Great. Thanks everyone for listening in. Thanks everyone for joining here in the room. My name is Rajat Gupta, member of the Automotive Equity Research team at JP Morgan. Very pleased to have with us Alex Vetter, President and CEO of Cars.com, and Sonia Jain, Chief Financial Officer, as well as Robin, you know, Head of Investor Relations. I believe Alex has a few short prepared remarks, and after that, we can go into Q&A.
Rajat, thank you, and good to have everybody here today. If you're in this room, I imagine you've heard of Cars.com before. I would say that's probably the best thing about my business and also maybe the worst thing because when people hear the name Cars.com, they think of us as a singular website. What's important to know about the business is over the past several years, we've transformed the company into a software solutions provider of technology to the auto industry. We're now powering over 6,000 dealer websites. We're selling Internet of Things technology that plugs into actual automobiles and sends us data over the cloud. The business has changed dramatically over the years, but because of the strength of our brand name, everybody thinks of us as a singular website.
That'd be number one. I think, I always get asked the question like, "Well, you're like Carvana or you're like one of those other guys, and how are you different?" We always clarify, well, you know, we're a tech enabler. We stay asset free. We're not taking possession of any inventory. The only inventory we take possession of are the computer monitors that we build the technology through and deploy to our customers. Those are some of the key things that are often misunderstood about the business. I don't know, Sonia, what else would you add to that?
no, I think those are really salient points. I mean, we make 90% of our revenue from our dealer customers. We have real size and scale in this space. We have about 20,000 dealer customers, 28 million average monthly unique visitors, and that's enabled us to really drive a strong subscription-based business. Our dealer revenues grew 7% year over year. To Alex's point, that's through a combination of our sort of flagship Cars.com marketplace sales. We power over 6,000 dealer websites today. we've launched new vehicle valuations tools that serve both dealers and consumers. truly a really diversified subscription-based business. We generate a little bit of money from a lot of customers, so no real concentration risk at about $2,400 of ARPD per month.
We've grown that double digits over the last couple years. That's all been through product penetration and really moving forward with our platform strategy, where we're not selling just a singular listing subscription, but a broad set of technology solutions to our dealer customers. That's happened organically, not through pricing increases. That being said, given the value delivery that we've experienced over the last several years, we are embarking on a plan to repackage our marketplace offerings and give dealers more value. Included in that is also going to be a bit of a price increase as well. Overall, I would say we're in the early innings of our solution strategy. Lot of runway for growth ahead of us.
Only a bit of price increase? Was it more than that?
Double digits.
Double digits. All right. Great. Thanks, thanks for that overview. Maybe, you know, I just wanted to ease in with, you know, a couple of, like, just more macro, you know, broad questions. You know, we keep hearing, like, almost every week, there is, like, a mixed data point on the sector on both new and used. You know, Cox had a report this morning, which suggested that, you know, retail new sales started to bounce back again and day supply is actually gonna be down again. Curious, like, what you're seeing from, the insights you get from your dealers and the traffic on your website, how do you feel about consumer demand?
maybe if you could, I mean, maybe into the second quarter, like April or since earnings season, how do you feel about consumer demand, both new or used vehicles? Anything you wanna point out in terms of.
Yeah
... geographical divergences or something in the search metrics or traffic trends that you're seeing?
Well, look, there's a lot we could unpack there, but let me start with a couple headlines. Part of the strength of our business is that, you know, with a brand like Cars.com, we generate the lion's share of our traffic organically, it comes to us directly. Unlike a lot of our peers who talk about statistics, you know, they're throttling metrics using paid media. We get a, I think, a very clean look at consumer intent. I'll tell you, it's a healthy market right now, and it's persisting into the second quarter, and we're seeing strong demand signals. Average user on Cars.com has about a 90-day purchase horizon, meaning they start visiting our website prior to purchase. That suggests to me that we'll see a strong second quarter in auto sales, both new and used.
I think the inventory picture is a little bit different. While we don't get a total picture of the market, with close to 20,000 dealers, we see a pretty good sample of the market. It, the inventory levels are all over the board, depending on the brand. You've got companies like Subaru who are running at about 10 days supply of actual new cars available versus Jeep, which is, like, close to 90 days supply. Jeep's currently advertising on the homepage of Cars.com, just to make a connection point. Like, when OEMs build cars and they aren't selling, they turn to us and to promote them and to help get more exposure for those vehicles. I think even though new cars are up almost 90% year-over-year, we're still about 60% below pre-COVID levels.
