Carsales.com delivers double-digit revenue and earnings growth in all key markets

Melbourne-based Carsales.com (ASX: CAR) has delivered strong results with double-digit revenue and earnings growth in all key markets for the full year ended 30 June.

The company’s achievements included two transformational acquisitions in the US and Latin America, delivering new products and features and generating strong outcomes for shareholders.

Proforma revenue of $942 million was up 18% on the previous corresponding period, while proforma EBITDA (earnings before interest, taxation, depreciation and amortisation) of $496 million was up 19%.

Adjusted revenue of $781 million increased by 53% on the 2022 full year, while adjusted EBITDA of $425 million was up 57%.

Adjusted earnings per share of 78.1 jumped 17% on the same time last year.

Adjusted net profit after tax of $278 million increased by 43% on the previous year, reflecting consolidation of new businesses Trader Interactive and webmotors for the first time.

New acquisitions

In September 2022, Carsales.com exercised a call option to acquire a remaining 51% interest in US business Trader Interactive, via $1.2 billion accelerated and non-renounceable entitlement offer.

Trader Interactive is an integrated platform of branded marketplaces which provides digital marketing solutions and services across the commercial truck, recreational vehicle, powersports and equipment industries.

The acquisition was believed to present an opportunity for Carsales.com to grow in a large non-automotive verticals market which is 16 times the size of the Australian non-automotive market.

In March, Carsales.com announced it would spend $353m to acquire an additional 40% of Brazil’s premier automotive digital marketplace webmotors SA, taking its stake up to 70%.

The equity change is expected to allow webmotors to benefit from Carsales.com’s expertise in digital marketing, customer experience, products and services within the digital motoring space.

Growth opportunity

Carsales.com chief executive officer Cameron McIntyre said results reflect a significant long-term growth opportunity in large and under-penetrated markets.

“It has been a fantastic year and we are incredibly proud of what our teams across the group have accomplished… we have delivered excellent financial results, made good progress executing our long-term growth strategy, delivered new products and capabilities to our customers and completed transformational acquisitions,” he said.

“These acquisitions helped us reach a key milestone for the business with more than 50% of our revenue now coming from sources outside of Australia… we see a substantial growth opportunity in these large addressable markets for many years to come.”

Mr McIntyre said the financials were strong in a potentially-difficult economic climate.

“The excellent financial performance outcome we have delivered in a higher interest rate environment underscores the strength of our global brands and the resilience of our business model,” he said.

“Our growth came from a number of sources including adding more customers, introducing new products to market and increasing the adoption rates of existing premium products… it was pleasing to see double-digit revenue and earnings growth in all our key markets.”