Q3 2025 Cars.com Inc Earnings Call

November 6, 2025

Following the presentation, we will conduct a question and answer session.

If at any time during this call you require immediate assistance.

Please press star zero for operator.

This call is being recorded on Thursday November six 2025.

I'd now like to turn the conference over to Catherine Chen. Please go ahead.

Good morning, everyone and thank you for joining us for the current Dot Com, Inc. Third quarter 2025 conference call with me. This morning are Alex Hutter, CEO and song and Jane CFO Alan.

Alex I'll start by discussing the business highlights from our third quarter, then Sonya will discuss our financial results in greater detail along with our outlook, we'll finish the call with Q&A.

Before I turn the call over to Alex I'd like to draw your attention to our forward looking statements and the description and definition of non-GAAP financial measures, which can be found in our presentation.

We will be discussing certain non-GAAP financial measures today, including adjusted EBITDA adjusted EBITDA margin adjusted operating expenses, adjusted net income and free cash flow.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the financial tables included with our earnings press release and in the appendix of our presentation.

Any forward looking statements are subject to risks and uncertainties.

For more information please refer to the risk factors included in our SEC filings, including those in our most recently filed 10-K, which is available on the IR section of our website.

We assume no obligation to update any forward looking statements.

Now I will turn the call over to Alex.

Thank you Catherine we were pleased to achieve record revenue and drive strong customer and product momentum in the third quarter on our path to Reaccelerate growth.

Revenue of $182 million, reflecting continued contribution from websites trading appraisal solutions and marketplace. These.

These are count increase for the third consecutive quarter as we reached a new three year high with marketplace in particular outperforming expectations.

Topline strength combined with our strong operating model enabled investments for innovation, while also producing adjusted EBITA margin of 30% up over 160 basis points year over year.

And resulting cash generation supported another $19 million of share buybacks in Q3 for a total of $64 million year to date.

It's clear that our consistent execution is delivering compounding benefits and we feel confident there is more improvement to come.

Our strong focus on 2025 growth initiatives continued to deliver measurable progress for the business in the third quarter.

First sales velocity and driving unit volume has lifted marketplace and solutions performance under new sales leadership and enhanced go to market strategy. We added 270, plus dealers year over year with subscriptions up across all of our leading products in total we powered 19500.

<unk> 2006 dealers in Q3, our largest customer base since late 2022, and only a few hundred dealers away from an all time record.

New franchise dealer sign ups also increased appreciably quarter over quarter in Q3, complementing the share gain amongst the independent dealers that we achieved in the first half of the year.

Dealers consistently cite our unique consumer audience data insights a differentiated product suite as key factors that are motivating them to join our platform.

Second our phase marketplace re packaging exercise.

To align pricing with product value and enhanced platform benefits for dealers launched in early summer.

By bundling media products and features and new premium and premium plus packages, we are helping dealers drive up to 14% more leads per listing versus base packages.

And we anticipate adoption of premium plus to accelerate with growing dealer awareness of these benefits.

Finally, our product team remains at the forefront of helping consumers Oems and dealers navigate the changing auto retail landscape, we are putting AI powered search and recommendations in the hands of marketplace shoppers and simultaneously enhancing lead conversion for dealers through advanced analytics.

Through our appraisal and wholesale capabilities. We are also directly helping dealers address used car scarcity and specifically how to profitably source attractive late model inventory.

And we continue to be the only platform with integrated <unk> wholesale and B to C retail capabilities, a key value proposition is dealers look for innovation and operating leverage.

Our multifaceted AI first platform makes us essential for both consumer and dealer customers. We are seeing clear signals of traction in our platform strategy.

Starting with marketplace, we fired on all cylinders in Q3 with momentum carrying into October.

We drew $25 4 million average monthly unique visitors up 4% year over year, leveraging better optimization of our revisit our acquisition strategy to attract strong consumer demand.

Traffic year to date was 488 million visits to the end of Q3, setting a new record.

Our leading editorial and brand expertise is evident from third party data that shows that we're we're the most excited public automotive marketplace across AI tools like Google AI, overviews and chat GPT with double the citations of our closest peer.

And we continue to leverage our strong brand and steady stream of in demand content as an integral part of our product and marketing strategy in this evolving landscape.

AI is central to our product innovation roadmap as we enhance the quality of our marketplace to deliver a best in class personalized shopping experience for car buyers.

Carson, our newly launched natural language search assistant gives users and interactive experience more akin to a conversation you have with an AI agent to complement traditional search results.

Carsten currently assist 15% of searches and search refinement on web and mobile today compared to the average shopper AI users also saved three times more vehicles to revisit later assure sign that we're fueling deeper consumer engagement.

Just like we were a pioneer with AI integration on the cars Dot Com website. Our next milestone will be integrating carson into our number one most downloaded automotive marketplace app.

Mobile apps, our highest converting channels and we believe AI powered targeted search results may lift conversion, even further as we drive search efficacy and our marketplace flywheel.

For dealers, who subscribe to our marketplace, we continue to deliver high performing tools for the sales and marketing teams embedding into their tech stack to drive engagement conversion and ultimately sales.

Shopper alerts, which we launched in the third quarter to fast follow our new lead intelligence reports proactively flag shopper engagement and buying indicators to dealers over.

Over 50% of marketplace customers have already used this feature lease once in its first two months of launch and as you can see from customer feedback.

Shopper alerts are quickly, becoming a key part of dealership workflow, helping salespeople identify the best prospects to close more sales.

With such an enthusiastic response, we're quickly iterating to provide richer data and AI driven insights directly into dealer CRM, both with incumbent players and through new investments in disruptive technologies as we unlock the full potential of our platform with more AI and SaaS based solutions.

Turning to our trading in sourcing solutions Accu trade and dealer club continued to scale in Q3 as dealers increasingly gravitate to tech first products that advance the industry's long term goal of improving profitability.

The recent success of digital dealers, who rely heavily on acquiring vehicles directly from consumers.

Put in even finer point on the importance of a diversified vehicle acquisition strategy for driving <unk> Gpus.

<unk> trade and dealer club address this gap by allowing dealers to acquire from either service lane or other trusted dealers back by the most accurate vehicle values in the industry.

Accu trade grew to 1150 subscribers in Q3 and dealer club increase of factor viewers by nearly 40% quarter over quarter.

We're also pleased to share that accu trade surpassed 1 million quarterly appraisals, a milestone that points to enthusiastic and growing customer engagement.

Importantly over 50% of vehicles acquired via Accu trade are between one and five years old highlighting the attractive pool of in demand late model inventory that dealers access when they expand beyond traditional physical auctions.

This quarter dealers can now easily analyze their accu trade activity via profit funnel and trade capture reports seeing how much profit is made on accu trade versus non accu trade cars and conversion rates on our <unk>.

We're excited to see these products and features further scale as we continue to innovate.

Lastly, total subscribers for dealer inspire and D to C media websites reached nearly 7900 in Q3, we have grown website subscriptions for five straight years, an impressive feat that speaks to our differentiated technical capabilities and support model.

Similar to marketplace website customers are also benefiting from our AI leadership, our dealer websites also support discovery and data processing by popular AI search tools, and we are now proactively enabling customers to improve their own site visibility.

By building more consultative relationships and innovating on behalf of customers. We're confident that we can further expand our market share.

Across marketplace websites and appraisal on wholesale we delivered triple digit dealer count growth for the second straight quarter.

Operator: All lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 6 November 2025. I would now like to turn the conference over to Katherine Chen. Please go ahead.

We also achieved <unk> growth on a sequential basis, consistent with our expectations that repackaging and cross selling would lift performance beginning in Q3.

Website subscriptions for five straight years, an impressive feat that speaks to our differentiated technical capabilities and support model.

We're on pace to surpass all time records for both direct dealer customers and AARP D. Before the end of 2026 on our way towards greater targets as we expand and enhance our product offering.

While dealer revenue was at its healthiest level in several quarters, we did see some variability in OEM and national revenue, which was down 5% year over year in Q3.

Katherine Chen: Good morning, everyone, and thank you for joining us for the Cars.com Inc. third quarter 2025 conference call. With me this morning are Alex Vetter, CEO, and Sonia Jain, CFO. Alex will start by discussing the business highlights from our third quarter. Sonia will discuss our financial results in greater detail, along with our outlook. We'll finish the call with Q&A. Before I turn the call over to Alex, I'd like to draw your attention to our forward-looking statements and the description and the definition of non-GAAP financial measures, which can be found in our presentation. We'll be discussing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margin, adjusted operating expenses, adjusted net income, and free cash flow.

By building more consultative relationships and innovating on behalf of customers. We're confident that we can further expand our market share.

Specifically, two OEM partners significantly adjusted their media investments during the fall due to factors like internal agency changes that are unrelated to our performance or value.

Across marketplace websites and appraisal on wholesale we delivered triple digit dealer count growth for the second straight quarter we.

We also achieved <unk> growth on a sequential basis, consistent with our expectations that repackaging and cross selling would lift performance beginning in Q3.

I'll also note that both of these customers remain advertisers on our platform and we're in active talks to and a greater share of their forward spending.

As we discussed in prior calls our OEM revenue pipeline is strong play in discussions for 2026 have been positive and our unique ability to drive better tier one to tier three outcomes via our marketplace is a winning asset for automakers as they compete for consumer demand.

We're on pace to surpass all time records for both direct dealer customers and AARP D. Before the end of 2026 on our way towards greater targets as we expand and enhance our product offering.

While dealer revenue was at its healthiest level in several quarters, we did see some variability in OEM and national revenue, which was down 5% year over year in Q3.

Katherine Chen: Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the financial tables included with our earnings press release, and in the appendix of our presentation. Any forward-looking statements are subject to risks and uncertainties. For more information, please refer to the risk factors included in our SEC filings, including those in our most recently filed 10-K, which is available on the IR section of our website. We assume no obligation to update any forward-looking statements. Now, I'll turn the call over to Alex.

We're confident that this segment can resume its growth trajectory in the coming quarters and continue to be a strong contributor to revenue and margin expansion.

Specifically, two OEM partners significantly adjusted their media investments during the fall due to factors like internal agency changes that are unrelated to our performance or value.

Looking at this quarter as a whole I am pleased that our steady execution is showing up in the P&L and then positive trends that point to more gains ahead, we're driving our business forward growing revenue and gaining customer market share all while continuously innovating Q.

I'll also note that both of these customers remain advertisers on our platform and we're in active talks to and a greater share of their forward spending.

Q3 is the right step in the right direction and we're focused on finishing the year with a healthy exit rate. So that we can deliver even better results as we continue scaling our leading platform.

As we discussed in prior calls our OEM revenue pipeline is strong.

Discussions for 2026 have been positive and our unique ability to drive better tier one to tier three outcomes via our marketplace is a winning asset for automakers as they compete for consumer demand.

Alex Vetter: Thank you, Katherine. We were pleased to achieve record revenue and drive strong customer and product momentum in the third quarter on our path to re-accelerating growth. Revenue of $182 million reflected continued contribution from Websites, trade and appraisal solutions, and Marketplace. These account increased for the third consecutive quarter as we reached a new three-year high, with Marketplace in particular outperforming expectations. Top-line strength, combined with our strong operating model, enabled investments for innovation while also producing adjusted EBITDA margin of 30%, up over 160 basis points year over year. Resulting cash generation supported another $19 million of share buybacks in Q3 for a total of $64 million year to date. It's clear that our consistent execution is delivering compounding benefits, and we feel confident there is more improvement to come.

And now I'll turn the call over to Sonya to discuss our third quarter financial results Sonya.

We're confident that this segment can resume its growth trajectory in the coming quarters and continue to be a strong contributor to revenue and margin expansion.

Thank you Alec we delivered a strong third quarter across multiple key financial metric producing record revenue adjusted EBITDA expansion and robust cash generation.

Looking at this quarter as a whole I am pleased that our steady execution is showing up in the P&L and in positive trends that point to more gains ahead, we're driving our business forward growing revenue and gaining customer market share all while continuously innovating Q.

The execution of 2025 growth initiatives has been our top priority and our new revenue trajectory reflects the positive changes we've implemented year to date.

We're also confident that as these improvements compound in our subscription business, both revenue and margins will accelerate in the coming quarters.

Q3 is the right step in the right direction and we're focused on finishing the year with a healthy exit rate. So that we can deliver even better results as we continue scaling our leading platform.

Starting with our revenue discussion third quarter revenue was $181 6 million.

Up 1% year over year and in line with our expectation for low single digit growth in the second half of the year.

And now I'll turn the call over to Sonya to discuss our third quarter financial results Sonya.