A big percentage of our business is tied to inventory size. Our pricing has been largely muted because dealers have been running at about half, if not less, of the inventory that's typically on their lots. As inventory production levels return to the manufacturers, we know that that fleet eventually flows into the used car market, and so we think we've got a nice built-in organic tailwind to the business and our pricing just on volume alone.
Right. No, that's, that makes sense. Thanks for that color. I wanted to touch on another key macro topic. Is more on the credit side and consumer financing side. You know, one of your peers mentioned that they were seeing some softening in consumer financing, you know, in terms of their contribution, in terms of their revenue contribution and how it flows through their P&L. Because of monthly payments, high monthly payments and, you know, unaffordable rates, how do you think about your investment in CreditIQ given this backdrop that we're seeing? Maybe how do you take advantage of CreditIQ in that backdrop as well? You know, if you could just.
Sure
... give us some insight.
I think important to understand the composition of our business in that we skew to the high end of the market. Most of our customers are the largest franchise dealers, and we tend to cover all largely new car franchise operators. A lot of our competition covers the long tail, sub $20,000, you know, independent dealer, 30 cars on their lot. That's not our core bread and butter because we're selling technology solutions. We're building their websites, we're giving them appraisal technology, and we're giving them financing tools. The acquisition of CreditIQ, we're in the early innings there. We're seeing great consumer utilization. Consumers have overwhelmingly told us they don't wanna spend 45 minutes in the F&I box at a dealership. They'd rather spend 15 minutes in complete control online prior to visiting the dealership.
We're thrilled from a product inclusion standpoint into our portfolio, and the credit challenges, I think are more gonna be felt on the lower end of the market as opposed to where we participate. I don't know, Sonia, you wanna say yeah?
Yeah. Well, maybe just to add a couple more things. I mean, one of the things we've observed is that when a consumer completes a financing application, they become a more tangible lead to dealers when they walk in the door. They're better prepared, better understand the commitment that they're signing up for. We do believe financing is important for both consumers and dealers. As part of our Marketplace Repackaging initiative, we are including CreditIQ and kind of expanding the footprint on which it's available.
Got it. Got it. That's helpful. You, you touched a little bit about just your customer base, you know, being like large dealers. You know, one of the headwinds you face as a company is, you know, some of the slowing and spending at, you know, the used car dealers, particularly the large online dealers. Do you believe that you're at kind of the end of that cycle in terms of how much lower it can get in terms of spending? You know, Carvana on their earnings call suggested I think they might need to step up advertising again at some point. I mean, curious what are you hearing from them or like, you know, similar peers in terms of, you know, their advertising path or strategy going forward?
Well, it's a great question. I think one of the things the market got wrong about our results is we were down about 320 dealerships net for the quarter. We had signaled that we would be down, the stock took a little bit of a hit there. What people didn't I think understood is it was really three digital dealers pulling back about 250 locations, in that we actually grew traditional dealerships 37 in the quarter. I think the stock didn't really contemplate that these virtual dealerships, when they canceled us, they weren't canceling us, they were canceling all advertising, all marketing, and had very structural, bigger structural challenges than the efficacy and ROI of our platform or products.
I do think if you're gonna be a participant in the automotive industry and you're gonna compete, you're gonna need to work with Cars.com. We've got the largest concentration of auto shoppers of any of our peer group. We've been number one in traffic now for about 12 consecutive months. Highest rated app, most downloaded app in the category. I think we heard Tesla claim that we're gonna have to get back into advertising this year. Doesn't shock me that Carvana is going to get back into advertising. It's gonna be a more competitive market towards the second half of this year, and I think we're an obvious place for them to place their dollars.
Got it. Got it. That's, that's helpful. You know, wanted to just move on to, you know, the pricing discussion. You know, we've seen that, we've seen your peers make similar moves. You know, what have been the key highlights and just early innings results from those discussions? You know, what are dealers are most concerned about? You know, is it just uncertainty around inventory supply or perhaps, you know, just fear around like their elevated margins, you know, starting to moderate? Then just separately, what's the key ROI proposition you're pitching to dealers, and are there any underlying industry assumptions embedded in those discussions?
There's.
Sorry
a lot to unpack there, but I'll try start. We're really embarking on the Marketplace Repackaging in part for a couple reasons. One is we've really invested in growing our audience and value delivery over the last couple years. Replatforming for SEO, continued development around our app, investment in high quality editorial content. As Alex mentioned, 2/3 of our traffic comes to us organically. That means it's complementary to what a dealer is doing on their own, not cannibalistic. We really wanted to get some alignment there, number one. Number two is we saw this as a real opportunity.
