingent consideration payments and strategic acquisitions.
We believe our positive operating cash flow, along with our $350.0 million revolving loan due in 2029 ("Revolving Loan"), provide adequate liquidity to meet our business needs for the next twelve months and beyond, including those for investments, debt service, share repurchases and strategic acquisitions.
During the year ended December 31, 2023, cash used in financing activities was primarily related to debt repayments, repurchases of common stock and tax payments made in connection with the vesting of certain equity awards, offset by proceeds from Revolving Loan borrowings related to the D2C Media Acquisition.
Financing Activities. During the year ended December 31, 2025, cash used in financing activities was primarily related to repurchases of common stock, net debt repayments and tax payments made in connection with the vesting of certain equity awards.
Visitors are identified when a user first visits an individual Cars.com property on an individual device/browser combination or installs one of our mobile apps on an individual device.
Visitors are identified upon first visit to an individual Cars.com property on an individual device/browser combination or installation of one of our mobile apps on an individual device.
For more information, see Note 14 (Income Taxes) to the accompanying Consolidated Financial Statements included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Key Operating Metrics.
For further information, see Note 6 (Debt) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Share Repurchase Program .
Interest expense, net was essentially flat compared to the prior-year period. For information related to our debt, see Note 7 (Debt) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Other income (expense), net.
Interest expense, net decreased $1.8 million or 6%, primarily due to a reduction in total indebtedness compared to the prior-year period and lower interest rates. For information related to our debt, see Note 6 (Debt) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Cost of revenue and operations . Cost of revenue and operations expense primarily consists of costs related to processing dealer vehicle inventory, product fulfillment, pay per lead products and compensation costs for the product fulfillment and customer service teams.
Other revenue increased $1.3 million or 11%. Cost of revenue and operations . Cost of revenue and operations expense primarily consists of costs related to processing dealer vehicle inventory, product fulfillment and compensation and severance costs for the product fulfillment and customer service teams.
As of December 31, 2024, the outstanding aggregate principal amount of our indebtedness was $460.0 million, at an average interest rate of 6.4%, including $400.0 million of outstanding aggregate principal under the 6.375% Senior Unsecured Notes due in 2028 and $60.0 million of outstanding principal under the Revolving Loan which had an interest rate of 6.5%.
As of December 31, 2025, the outstanding aggregate principal amount of our indebtedness was $455.0 million, at an average interest rate of 6.3%, including $400.0 million of outstanding aggregate principal under the 6.375% Senior Unsecured Notes due in 2028 and $55.0 million of outstanding principal under the Revolving Loan which had an interest rate of 5.8%. 26 During the year ended December 31, 2025, we borrowed $10.0 million and repaid $15.0 million on our Revolving Loan.
We intend to fund the share repurchase program principally with cash from operations Critical Accounting Policies and Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
The fair value is measured based on a Monte Carlo simulation or a scenario-based method, depending on the earnout objective and timing. The fair value measurement includes the following significant inputs: volatility and projected financial information. Significant increases or decreases to any of these inputs in isolation could result in a significantly higher or lower liability.
The fair value measurement included the following significant inputs: volatility and projected financial information. Significant increases or decreases to any of these inputs in isolation could result in a significantly higher or lower liability.
However, our ability to maintain adequate liquidity in the future is dependent upon a number of factors, including our revenue, our ability to contain costs, including capital expenditures, and to collect accounts receivable, and various other macroeconomic factors, many of which are beyond our direct control. 28 We may also seek to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our strategy.
However, our ability to maintain adequate liquidity in the future is dependent upon a number of factors, including our revenue, our ability to contain costs, including capital expenditures, and to collect accounts receivable and various other macroeconomic factors, many of which are beyond our direct control.
An impression is the display of an advertisement to an end-user on the website and is a measure of volume. A click-through occurs when an end-user clicks on an impression. We recognize revenue as the impressions or click-throughs are delivered.
Revenue related to OEM and National customers are primarily transaction-based contracts, which are billed for impressions delivered or click-throughs on their advertisements. An impression is the display of an advertisement to an end-user on the Cars.com website and is a measure of volume. A click-through occurs when an end-user clicks on an impression.