Dealer revenue was up 2% year over year, driven by favorability from repackaging activity and better customer count.

Thank you Alec we delivered a strong third quarter across multiple key financial metric producing record revenue adjusted EBITDA expansion and robust cash generation.

Alex Vetter: Our strong focus on 2025 growth initiatives continued to deliver measurable progress for the business in the third quarter. First, sales velocity and driving unit volume has lifted Marketplace and solutions performance. Under new sales leadership and enhanced go-to-market strategy, we added 270-plus dealers year over year, with subscriptions up across all our leading products. In total, we powered 19,526 dealers in Q3, our largest customer base since late 2022, and only a few hundred dealers away from an all-time record. New franchise dealer signups also increased appreciably quarter over quarter in Q3, complementing the share gain amongst independent dealers that we achieved in the first half of the year. Dealers consistently cite our unique consumer audience, data insights, and differentiated product suite as key factors that are motivating them to join our platform.

Our ongoing repackaging market resulted in successful renegotiation of additional OEM website agreement and the phased launch of new marketplace packages in Q3 as.

Just the execution of 2025 growth initiatives has been our top priority and our new revenue trajectory and reflects the positive changes we've implemented year to date.

As Alex mentioned, our top two marketplace tiered bundle more media.

For better vehicle merchandising and promotion, helping dealers attract and convert in market shoppers.

We're also confident that as these improvements compound in our subscription business, both revenue and margins will accelerate in the coming quarters.

Gration of legacy preferred customers into new premium and premium plus packages with a 100% complete as of the end of October.

Starting with our revenue discussion third quarter revenue was $181 6 million.

Also note that we have seen very few cancellations attributable to this exercise and other encouraging signal of the value dealer fee in our marketplace.

Up 1% year over year and in line with our expectation for low single digit growth in the second half of the year.

Dealer revenue was up 2% year over year, driven by favorability from repackaging activity and better customer count are ongoing repackaging work resulted in successful renegotiation of additional OEM website agreement and the phased launch of new marketplace packages in Q3 as.

Marketplace. Our most scaled solution is also the tip of the spear for customer acquisition and cross selling and key to winning dealer market share over time, it's therefore encouraging to see that marketplace continues to be the biggest quarter over quarter contributor to dealer count grow and as the linchpin for our net gain of over.

As Alex mentioned, our top two marketplace tiers now bundle more media features for better vehicle merchandising and promotion, helping dealers attract and convert in market shoppers.

Alex Vetter: Second, our phased marketplace repackaging exercise, intended to align pricing with product value and enhance platform benefits for dealers, launched in early summer. By bundling media products and features in new premium and premium-plus packages, we are helping dealers drive up to 14% more leads per listing versus base packages. We anticipate adoption of premium-plus to accelerate with growing dealer awareness of these benefits. Finally, our product team remains at the forefront of helping consumers, OEMs, and dealers navigate the changing auto retail landscape. We are putting AI-powered search and recommendations in the hands of marketplace shoppers and simultaneously enhancing lead conversion for dealers through advanced analytics. Through our appraisal and wholesale capabilities, we are also directly helping dealers address used car scarcity and specifically how to profitably source attractive late-model inventory.

300 dealer customers since the start of the year.

Multiple levers to inflect AARP D driving new customer growth as well as upgrading packaged here and cross selling against our installed base and this is amplified by our improved pricing. We saw early signs of these levers in action in Q3, with AARP up 1% quarter over quarter and we are optimistic.

The migration of legacy preferred customers into new premium and premium plus packages with a 100% complete as of the end of October.

Also note that we've seen very few cancellations attributable to this exercise and other encouraging signal of the value dealers fee in our marketplace.

That trends will improve as these positive changes gained further traction in annualized.

Overall dealer revenue growth more than offset near term noise in OEM and national revenue, which was down just under $1 million or 5% year over year.

Previously mentioned lower spending by two customers accounted for almost the entirety of the OEM revenue declined in the quarter and we're already at work rebuilding the revenue pipeline with those partners.

There are 300 dealer customers since the start of the year.

We have multiple levers to inflect AARP D driving new customer growth as well as upgrading packaged here and cross selling against our installed base and this is amplified by our improved pricing. We saw early signs of these levers in action in Q3, with AARP up 1% quarter over quarter and we are optimistic.

More broadly speaking media investments did taper in September as the industry digested large scale changes like strong pull forward demand from exploration and Edie credit and continuing shifts in production as well as downward revisions in Saar.

Alex Vetter: We continue to be the only platform with integrated B2B wholesale and B2C retail capabilities, a key value proposition as dealers look for innovation and operating leverage. Our multifaceted AI-first platform makes us essential for both consumer and dealer customers. We are seeing clear signals of traction in our platform strategy. Starting with Marketplace, we fired on all cylinders in Q3, with momentum carrying into October. We drew 25.4 million average monthly visitors, up 4% year over year, leveraging better optimization of our visitor acquisition strategy to attract strong consumer demand. Traffic year to date was 488 million visits through the end of Q3, setting a new record. Our leading editorial and brand expertise is evident from third-party data that shows that we're the most cited public automotive marketplace across AI tools like Google AI Overviews and ChatGPT, with double the citations of our closest peer.

And then last September with our best month of OEM revenue for 2024, we also had a challenging comp that accentuated this late quarter trends.

That trends will improve as these positive changes gained further traction in annualized.

Overall dealer revenue growth more than offset near term noise in OEM and national revenue, which was down just under $1 million or 5% year over year.

We're observing that Oems continue to prefer a more flexibility in the current operating environment and as such we expect their AD spending may fluctuate through the end of this year. However, we remain confident in our audience and value delivery and in our ability to power growth in this segment.

Turning to our cost discussion third quarter operating expenses were $165 million.

More broadly speaking media investments did taper in September as the industry digested large scale changes like strong pull forward demand from exploration of EV credits and continuing shifts in production as well as downward revisions in SAR.

Down 2% year over year compared to the prior year period cost efficiencies in head count and lease related expenses as well as lower depreciation and amortization fully offset new dealer club comp and slightly higher marketing and G&A spend.

It didn't last September was our best month of OEM revenue for 2024, we also had a challenging comp that accentuated this late quarter trends.

Adjusted operating expenses were $150 million down 4% year over year for substantially similar reason.

We're observing that Oems continue to prefer more flexibility in the current operating environment and as such we expect their AD spending may fluctuate through the end of this year. However, we remain confident in our audience and value delivery and in our ability to power growth in this segment.

For the following line item detail all comparison on a year over year basis, unless otherwise noted.

Alex Vetter: We continue to leverage our strong brand and steady stream of in-demand content as an integral part of our product and marketing strategy in this evolving landscape. AI is central to our product innovation roadmap as we enhance the quality of our Marketplace to deliver a best-in-class, personalized shopping experience for car buyers. Carson, our newly launched natural language search assistant, gives users an interactive experience more akin to a conversation you have with an AI agent to complement traditional search results. Carson currently assists 15% of searches and search refinement on web and mobile today. Compared to the average shopper, AI users also save three times more vehicles to revisit later, a sure sign that we're fueling deeper consumer engagement.

Product and technology expenditures decreased $1 $6 million on a reported basis and $1 million on an adjusted basis.

Turning to our cost discussion third quarter operating expenses were $165 million.

Fully offsetting dealer cup costs through lower compensation and third party fees.

Marketing and sales increased $1 million on both a reported and adjusted basis, reflecting marketing investments and general and administrative expense was up $2 $8 million year over year on a reported basis, but was roughly flat on an adjusted basis. The reported increase was primarily due to increased third party costs that were partially.

Adjusted operating expenses were $150 million down 4% year over year for substantially similar reason.

<unk> savings from the leaf Amendment completed in Q4 2024.

The following line item detail all comparisons are on a year over year basis, unless otherwise noted.

Net income for the third quarter was $7 7 million or <unk> 12 per diluted share compared to net income of $18 7 million or 28 per diluted share a year ago.

Product and technology expenditures decreased $1 $6 million on a reported basis and $1 million on an adjusted basis fully offsetting dealer cup costs through lower compensation and third party fees.

Alex Vetter: Just like we were a pioneer with AI integration on the Cars.com website, our next milestone will be integrating Carson into our number one most downloaded automotive marketplace app. Mobile apps are our highest converting channels, and we believe AI-powered targeted search results may lift conversion even further as we drive search efficacy and our marketplace flywheel. For dealers who subscribe to our marketplace, we continue to deliver high-performing tools for their sales and marketing teams, embedding into their tech stack to drive engagement, conversion, and ultimately sales. Shopper Alerts, which we launched in the third quarter to fast-follow our new lead intelligence reports, proactively flag shopper engagement and buying indicators to dealers. Over 50% of marketplace customers have already used this feature at least once in its first two months of launch. As you can see from customer feedback.

Net income is primarily due to changes in the fair value of contingent consideration for prior acquisitions that were included in the prior year period.

Adjusted net income for the third quarter with $30 4 million or <unk> 48 per diluted share compared to $27 7 million or <unk> 41 per diluted share a year ago adjust.

Adjusted EBITDA of $55 million into third quarter grew 7% year over year benefiting from both higher revenue and cost control third quarter adjusted EBITDA margin of 31% demonstrated strong revenue flow through benefit from the cost management initiatives described earlier and <unk>.

<unk> savings from the leaf Amendment completed in Q4 2024.

Net income for the third quarter was $7 7 million or <unk> 12 per diluted share compared to net income of $18 7 million or 28 per diluted share a year ago.

<unk> of certain costs.

Now onto key metrics.

Net income is primarily due to changes in the fair value of contingent consideration for prior acquisitions that were included in the prior year period.

Account was up in the third quarter based on strength across all of our major products brand websites grew sequentially by 67 subscribers with most of the growth coming in the U S.

Adjusted net income for the third quarter was $30 4 million or <unk> 48 per diluted share compared to $27 7 million or <unk> 41 per diluted share a year ago adjust.

Alex Vetter: Shopper Alerts are quickly becoming a key part of dealership workflow, helping salespeople identify the best prospects to close more sales. With such an enthusiastic response, we're quickly iterating to provide richer data and AI-driven insights directly into dealer CRMs, both with incumbent players, and through new investments in disruptive technologies as we unlock the full potential of our platform with more AI and SaaS-based solutions. Turning to our trading and sourcing solutions, ACCUTRADE and Dealer Club continue to scale in Q3 as dealers increasingly gravitate to tech-first products that advance the industry's long-term goal of improving profitability. The recent success of digital dealers, who rely heavily on acquiring vehicles directly from consumers, has put an even finer point on the importance of a diversified vehicle acquisition strategy for driving up GPUs.

Trade grew by 82 subscribers sequentially about half of whom came from the enterprise deal announced last quarter.

Third quarter, AARP D was $2460 up 1% quarter over quarter and down slightly year over year.

Adjusted EBITDA of $55 million in the third quarter grew 7% year over year benefiting from both higher revenue and cost controls third quarter adjusted EBITDA margin of 31% demonstrated strong revenue flow through benefit from the cost management initiatives described earlier and <unk>.

We think customer and product mix shifts like faster independent dealer growth and lower media attach rates continue to have a near term leveling effect on this metric. However, as previously discussed we have multiple ways to inflect AARP overtime first new customer acquisition and continued up tier migration.

<unk> of certain costs.

Now onto key metrics.

Count was up in the third quarter based on strength across all of our major products brands websites grew sequentially by 67 subscribers with most of the growth coming in the U S. Accu trade grew by 82 subscribers sequentially about half of whom came from the enterprise deal announced last quarter.

We'll both benefit from new marketplace and website right.

A good example is marketplace premium plus adoption, which grew 50% month over month from September to October as dealer awareness increased.

Second moving website customers up tier remains a substantial opportunity recall roughly 70% of marketplace customers are any premium are better subscription relative to just 50% for web site.

Third quarter, AARP D was $2460 up 1% quarter over quarter and down slightly year over year.

Alex Vetter: ACCUTRADE and Dealer Club addressed this gap by allowing dealers to acquire from either ServiceLane or other trusted dealers, backed by the most accurate vehicle values in the industry. ACCUTRADE grew to 1,150 subscribers in Q3, and Dealer Club increased its active users by nearly 40% quarter over quarter. We're also pleased to share that ACCUTRADE surpassed 1 million quarterly appraisals, a milestone that points to enthusiastic and growing customer engagement. Importantly, over 50% of vehicles acquired via ACCUTRADE are between one and five years old, highlighting the attractive pool of in-demand late-model inventory that dealers access when they expand beyond traditional physical auctions. New this quarter, dealers can now easily analyze their ACCUTRADE activity via profit funnel and trade capture reports, seeing how much profit is made on ACCUTRADE versus non-ACCUTRADE cars, and conversion rates on appraisals.