We've expanded the portfolio of products and solutions we offer, rather than bring them to dealers as individual sales, bringing them a full suite of solutions that embeds us more deeply within their ecosystem, drives stickiness, and gives them more value. As part of that, yes, rates are also increasing. Some of the things that we are including in the Marketplace Repackaging are CreditIQ's instant financing capabilities, DealerRater reputation management tools. As you can imagine, finding the right dealer to make a purchase and understanding that purchase experience is really important for a consumer. Search radius expansion. This was something we saw become increasingly important over the last several quarters when inventory is tight. It's improving, but it's still a consideration, particularly as consumers look for the right vehicle at the right price.
Those are some of the things that we have embedded within, Marketplace Repackaging.
Got it. AccuTrade and, you know, FUEL, they're all on top of...
Those are all.
Those are a la carte incremental solutions. There are some interplay between the various products. Yes, those are additional charges on top of our Marketplace Repackaging.
Got it. Got it.
By the way, we started our repackaging testing last year, and with a cohort of smaller dealerships, we justified double-digit increases. We saw some elevated dealer churn, but the cumulative effect of the rate increase was very much accretive in terms of total dollars.
Got it.
The dealers that canceled us started returning back at about that four to six- month interval, we were getting those renewals coming back in at even higher rates than the rate increases we were offering. Part of this is training the dealer community that, you know, the price increases are coming, and rather than canceling us, waiting six months and coming out at a higher level, they're better off taking a modest price increase now.
Got it. They would come on higher increases later.
If they cancel and they wanna come back on at a later date, they're gonna pay a higher rack rate than they would if they would just stay on as a valued tenured client.
Got it. Got it. Any metrics you can share on those discussions, like, such as success rates or average price increase or just... You know, I'm assuming you're targeting the whole dealer base?
We've only targeted about a quarter of the dealer base at this point and had great success initially, and so they'll continue to phase on. It'll have a muted impact this year because of the rolling subscription nature of the increase as it hits this year's financials, but obviously it'll start at a much higher elevated run rate going into 2024.
That's right.
Got it. That's helpful. You mentioned like, you know, the cancellation and then return to the platform. You know, based on your experience over many years, how long does it take for a dealer to come back-?
Yeah
... you know, any historical trends?
Well, look, I think what you need to know about auto is that this is the largest category where the shopping time online is significant, but the purchase is happening offline. There's massive slippage or breakage in the attribution loop. Dealers get un-insecure about how many sales is this platform generating. What we often find is if they do cancel us, they seem to see their website traffic start to decline, their phone calls stop ringing. We're generating about 60 phone calls a month for dealers in terms of inbound sales leads. Actual, like, form filled, submitted leads and applications obviously stop as well.
We've had dealers that have called us back 24 hours from canceling, saying, "My operating team didn't know I was canceling you, and I'm ready to re-sign." Typically we see a little bit of a prideful 90 days. In some cases it's longer, but usually.
Right
... within the six-month window they end up coming back.
Got it. Got it. That's helpful. You know, just wanted to check in with the audience if any questions here in the room. None, not any on the webcast yet. I wanted to, like, move on to some of, you know, these the a la carte offerings that you mentioned, FUEL, AccuTrade. You've previously mentioned roughly 30% penetration for FUEL as a long-term target, which would imply a pretty significant growth potential, revenue potential. Could you help us understand how we get there from today's low single digit-
... penetration? Is pricing one of the levers you would be looking to pull to increase that? Because some of this offering might be out of reach for a large segment of your dealer base.
You know, over the past year with the inventory, production challenges and shortages, we definitely saw Fuel take a pause, right. Dealers had six buyers for every car. They weren't spending incremental advertising marketing dollars to exhaust that inventory. That number, obviously, I think is coming back pre-pandemic levels. You know, we're thrilled with the business. We grew it from zero to almost $30 million in less than 16 months. By the way, for those that don't know, Fuel basically, only about 3% of our audience converts to a tangible lead. What Fuel does, it says for everybody that comes to Cars.com in certain zip codes, you can run advertising over the top across the big media platforms, Facebook, you know, any other techno... Netflix, or not Netflix.
YouTube TV
Thank you.
