Cars.com returns to profitability in Q1 as cost-cutting measures take hold

Cars.com (NYSE:CARS) delivered a solid start to 2026, highlighted by a return to GAAP profitability and a significant expansion in its commitment to shareholder returns.

The Chicago-based automotive platform reported total revenue of $180.2 million for the first quarter ended March 31, 2026, a 1% increase year-over-year that fell within the company's previous guidance.

The quarter’s bottom line showed a marked improvement over the prior year, with net income reaching $5 million, compared to a net loss of $2 million in the first quarter of 2025.

Adjusted EBITDA for the period was $51 million, representing a margin of 28.3%—outperforming the company's original forecast of 26% to 27%.

The swing to profitability follows a strategic organizational overhaul initiated in early 2026.

The program included an 11% reduction in the company's workforce and a streamlining of vendor relationships.

These actions are expected to generate between $25 million and $30 million in recurring annualized operating cost savings starting in 2027.

In light of its strong cash flow performance—reporting $39.8 million in net cash from operations and $33.5 million in free cash flow—Cars.com has significantly raised its 2026 capital return targets.

The company increased its full-year share repurchase target to $90 million, up from the initial goal of over $60 million.

Through April 30, 2026, the company had already repurchased 3.8 million shares for approximately $33 million, representing roughly 5% of the shares outstanding as of the end of 2025.