We think customer and product mix shifts like faster independent dealer growth and lower media attach rates continue to have a near term leveling effect on this metric. However, as previously discussed we have multiple ways to inflect AARP D overtime first new customer acquisition and continued up tier migration.

Third cross selling additional products like accu trade, our media add ons to marketplace customers can be as much as a 60% jump relative to current AARP D. The multiplier effect is especially evident when looking at customers, who utilize all four of our brands and have an ERP that is three times higher than our.

We will both benefit from new marketplace and website right. A good example is marketplace premium plus adoption, which grew 50% month over month from September to October as dealer awareness increased.

Our reported average with these levers at our disposal, we are confident in future <unk> improvement as we expand our platform's reach.

Now over to cash flow and the balance sheet net cash provided by operating activities totaled $115 million for the first nine months of the year compared to $123 million for the comparable period last year.

Second moving website customers up tier remains a substantial opportunity recall roughly 70% of marketplace customers are any premium or better subscription relative to just 50% for web sites.

Recall that the earn out for the <unk> acquisition has a contractual step up from year, one to year, two and accounts for the majority of the variance in operating cash flow free.

Free cash flow was $94 $5 million year to date down slightly year over year with the acquisition items mentioned above.

Alex Vetter: We're excited to see these products and features further scale as we continue to innovate. Lastly, total subscribers for Dealer Inspire and D2C Media websites reached nearly 7,900 in Q3. We have grown website subscriptions for five straight years, an impressive feat that speaks to our differentiated technical capabilities and support model. Similar to Marketplace, website customers are also benefiting from our AI leadership. Our dealer websites also support discovery and data processing by popular AI search tools, and we are now proactively enabling customers to improve their own site visibility. By building more consultative relationships, and innovating on behalf of customers, we're confident we can further expand our market share. Across Marketplace, websites, and appraisal and wholesale, we delivered triple-digit dealer count growth for the second straight quarter.

Year to date share buybacks totaled $5 2 million shares for $64 million as we utilized more than two thirds of free cash flow for our repurchase program.

Our reported average with these levers at our disposal, we are confident in future <unk> improvement as we expand our platform's reach.

Last quarter, we raised our full year repurchase target to $70 million to $90 million and we are pleased to be on pace to finish the year towards the high end of that range.

We also paid down $5 million of our revolver in Q3, bringing the outstanding to $455 million as of September 32025 equivalent to a total net leverage ratio of one nine times, notably this is also the first time that we have sat below the low end of our target net.

Recall that the earn out for the <unk> acquisition has a contractual step up from year, one to year, two and accounts for the majority of the variance in operating cash flow free.

Free cash flow was $94 $5 million year to date down slightly year over year with the acquisition items mentioned above.

Leverage range of two to two five times total liquidity with $350 million as of September 32025, which provide us ample capacity for capital allocation priorities and other avenues of value creation.

Year to date share buybacks totaled $5 2 million shares for $64 million as we.

<unk> more than two thirds of free cash flow for our repurchase program.

Alex Vetter: We also achieved ARPD growth on a sequential basis, consistent with our expectations that repackaging and cross-selling would lift performance beginning in Q3. We're on pace to surpass all-time records for both direct dealer customers and ARPD before the end of 2026, on our way towards greater targets as we expand and enhance our product offering. While dealer revenue was at its healthiest level in several quarters, we did see some variability in OEM and national revenue, which was down 5% year over year in Q3. Specifically, two OEM partners significantly adjusted their media investments during the fall due to factors like internal agency changes that are unrelated to our performance or value. I'll also note that both of these customers remain advertisers on our platform, and were in active talks to win a greater share of their forward spending.

Last quarter, we raised our full year repurchase target to $70 million to $90 million and we're pleased to be on pace to finish the year towards the high end of that range.

And now we will conclude with outlook.

We are reaffirming our expectation for low single digit revenue growth year over year in the second half of 2025, we expect to achieve that target through continued execution of our growth initiatives, namely improved dealer count and product adoption and repackaging for marketplace and website.

As in the prior quarter. This outlook assumes today's macroeconomic conditions as a stable baseline for the remainder of the year.

Considering third quarter trends and historical fourth quarter performance, we believe that some degree of discretionary media investment is subject to greater variability both to the upside and the downside from factors like pull forward consumer demand inventory levels, new model launches and manufacturer incentives.

<unk> of two to two five times total liquidity was $350 million as of September 32025, which provides us ample capacity for capital allocation priorities and other avenues of value creation.

And now we will conclude with outlook.

We are reaffirming our expectation for low single digit revenue growth year over year in the second half of 2025, we expect to achieve this target through continued execution of our growth initiatives, namely improved dealer count and product adoption and repackaging for marketplace and websites.

We are also reaffirming adjusted EBITDA margin outlook for fiscal 2025 between 29% to 31%.

Alex Vetter: As we discussed in prior calls, our OEM revenue pipeline is strong. Planning discussions for 2026 have been positive, and our unique ability to drive better tier-one to tier-three outcomes via our Marketplace is a winning asset for automakers as they compete for consumer demand. We're confident that this segment can resume its growth trajectory in the coming quarters and continue to be a strong contributor to revenue and margin expansion. Looking at this quarter as a whole, I'm pleased that our steady execution is showing up in the P&L, and in positive trends that point to more gains ahead. We're driving our business forward, growing revenue, and gaining customer market share, all while continuously innovating.

Putting disciplined cost management high contribution margin from pricing initiatives and revenue growth.

Looking ahead, we remain focused on execution and are confident we will deliver improved operating and financial results.

As in the prior quarter. This outlook assumes today's macroeconomic conditions as a stable baseline for the remainder of the year.

And with that I'd like to open the call for Q&A.

Operator.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

Do you have a question. Please press the star followed by the number one on your Touchtone phone.

You'll hear a prompt that you had has been raised.

Should you wish to decline from the polling process. Please press the star followed by the number too.

We are also reaffirming adjusted EBITDA margin outlook for fiscal 2025 between 29% to 31%, reflecting disciplined cost management high contribution margin from pricing initiatives and revenue growth.

Alex Vetter: Q3 is the right step in the right direction, and we're focused on finishing the year with a healthy exit rate so that we can deliver even better results as we continue scaling our leading platform. I'll turn the call over to Sonia to discuss our third-quarter financial results. Sonia? Thank you, Alex. We delivered a strong third quarter across multiple key financial metrics, producing record revenue, adjusted EBITDA expansion, and robust cash generation. Consistent execution of 2025 growth initiatives has been our top priority, and our new revenue trajectory reflects the positive changes we've implemented year to date. We're also confident that as these improvements compound in our subscription business, both revenue and margins will accelerate in the coming quarters.

You are using a speaker phone please lift the handset before pressing any keys.

One moment. Please for your first question.

Your first question is from Tom White from D. A Davidson. Please go ahead.

Looking ahead, we remain focused on execution and are confident we will deliver improved operating and financial results.

Hello, Good morning, Thanks for taking my questions.

And with that I'd like to open the call for Q&A.

If I could I guess first off just on the drivers of revenue in the third quarter. It was impressive to see that you delivered a bit of kind of upside versus kind of expectations on revenues. Despite national kind of declining sequentially. When we all our fingers crossed that it might be up a little.

Operator.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

Do you have a question. Please press the star followed by the number one on your Touchtone phone.

You'll hear a prompt that you had has been raised.

Should you wish to decline from the polling process. Please press the star followed by the number too.

So.

Just can you help us I guess, what I'm trying to understand is on dealer revenue.

Theory, using a speaker phone please lift the handset before pressing any keys.

Alex Vetter: Starting with our revenue discussion, third-quarter revenue was $181.6 million, up 1% year over year, and in line with our expectation for low single-digit growth in the second half of the year. Dealer revenue was up 2% year over year, driven by favorability from repackaging activity and better customer count. Our ongoing repackaging work resulted in successful renegotiation of additional OEM website agreements, and the phased launch of new Marketplace packages in Q3. As Alex mentioned, our top two Marketplace tiers now bundle more media features for better vehicle merchandising and promotion, helping dealers attract and convert in-market shoppers. Migration of legacy preferred customers into new Premium and Premium-Plus packages was 100% complete as of the end of October. I'll also note that we've seen very few cancellations attributable to this exercise, another encouraging signal of the value dealers see in our Marketplace.

The obviously you guys are getting Stefan repackaging and product.

One moment. Please for your first question.

But maybe first off just talk on the industry backdrop.

Your first question is from Tom White from D. A Davidson. Please go ahead.

You added dealers again for the third straight quarter, it sounds like youre going to add dealers again and it sounds like marketplaces.

Hello, Good morning, Thanks for taking my questions.

Maybe one of the main areas, where youre, adding dealers.

How would you kind of characterize.

Hello.

Dealers are sort of navigating the current just kind of industry backdrop like are they.

Are they leaning into you guys on marketplace is there.

They need to find new sources of demand.

So.

Is it because of maybe the word is getting out.

Just can you help us I guess, what I'm trying to understand is on dealer revenue.

Some of the immediate stuff that youre, adding to the higher tiers is really attractive.

Kind of the obviously you guys are getting Stefan repackaging and product.

Sorry for the long winded question, but just maybe just.

But maybe first off just looking on the industry backdrop.

A little bit and then I have a quick follow up.

Tom Thanks for your question I'll start maybe then Sonya if you give some color on the revenue mix, but.

You added dealers again for the third straight quarter, it sounds like youre going to add dealers again and it sounds like marketplaces.

Alex Vetter: Marketplace, our most scaled solution, is also the tip of the spear for customer acquisition and cross-selling, and key to winning dealer market share over time. It's therefore encouraging to see that Marketplace continues to be the biggest quarter-over-quarter contributor to dealer count growth, and is the linchpin for our net gain of over 300 dealer customers since the start of the year. We have multiple levers to inflect ARPD, driving new customer growth, as well as upgrading package tiers and cross-selling against our installed base. This is amplified by our improved pricing. We saw early signs of these levers in action in Q3, with ARPD up 1% quarter over quarter. We are optimistic that trends will improve as these positive changes gain further traction and annualize.

I'll start obviously manufacturers have got some near term headwinds that certainly are impacting their business. We feel good about the business because overall enthusiasm for our audience, particularly the concentration of new car shoppers that we have on our marketplace remains scaled healthy and strong.

Maybe one of the main areas, where youre, adding dealers.

How would you kind of characterize.

Dealers are sort of navigating the correct just kind of industry backdrop like are they.

Are they leaning into you guys on marketplace cause there.

And so the vast majority of our OEM partners are leaning in not only this year, but also next year. We did have some pullback in the quarter from two Oems that were temporary and sentiment not performative, meaning that they had their own internal issues that delayed their investments with us in the period Thats why we feel.

They need to find new sources of demand.

Is it because of maybe the word is getting out.

Some of the immediate stuff that you are adding to the higher tiers is really attractive.

Sorry for the long winded question, but just maybe just.

And then I have a quick follow up.

Tom Thanks for your question I'll start maybe then Sonya if you give some color on the revenue mix, but.

Fundamentally bullish about the business overall and our ability to continue to grow OEM revenue heading into next year and beyond I think on the dealer side. It is a little bit of a mixed bag right now I think dealerships are struggling with softening demand and.

I'll start obviously manufacturers I've got some near term headwinds that certainly are impacting their business. We feel good about the business because overall enthusiasm for our audience, particularly the concentration of new car shoppers that we have on our marketplace remains scaled healthy and strong.

Alex Vetter: Overall, dealer revenue growth more than offset near-term noise in OEM and national revenue, which was down just under $1 million or 5% year over year. As previously mentioned, lower spending by two customers accounted for almost the entirety of the OEM revenue decline in the quarter, and we're already at work rebuilding the revenue pipeline with those partners. More broadly speaking, media investments did taper in September as the industry digested large-scale changes like strong pull-forward demand from expiration of EV credits, continuing shifts in production, as well as downward revisions in SAR. Given last September was our best month of OEM revenue for 2024, we also had a challenging comp that accentuated this late-quarter trend. We're observing that OEMs continue to prefer more flexibility in the current operating environment, and as such, we expect their ad spending may fluctuate through the end of this year.

And.

The vast majority of dealer investments are chasing impressions and clicks across the Internet and I think the smart dealers are realizing tapping into end market car shoppers, who are actively in market is a much sure path to sales and so we're pleased with dealer adoption not only in the quarter and as you noted.