Hulu, things like that. You can go on, like, basically a comparison or parallel to typical television advertising, but in a much more targeted way 'cause we're leveraging our first party audience.
Someone's already expressed an interest to sell. You know, I think the business has got tremendous upside. In fact, in the more recent periods, we're starting to see an increase in RFPs for FUEL again after about a year hiatus because of the inventory shortage. Now that inventory levels are returning, we're getting both dealers and OEMs reaching back out to us, looking for ways to start promoting their inventory and getting that turn rate accelerated.
Got it. Got it. That's helpful. Then on Online Shopper, you know, you've mentioned penetration has tracked about 20%. Any latest penetration metrics you could give us, and just an overview of the monetization model there? You know, is it, is it primarily subscription-based, or is there an element of transaction-based monetization there as well? Maybe if you could just give us an overview of Online Shopper in general.
Basically, Digital Retailing is a prevalent term in the industry, where dealerships are looking for more transactional technology on their own website, moving from just generic lead-based form fill submissions towards further deal-making, configuration of the deal. We're actually evolving our suite towards what we're calling now more modern retail because a trade-in has to be factored in for most sales. Over half of new sales have a trade-in required. Dealerships can now use our AccuTrade appraisal technology on their own website, configure what the trade-in value's worth. With CreditIQ, they can apply for financing on the car that they want. We're bundling these solutions together to create a more compelling, full suite Digital Retailing solution for dealers. We're seeing great interest, not only from dealers, but increasingly now with OEMs.
When we bought AccuTrade, I candidly wouldn't have projected this, but manufacturers too are realizing that in order to sell a new luxury vehicle, they need to exit somebody out of their existing automobile, and they need to do it in a compelling way. We're talking to OEMs now about licensing AccuTrade's technology to help them provide trade-in values to shoppers as well.
Got it. Got it. That's, that's interesting. Any questions, you know, in the audience? No. Yeah, just, I was gonna get into AccuTrade. 2022 was a big investment year for that platform. You know, the uptake and the penetration you've seen has been pretty impressive. Just curious, like, where do we go from here? You've mentioned an opportunity to tap into the private dealer group marketplace segment. I'm curious, like, if there are any more initiatives in the pipeline as well.
We're gonna do some investor day work over the course of the summer. We'll do live demos, so forgive me for not having the AccuTrade tool to show you. You know, the technology's incredible. Most dealerships, if you go to take your car to a dealership, they'll take about 45 minutes to appraise your vehicle. They'll have to have a service tech get under the hood, look at the car. With our AccuTrade technology, we plug in a key fob under the dash of the car, and within minutes, we can do an internal diagnostic of the car and render an accurate vehicle value in under four minutes.
Part of the premise of AccuTrade is that we're gonna help dealers reduce their operating cost, and now the dealers using AccuTrade are providing real-time offers for every car that comes into the dealership for service. Average dealer spends around $800 to buy a car from auction, so they gotta pack that into the impact on their margin when they buy cars at auction. We're helping dealers source inventory directly from their service lanes.
Yeah.
They're able to buy cars for pennies compared to the auction and keep a more virtuous ecosystem of selling their current customers more vehicles or upgrading the car that you bring in for service. AccuTrade is early innings. One of the things we learned in the initial launch of the business is that dealers just needed more training. We ramped up a little bit in our sales and marketing during the quarter just to help onboard dealerships to train their staff on how to plug in the device and get the accurate value. We're also seeing tremendous consumer engagement. Think of it as the Zestimate for your car. You can go to Cars.com, fill out their form. We can tell you a fairly accurate representation of what your vehicle's worth.
If you take it to the dealership, they plug in the OBD, we'll guarantee the offer for 72 hours. Even if the dealer doesn't want the car, you know, that's okay. We've got a wholesale partner that'll pick it up. You know, we're in the early innings here. This technology, I think, changes the auto industry in terms of its auction-based, physical auction-based model to a much more retail collective across the industry, we're thrilled about the prospects here.
Got it. You know, one of the challenges, I think one of the peers faced with a little bit different approach, you know, with CarOffer. I mean, they ran into a lot of, like, arbitration issues. You know, how do you make sure that, you know, because you have a wholesale partner, you know, here, because you're guaranteeing a price and then, you know, if the consumer doesn't want it or, like, the dealer doesn't want it, you're going to give it to a wholesale partner. You know, does the dealer get to inspect the vehicle and thereafter confirm or renegotiate that offer? In the event that the transaction does not go through, it seems a guaranteed price will be honored by your wholesale partner.
