Cars.com Inc.

Good morning and welcome to the CARS third quarter 2021 earnings conference call. This call is being recorded and a live webcast can be found at investor.cars.com. A replay of this webcast will be available until November 18th. A copy of the accompanying slides can also be found on the company's investor relations website. I'd now like you to turn the call over to Robin Moore-Randolph, Director of Investor Relations.

Good morning, everyone, and thank you for joining us. It's my pleasure to welcome you to the CARD third quarter 2021 conference call. With me this morning are Alex Vedder, CEO, and Sonya J., CFO. Alex will start by discussing our acquisition of Credit IQ and our highlights from the quarter. Then, Sonya will discuss our financial results in greater detail along with our fourth quarter expectations. 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, and free cash flow. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measure can be found in the financial tables included with our earnings press release and in the appendix of the presentation. For more information, please refer to the risk factors included in our SEC filings, including those in our annual, quarterly, and current reports, which are available on the investor section of our IR website. We assume no obligation to update any forward-looking statements or information as of the respective date. Now, I'll turn the call over to Alex.

Thank you, Robin, and welcome to our third quarter 2021 earnings call. We continue to focus on execution and deliver yet another quarter of strong growth in dealer customers, ARPD, and revenue. Before we dive into the details of the quarter, I'm excited to talk about our strategic acquisition of CreditIQ, which strengthens our automotive technology platform and delivers value to dealers, lenders, and consumers. Credit IQ has built cutting-edge auto finance technology that will leverage the massive audience of high-intent, in-market car shoppers that visit the car's platform and will enable us to generate incremental revenue from a new set of customers, lenders. The ability to complete more of a car purchase online will allow us to better monetize the 142 million visits to cars.com, and the additional 247 million visits across our DI dealer websites. This makes cars more transactional for our dealer partners while giving us robust financing capabilities for dealer websites. This latest technology addition to our scalable platform represents our entry into the fast-growing multi-billion dollar auto finance segment. which aligns with our vision of creating a frictionless, omnichannel experience for buyers and sellers. We're excited to participate in this market with a powerful digital solution that better allows lenders to compete for car loans online, saving consumers time and helping bring transactional capabilities to our dealer partners. Credit IQ's robust API technology enables a near-seamless integration into both our marketplace and dealer websites, connecting buyers and sellers using the dealer's existing lender network. As we roll out this dealer-centric platform to our marketplace and the 5,200 websites we power, dealers will benefit from its advanced features for credit application management and contract-ready digital retail. In turn, dealers will be armed with pre-approved loans, saving them valuable time in their finance office, enabling them to drive greater dealership efficiencies and enhance customer experiences. By using this technology, consumers can be pre-approved online and secure financing from the comfort of their home, alleviating a key pain point in their car shopping journey. This advanced digital financing technology creates an entirely new revenue stream for cars as now lenders can begin to compete for valuable upstream opportunities, connecting with car buyers and getting them pre-approved prior to delivery or the dealership visit. And by using the dealer's existing lender network, we enhance dealers' financing profits and strengthen their respective lender relationships. And finally, one of the direct benefits of this acquisition will be the improved sales attribution. By helping dealers source more sales linked to Credit IQ technology, we will further demonstrate Cars.com's overall sales effectiveness. Just like cars, Credit IQ has been focused on helping dealers be more efficient and profitable using technology. We're excited to combine forces and continue to enable dealers to generate more transactions online and enhance their digital strategy. Credit IQ opens up an exciting new tan for us, participating in the rapidly growing fintech segment, which will create incremental long-term value for shareholders. While Credit IQ is new and exciting, I'm equally excited to talk about our strong Q3 results. We delivered revenue and adjusted heat at the high end of our guidance. Performance was driven by growth in ARPD from the continued adoption of our industry-leading digital solutions, new dealer growth, and continued strong retention. Revenue growth has continued unabated for more than a year and reflects the strength of our dealer revenue, which increased 12% year over year. Total revenue increased 8% even as the industry-wide chip shortage continued to impact our OEM revenue. Looking ahead, we expect continued strength in our dealer business, accelerated growth from our acquisitions, and we also anticipate a rebound in OEM revenue when the supply chain disruptions ease, production levels return, and new car launches normalize. Consumer demand continues to outpace supply as lower OEM production has constrained new car sales and accelerated used car volume. In the certified pre-owned market, year-to-date sales were the best on record and are expected to continue to grow as dealers seek to buy out leases early and certify a higher percentage of used cars. Our value in this inventory-constrained environment is second to none. Our strong brand and organic traffic provide exceptional value, enabling dealers to market their actual on-the-lot inventory directly and efficiently to consumers searching for an exact match. For the quarter, as expected, average monthly unique visitors and visits were lower compared to the prior year. Recall, last quarter we noted that it would be difficult to outpace the COVID-19 lockdown period, which elevated traffic levels due to stay-at-home orders that lifted online car shopping to record levels. We also noted that we will experience some temporary impacts from our technology transformation. When compared to 2019, a more typical operating environment, monthly average unique visitors increased 5%. Lead generation also remains one of our strengths. Although leads were lower as compared to the prior year, when compared to the more normalized 2019 operating environment, dealer leads were up double digits. Dealers appreciate cars because we are a platform, not an aggregator. They appreciate our unique, high-quality traffic and leads and love the volume of traffic we send directly to our dealer websites. This is a key differentiator between cars.com versus aggregator marketplace. While aggregators force consumers to submit leads through their website, our platform successfully drives customers directly to our dealers. Through our platform, dealer customers receive twice as many website referrals as compared to others. This value is demonstrated by our record retention and continued growth in customers. We ended the quarter with 19,029 dealer customers, a 184 dealer count increase from last quarter, and 899 higher than a year ago. ARPD grew 7% for the quarter, driven by continued strong performance in fuel, our targeted video solution that enables dealers or OEMs to connect with car shoppers in an efficient manner. Dealers using Fuel consistently experience market share gains as they realize the strength of our first-party data to reach pure in-market car shoppers. Fuel revenue grew double digits compared to last quarter. Looking ahead, we see continued opportunities for growth given the ongoing shift from linear TV to streaming platforms, empowering dealers and OEMs to connect with Cars.com shoppers across digital video platforms and devices. This quarter, we were also proud that we launched the first of our four dealer websites, delivering steady growth in customers and increased adoption of our digital tools. By quarter end, we're powering over 5,200 dealer websites. Looking ahead, we expect continued growth as we deliver on additional four dealer websites, and we continue to grow the business with our existing OEM partners and others. We have ample opportunity to expand beyond the 5,200 website customers we have today in an industry with more than 40,000 dealerships. Our focus on empowering dealers with innovative digital solutions is reflected in the growth of our differentiated solution strategy. We've successfully transformed the business, moving from our legacy lead generation affiliate model into a platform with in-market car shoppers that empowers industry-leading digital solutions. We are now enhancing that platform with financing capabilities that engage consumers, benefit dealers, and generate an entirely new customer revenue stream with scale potential. Our strategy continues to win industry adoption and advance in powerful new ways. Now, I'll turn the call over to Sonia to discuss our detailed financial performance. Sonia?