Dealership technology company Cars.com posted a $6 million net loss in the fourth quarter, which it said was primarily related to its November acquisition of automotive financial technology company CreditIQ.
The Chicago-based company said Thursday that the net loss for the quarter ended Dec. 31 compared with net income of $7.2 million in the same quarter a year earlier. Cars.com said the $6 million loss stems in large part from a $9.6 million compensation expense related to its $30 million purchase of CreditIQ, while the net profit in the fourth quarter of 2020 was attributed to tax benefits resulting from federal coronavirus pandemic relief legislation.
Revenue rose 3.5 percent to $158.3 million in the fourth quarter of 2021.
“Our business has demonstrated resiliency and profitability during a period of uncertainty,” CEO Alex Vetter told analysts on the company’s fourth-quarter earnings call Thursday.
Shares of Cars.com were trading up 1 percent to $14.31 Thursday morning.
For the full year 2021, Cars.com swung to net income of $7.7 million from a net loss of $817.1 million in 2020. The company had attributed last year’s net loss to a pandemic-related noncash goodwill and intangible asset impairment pre-tax charge of $905.9 million. Revenue rose 14 percent to $623.7 million in 2021.
The company had 19,179 dealership customers as of Dec. 31, an increase of 150 from Sept. 30, and an increase of 807 from Dec. 31, 2020. Monthly average revenue per dealership rose 3 percent to $2,333 in the fourth quarter, which Cars.com attributed to growth in its digital products and its Fuel digital video marketing platform.
Cars.com in November acquired CreditIQ, a technology provider for digital retailing and financing, including online credit and loan approvals. Vetter said Thursday that the integration of CreditIQ with Cars.com’s vehicle listings marketplace and digital products, including dealership websites, is under way and the platform has been “well received” by its dealership customers.
“We expect to begin scaling this technology to a wider audience,” including dealerships and lenders, Vetter told analysts.
Also Thursday, Cars.com announced a share repurchase program worth up to $200 million over the next three years.
Q4 revenue: $158.3 million, up 3.5% from a year earlier
Q4 net loss: $6 million, compared with net income of $7.2 million a year earlier
Q4 adjusted EBITDA: $46.8 million, down 3.4% from a year earlier
Full-year 2021 revenue: $623.7 million, up 14% from a year earlier
Full-year 2021 net income: $7.7 million, compared with a net loss of $817.1 million a year earlier
Full-year 2021 adjusted EBITDA: $189.2 million, up 21% from a year earlier
Guidance: First-quarter revenue of $156.5 million to $158.5 million. Full-year revenue growth ranging from 6% to 8%.