And that growth continued into October and so.

That delayed their investments with us in the period Thats why we feel fundamentally bullish about the business overall and our ability to continue to grow our OEM revenue heading into next year and beyond I think on the dealer side. It is a little bit of a mixed bag right now I think dealerships are struggling with softening demand.

We're feeling good about dealers realizing the strength of our scaled audience certainly some of the product innovation that we're doing on the AI front has garnered some some dealer interest as well, but but ultimately we feel like the market is realizing our strengthen our value. So I know you want to comment on the revenue buildup.

And.

Yes, thanks for the question.

Just to add a little bit more incremental color I mean, I think we're pretty pleased to see growth across all of our dealer product line.

Alex Vetter: However, we remain confident in our audience and value delivery, and in our ability to power growth in this segment. Turning to our cost discussion, third-quarter operating expenses were $165 million, down 2% year over year. Compared to the prior year period, cost efficiencies in headcount and lease-related expenses, as well as lower depreciation and amortization, fully offset new Dealer Club costs and slightly higher marketing and G&A spend. Adjusted operating expenses were $150 million, down 4% year over year, for substantially similar reasons. For the following line item detail, all comparisons are on a year-over-year basis unless otherwise noted. Product and technology expenditures decreased $1.6 million on a reported basis and $1 million on an adjusted basis, fully offsetting Dealer Club costs through lower compensation and third-party fees. Marketing and sales increased $1 million on both a reported and adjusted basis, reflecting marketing investments.

Packaging was probably the most immediate benefit to the quarter. If you think about revenue, we had repackaging and marketplace with upgrades into premium and then the launch of our new premium plus package and also we continue to work on optimizing our website packages I think the new dealer customers.

<unk>.

That growth continued into October and so.

We're feeling good about dealers realizing the strength of our scaled audience certainly some of the product innovation that we're doing on the front.

As we've had in kind of.

<unk>, some some dealer interest as well, but but ultimately we feel like the market is realizing our strengthen our value Sonya you want to comment on the revenue buildup.

Really since the beginning of the year with the exception of January we've grown dealer count month over month.

It is really just adding additional fuel to how we think about the opportunity to continue growth on a go forward basis, as we upgrade and cross sell those incremental <unk> coming into the mix.

Yes, thanks for the question.

Just to add a little bit more incremental color I mean, I think we're pretty pleased to see.

The growth across all of our dealer product line.

Okay. That's really helpful. Maybe just a quick follow up on that.

Repackaging was probably the most immediate benefit to the quarter. If you think about revenue, we had repackaging and marketplace with upgrades into premium and then the launch of our new premium plus package and also we continue to work on optimizing our website packages I think the new dealer custom.

I think I heard you say that in marketplace.

Maybe 70% of the dealers were on something other than just sort of a base here, but it was lower than in web site. So I guess as you think about.

Alex Vetter: General and administrative expense was up $2.8 million year over year on a reported basis, but was roughly flat on an adjusted basis. The reported increase was primarily due to increased third-party costs that were partially offset by savings from the lease amendment completed in Q4 2024. Net income for the third quarter was $7.7 million, or $0.12 per diluted share, compared to net income of $18.7 million, or $0.28 per diluted share a year ago. The difference in net income is primarily due to changes in the fair value of contingent consideration for prior acquisitions that were included in the prior year period. Adjusted net income for the third quarter was $30.4 million, or $0.48 per diluted share, compared to $27.7 million, or $0.41 per diluted share a year ago.

How should we think about.

Sure.

Like what products you might.

As we've had in kind of.

Maybe at the higher tiers in web site to kind of get to get folks to to upgrade is it more like kind of media add ons or just any color you can share there and maybe a timeline for how you expect that rollout.

Really since the beginning of the year with the exception of January we've grown dealer count month over month.

It is really just adding additional fuel to how we think about the opportunity to continue growth on a go forward basis, as we upgrade and cross sell those incremental new dealers coming into the mix.

Yes look I think one of the strengths of our platform strategy. Tom is that our innovation can take place on our marketplace and then we can deploy that technology to our dealer partners on their website. So one of the big.

Okay. That's really helpful. Maybe just a quick follow up on that I think I heard you say that in marketplace.

Benefits that our website customers enjoy over the last year is the fortification of our our cloud infrastructure to make sure with dealer websites are meeting and beating core web vital standards, because we're we're able to leverage our larger infrastructure to optimize speed and performance.

70% of the dealers were on something other than just sort of a base here, but it was lower than in web site. So I guess as you think about.

How should we think about.

Like what products you might.

Alex Vetter: Adjusted EBITDA of $55 million in the third quarter grew 7% year over year, benefiting from both higher revenue and cost controls. Third-quarter adjusted EBITDA margin of 30.1% demonstrated strong revenue flow-through, benefit from the cost management initiatives described earlier, and timing of certain costs. Now on to key metrics. Dealer count was up in the third quarter based on strength across all of our major product brands. Websites grew sequentially by 67 subscribers, with most of the growth coming in the US. ACCUTRADE grew by 82 subscribers sequentially, about half of whom came from the enterprise deal announced last quarter. Third-quarter ARPD was $2,460, up 1% quarter over quarter and down slightly year over year. Recent customer and product mix shifts, like faster independent dealer growth and lower media attach rates, continue to have a near-term leveling effect on this metric.

<unk>.

And the underlying benefit of our platform model I think if you look at what we've done on cars dot com with launching Carson and open text.

Generative AI search we can now deploy that technology in dealer websites. So thats one of the utilities that were looking ahead towards next year, but then obviously just even indexing dealer websites into the LLM, we use cloud fair technology to help index cars dot com listings into the <unk>.

Models and now that we have our dealer websites fortified with cloud <unk> as well, we can do more for dealer websites and get there.

<unk> indexed and yellow arms as well so I think there's multiple benefits for dealers running on our backbone platform, but the product innovation is accelerating in the company and we're excited to keep that going.

Sort of.

The underlying benefits of our platform model I think if you look at what we've done on cars Dot Com was launching Carson and open text.

Great. Thanks, and again this quarter.

Generative AI search we can now deploy that technology in dealer websites. So thats one of the utilities that were looking ahead towards next year, but then obviously just even indexing dealer websites into the LLM, we use cloud technology to help index cars dot com listings into the AI.

Yes.

Thank you Tom.

Alex Vetter: However, as previously discussed, we have multiple ways to inflect ARPD over time. First, new customer acquisition and continued up-tier migration will both benefit from new Marketplace and Website rates. A good example is Marketplace Premium-Plus adoption, which grew 50% month over month from September to October as dealer awareness increased. Second, moving Website customers up-tier remains a substantial opportunity. Recall, roughly 70% of Marketplace customers are in a premium or better subscription, relative to just 50% for Websites. Third, cross-selling additional products like ACCUTRADE or media add-ons to Marketplace customers can be as much as a 60% jump relative to current ARPD. The multiplier effect is especially evident when looking at customers who utilize all four of our brands and have an ARPD that is three times higher than our reported average.

Your next question is from Gary <unk> from Barrington. Please go ahead.

Hi, good morning, all.

Sonya.

Really interesting when you were talking about the amount of <unk>.

Entities on dealers that are moved to repackaging and website.

And now that we have our dealer websites fortified with cloud <unk> as well, we can do more for dealer websites and get there.

Packaging you also gave some.

Statistics on what the lift is AARP D for some of these <unk> packaging.

Content index Vimeo arms as well so I think there's multiple benefits for dealers running on our backbone platform, but the product innovation is accelerating in the company and we're excited to keep that going.

Okay.

And I didn't quite get that.

Great. Thanks again this quarter.

The lift to <unk> I mean, I think overall, we're pretty happy to see the sequential momentum that we started to achieve an AARP.

Yes.

Thank you Tom.

Your next question is from Gary <unk> from Barrington. Please go ahead.

The we saw quarter over quarter growth.

Hi, good morning, all.

And I think that puts us on strong footing as we look from Q3 into Q4 to.

Hey, Sonya.

Really interesting when you were talking about the amount of it.

Alex Vetter: With these levers at our disposal, we are confident in future ARPD improvement as we expand our platform's reach. Now over to cash flow and the balance sheet. Net cash provided by operating activities totaled $115 million for the first nine months of the year, compared to $123 million for the comparable period last year. Recall that the earnout for the D2C Media acquisition has a contractual step-up from year one to year two, and accounts for the majority of the variance in operating cash flow. Free cash flow was $94.5 million year to date, down slightly year over year from the acquisition item mentioned above. Year to date, share buybacks totaled 5.2 million shares for $64 million, as we utilized more than two-thirds of free cash flow for our repurchase program.

And the teams on dealers that are moved to repackaging and website to the packaging you also gave some.

To continue to accelerate that we did it I don't think we gave specific color on the portion.

Okay.

As of ERP that was driven by packages, but what may be helpful is to understand like the spread difference between a premium and premium package one of the key differentiators and those are marketplace packages one of the key differentiators between those two packages as we bundled been performance media into the premium package.

Statistics on what the lift is.

<unk> for <unk>.

Some of these repackaging.

Okay.

And I didn't quite get that.

The lift to <unk> I mean, I think overall, we're pretty happy to see the sequential momentum that we started to achieve in the AARP.

That's something that retail for around $500 of bonds, but obviously for our premium plus customers since its bundle, they're going to be getting a slightly better rate than that but it will give you a sense for how we're trying to create differentiation. That's just been price, but also in terms of the overall value delivery.

So we saw quarter over quarter growth.

And I think that puts us on strong footing as we look.

From Q3 into Q4.

To continue to accelerate that we did it I don't think we gave specific color on the portion.

We're offering to dealers across our packages.

Alex Vetter: Last quarter, we raised our full-year repurchase target to $70 to $90 million, and we're pleased to be on pace to finish the year towards the high end of that range. We also paid down $5 million of our revolver in Q3, bringing debt outstanding to $455 million as of 30 September 2025, equivalent to a total net leverage ratio of 1.9x. Notably, this is also the first time that we have sat below the low end of our target net leverage range of 2 to 2.5x. Total liquidity was $350 million as of 30 September 2025, which provides us ample capacity for capital allocation priorities and other avenues of value creation. Now we'll conclude with outlook. We are reaffirming our expectation for low single-digit revenue growth year over year in the second half of 2025.

Okay.

<unk> of AARP D that was driven by packages, but what may be helpful is to understand like the spread difference between a premium and premium plus package one of the key differentiators and those are marketplace packages one of the key differentiators between those two packages as we bundled been performance media into the premium plus pack.

Okay.

I thought I heard you say something about a three times lift so that's why I ask the question, maybe I'll, just say Oh, yes.

I did talk about that as like an example of a platform value and how as we increased product penetration, we're able to really meaningfully lift AARP D and I think the fact that I shared with that deal.

That's something that retail for around $500 of bonds, but obviously for our premium plus customers since its bundle, they're going to be getting a slightly better rate than that but it'll give you a sense for how we're trying to create differentiation. That's just been price, but also in terms of the overall value delivery.

<unk>, who use our major product pillars will have a three times higher AARP.

Our reported average.

Okay. That's great that's what I wanted to get to.

And then.

We're offering to dealers across our packages.

Alex in terms of both accu trade and dealer club good to see that these things are starting to get more traction.

Okay.

Yeah.

I thought I heard you say something about a three times lift. So that's why I asked the question, maybe I'll, just say Oh, yes, I do.

But in terms of appraisal versus actual.

Alex Vetter: We expect to achieve this target through continued execution of our growth initiatives, namely improved dealer count and product adoption, and repackaging for Marketplace and Websites. As in the prior quarter, this outlook assumes today's macroeconomic conditions as a stable baseline for the remainder of the year. Considering third-quarter trends and historical fourth-quarter performance, we believe that some degree of discretionary media investment is subject to greater variability, both to the upside and the downside, from factors like pull-forward consumer demand, inventory levels, new model launches, and manufacturer incentives. We are also reaffirming adjusted EBITDA margin outlook for fiscal 2025 between 29% and 31%, reflecting disciplined cost management, high contribution margin from pricing initiatives, and revenue growth. Looking ahead, we remain focused on execution, and are confident we will deliver improved operating and financial results. With that, I'd like to open the call for Q&A. Operator? Thank you.

Sell through to the dealer from the appraisal can you kind of slap some metrics on that and then in terms of dealer club I know, it's real early but.

I did talk about that as like an example of a platform value and how as we increase product penetration, we're able to really meaningfully lift AARP D and I think the stat that I shared was that <unk>.

If you could give us some indication of what kind of volume is going through.

