CARS.COM INC (NYSE:CARS) Q3 2025 Earnings: EPS Beats by 200% as Profitability Soars

CARS.COM INC (NYSE:CARS) reported third quarter 2025 financial results that presented a complex picture for investors, with revenue figures meeting expectations while profitability significantly exceeded projections, triggering notable market movement in early trading sessions.

Earnings Performance Versus Expectations

The automotive marketplace delivered mixed results against analyst forecasts for the quarter ending September 2025. While revenue came in essentially in line with expectations, the company's profitability metrics demonstrated substantial outperformance.

• Revenue: $181.6 million reported versus $185.1 million estimated (approximately 1.9% below expectations)
• Non-GAAP EPS: $0.48 per share reported versus $0.16 estimated (200% above expectations)

The revenue figure represented a modest 1.1% year-over-year increase, indicating steady but not accelerating top-line growth. However, the significant earnings beat suggests improved operational efficiency and cost management during the quarter.

Market Reaction and Price Action

The market responded positively to the earnings release, particularly focusing on the substantial earnings per share outperformance. In pre-market trading following the announcement, the stock surged approximately 8.1%, indicating strong investor approval of the results. This positive movement contrasts with the stock's recent performance trends, which had shown declines across multiple timeframes prior to the earnings announcement.

• Pre-market performance: +8.1%
• Previous week performance: -1.2%
• Previous month performance: -6.3%

The sharp reversal in sentiment suggests that investors were particularly encouraged by the company's ability to translate moderate revenue growth into significantly higher profitability than anticipated.

Business Highlights and Strategic Developments

The company's press release highlighted several key achievements during the quarter, including record total revenue of $182 million and dealer revenue growth of 2% year-over-year. Perhaps most notably, the company reported accelerating marketplace adoption, growing its dealer customer base by 271 year-over-year to reach 19,526 dealer customers. This expansion of the core customer base represents fundamental strength in the company's marketplace model and suggests potential for sustained revenue growth moving forward.

The quarter also featured the launch of "Carson," the company's new multilingual AI-powered search experience, representing the company's ongoing investment in technology to enhance the car shopping experience. While the immediate financial impact of such initiatives may not be quantifiable in current results, they signal the company's commitment to maintaining competitive advantage in the digital automotive marketplace space.

Forward Outlook and Analyst Expectations

Looking ahead, analysts have established expectations for the coming quarters that the company will need to navigate. For the fourth quarter of 2025, the consensus estimates project revenue of approximately $187.4 million and earnings metrics that will be closely watched following the significant beat in Q3. For the full year 2025, analysts are forecasting sales of approximately $737.3 million, representing a meaningful growth trajectory that the company will need to maintain to justify current market valuations.

The company's ability to continue expanding its dealer customer base while improving profitability through operational efficiencies will likely be critical factors in meeting or exceeding these forward-looking estimates. The market will be watching closely to see if the strong earnings performance represents a new sustainable trend or a one-time outperformance.

For detailed historical earnings data and updated analyst estimates, readers can access comprehensive information through the CARS earnings and estimates page.

Disclaimer: This article provides financial analysis for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any particular security or investment strategy. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.