Dealership technology company Cars.com made money in the first quarter on slightly higher revenue, an improvement from the year-earlier quarter that saw the start of the coronavirus pandemic in the U.S.
The Chicago vehicle listings company on Thursday reported net income of $5.3 million, compared with a net loss of $787.4 million in the same period a year earlier. That loss was impacted by a noncash goodwill and intangible asset impairment charge of $905.9 million related to the pandemic.
Revenue rose 3.5 percent to $153.3 million, compared with a decline of 4 percent in the year-earlier quarter. Cars.com said the increase was attributable to growth in average revenue per dealer. That metric rose 8 percent to $2,268 on sales of its technology products, including websites offered by its Dealer Inspire unit and its Fuel video marketing product, and its vehicle marketplace business.
“We maintained strong momentum in our business in the first quarter, delivering continued sequential growth in dealer customers and year-over-year growth in [average revenue per dealer] and across all key financial measures,” Cars.com CEO Alex Vetter said in a statement. “So far this year we have seen positive industry trends, an indication of strong consumer demand and continued dealer health. These trends reinforce confidence in our outlook for growth in 2021.”
Cars.com reported 18,823 dealership customers as of March 31, a figure the company said has nearly returned to pre-pandemic levels after falling during 2020 as dealerships pulled back on marketing expenses. The company reported 18,938 dealership customers as of March 31, 2020.
It added 451 dealership customers since the fourth quarter of 2020, which it said was the biggest quarter-over-quarter increase since Cars.com became a public company in 2017.
Cars.com’s share price was trading down 2.4 percent at $12.80 in afternoon trading in New York.
The company said Thursday that it has become a preferred website provider for FordDirect, a joint venture with Ford and Lincoln dealers that provides such products as websites and marketing tools, giving Cars.com access to about 3,000 dealerships in the U.S. Average monthly unique visitors to Cars.com websites grew 4 percent to 26 million, while website traffic dipped slightly.
Cars.com reported financial guidance for the second quarter only, with revenue forecast from $152 million to $154 million. No net income estimate was provided.
“Our balance sheet remains strong, giving us ample flexibility to opportunistically pay down debt and continue our investments in product innovation, marketing and talent acquisition supporting and enabling dealers to meet consumers in both physical and digital channels,” CFO Sonia Jain said in a statement.
The first quarter a year earlier was affected by the rapid spread of the coronavirus starting that March and in-person business restrictions in some states and municipalities that closed some dealership showrooms. Cars.com offered discounts to dealership customers for several months last spring and trimmed spending and staffing to sustain the financial hit from the pandemic.