Details of our cash flows are as follows (in thousands): Year Ended December 31, 2024 2023 Change Net cash provided by (used in): Operating activities $ 152,524 $ 136,720 $ 15,804 Investing activities (24,597 ) (97,050 ) 72,453 Financing activities (115,958 ) (31,748 ) (84,210 ) Effect of exchange rate changes on Cash and cash equivalents (494 ) (439 ) (55 ) Net change in Cash and cash equivalents $ 11,475 $ 7,483 $ 3,992 Operating Activities.
Details of our cash flows are as follows (in thousands): Year Ended December 31, 2025 2024 Change Net cash provided by (used in): Operating activities $ 151,639 $ 152,524 $ (885 ) Investing activities (49,399 ) (24,597 ) (24,802 ) Financing activities (96,622 ) (115,958 ) 19,336 Effect of exchange rate changes on Cash and cash equivalents (55 ) (494 ) 439 Net change in Cash and cash equivalents $ 5,563 $ 11,475 $ (5,912 ) Operating Activities.
Annual information regarding Traffic, Average Monthly Unique Visitors ("UVs") and Monthly Average Revenue Per Dealer ("ARPD") is as follows (Traffic and Average Monthly Unique Visitors in thousands): Year Ended December 31, 2024 2023 % Change Average Monthly Unique Visitors 25,517 26,421 (3 )% Traffic 627,556 614,798 2 % Monthly Average Revenue Per Dealer - Annual $ 2,483 $ 2,486 (0 )% Quarterly information regarding our Dealer Customers and ARPD is as follows: December 31, 2024 December 31, 2023 YoY % Change September 30, 2024 QoQ % Change Dealer Customers 19,206 19,504 (2 )% 19,255 (0 )% Monthly Average Revenue Per Dealer - Quarterly $ 2,475 $ 2,523 (2 )% $ 2,478 (0 )% UVs and Traffic.
Key Operating Metrics are as follows (Traffic and Average Monthly Unique Visitors in thousands): Year Ended December 31, 2025 2024 % Change Average Monthly Unique Visitors 25,708 25,517 1 % Traffic 627,141 627,556 (0 )% Monthly Average Revenue Per Dealer - Annual $ 2,460 $ 2,483 (1 )% December 31, 2025 December 31, 2024 YoY % Change September 30, 2025 QoQ % Change Dealer Customers 19,544 19,206 2 % 19,526 0 % Monthly Average Revenue Per Dealer - Quarterly $ 2,472 $ 2,475 (0 )% $ 2,460 0 % Average Monthly Unique Visitors ("UVs") and Traffic.
For information related to commitments and contingencies, see Note 10 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Subsequent Events. DealerClub Acquisition. In January 2025, we acquired all of the outstanding stock of DealerClub, Inc.
For information related to commitments and contingencies, see Note 8 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Off-Balance Sheet Arrangements. We do not have any material off-balance sheet arrangements. Critical Accounting Policies and Estimates.
The actual amount to be paid will be based on the future performance of the acquired business to be attained over a three-year performance period through February 2025. • As part of the D2C Media Acquisition, we may be required to pay additional cash consideration to certain former owners who are now employees of Cars Commerce based on the achievement of a revenue performance metric.
("D2C Media"), are required to pay additional cash consideration to certain former owners who are now employees of the Company based on the achievement of a revenue performance metric. The amount to be paid will be determined by the acquired business’ achievement of certain revenue-related financial targets through December 31, 2025 and expensed over each performance period.
Dealer Customers represent dealerships subscribed to our products as of the end of each reporting period. Each physical or virtual dealership location is counted separately, whether it is a single-location proprietorship or part of a large, consolidated dealer group. Beginning December 31, 2023, this key operating metric includes D2C Media.
Dealer Customers represent dealerships using our products as of the end of each reporting period. Each physical or virtual dealership location is counted separately, whether it is a single-location proprietorship or part of a large, consolidated dealer group. Multi-franchise dealerships at a single location are counted as one dealer. Dealer Customer metrics do not include DealerClub.