<unk>, who use our major product pillars will have a three times higher arpus than our.

Dealer club that would be real helpful.

Sure Gary well first of all we were really pleased with the growing dealer participation in accu trade as well as the improving appraisal volume, it's showing what we believe is a very durable trend of dealers realizing that sourcing cars directly from customers is a far more profitable strategy.

Our reported average.

Okay. That's great that's what I wanted to get to.

And then.

Alex in terms of both that can trade and dealer club good to see that these things are starting to get more traction.

<unk> than traditional or legacy auctions.

But in terms of appraisal versus actual.

And so that realization is helping every dealer recreate the advantage of creating more inventory in their own service Lane.

Sell through to the dealer from the appraisal can you kind of slap some metrics on that.

Then in terms of dealer club I know, it's real early but.

Which increases our supply and then also it creates demand within their own dealership because now their customers need new cars and so we think this is a very durable strategy. The dealers are adopting youre seeing.

If you could give us some indication of what kind of volume is going through.

Dealer club that would be real helpful.

Sure Gary well first of all we were really pleased with the growing dealer participation in accu trade as well as the improving appraisal volume, it's showing what we believe is a very durable trend.

Dealers talk more at 20 groups about how they can source more cars directly then we've got the tooling to enable them to do that at scale in a very low cost basis. When you think about the cost of an accu trade subscription.

Alex Vetter: Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question is from Tom White from D.A. Davidson. Please go ahead. Good morning. Thanks for taking my questions. Two, if I could.

Dealers, realizing that sourcing cars directly from customers is a far more profitable strategy than traditional or legacy auctions.

<unk>, we're buying cars at auctions is costing the industry. So so again very healthy trends on dealer adoption and appraisal volume I think dealer club, obviously complements the strategy, which is enabling dealerships to trade cars amongst themselves as a collective as opposed to paying.

And so that realization is helping every dealer recreate the advantage of creating more inventory in their own service Lane.

The Mighty toll booth, operator, the physical auction and so dealer adoption on dealer club. We're pleased with it as you know it's very early stage, we're barely getting started here with dealer club.

Alex Vetter: I guess, first off, just on the drivers of revenue in the third quarter, it was impressive to see that you delivered a bit of kind of upside versus kind of expectations on revenues, despite national kind of declining sequentially when I think we all were fingers crossed that it might be up a little bit. Just can you help us? I guess what I'm trying to understand is on dealer revenue, kind of the obviously, you guys are doing stuff on repackaging and product. Maybe first off, just on the industry backdrop, and you added dealers again for the third straight quarter. It sounds like you're going to add dealers again. It sounds like Marketplace is kind of maybe one of the main areas where you're adding dealers. I don't know. How would you kind of characterize.

Dealers talk more at 20 groups about how they can source more cars directly then we've got the tooling to enable them to do that at scale and on a very low cost basis. When you think about the cost of an accu trade subscription.

But we're pleased with the initial momentum that the platform is generating on a very low cost basis, because it's part of our platform strategy, meaning that.

We're leveraging the infrastructure that we have today in house dealers are pleased that now we're showing them their aged inventory from our marketplace and the club and they can immediately launched those cars to a wholesale auction with limited to no additional data entry and so stay tuned we're going to continue to.

Dwarfs, what buying cars at auctions is costing the industry. So so again very healthy trends on dealer adoption and appraisal volume I think dealer club, obviously complements the strategy, which is enabling dealerships to trade cars amongst themselves as a collective as opposed to paying.

First in the product.

Platform and give dealers more tooling that makes their workflow even easier, but very pleased with the initial momentum both with accu trade and dealer club.

The Mighty tollbooth, operator, the physical auction and so dealer adoption on dealer club. We're pleased with it as you know it's very early stage, we're barely getting started here with dealer club.

Thank you.

Alex Vetter: How dealers are sort of navigating the current just kind of industry backdrop? Are they leaning into you guys on Marketplace because they need to find new sources of demand? Is it because of maybe the words getting out that some of the new media stuff that you're adding to the higher tiers is really attractive? Sorry for the long-winded question, but just maybe just trying to unpack that a little bit. I have a quick follow-up. Tom, thanks for your question. I'll start maybe, then Sonia, if you get some color on the revenue mix. I'll start. Obviously, manufacturers have got some near-term headwinds that certainly are impacting their business. We feel good about the business because overall, enthusiasm for our audience, particularly the concentration of new car shoppers that we have on our Marketplace, remains scaled, healthy, and strong.

But we're pleased with the initial momentum that the platform is generating on a very low cost basis, because it's part of our platform strategy, meaning that.

Your next question is from Rajat Gupta from Jpmorgan Chase. Please go ahead.

Alright, thanks for taking the questions.

I had one broader question on just the competitive landscape.

One of your peers.

Our recently announced their intention to go private.

We've had some tough results.

The other public peers on the marketplace side on the auction side of the used car side.

No additional data entry and so stay tuned we're going to continue to invest in the product.

Just curious that.

If you are observing any changes.

Platform and give dealers more tooling that makes their workflow even easier, but very pleased with the initial momentum both with accu trade and dealer club.

And the competitive landscape.

Pricing.

You know be more more adjacent players may be participating in the market I'm curious if anything has taken a step change.

Okay. Thank you.

Your next question is from Rajat Gupta from Jpmorgan Chase. Please go ahead.

In recent months that Youre seeing.

Like how are you.

Alex Vetter: The vast majority of our OEM partners are leaning in, not only this year but also next year. We did have some pullback in the quarter from two OEMs that were temporary in sentiment, not performative, meaning that they had their own internal issues that delayed their investments with us in the period. That's why we feel fundamentally bullish about the business overall, and our ability to continue to grow OEM revenue heading into next year and beyond. I think on the dealer side, it is a little bit of a mixed bag right now. I think dealerships are struggling with softening demand. The vast majority of dealer investments are chasing impressions and clicks across the internet, and I think the smart dealers are realizing tapping into in-market car shoppers who are actively in market is a much surer path to sales.

Having to navigate that and I have a quick follow up.

Alright, thanks for taking the questions.

Yeah.

I had one broader question on just the competitive landscape.

Alright, thanks for the question.

One of your peers.

I think on the competitive landscape, while there could be changes in terms of public versus private when we look at the competitive landscape a little bit differently and that dealerships are trying to.

<unk> recently announced their intention to go private.

We've had some tough results for us.

Other public peers on the marketplace side on the auction side on the used car side.

Drive traffic to themselves directly and they are spending in Oregon amounts of capital trying to interrupt consumers, while they perform other tasks to drive them into their stores the.

I'm just curious that.

If you are observing any changes.

And the competitive landscape.

Pricing.

The benefit of our platform strategy is we're the largest concentration of organic car shoppers that are spending their shopping time researching and deciding what and where to buy on our platform and we think savvy dealers are realizing that interrupted advertising is less efficient and native.

Be more more adjacent players may be participating in the market I'm curious if anything has taken a step change.

In recent months that Youre seeing.

If anything like how are you planning to navigate that and I have a quick follow up.

Alright, thanks for the question.

Marketplace traffic that we can source and drive consumers directly to their stores.

Alex Vetter: We're pleased with dealer adoption, not only in the quarter, as you noted. That growth continued into October. We're feeling good about dealers realizing the strength of our scaled audience. Certainly, some of the product innovation that we're doing on the AI front has garnered some dealer interest as well. Ultimately, we feel like the market is realizing our strength and our value. Sonia, you want to comment on the revenue buildup? Yeah. Thanks for the question, Tom. Just to add a little bit more incremental color, I mean, I think we're pretty pleased to see growth across all of our dealer product lines. Repackaging was probably the most immediate benefit to the quarter as you think about revenue. We had repackaging in Marketplace with upgrades into premium, and then the launch of our new premium-plus package.

Particularly as average dealers are trying to compete with carvana and larger platforms using cars dot com as the demand engine for their business. We think is a no brainer and so.

Drive traffic to themselves directly and they are spending in Oregon amounts of capital trying to interrupt consumers, while they perform other tasks to drive them into their stores the.

I look at the competitive landscape more about how do we get to us to spend less on Google or less than traditional media and do more digitally first and foremost.

Got tons of respect for my my digital peer set.

Auto is a very competitive category, but we feel very confident because again, we source the majority of our traffic organically or directly and so we are a complement to dealers in our advertising mix I also will say our platform strategy is differentiated.

Marketplace traffic that we can source and drive consumers directly to their stores.

We're now powering north of 9000 dealer websites, helping them optimize their retail presence online, we're giving them tools to operate their business more with more self sufficiency, which we think we can help overall bring their profitability to new levels and so we're excited about our innovation roadmap on a.

Particularly as average dealers are trying to compete with carvana and larger platforms using cars dot com as the demand engine for their business. We think is a no brainer and so.

Alex Vetter: We continue to work on optimizing our website packages. I think the new dealer customer ads we've had, really since the beginning of the year, with the exception of January, we've grown dealer count month over month. It is really just adding additional fuel to how we think about the opportunity to continue growth on a go-forward basis as we upgrade and cross-sell those incremental new dealers coming into the mix. Okay. That's really helpful. Maybe just a quick follow-up on that. I think I heard you say that in Marketplace, maybe 70% of the dealers were on something other than just the base tier, but it was lower in Websites. I guess as you think about how should we think about what products you might maybe add to higher tiers in Websites to kind of get folks to upgrade?

I look at the competitive landscape more about how do we get to us to spend less on Google or less than traditional media and do more digitally first and foremost.

And what that can do and help dealers add capabilities to their business.

Got tons of respect for my my digital peer set.

And then again.

Marketplaces are competitive, but we've got a much more differentiated and ambitious strategy.

Understood understood that's helpful and then.

Within your dealer demographic.

Is it possible to provide a split across.

If it's a meaningful difference across like luxury domestic or import.

On the franchise dealer side I ask only because.

Starting to see some of the European brands feel the brunt of tariffs.

It looks like October started off a little weak for those brand I'm just wondering.

But that can have any meaningful impact.

And what that can do and help dealers add capabilities to their business.

Alex Vetter: Is it more like kind of media add-ons or just any color you can share there and maybe a timeline for how you expect that to roll out? Thanks. Yeah. Look, I think one of the strengths of our platform strategy, Tom, is that our innovation can take place on our Marketplace, and then we can deploy that technology to our dealer partners on their Websites. One of the big benefits that our website customers enjoy over the last year is the fortification of our cloud infrastructure to make sure dealer websites are meeting and beating Core Web Vitals standards, because we're able to leverage our larger infrastructure to optimize speed and performance. That's sort of an underlying benefit of our platform model. I think if you look at what we've done on Cars.com with launching Carson and OpenText.

On churn rates on RPT.

For your business.

And then again.

Just curious if you would have any appetite as well on that front.

Marketplaces are competitive, but we've got a much more differentiated and ambitious strategy.

Well listen I know, it's a very dynamic marketplace right now as you know about our business.

Understood understood that's helpful and then.

But we tend to skew up market the bulk of our dealers our franchise dealerships.

Dealer demographic.

Is it possible to provide a split across.

The bulk of our audience tends to be late model, even new car shoppers. That's why we have a large OEM business. Unlike our peers because manufacturers know that new car shoppers are also considering late model used and so we tend to skew up market and therefore don't feel some of the same pressures that.

If it's a meaningful difference across like luxury domestic or import.

The franchise dealer side I ask only because we're.

We're starting to see some of the European brands.

The branch of tariffs.

It looks like October started off a little weak for those brands.

Perhaps some of the credit challenged or lower end of the market.

I'm just wondering if that can have any meaningful impact on churn rates on RPT.

May experience.

And so we feel very fortified heading into <unk>.

You know for your business.

Just curious if you have any appetite as well on that front.

Alex Vetter: Generative AI search, we can now deploy that technology on dealer websites. That's one of the utilities that we're looking ahead towards next year. Obviously, just even indexing dealer websites into the LLM. We use Cloudflare technology to help index Cars.com listings into the AI models. Now that we have our dealer websites fortified with Cloudflare as well, we can do more for dealer websites and get their content indexed in the LLMs as well. I think there's multiple benefits for dealers running on our backbone platform, but the product innovation is accelerating in the company, and we're excited to keep that going. Great. Thanks. Again, next quarter. Thank you, Tom. Sure. Next question is from Gary Prestopino from Barrington. Please go ahead. Hi. Good morning, all. Hey, Sonia. Really interesting when you were talking about the amount of.

Next year and that the bulk of our audience tends to be more affluent higher household income and then our dealer base also remains the stronger side of the market as well with franchise dealers, making up the majority of our revenue mix.