We were wondering, like, if you could disclose, you know, any more details around that?
Sure.
What capacity of volume?
I think the first important detail is there is that we're not taking title on any inventory, right? We're keeping the business asset light or asset free really and leaving the last mile logistics to the pros. If you use our technology, because Most of our competitors price inventory based on generic make, model, trim, sort of horizontal data, where we actually are getting an EKG of the human heart of the car. We're actually able to see what mechanical work needs to be done on the car to replenish or bring the vehicle to retail standards. Because we're getting that touch of the intrinsic value of the car, we can provide a much more precise estimate on vehicle value.
Dealers that are using AccuTrade on average are seeing that they're saving $12,000 a month on unseen issues with trade-ins, that if they bought the car, their service tech would've told them, "In order to retail this car, we're gonna have to replace these parts." The fact that we're eliminating that blind buying activity gives dealers tremendous peace of mind that they're buying cars more intelligently. Keep in mind, AccuTrade's only $1,500 a month subscription, they can use it as much as they want. They can, you know, save money on the appraisal time and value. Tremendous upside for dealers using this technology. We're not taking title of the vehicle, we're not bearing any heavy downside risk on depreciation as well, right?
Once you start owning assets in this space with the fluctuations in pricing, it can be a very volatile business. We're a vertical software. Well, you know, SaaS-like qualities where we have high reoccurrence of revenue, very sticky, lower customer acquisition costs because we're upselling these technologies to an existing install base. I just don't think we have a peer here who's running the business in the way that we are, not as a participant, but more as an enabler.
Got it. I mean, the technology that you have or the capability you get with AccuTrade, you know, it could easily be applicable into or in the digital, you know, wholesale market, you know, like some of your peers ultimately, which is like a big TAM and there are like some good players there, you know, that's getting increasingly competitive, but is that something we could expect you to dabble into?
Absolutely. I mean, really, the physical auction business is about a $10 billion TAM that's occupied by two major participants. Again, it's very old school, physically come to the dealership, trade inventory that you couldn't sell to a dealer who had another car that they couldn't sell, and you're recycling basically troubled goods. Where we think the industry is gonna evolve more to buying cars from their existing established customer bases, recycling that inventory, as opposed to, you know, buying off this failure rate data. We're having great success. All of our Accu-Trade pilot dealers or our first, you know, few hundred dealers are all from the large publicly traded dealer groups. In each one of those, our installations have been expanded. We've had none contract. They're starting out using it in two stores, now we're up to 20.
We think we can continue that success because they're seeing the operating efficiency, they're seeing that they're buying cars more profitably, they're reducing their overall operating costs, and there's little to no downside risk. We have had those dealer groups say, "Could you enable dealer-to-dealer trading?
Yeah.
Which would be the precursor to opening it up, you know, to any dealership to be able to trade inventory.
Yeah.
all the bones of a digital wholesale auction platform are there.
Got it. Got it. That's helpful. You know, wanted to touch on generative AI. It's obviously very topical right now. How do you see that in terms of, you know, implications to your business? You know, what kind of opportunities do you see, not just from a product development and operational perspective, obviously, you know, from a consumer-facing perspective, but candidly, you know, any areas in your business model where you think it could be a threat that you would need to, you know, start working on soon or sooner rather than later? You know, just maybe if you could address.
Well, look, I think we tend to run. The business DNA is to view most technology as opportunistic before we view it as a threat. We were the first to launch on a mobile device. We were the first to launch an app. We've jumped into things like, you know, dealer reviews, which, you know, our customers initially met with chagrin because we're gonna rate them even though they're the paying customer. We've always viewed innovation as core to our business. Sonia won't let me get too far ahead of how excited I am about some of the opportunities with generative AI yet financially because our website business is highly human services dependent, right? Dealers call us for changes. They want us to produce content about their dealership.
For the first time, we're starting to cut our production cycles times down, leveraging the technology to generate content for us to be able to put it on the dealer's website in a fraction of the time. I think that's a big opportunity as well. Sentiment analysis is another one. You know, we're the largest database of dealer reviews, over 10 million reviews on dealerships. We can now use generative AI to provide sentiment around the experiences those dealers provide, whether it's speed or service, and start to display some of those attributes directly into the product experience. Those are just a couple of the areas that we're excited about.
Certainly every tech has potential threats, but like, knock on wood, we're 25 years in the game, we've always stood the test of time and kept approaching these things as, how can we take advantage of them? I think there's more upside here than downside risk for sure.