Marketing and sales expense represented 32% and 34% of total revenue for the years ended December 31, 2024 and 2023, respectively. Marketing and sales expense decreased $4.0 million or 2%, primarily due to changes in our marketing investment and mix, partially offset by incremental costs related to the acquisition of the D2C Media business. General and administrative .
Marketing and sales expense represented 33% and 32% of total revenue for the years ended December 31, 2025 and 2024, respectively. Marketing and sales expense increased $7.1 million or 3%, primarily due to higher compensation, including stock-based compensation, and severance-related costs, as well as changes in our marketing investment, partially offset by lower bad debt expense. General and administrative .
Depreciation and amortization expense increased $6.2 million or 6%, primarily due to depreciation and amortization on additional assets acquired and the amortization of intangible assets related to the D2C Media Acquisition, partially offset by certain assets being fully depreciated and amortized as compared to the prior-year period. Interest expense, net .
Depreciation and amortization expense decreased $15.3 million or 14%, primarily due to certain assets being fully depreciated and amortized as compared to the prior-year period, partially offset by accelerated depreciation associated with our amended headquarters office lease. Interest expense, net .
We define ARPD as Dealer revenue, excluding digital advertising services, during the period divided by the monthly average number of Dealer Customers during the same period. Beginning December 31, 2023, this key operating metric includes D2C Media. ARPD for the annual period of 2024 remained flat compared to the annual period 2023.
We define ARPD as Dealer revenue, excluding digital advertising services and DealerClub, during the period divided by the monthly average number of Dealer Customers during the same period. For the annual period of 2025, ARPD decreased 1% compared to the annual period 2024, primarily due to changes in our customer and product mix.
Prior period UVs and Traffic information has not been recast, as it is impracticable to do so. These metrics do not include traffic to Dealer Inspire or D2C Media websites.
These metrics do not include traffic to Dealer Inspire, D2C Media or DealerClub websites.
The recognition of revenue associated with the license fee is recorded in Other revenue. Other revenue is recorded in Other revenue in the Consolidated Statements of Income. Business Combinations. Intangible Assets. Intangible assets are recorded at their estimated fair value at the date of acquisition.
Intangible assets are recorded at their estimated fair value at the date of acquisition.
Our long-term success will depend in part on our ability to continue to execute our platform strategy including continuing to create the most engaged in-market audience, growing our dealer customers, expanding our relationship with dealers through greater adoption of our platform, unlocking the cross-sell, transforming our OEM relationships and creating platform advantages.
Our long-term success will depend in part on our ability to attract and engage an in-market audience, to grow inventory supply and our dealer customers, to expand our relationship with dealers through greater adoption of our product offering, to transform our OEM relationships and to create operating leverage.
The contingent consideration is classified as Level 3 in the fair value hierarchy and the fair value is measured based on a Monte Carlo simulation or a scenario-based method, depending on the earn-out achievement objective, utilizing projections about future performance. Significant inputs include volatility and projected financial information. AccuTrade Contingent Consideration.
We measured contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The fair value was measured based on a Monte Carlo simulation or a scenario-based method, depending on the earnout objective and timing.
Product and technology expense represented 16% and 14% of total revenue for the years ended December 31, 2024 and 2023, respectively. Product and technology expense increased $14.3 million or 14%, primarily due to higher compensation, including stock-based compensation and third-party costs, including licenses. 27 Marketing and sales .
Product and technology expense represented 16% of total revenue for both the years ended December 31, 2025 and 2024. Product and technology expense decreased $0.5 million, primarily due to lower stock-based compensation, partially offset by incremental costs related to the acquisition of DealerClub Inc. ("DealerClub").
Our contingent consideration obligations are from arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of certain financial metrics or lender market share. Contingent consideration is recognized at its estimated fair value at the date of acquisition based on our expected future payment, discounted using accepted valuation methodologies.
In the prior periods presented, we had contingent consideration obligations from arrangements resulting from acquisitions that involved potential future payment of consideration that was contingent upon the achievement of certain financial metrics or lender market share.
We review and re-assess the estimated fair value of contingent consideration liabilities at each reporting period and the updated fair value could differ materially from the initial estimates. We measure contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs.
Contingent consideration was recognized at its estimated fair value at the date of acquisition based on our expected future payment, discounted using accepted valuation methodologies. We reviewed and re-assessed the estimated fair value of contingent consideration liabilities at each reporting period and the updated fair value could differ materially from the initial estimates.