Well listen I know, it's a very dynamic marketplace right now as you know about our business.

But we tend to skew up market the bulk of our dealers our franchise dealerships.

Bulk of our audience tends to be late model, even new car shoppers. That's why we have a large OEM business. Unlike our peers because manufacturers know that new car shoppers are also considering late model used and so we tend to skew up market and therefore don't feel some of the same pressures that.

Understood.

Maybe just a final one on capital allocation.

And are you starting to see like a return back to Tom.

Top line growth.

Are you seeing some good progress with like dealer ambition.

I'm curious.

We can expect I'm, just trying to see like how you rank order capital allocation today.

Perhaps some of the credit challenged or lower end of the market may experience.

Or is buyback still the bubble on Friday are there other avenues, we're looking at.

So we feel very fortified heading into next.

Okay.

Yes, no. Thanks for the question.

Think we we're still committed to share repurchases as an important portion of our overall capital allocation strategy.

Please please to see how kind of the growth in adjusted EBITDA in particular is helping to bring that leverage.

Alex Vetter: Entities that on dealers that have moved to repackaging and websites that have moved to repackaging. You also gave some statistics on what the lift is in ARPD for some of these repackaging efforts. I didn't quite get that. The lift to ARPD? I mean, I think overall, we're pretty happy to see the sequential momentum that we've started to achieve in ARPD. We saw quarter-over-quarter growth, and I think that puts us on strong footing as we look from Q3 into Q4 to continue to accelerate that. I don't think we gave specific color on the portion of ARPD that was driven by packages, but what may be helpful is to understand the spread difference between a premium and premium-plus package.

Understood.

Our net leverage ratio continues to kind of.

Maybe just a final one on capital allocation.

Improve but we're tracking towards the high end of our share repurchase range based on how we've been buying back on a year to date basis, and we still see the upside there.

And are you starting to see like a return back to John.

Top line growth.

You're seeing some good progress with like dealer ambition.

I'm curious.

We can expect I'm, just trying to see like how you rank order capital allocation today.

Got it okay, great. Thanks for all the color.

Or is buyback still the number one priority are there other avenues, we're looking at.

Your next question is from Marvin Fong from <unk>. Please go ahead.

Okay.

Yes, thanks for the question.

Think we we're still committed to share repurchases as an important portion of our overall capital allocation strategy.

Great. Good morning, Thanks for the question very nice quarter here.

I would like to ask you.

Trade a little bit deeper on that.

Please please to see how kind of the growth in adjusted EBITDA in particular is helping to bring that leverage.

So.

No.

Kind of consistent in the 70 to 80 either edition range last quarter.

Our net leverage ratio continues to kind of.

Just like to kind of get.

Improve but we're tracking toward the high end of our share repurchase range based on how we've been buying back on a year to date basis, and we still see the upside there.

A little more color on the pipeline there.

And should we kind of thing.

Good.

So are these incentives.

And is it going to be sort of lumpy with sort of the.

Larger enterprise deals or larger dealers.

Alex Vetter: One of the key differentiators, and those are marketplace packages, one of the key differentiators between those two packages is we've bundled VIN performance media into the premium-plus package. That's something that retails for around $1,500 a month. Obviously, for our premium-plus customers, since it's bundled, they're going to be getting a slightly better rate than that. It'll give you a sense for how we're trying to create differentiation, not just in price, but also in terms of the overall value delivery we're offering to dealers across our packages. Okay. I thought I heard you say something about a 3x lift. That's why I asked the question. Maybe I just typed it down. Oh, yes. I did talk about that as an example of platform value and how, as we increase product penetration, we're able to really meaningfully lift ARPD.

Got it okay, great. Thanks for all the color.

And they're all kind of expected.

And then just remind us on that on that large dealer groups that added about half.

Your next question is from Marvin Fong from <unk>. Please go ahead.

As this quarter, how many more stores.

Great. Good morning, Thanks for the question very nice quarter here.

In there.

You haven't penetrated yet.

I would like to so accu trade a little bit deeper on that.

So.

Yes, well first of all look we were pleased to close an enterprise deal last quarter for accu trade in and that I think it was about just about half the dealer count growth in the queue.

No.

Kind of consistent in the 70 to 80, either addition range last quarter.

I just wanted to kind of get.

A little more color on the pipeline there.

Because we still have steady dealer adoption and growth.

And should we kind of thing.

Good.

So are these incentives to celebrate that.

We're also basically.

Continuing to see dealer group interest in standardizing their <unk>.

And is it going to be sort of lumpy with sort of the.

Larger enterprise deals or larger dealers.

Vehicle sourcing strategy, which we think is a big tailwind for accu trade because we can provide dealer groups consistent tooling that puts a process in place that they can manage their vehicle sourcing.

And they're all kind of expected.

And then just remind us on that on that large.

That added about half.

Alex Vetter: I think the stat that I shared was that dealers who use our major product pillars will have a three-times higher ARPD than our reported average. Okay. That's great. That's what I wanted to get to. Alex, in terms of both AccuTrade and Dealer Club, it's good to see that these things are starting to get more traction. In terms of appraisals versus actual sell-through to the dealer from the appraisal, can you kind of slap some metrics on that? In terms of Dealer Club, I know it's real early, but if you could give us some indication of what kind of volume is going through Dealer Club, that would be real helpful. Sure, Gary. Well, first of all, we were really pleased with the growing dealer participation in AccuTrade, as well as the improving appraisal volume.

As this quarter, how many more stores.

Our strategy with tools that give them enterprise leverage and consistency in how they run their operation. So we're seeing strong interest in continued.

In there.

You haven't penetrated yet.

Yes, well first of all look we were pleased to close an enterprise deal last quarter for accu trade in and that I think it was about just about half the dealer count growth in the Q because.

Dealer demonstrations and a healthy pipeline. There. We're also hearing dealers asking us for more inventory syndication capabilities with accu trade. So that's on our innovation roadmap, which can be another tailwind.

Because we still have steady dealer adoption and growth.

We're also basically.

But we're overall pleased with the organic momentum we have.

Continuing to see dealer group interest in standardizing their.

In our dealer count, we think enterprise deals with larger dealer groups can continue to be.

Strong.

Edition to our platform, if we were able to secure more of these enterprise deals in Q4 and beyond.

Strategy with with tools that give them enterprise leverage and consistency in how they run their operation. So we are seeing strong interest in continued.

This is a slow roll.

Strategy that will scale over time, and it certainly adds meaningful AARP D and a high reoccurring revenue because the dealers that standardized with accu trade not only does that revenue.

Alex Vetter: It's showing what we believe is a very durable trend of dealers realizing that sourcing cars directly from customers is a far more profitable strategy than traditional or legacy auctions. That realization is helping every dealer recreate the advantage of creating more inventory in their own service lane, which increases their supply. It also creates demand within their own dealership because now their customers need new cars. We think this is a very durable strategy that dealers are adopting. You're seeing dealers talk more at 20 groups about how they can source more cars directly. We've got the tooling to enable them to do that at scale and on a very low-cost basis. When you think about the cost of an AccuTrade subscription, it dwarfs what buying cars at auctions is costing the industry.

Stay sticky in our platform, but it has a halo effect for our other subscription offerings as well, including dealer club as well. So we're feeling good about the business.

Got it.

And second question is on on AI, everyone, David topic, and I guess.

We think enterprise deals with larger dealer groups can continue to be strong.

That's it all.

Different ways of course.

Edition to our platform, if we were able to secure more of these enterprise deals in Q4 and beyond but this is a slow roll.

Yeah.

Are you are you seeing any meaningful traffic today, that's coming from.

Hi, David.

Strategy that will scale over time, and it certainly adds meaningful AARP D and a high reoccurring revenue because the dealers that standardized with accu trade not only does that revenue.

And how.

If so how.

Okay.

With the lead than any better than another truck.

Stay sticky in our platform, but it has a halo effect for our other subscription offerings as well, including dealer club as well. So we're feeling good about the business.

Yes, well first of all of our rigs. Thanks for the question on the NII front, we're very pleased as we mentioned during the call. When you look at all of the leading AI consumer engines.

Alex Vetter: Again, very healthy trends on dealer adoption and appraisal volume. I think Dealer Club obviously complements this strategy, which is enabling dealerships to trade cars amongst themselves as a collective as opposed to paying the mighty toll booth operator, the physical auction. Dealer adoption on Dealer Club, we're pleased with it. As you know, it's very early stage. We're barely getting started here with Dealer Club. We're pleased with the initial momentum that the platform is generating on a very low-cost basis because it's part of our platform strategy, meaning that we're leveraging the infrastructure that we have today in-house. Dealers are pleased that now we're showing them their aged inventory from our Marketplace in the club, and they can immediately launch those cars to a wholesale auction with limited to no additional data entry. Stay tuned.

We are in many cases to X. Our nearest closest publicly traded peer and so that is a testament to the strength of the cars Dot com brand and our decade long commitment to independent expertise and editorial depth and breadth and quality.

Got it.

Thanks.

Second question is on on AI, everyone, David topic, and I guess.

Okay.

Differently.

No.

Are you are you seeing any meaningful traffic today, that's coming from.

So our strength there is being played back to us by these LLM said that recognize our authority as you know auto is multi touch omnichannel experience, meaning consumers are seeking out multiple destinations prior to purchase our brands strengthen our authority in these engines.

Hi, David.

And how.

If so how is the behavior.

Okay.

I believe than any better than another channel.

Yeah, well first of all thanks for the question on the NII front, we're very pleased as we mentioned during the call. When you look at all of the leading AI consumer engines.

While it may not generate a ton of traffic today.

It is amplifying our brand strength, which is why we had record traffic in Q3 and feel very strong about continued momentum of.

Of our marketplace consumers are going to seek out trusted independent expertise and auto and these new AI models are are firming, our brand strength and so we feel very good about the advent of AI and what it can do for our business.

Alex Vetter: We're going to continue to invest in the product platform and give dealers more tooling that makes their workflow even easier. Very pleased with the initial momentum, both with AccuTrade and Dealer Club. Okay. Thank you. Your next question is from Rajat Gupta from J.P. Morgan. Please go ahead. Hi. Thanks for taking the questions. I had one broader question on just the competitive landscape. One of the peers recently announced their intention to go private. We have had some tough results from some of our other public peers on the marketplace side, the auction side, and the used car side. I'm just curious if you're observing any changes in the competitive landscape, be it pricing, be it more adjacent players maybe participating in the market. I'm curious if anything has taken a step change in recent months that you're seeing.

To us by these LLM that recognize our authority as you know auto is multi touch omnichannel experience, meaning consumers are seeking out multiple destinations prior to purchase our brand strength and our our authority in these engines, while it may not generate a ton of traffic today.

Over time as well.

I would add.

Yes.

Add in addition to what Alex was talking about in terms of how we're showing up in the various like AI search tools. We're also really pleased with how leveraging AI and natural language search on our own marketplace is helping to drive increased consumer engagement, we see.

It is amplifying our brand strength, which is why we had record traffic in Q3 and feel very strong about continued momentum.

On the order of three times more vehicles state for consumers, who use Carson.

Of our marketplace consumers are going to seek out trusted independent expertise and auto.

They're looking at two times more listing.

And these new AI models are are firming, our brand strength and so we feel very good about the advent of AI and what it can do for our business.

Return more frequently so we're actually closing that sounds like a its a multi pronged strategy I really believe to leverage AI to the benefit of the business and we're seeing it translate into real engagement numbers.

Over time as well.

I would add.

Add add in addition to what Alex was talking about in terms of how we're showing up in the various like AI search tools. We're also really pleased with how leveraging AI and natural language search on our own marketplace is helping to drive increased consumer engagement.

Alright, and that was sort of my second part of the question I guess works.

Alex Vetter: If anything, how are you planning to navigate that? I have a quick follow-up. Yeah. Look, Rajat, thanks for the question. I think on the competitive landscape, while there could be changes in terms of public versus private, we look at the competitive landscape a little bit differently in that dealerships are trying to drive traffic to themselves directly, and they're spending inordinate amounts of capital trying to interrupt consumers while they perform other tasks to drive them into their stores. The benefit of our platform strategy is we're the largest concentration of organic car shoppers that are spending their shopping time researching and deciding what and where to buy on our platform. We think savvy dealers are realizing that interruptive advertising is less efficient than native Marketplace traffic that we can source and drive consumers directly to their stores.

Are you able to.

How many people who are using carson or the other.

AI related search tool are they purchasing.

Yes.

We see on the order of three times more vehicles state for consumers who use Carson.

Or more attribution can be given the cars.

Got it okay.

Got it.

