Cars.com has released its second-quarter 2026 financial outcomes, showcasing a 1% year-over-year revenue increase to $179.9 million, consistent with earlier forecasts. The company experienced notable expansion in its core marketplace segment and improved operating margins. This performance was achieved amidst a decline in OEM advertising and overall website traffic, as the company strategically shifted its focus towards high-intent consumers, leading to enhanced lead conversion despite reduced unique visitor numbers. Key initiatives include the introduction of "Dealer Verified Listings" to foster greater trust in the marketplace and the integration of generative AI to boost user engagement. A significant portion of free cash flow has been allocated to share repurchases, reflecting a commitment to shareholder value.
During the second quarter of 2026, Cars.com achieved a revenue of $179.9 million, marking a 1% increase from the previous year. This growth was primarily fueled by strong dealer subscription products, with marketplace revenue surging over 7% year-over-year, its fastest growth rate since 2021, excluding the pandemic recovery period. Adjusted EBITDA reached $53 million, a 4% increase year-over-year, leading to an adjusted EBITDA margin of 29.4%, surpassing management's high-end guidance. Net income saw a substantial rise to $14.3 million, or $0.25 per diluted share, up from $7 million, or $0.11 per diluted share, in the prior-year period. The company also reported an adjusted net income of $28.7 million, or $0.51 per diluted share.
A strategic shift in marketing priorities resulted in a year-over-year decrease of 14% in average monthly unique visitors and 12% in total traffic. However, this intentional approach, aimed at prioritizing value delivery and targeting high-intent shoppers, led to a double-digit increase in lead conversion. Organic traffic remained robust, constituting approximately 60% of the total volume, with direct traffic, the largest organic channel, showing growth in the first half of 2026. The company's AI shopping assistant, Carson, saw 20% engagement among active searches, with Carson users being four times more likely to submit a lead, accounting for nearly 30% of total leads in June.
Innovations such as "Dealer Verified Listings" were launched in June, integrating AccuTrade condition reports directly into marketplace listings. This feature aims to provide an additional layer of trust for consumers by offering current vehicle condition reports rather than just historical data. The deployment rate for new features increased by 80% year-over-year in 2026, signaling accelerated technical interoperability and product momentum. Cars.com also continues to reinforce its brand, investing in marketing to position itself as a transaction enablement platform rather than merely a listings destination, highlighting the importance of long-term strategic success.
Looking ahead, Cars.com has reaffirmed its full-year 2026 guidance, expecting revenue growth between 0% and 2% and an adjusted EBITDA margin ranging from 29% to 30%. For the third quarter of 2026, the company anticipates revenue to be flat to up 2% year-over-year, supported by continued dealer revenue growth and an expected quarter-over-quarter improvement in OEM and national revenue. Adjusted EBITDA margin for Q3 is projected to be between 28.5% and 29.5%, reflecting ongoing cost and operational discipline. The company's commitment to share repurchases continues, with 6.2 million shares bought back for $57 million year-to-date, representing over 10% of outstanding shares at the start of the year.