For more information related to contingent consideration, see the Liquidity and Capital Resources section below, and Note 3 (Business Combinations) and Note 4 (Fair Value Measurements) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Our effective income tax rate is generally more volatile at lower amounts of pre-tax income since the impact of our reconciling items is greater. For more information, see Note 12 (Income Taxes) to the Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
On February 21, 2022, our Board of Directors authorized a three-year share repurchase program to acquire up to $200.0 million of our common stock. During the year ended December 31, 2024, we repurchased and subsequently retired 2.8 million shares for $49.2 million at an average price per share of $17.72. The share repurchase authorization expired on February 21, 2025.
During the year ended December 31, 2025, we repurchased and subsequently retired 7.1 million shares for $86.0 million at an average price per share of $12.17. As of December 31, 2025, $173.8 million remained under the share repurchase program. Earnouts. • As part of the acquisition of D2C Media, Inc.
As of December 31, 2024, we had the following obligations and commitments to make future payments under contracts, contractual obligations and commercial commitments (in thousands): Payments due by Period Contractual Obligations Total 2025 2026 2027 2028 2029 Thereafter Long-term debt (1) $ 460,000 $ — $ — $ — $ 400,000 $ 60,000 $ — Interest on debt (2) 119,078 29,428 29,428 29,428 29,417 1,377 — Operating leases 27,260 5,257 3,527 2,033 2,085 1,993 12,365 Other obligations (3) 30,367 26,514 3,853 — — — — Total $ 636,705 $ 61,199 $ 36,808 $ 31,461 $ 431,502 $ 63,370 $ 12,365 (1) Long-term debt includes future principal payments on long-term borrowings through scheduled maturity dates.
As of December 31, 2025, we had the following obligations and commitments to make future payments under contracts, contractual obligations and commercial commitments (in thousands): Payments due by Period Contractual Obligations Total 2026 2027 2028 2029 2030 Thereafter Long-term debt (1) $ 455,000 $ — $ — $ 400,000 $ 55,000 $ — $ — Interest on debt (2) 89,990 29,473 29,473 29,466 1,578 — — Operating leases 22,420 3,919 2,040 2,093 2,001 1,925 10,442 Other obligations (3) 52,603 28,758 21,114 1,412 754 565 — Total $ 620,013 $ 62,150 $ 52,627 $ 432,971 $ 59,333 $ 2,490 $ 10,442 (1) Long-term debt includes future principal payments on long-term borrowings through scheduled maturity dates.
In-Market Display products revenue sold to OEMs and national customers is recorded in OEM and National revenue in the Consolidated Statements of Income. Other Revenue. Other revenue primarily includes revenue related to vehicle listing data sold to third parties.
Other revenue primarily includes revenue related to vehicle listing data sold to third parties. We recognize other revenue either ratably as the services are provided or at the point in time the services have been performed. Other revenue is recorded in Other revenue in the Consolidated Statements of Income. Business Combinations. Intangible Assets.
General and administrative expense represented 12% and 11% of total revenue for the years ended December 31, 2024 and 2023, respectively. General and administrative expense increased $11.9 million or 15%, the majority of which is due to incremental costs related to the acquisition of the D2C Media business, including compensation expense of $10.8 million related to the D2C Media earnout.
General and administrative expense represented 13% and 12% of total revenue for the years ended December 31, 2025 and 2024, respectively. General and administrative expense increased $7.1 million or 9%, primarily due to higher compensation, including stock-based compensation, severance-related and third-party costs, partially offset by lower costs associated with our amended headquarters office lease. Depreciation and amortization .
Substantially all of our add-on products are not sold separately from the subscription packages as the customer cannot benefit from add-on products on their own.
Our primary source of revenue is through the sale of marketplace subscription advertising packages to dealer customers. Our subscription based add-on media products include: Cars Social, In-Market Video and VIN Performance Media. Substantially all of our add-on products are not sold separately from our subscription packages as the customer cannot benefit from add-on products on a standalone basis.