Okay.

They're looking at two times more listing.

Yeah.

This is still a category where the majority of time is spent online and the purchases offline and we know the dealer CRM grossly under recognize our value delivery I mean, there's only 5 million cars retailed every month in this country and we know we're saturating the majority of car buyers on our platform.

Alright, and that was sort of my second part of the question I guess works.

I'd like about what we're seeing with Carson is that users are saving more vehicles in their search history. So they're coming back at two times the rate of other shoppers, they're generating more leads compared to people that are are using directive search as opposed to more.

Are you able to.

How many people who are using carson or the other.

AI related search tool are they purchasing.

Yes.

We're more attribution can be given the cars.

Alex Vetter: Particularly as average dealers are trying to compete with Carvana and larger platforms using Cars.com as a demand engine for their business, we think is a no-brainer. I look at the competitive landscape more about how do we get dealers to spend less on Google or less in traditional media and do more digitally first and foremost. I've got tons of respect for my digital peer set. I know auto is a very competitive category, but we feel very confident because, again, we source the majority of our traffic organically or directly, and we are a complement to dealers in their advertising mix. I also will say our platform strategy is differentiated. We're now powering north of 9,000 dealer websites, helping them optimize their retail presence online. We're giving them tools to operate their business.

Got it okay.

Got it.

Exploratory we also know that 70% of our users are undecided on make and model selection. So we're going back to Oems, who previously maybe haven't realized the power of our our search engine that they can influence undecided shoppers on our platform and we're seeing higher conversion.

Okay.

Yes.

Eight of these users in terms of tangible leads to dealers and so.

Like about what we're seeing with Carson is that users are saving more vehicles in their search history. So they're coming back at two times the rate of other shoppers, they're generating more leads compared to people that are are using directive search as opposed to more.

Consumer engagement is critical to thrive in any marketplace and Carson is showing us a lot more potential what we can do on the user experience front to connect brands and dealers to our audience using AI as an advantage. So I expect to see a steady quarterly stream of <unk>.

<unk> here that both improve user experience and also drive down or drive down our operating costs.

Alex Vetter: With more self-sufficiency, which we think we can help overall bring their profitability to new levels. We're excited about our innovation roadmap on AI and what that can do and help dealers add capabilities to their business. Again, marketplaces are competitive, but we've got a much more differentiated and ambitious strategy. Understood. That's helpful. Within your dealer demographic, I mean, is it possible to provide a split across, if it's meaningful, difference across luxury, domestic, or import on the franchise dealer side? I ask only because we're starting to see some of the European brands feel the brunt of tariffs. It looks like October started off a little weak for those brands. I'm just wondering if that can have any meaningful impact on churn rates, on ARPD for your business. Just curious if you're hearing anything as well on that front.

Okay that sounds great. Thanks, Alex.

Yes.

Your next question is from <unk> <unk> from <unk> Securities. Please go ahead.

Eight of these users in terms of tangible leads to dealers and so.

Okay.

Thank you very much.

Maybe just on the on the marketplace Repackaging initiative I know you've been using offense.

From a dealer's too.

Yes.

Migrate up to the higher tier.

Is there any plan to kind of accelerate that maybe.

Sure.

So that more of the dealers can migrate to the higher tiers continue.

<unk> here that both improve user experience and also drive down or drive down our operating costs.

Continuing to see it as an often move.

That's my first question and the second question I have is.

Okay that sounds great. Thanks, Alex.

Yeah.

And just around the.

Traffic growth kind of can you just talk about organic what's the state mix and ill or views if it had any impact at all.

Your next question is from <unk> <unk> from <unk> Securities. Please go ahead.

Okay.

At least from the headline numbers looks like noggin, but just talk about how youre thinking about.

Thank you very much.

Alex Vetter: Well, listen, I know it's a very dynamic marketplace right now. As you know about our business, we tend to skew up market. The bulk of our dealers are franchise dealerships. The bulk of our audience tends to be late-model, even new car shoppers. That's why we have a large OEM business, unlike our peers, because manufacturers know that new car shoppers are also considering late-model used. We tend to skew up market and therefore don't feel some of the same pressures that perhaps some of the credit-challenged or lower end of the market may experience. We feel very fortified heading into next year in that the bulk of our audience tends to be more affluent, higher household income, and our dealer base also remains the stronger side of the market as well, with franchise dealers making up the majority of our revenue mix. Understood.

Maybe just on the on the marketplace Repackaging initiative I know you've been using offense.

The traffic.

From dealers too.

Sure well first of all our sales.

Yes.

Also I'll start <unk> and then you can maybe comment on the repackaging I think our sales go to market motion is constantly showing dealers the strength of upgrading to our premium tiers and we've got demonstrable data that shows the more dealers spend the more value in market share they can.

Migrate up to the higher tier.

Is there any plan to kind of accelerate that maybe.

Sure.

So that more of the dealers can migrate to the higher tiers continue.

Continuing to see it as an often move.

That's that's my first question and the second question I have is.

They can get on our marketplace and so that will be a rolling benefit for us to educate dealers on the strength of higher tiers in the Sony I pointed out earlier like we've got a lot of headroom to go there on a repackaging front and I think we can also continue to introduce new tools and features that help dealers gravitate to.

Just around the.

Traffic growth kind of can you just talk about organic versus paid mix in your views if it had any impact at all.

At least from the headline numbers it looks like not but just talk about how youre thinking about.

Words higher spending levels on our marketplace, and even cross selling or their solutions.

The traffic.

Sure well first of all of our sales.

I think also on the AI front. Yes. This is early innings, we are really pleased with the initial.

I'll start I'll start Sone, and then you can maybe comment on the repackaging I think our sales go to market motion is constantly showing dealers the strength of upgrading to our premium tiers and we've got demonstrable data that shows the more dealers spend the more value in market share. They can they can get on our marketplace and so that will be a.

Alex Vetter: Maybe just final one on capital allocation. You're starting to see a return back to top-line growth. You're seeing some good progress with dealer additions. I'm curious if we can expect, I'm just trying to see how you rank water capital allocation today. Is buyback still the number one priority? Are there other avenues that you're looking at? Thanks. Yeah, no, thanks for the question. I think we are still committed to share repurchases as an important portion of our overall capital allocation strategy. Pleased to see how kind of the growth in Adjusted EBITDA in particular is helping to bring net leverage down. Our net leverage ratio continues to kind of improve. We're tracking towards the high end of our share repurchase range based on how we've been buying back on a year-to-date basis, and we still see the upside there. Got it. Okay. Great.

<unk>.

Response that we're seeing with consumers using AI in our marketplace. We also are pleased with how we're showing up organically and all of the leading llm's in.

The ACO optimization strategy I'd say is in the early stages here, but our brand strength and our unique content certainly give us distinct advantages to our peers I don't know Sonya what else you would add to that.

Rolling benefit for us to educate dealers on the strength of higher tiers in the Sony had pointed out earlier, we've got a lot of headroom to go there on a repackaging front and I think we can also continue to introduce new tools and features that help dealers gravitate towards higher spending levels on our marketplace.

No I think Alex you covered it really well I was just going to add on re packaging. We continue to be focused then on the the opt in opt in model it by driving better outcomes overall with the dealers when they're bought into the rationale and the expectation of why they are moving up tier and we've seen.

And even cross selling or their solutions.

I think also on the AI front. Yes. This is early innings, we are really pleased with the initial.

<unk>.

The response that we're seeing with consumers using AI in our marketplace. We also are pleased with how we're showing up organically and all of the leading LMS in.

<unk> good traction with it like I think we cited is that in.

Earlier.

Around premium plus and we saw a 50% increase in premium plus from September to October. So we will continue to focus on on the benefit of moving up tier in terms of the value delivery creation.

Alex Vetter: Thanks for all the color. Your next question is from Marvin Fong from BITG. Please go ahead. Great. Good morning. Thanks for the question. Very nice quarter here. I would like to start with AccuTrade a little bit deeper on that. Kind of consistent in the 70 to 80 dealer addition range the last three quarters. Just like to kind of get a little more color on the pipeline there. Should we kind of think of this as a good pace of adds, or do you think it's going to accelerate? Is it going to be sort of lumpy with sort of the larger enterprise deal or larger dealers in there, or do you kind of expect it to be kind of smooth? Just remind us on that large dealer group that added about half the adds this quarter.

Okay. Thank you Alex Thank you Sonya.

No I think Alex you covered it really well I was just going to add on re packaging. We continue to be focused in on the the opt in opt in model it by driving better outcomes overall with the dealers when they're bought into the rationale and the expectation of why they are moving up tier and we've seen.

Your next question is from Joe Spak from UBS. Please go ahead.

Thanks, Good morning.

So first first question just on.

The guidance up the way you got obviously gets some decently wide range is based on your disclosures, but if I look at sort of the past few years' seasonality it looks like <unk>.

And good traction with it right like I think we cited that in earlier.

Around premium.

<unk> EBITDA is about 10% higher quarter over quarter, which would mean something around $60 million, which obviously clearly falls within that implied range is I just want to make sure. We're all level set is that sort of like a good level to calibrate upon and what do you really think sort of drew.

And we saw a 50% increase in premium plus from September to October. So we will continue to focus on on the benefit of moving up tier in terms of the value delivery creation.

Okay. Thank you Alex Thank you Sonya.

<unk> drives the higher end versus the lower end here with.

Alex Vetter: How many more stores are in their system that you haven't penetrated yet? Yeah. Well, first of all, look, we're pleased to close an enterprise deal last quarter for AccuTrade. That, I think, was just about half the dealer count growth in the quarter because we still have steady dealer adoption and growth. We're also basically continuing to see dealer group interest in standardizing their vehicle sourcing strategy, which we think is a big tailwind for AccuTrade because we can provide dealer groups consistent tooling that puts a process in place that they can manage their vehicle sourcing strategy with tools that give them enterprise leverage and consistency in how they run their operation. We're seeing strong interest in continued dealer demonstrations and a healthy pipeline there. We're also hearing dealers asking us for more inventory syndication capabilities with AccuTrade.

Basically two months left in the year.

Your next question is from Joe Spak from UBS. Please go ahead.

Yes.

Great question. Thank you I think in terms of adjusted EBITDA, what the benefit that we really saw in Q3. Some of it came from revenue somewhat high flow through on revenue. Some of it came from continued cost management and then a portion of it but a little bit more timing oriented so we feel.

Okay.

Thanks, Good morning.

So first first question just on.

On the guidance.

<unk> got obviously gets some decently wide range is based on your disclosures, but if I look at sort of the past few years' seasonality it looks like <unk>.

Are you comfortable with our overall adjusted EBITDA range, but I would say getting towards the higher end of that range, probably requires some little bit more of that episodic revenue to come in that tends to be a little bit higher margin. So it would require a heavier lift on let's say.

<unk> drives the higher end versus the lower end here with.

Basically two months left in the year.

OEM and national side of the business to get closer to the high end of the range.

Yes.

Okay any update there was there is still some some pause and I know they committed to that spend but it could bleed into next year as I said.

Yeah, we're seeing.

A little bit more like kind of like we talked about in September some of that pressure has been continuing into October now as I mentioned periodically we will see as we get towards the end of the year some of them will lean in to those budgets a little bit more and also I think some of the overhang.

Alex Vetter: That's on our innovation roadmap, which could be another tailwind. We're overall pleased with the organic momentum we have in our dealer count. We think enterprise deals with larger dealer groups can continue to be a strong addition to our platform if we are able to secure more of these enterprise deals in Q4 and beyond. This is a slow-roll strategy that will scale over time, and it certainly adds meaningful ARPD and a high recurrence of revenue because the dealers that standardize with AccuTrade, not only does that revenue stay sticky in our platform, but it has a halo effect for our other subscription offerings as well, including Dealer Club. We're feeling good about the business. Got it. That ends. Second question's on AI, everyone's favorite topic. I guess I'd ask it a couple of different ways. First.

Pretty comfortable with our overall adjusted EBITDA range, but I would say getting towards the higher end of that range, probably requires some little bit more of that episodic revenue to come in that tends to be a little bit higher margin. So it would require a heavier lift on let's say.

Production numbers, where Saar sitting right now are probably a little bit of a drag.

On expectations as well.

The OEM and national side of the business to get closer to the high end of the range.

Okay.

And then on Carson.

Apologize this might be a very taken.

Okay any update there was there is still some some pause and I know they are committed to that spend but it could bleed into next year is that yeah.

<unk> question, but I'm, just trying to sort of understand.

All the AI stuff.

Is it just trained on.

