2017 a mixed year for lead providers' earnings
The publicly traded third-party lead providers posted mixed financial results in 2017.
Net income soared at CarGurus Inc. and rose at Cars.com Inc., while TrueCar Inc.'s net loss narrowed. AutoWeb Inc. swung to a loss on special charges in the fourth quarter.
Cars.com, of Chicago, is the largest of the pack, with revenue of $626.3 million last year, down 1.1 percent from a year earlier. Its net rose 27 percent to $224.4 million.
Profits were helped by a strong fourth quarter, when net tripled to $151.8 million even though revenue fell 3.2 percent to $156.6 million. The surge in net came largely on a $118.1 million one-time adjustment of deferred tax liabilities for the company, which was spun off last year and began trading on the New York Stock Exchange on June 1.
Cars.com said its average monthly unique visitor count grew 1 percent last year, bouncing back from a 7 percent drop in 2016. While total traffic, as measured by visits to its website, fell 3 percent in 2017, mobile traffic grew 6 percent.
It expects revenue to grow 10 to 11 percent in 2018, aided by the acquisitions of Dealer Inspire and Launch Digital Marketing.
At TrueCar, revenue rose 16 percent to $323.1 million in 2017. The Santa Monica, Calif., company's net loss narrowed to $32.8 million from $41.7 million a year earlier.
In 2017, average monthly unique visitors rose 5.7 percent to 7.4 million, and the number of vehicles bought by TrueCar users from TrueCar certified dealers rose 18 percent to 952,834. It expects the number of vehicles sold to rise to between 1.03 million and 1.05 million in 2018.
"We've made significant progress throughout 2017; however, there is still much we need to do. We believe our work this year will set us up for a strong 2019," said CEO Chip Perry in a statement.
Providing leads, maybe profits
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CarGurus was the fastest-growing company in the group, with its revenue closing in on TrueCar's for the year and surpassing its rival's in the fourth quarter.
In 2017, CarGurus' net doubled to $13.2 million, as revenue jumped 60 percent to $316.9 million.
The Cambridge, Mass., company said total paying dealers were 27,670 at year end, up 30 percent from a year earlier. U.S. dealers made up 25,122 of those, and international dealers 2,548.
U.S. average monthly unique users rose 25 percent to 25.7 million in the fourth quarter.
AutoWeb's 2017 revenue fell 9.3 percent to $142.1 million. It swung to a net loss of $65 million from a net profit of $3.9 million a year earlier.
The net loss included a fourth-quarter noncash charge to income tax of $25.4 million, as well as a goodwill impairment charge of $37.7 million.
The Irvine, Calif., company, formerly known as Autobytel, is in flux. CEO Jeff Coats is set to step down in the coming months, after the board names a successor. CFO Kimberly Boren also will step down, effective April 12.
"Despite recent struggles with our traffic acquisition, we've dramatically increased the company's addressable market over the last several years through targeted acquisitions, while establishing AutoWeb as the largest supplier of online leads to every major OEM in the country," Coats said in a statement.
"Demand for leads and clicks from our customers remained strong in Q4. However, we were unable to fully meet this demand due to higher traffic acquisition costs. Though our Q4 results certainly weren't acceptable to us, we believe we have been taking the appropriate actions to address these traffic issues and mitigate the impact to profitability. Just last month, we realigned our headcount and expect it to reduce operating expenses by $2 million on an annual basis," he said.
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