Got it. Got it. That's helpful. Just want to see if any questions in the audience. Excuse me. You know, wanted to just shift gears on some of like, you know, the capital allocation and just long-term topics. Just latest thoughts, I mean, amongst the three public peers that most investors follow, obviously you're the ones that, saddled with the most debt. In keeping that aside, you know, pretty healthy cash flow generation happening. What are the priorities in terms of, you know, deploying that cash? Is it debt, pay back debt, buyback, you know, tuck-in acquisitions, any larger acquisitions? Run us through your priorities.
Yeah. I mean, well, first of all, we also have the highest margins in our competitive set, right?
Yes.
We're gonna approach 30% margins this year. While we have some debt, it's very modest and we've been very prudent in our capital allocation strategy. Most of our inorganic expansion have been more tuck-in size opportunities to bring that technology into our current platform. We've got a share repurchase and obviously paying down debt to reasonable levels.
Yeah.
I don't know, Sonia, what else you'd add.
Paying down debt has been a pretty big refocus over the past couple years. We set a target net leverage range of 2 to 2.5 times, and we're now squarely in the middle of that range. Some of that involved debt pay down, because we did borrow a little bit on our revolver to fund the acquisition of AccuTrade. The nice thing about our free cash flow generation is we can very quickly pay down debt associated with things like M&A. From a priorities perspective now, I would say, capital allocation-wise, it's how do we continue to invest in growth? We do have a share repurchase authorization out there, and we do view that as an important element of our overall capital allocation strategy.
I would say focus area, given how much debt we've paid down and the fact that most of it is now in our bond, is on driving growth in the business.
Got it. That's, that's helpful color. You know, we cover a lot of, like, the franchise dealer groups and used car dealer groups and, you know, a lot of secular debate around those companies have been around this move to or potential move to an agency model.
Mm-hmm.
you know, direct to consumer sales model. We're seeing Ford doing that to some extent with their Model e, right? Like, they want dealers to have a fixed price, you know, and maintain low levels of inventory. How do these changes, you know, impact the way you think about investments and just in general, how do you see that impacting your business longer term? Like, just in terms of how much the OEMs or even the dealers might be willing to spend on advertising, maybe on the new car side for now, but, yeah, just broadly.
You know, well, a couple things on pricing. Obviously, the most recent period's a little bit wacky because of the limited inventory volume. I can tell you that our platform has helped bring, you know, a level playing field to pricing. I can recall 10 years ago, same Honda Accord in the same market, there would be a $7,000 delta between two sales. Today you would never see that because of platforms like ours that just allows consumers to compare pricing side by side. The disparity in pricing has largely evaporated. I think when you think about OEMs wanting to go DTC, even, you know, Elon with all his rockets is now saying, "We need to advertise and help compare Tesla to all the other EV makes and models that are available." About 50 new ones coming, folks.
I think there's going to be plenty of cross-shopping and opportunities to participate.
Yeah.
I look at, you know, a recent OEM tried to pre-order their car only on their own website. When I looked at the data, we had 4 times as many shoppers for that brand than were appearing on the OEM website. I think if OEMs wanna steal market share, 90% of our audience is undecided on make and model. We are the perfect venue for them to share shift away from one brand to the next.
Mm-hmm.
Got it. Make it easier for the consumer to go through the process. Maybe one last question, you know, before we run out of time. What do you think... I mean, the shares obviously took a bit of a pullback here after, as you mentioned, one or two areas that were misunderstood around the dealer count. You know, in your conversations, you know, what do you think people are the most concerned about, you know, around your company and the sector in general? What do you think investors don't appreciate enough about the business, in general or is misunderstood?
Well, I think the misunderstanding part is clearly the diversification of revenues. I mean, you're not gonna have dealers turn off their websites anytime soon. One of the biggest chunks of our business are embedded software solutions sold into the auto industry. I don't think they understand both the resilience of that revenue and how sticky it is in any economic cycle. I think if there is concern, it's what I started with. People hear Cars.com, and they think of a singular website. They don't see the depth and the totality of the business and the strong operating profile and cash flows that we generate and have proven resilient, you know, through a lot of economic cycles.
Right. Got it. That's helpful and clear. Any final questions from the audience? I think we'll end it there. Thanks again, Alex and Sonia.
Thank you.
Thank you.
Appreciate it. Thank you, Rajat. Appreciate it.