Like the data you have access to like your dealership customers or is it broader and then out of curiosity is there anything that prevents other AI agents from accessing the data you have on your side. It sounds like you actually want to feed that but if you do it.

Yeah, we're seeing.

A little bit more like kind of like we talked about in September some of that pressure has been continuing into October now as I mentioned periodically we will see as we get towards the end of the year some of them will lean into those budgets a little bit more and also I think some of the overhang.

Is there a way to guarantee that those other solutions.

Production numbers, where Sars sitting right now are probably a little bit of a drag.

Almost like don't cut you out and go through your site and not around cars Dotcom I don't know if that makes sense or misinterpreting the technology, but if you could sort of no.

Alex Vetter: Are you seeing any meaningful traffic today that's coming from a ChatGPT-type service? If so, how's the behavior of those customers? Is it convert to leads any better than other traffic? Yeah. Well, first of all, Marvin, thanks for the question. On the AI front, we're very pleased. As we mentioned during the call, when you look at all the leading AI consumer engines, we are, in many cases, 2x our nearest, closest publicly traded peer. That is a testament to the strength of the Cars.com brand and our decade-long commitment to independent expertise, editorial depth, breadth, and quality. Our strength there is being played back to us by these LLMs that recognize our authority. As you know, auto is a multi-touch, omnichannel experience, meaning consumers are seeking out multiple destinations prior to purchase.

On expectations as well.

Okay.

And then on Carson I apologize this might be a very.

Okay.

So it's a great question. So thank you so Carson.

Taking <unk> question, but I'm, just trying to sort of understand.

We are leveraging our data infrastructure to power and trained Carson.

All the AI stuff.

Is it just trained on.

Millions and millions of data signals flowing through our systems every day and so.

Like the data you have access to like your dealership customers or is it broader and then out of curiosity is there anything that prevents other AI Asians from accessing the data you have on your side. It sounds like you actually want to feed that but if you do it.

<unk> intelligence continues to be self taught himself said on all these automotive intentions in searches and behaviors by the way we put out a press release on Carson today. So you can read more about how consumers are interacting with Carson.

Is there a way to guarantee that those other solutions.

Certainly.

Almost like don't cut you out and go through your site and not around cars Dotcom I don't know if that makes sense or misinterpreting the technology, but if you could sort of no.

Sure.

The large consumer facing.

<unk> are able to trade off our data as well and so while there is risk that consumers can render answers on these other environments. What they do do is attribute their knowledge to cars dot com and we think that is incredible brand exposure and leverages our deep.

So it's a great question. So thank you so Carson.

We are leveraging our data infrastructure to power and trained Carson.

Got it.

Millions and millions of data signals flowing through our systems every day and so.

Alex Vetter: Our brand strength and our authority in these engines, while it may not generate a ton of traffic today, is amplifying our brand strength, which is why we had record traffic in Q3 and feel very strong about continued momentum of our marketplace. Consumers are going to seek out trusted, independent expertise in auto, and these new AI models are affirming our brand strength. We feel very good about the advent of AI and what it can do for our business over time as well. I would just maybe add, in addition to what Alex was talking about in terms of how we're showing up in the various AI search tools, we're also really pleased with how leveraging AI and natural language search on our own marketplace is helping to drive increased consumer engagement.

<unk> to make consumers aware that pires dotcom has knowledge in automotive is uniquely multi touch category. Unlike a lot of consumer goods are low price point purchases consumers may only seek out one to two destinations but.

Carson's intelligence continues to be self taught himself fed on all of these automotive intentions in searches.

<unk> by the way, we put out a press release on Carson today. So you can read more about how consumers are interacting with Carson certainly.

<unk> is the second largest transaction in People's lives.

Sure.

The large consumer facing.

They're going to seek out multiple sources of information prior to purchase and we certainly think the llm's constantly referencing cars dot com as an authority is going to continue to generate traffic directly to us as consumers go to get additional information research on which dealerships have the best reputations.

They could expect to pay any OEM incentives that are available theres just a lot of information consumption. In this category that makes me certain that no. One destination can disrupt the 20 year strength of our brand and our content expertise.

<unk> to make consumers aware that powers dotcom has knowledge in automotive is uniquely multi touch category. Unlike a lot of consumer goods or low price point purchases.

Alex Vetter: We see on the order of 3x more vehicles saved for consumers who use Carson. They're looking at 2x more listings. They return more frequently. We're actually playing this as a multi-pronged strategy, I really believe, to leverage AI to the benefit of the business. We're seeing it translate into real engagement numbers. Right. That was sort of my second part of the question. I guess to be rocks, are you able to see how many people who are using Carson or your other AI-related search tools, are they purchasing, or more attribution can be given to Cars.com if they are using Carson compared to someone that's not using the AI tools? What was it you were looking at? Obviously, this is still a category where the majority of time is spent online and the purchase is offline.

Tumors may only seek out one to two destinations but diane.

Thanks.

Thanks helpful. Thanks.

<unk> is the second largest transaction in People's lives.

Thank you Joe.

Yes.

We're going to seek out multiple sources of information prior to purchase and we certainly think the llm's constantly referencing cars dot com as an authority is going to continue to generate traffic directly to us as consumers go to get additional information research on which dealerships have the best reputations.

Ladies and gentlemen.

Minder should you have any questions. Please press star followed by the number one.

We'll pause for a moment for further questions.

There are no further questions at this time. Please proceed with closing remarks.

They could expect to pay any OEM incentives that are available theres just a lot of information consumption. In this category that makes me certain no one destination can disrupt the 20 year strength of our brand and our content expertise.

Thanks, everyone for joining the call we will see some of you on the road very soon and I appreciate the support and.

Good day, thank you.

Goodbye.

This concludes our conference call for today.

Thank you for participating and ask that you. Please disconnect your lines.

Thanks.

So Paul Thanks.

Thank you Joe.

Ladies and gentlemen.

Should you have any questions. Please press the star followed by the number one.

Alex Vetter: We know that dealer CRMs grossly under-recognize our value delivery. I mean, there's only 5 million cars retailed every month in this country, and we know we're saturating the majority of car buyers on our platform. What I like about what we're seeing with Carson is that users are saving more vehicles in their search history, so they're coming back at two times the rate of other shoppers. They're generating more leads compared to people that are using directive search as opposed to more exploratory. We also know that 70% of our users are undecided on make and model selection. We're going back to OEMs who previously maybe haven't realized the power of our search engine, that they can influence undecided shoppers on our platform. We're seeing a higher conversion rate of these users in terms of tangible leads to dealers.

We will pause a moment for further questions.

There are no further questions at this time. Please proceed with closing remarks.

Thanks, everyone for joining the call we will see some of you on the road very soon and I appreciate the support and.

I have a good day. Thank you.

Goodbye.

Concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Alex Vetter: Consumer engagement is critical to thrive in any marketplace. Carson is showing us a lot more potential, what we can do on the user experience front to connect brands and dealers to our audience using AI as an advantage. I expect to see a steady quarterly stream of innovations here that both improve user experience and also drive down our operating costs. Okay. That sounds great. Thanks, Alex. Thank you. Your next question is from Con Navid from Barclays Securities. Please go ahead. Thank you very much. Maybe just on the Marketplace repackaging initiative, I know you've been using opt-ins for dealers to kind of migrate up to the higher tier. Is there any plan to kind of accelerate that, maybe so that more of the dealers can migrate to the higher tiers, or do you continue to see it as an opt-in move?

Alex Vetter: That's my first question. The second question I have is just around the traffic growth. Can you just maybe talk about organic versus paid mix and AI Overviews, if it had any impact at all? At least from the headline numbers, it looks like not, but just talk about how you're thinking about the traffic. Sure. Well, first of all, our sales go to—I’ll start, Sonia, and then you can maybe comment on the repackaging. I think our sales go-to-market motion is constantly showing dealers the strength of upgrading to our premium tiers. We've got demonstrable data that shows the more dealers spend, the more value and market share they can get on our Marketplace. That will be a rolling benefit for us to educate dealers on the strength of higher tiers.

Alex Vetter: As Sonia pointed out earlier, we've got a lot of headroom to go there on the repackaging front. I think we can also continue to introduce new tools and features that help dealers gravitate towards higher spending levels on our marketplace and even cross-selling your other solutions. I think also on the AI front, this is early innings. We're really pleased with the initial response that we're seeing with consumers using AI in our marketplace. We also are pleased with how we're showing up organically in all the leading LLMs. The AEO optimization strategy, I'd say, is in the early stages here, but our brand strength and our unique content certainly give us distinct advantages to our peers. I don't know, Sonia, what else you'd add to that? No, I think, Alex, you covered it really well. I was just going to add on repackaging.

Alex Vetter: We continue to be focused in on the opt-in model. It buys us better outcomes overall with dealers when they're bought into the rationale and the expectation of why they're moving up tier. We've seen good traction with it, right? I think we cited a stat earlier around Premium Plus, and we saw a 50% increase in Premium Plus from September to October. We'll continue to focus on the benefits of moving up tier in terms of the value delivery creation. Great. Thank you, Alex. Thank you, Sonia. Your next question is from Joe Spak from UBS. Please go ahead. Thanks. Good morning. Sonia, the first question just on the guidance, the way you guide obviously gets some decently wide ranges based on your disclosures.

Alex Vetter: If I look at sort of the past few years' seasonality, it looks like Q4 EBITDA is about 10% higher quarter over quarter, which would mean something around $60 million, which obviously clearly falls within that implied range. I just want to make sure we're all level set. Is that sort of a good level to calibrate upon? What do you really think sort of drives the higher end versus the lower end here with basically two months left in the year? Yeah. No, this is a great question. Thank you. I think in terms of adjusted EBITDA, the benefit that we really saw in Q3, some of it came from revenue, some of the high flow-through on revenue, some of it came from continued cost management, and then a portion of it was a little bit more timing-oriented.

Alex Vetter: We feel pretty comfortable with our overall adjusted EBITDA range, but I would say getting towards the higher end of that range probably requires a little bit more of that episodic revenue to come in that tends to be a little bit higher margin. It would require a heavier lift on, let's say, the OEM and national side of the business to get closer to the high end of the range. Okay. The update there was there's still some pause. I know they committed to that spend, but it could bleed into next year. Is that still the message? Yeah. We're seeing a little bit more, kind of like we talked about in September. Some of that pressure has been continuing into October.

Alex Vetter: Now, as I mentioned, periodically, we will see as we get towards the end of the year, some of them will lean into those budgets a little bit more. Also, I think some of the overhanging production numbers where SAR is sitting right now are probably a little bit of a drag on expectations as well. Okay. On Carson, and I apologize, this might be a very ignorant question, but I'm just trying to sort of understand all the AI stuff. Is it just trained on the data you have access to, like your dealership customers, or is it broader? Out of curiosity, is there anything that prevents other AI agents from accessing the data you have on your site? It sounds like you actually want to feed that. If you do, is there a way to guarantee that those other solutions.

Alex Vetter: Almost do not cut you out and go through your site and not around Cars.com? I do not know if that makes sense or I am misinterpreting the technology, but if you could sort of—No, Joe. It is a great question, so thank you. Carson. We are leveraging our data infrastructure to power and train Carson. We have got millions and millions of data signals flowing through our systems every day. Carson's intelligence continues to be self-taught and self-fed on all these automotive intentions, searches, and behaviors. By the way, we put out a press release on Carson today, so you can read more about how consumers are interacting with Carson. Certainly, we let the large consumer-facing LLMs train off our data as well. While there is risk that consumers can render answers on these other environments, what they do do is attribute their knowledge to Cars.com.

Alex Vetter: We think that is incredible brand exposure and leverages our deep authority to make consumers aware that Cars.com has knowledge. Automotive is uniquely a multi-touch category. Unlike a lot of consumer goods or low-price point purchases, consumers may only seek out one to two destinations. Buying a car is the second largest transaction in people's lives. They're going to seek out multiple sources of information prior to purchase. We certainly think the LLMs constantly referencing Cars.com as an authority is going to continue to generate traffic directly to us as consumers go to get additional information, research on which dealerships have the best reputations, what they could expect to pay, any OEM incentives that are available. There's just a lot of information consumption in this category that makes me certain that no one destination can disrupt the 20-year strength of our brand and our content expertise.

Alex Vetter: Thanks. That's incredibly insightful. Thank you. Thank you, Joe. Ladies and gentlemen, as a reminder, should you have any questions, please press the star key followed by the number one. We'll pause a moment for further questions. There are no further questions at this time. Please proceed with closing remarks. Thanks, everyone, for joining the call. We'll see some of you on the road very soon. I appreciate the support, and have a good day. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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