For the three months ended December 31, 2024, ARPD decreased 2% compared to the three months ended December 31, 2023, primarily due to the impact of one additional month of D2C Media. For the three months ended December 31, 2024, ARPD remained flat compared to the three months ended September 30, 2024. Dealer Customers .
For the three months ended December 31, 2025, ARPD remained flat compared to the three months ended September 30, 2025, primarily due to changes in our customer and product mix. Factors Affecting Our Performance.
The amount to be paid will be determined by the acquired business' future achievement of certain revenue-related financial targets through December 31, 2025 and expensed over each performance period. We may expense up to CAD$15.0 million (approximately US$10.4 million as of December 31, 2024) associated with the remaining portion of the earnout for the year ending December 31, 2025.
The amount paid will be determined by DealerClub's future achievement of certain revenue-related financial targets through December 31, 2028, and will be expensed over the relevant performance periods. No such consideration was expensed during the year ended December 31, 2025.
Calculated in accordance with our Credit Agreement, these ratios were 0.04x and 6.5x, respectively, as of December 31, 2024. For further information, see Note 7 (Debt) to the accompanying Consolidated Financial Statements included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Share Repurchase Program .
These decreases were partially offset by the impact of the prior year payment of the $10.5 million lease termination penalty. For further information, see the Consolidated Statements of Cash Flows included in Part II, Item 8., "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Investing Activities.
References in this discussion and analysis to "we," "us," "our", "Cars Commerce" and similar terms refer to Cars.com Inc. and its subsidiaries, collectively, unless the context indicates otherwise. Business Overview. Cars Commerce is an audience-driven technology company empowering the automotive industry.
The financial information discussed below and included elsewhere in this Annual Report on Form 10-K may not necessarily reflect what our financial condition, results of operations and cash flows may be in the future. References in this discussion and analysis to "we," "us," "our" and similar terms refer to Cars.com Inc. and its subsidiaries, collectively, unless the context indicates otherwise.
Traffic increased 2% year-over-year for the year ended December 31, 2024, primarily driven by the shift to RudderStack, higher repeat visitation and optimization of our user acquisition strategy, partially offset by shifts in our marketing mix. ARPD. We believe that our ability to grow ARPD is an indicator of the value proposition of our platform.
Dealer Customers increased 2% from December 31, 2024, primarily due to an increase in marketplace customers. Dealer Customers remained flat from September 30, 2025. Monthly Average Revenue Per Dealer ("ARPD"). We believe that our ability to grow ARPD is an indicator of the value proposition of our platform.
Cost of revenue and operations expense represented 17% and 18% of total revenue for the years ended December 31, 2024 and 2023, respectively. Cost of revenue and operations increased $2.1 million or 2%, but decreased as a percentage of revenue. The change is primarily due to the incremental costs related to the acquisition of the D2C Media business.
Cost of revenue and operations expense represented 17% of total revenue for both the years ended December 31, 2025 and 2024. Cost of revenue and operations decreased $1.0 million or 1%, primarily due to lower compensation expense, partially offset by higher third-party costs associated with certain products driven by slight shifts in product mix. Product and technology.
During the year ended December 31, 2024, we made $10.0 million in mandatory Term Loan payments and repaid $20.0 million on our Revolving Loan. As of December 31, 2024, $290.0 million was available to borrow under the Revolving Loan. Our borrowings are limited by our Senior Secured Net Leverage Ratio and Consolidated Interest Coverage Ratio, in addition to other factors.
As of December 31, 2025, $295.0 million was available to borrow under the Revolving Loan. At each quarter-end, we are subject to certain net leverage ratio and interest coverage ratio financial covenants under our Credit Agreement. As of December 31, 2025, we were in compliance with all such covenants.
If we need to access the capital markets, there can be no assurance that financing may be available on attractive terms, if at all. As of December 31, 2024, Cash and cash equivalents were $50.7 million and including our undrawn Revolving Loan, our total liquidity was $340.7 million. Indebtedness.
As of December 31, 2025, Cash and cash equivalents were $56.2 million and including our undrawn Revolving Loan, our total liquidity was $351.2 million. Indebtedness.
