Cars.com (CARS) Q2 FY26 earnings call: guidance and Q&A

What are the key drivers behind the 7%+ marketplace revenue growth, specifically regarding premium package adoption and new products, and is this trajectory sustainable?

Marketplace growth was driven by a combination of improved dealer count and continued ARPD progress, largely from the new Premium Plus package. The company is seeing good adoption and aims for 15% penetration by year-end, indicating sustainability.

“it was driven by a combination of both improvements in dealer count, which really helped accelerate the marketplace flywheel and continued progress on ARPD, a chunk of which was driven by the new Premium Plus package that we rolled out last year.”

asked by Thomas White · answered by Sonia Jain

How to reconcile the decline in unique visitors with growth in lead volume, especially given SEO headwinds for other internet marketplaces?

The decline in uniques is an intentional shift to prioritize value delivery over pure audience reach, focusing marketing spend on high-intent shoppers. This strategy has led to better conversion and lead volume, which is deemed the right approach for dealers.

“We looked at our marketing spend and our marketing practice, and we figured that there are some inefficiencies. We drove a lot of traffic in the past, a lot of clicks that didn't convert into leads. So we do not want to do this anymore. So we are intentionally shifting to prioritize the value delivery versus the pure audience reach.”

asked by Thomas White · answered by Tobias Hartmann

What is the timeline for new product rollouts to stabilize and grow Solutions subscriber count? Also, what are the early lead/conversion results and monetization strategy for Dealer Verified Listings?

For Solutions, the company will apply the marketplace playbook, focusing on product innovation and interconnectivity over the next 2-3 quarters to return to growth. Dealer Verified Listings are showing increased impressions and click-through rates, creating a trust signal for consumers. It started with AccuTrade customers and will expand to a broader audience, with monetization details still being refined.

“So over the next 2 to 3 quarters, there will be a focus on really product innovation and applying the same playbook. So we're very confident that we'll get this back on a growth trajectory.”

asked by Marvin Fong · answered by Tobias Hartmann

Marketing and sales expenses are up year-over-year, despite the stated focus on higher-quality traffic. Why the deleverage in the marketing line?

The increased marketing spend is partly due to brand investments to position Cars.com as a transaction enablement platform, not just a listings destination. This is separate from the performance marketing focus on driving more value and leads, supporting a long-term interconnected strategy.

“But there's something else that we're trying to catch up with and trying to have proper allocation, which is really, call it, brand. Remember, we still need some brand investments for the long-term interconnected strategy. So we need to position this not only just a listings destination, but instead as a transaction enablement platform.”

asked by Naved Khan · answered by Tobias Hartmann

How has the platform adapted to the FTC's push for dealer pricing transparency, and does all-in pricing create friction for dealers or align with the trust-based marketplace?

The company supports dealers in complying with transparency, believing it reduces friction and increases lead-to-sale conversion by informing consumers upfront. This aligns with their vision of a marketplace built on trust and transparency.

“We tried to take a role in helping dealers ensure that they are able to get their information out there and be trusted partners to consumers. If you think about our vision for marketplace, it is embedded in trust, transparency.”

asked by Unknown Analyst · answered by Sonia Jain