OEM and National revenue increased $10.0 million or 18%, primarily due to increased OEM spending to raise consumer awareness, as on-the lot inventory continues to increase. Other revenue. Other revenue primarily consists of revenue related to vehicle listing data sold to third parties and pay per lead products.
OEM and National revenue decreased $0.6 million or 1%, which we believe is primarily due to shifts in spending by OEM partners. Other revenue. Other revenue primarily consists of revenue related to vehicle listing data sold to third parties. Other revenue represented 2% of total revenue for both the years ended December 31, 2025 and 2024.
Dealer revenue increased $19.1 million or 3%, primarily driven by the incremental revenue related to the acquisition of the D2C Media business and growth in digital experience revenue, including our website creation and hosting. OEM and National revenue .
Dealer revenue increased $3.3 million or 1%, primarily due to continued growth in solutions, partially offset by declines in marketplace and media, as a result of lower average dealer count during the first half of 2025 and changes in our customer mix. OEM and National revenue .
C ash provided by operating activities for the year ended December 31, 2024 increased due to Net income after non-cash adjustments, partially offset by changes in working capital compared to the year ended December 31, 2023. Investing Activities.
Cash provided by operating activities for the year ended December 31, 2025 decreased slightly as compared to the year ended December 31, 2024, primarily due to an increase of $7.8 million of earnout payments related to the D2C Acquisition, as well as lower Net income and the related adjustments in the Consolidated Statement of Cash Flows.
The effective income tax rate differed from the statutory federal income tax rate of 21%, primarily due to the impact of state income taxes, net of federal income tax expense, nondeductible transaction expenses and nondeductible executive compensation, partially offset by tax credits and the release of the remaining portion of our valuation allowance.
The increase is primarily due to an outsized impact of state income taxes, net of federal income tax effect and nondeductible items, partially offset by the benefit of tax credits on substantially lower pre-tax income as compared to the prior-year period.
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We simplify everything about car buying and selling with powerful products, solutions and machine learning model-driven artificial intelligence technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe effect of foreign currency exchange rate fluctuations during 2023 and 2024 is immaterial. As we continue to grow our Canadian operations, we expect to continue to be exposed to foreign exchange rate risk. We may determine to take certain foreign exchange rate risk management measures.
Biggest changeAs we continue to grow our Canadian operations, we expect to continue to be exposed to foreign exchange rate risk. We may determine to take certain foreign exchange rate risk management measures.
Foreign Currency Exchange Risk. Historically, we have not faced any significant foreign currency risk as our operations and sales have been primarily in the United States. However, with the acquisition of D2C Media in November 2023, we have expanded our presence in Canada and therefore our risk related to changes in exchange rates between the U.S. dollar and Canadian dollar.
Foreign Currency Exchange Risk. Historically, we have not faced any significant foreign currency risk as our operations and sales have been primarily in the United States. However, with the acquisition of D2C Media in November 2023, we expanded our presence in Canada and therefore, our risk related to changes in exchange rates between the U.S. dollar and Canadian dollar.
D2C Media primarily bills its customers and incurs expenses in Canadian dollars. We also have intercompany debt between U.S. and Canadian entities that is subject to exchange rate fluctuations and will result in foreign exchange gains or losses depending on the currency movement during the respective time period.
D2C Media primarily bills its customers and incurs expenses in Canadian dollars. We also have intercompany debt between U.S. and Canadian entities that is subject to exchange rate fluctuations and will result in foreign exchange gains or losses depending on the currency movement during the respective time period. The effect of foreign currency exchange rate fluctuations since 2023 is immaterial.
As of December 31, 2024, the outstanding aggregate principal amount of our indebtedness was $460.0 million, at a weighted average interest rate of 6.4%, including $400.0 million of outstanding principal under the bonds, which carries a fixed interest rate of 6.375% and $60.0 million of outstanding principal under the Revolving Loan which carried an interest rate of 6.5% at December 31, 2024.
As of December 31, 2025, the outstanding aggregate principal amount of our indebtedness was $455.0 million, at a weighted average interest rate of 6.3%, including $400.0 million of outstanding principal under the bonds, which carries a fixed interest rate of 6.375% and $55.0 million of outstanding principal under the Revolving Loan which carried an interest rate of 5.8% at December 31, 2025.

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