TrueCar Inc ((TRUE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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TrueCar Inc’s recent earnings call painted a picture of optimism tempered with caution. The company celebrated significant revenue growth and product advancements, particularly in the OEM segment and digital retail innovations with TrueCar+. However, challenges such as negative adjusted EBITDA and dealer network optimization issues were also acknowledged. Despite these hurdles, TrueCar remains hopeful about its long-term growth prospects, even amidst macroeconomic uncertainties.
Revenue Growth and Reduced Net Loss
TrueCar reported a total revenue increase to $47 million, representing a 12.4% year-over-year growth, marking the highest quarterly revenue since Q3 2021. The company also managed to significantly reduce its net loss from $13.5 million to $7.6 million, showcasing a positive financial trajectory.
OEM Revenue Growth
The earnings call highlighted a robust 19.7% year-over-year growth in OEM revenue, reaching $3.6 million. This growth underscores the strength of TrueCar’s partnerships and its ability to capitalize on opportunities within the OEM segment.
Product Enhancements and Improved Metrics
TrueCar introduced new features such as Actionable Insights and Motivated Buyer Badging, which have led to improved dealer engagement. The company reported the highest prospect close rate since Q2 2021 and a 30% year-over-year improvement in average cost per sale for non-affinity partner units.
Progress in Commercializing TrueCar+
Significant strides were made towards enhancing the end-to-end digital retailing experience with TrueCar+. The company saw a 115% increase in add-to-cart rates and a 40% lift in daily credit application submissions, indicating strong consumer interest and engagement.
Dealer Network Optimization
TrueCar is focused on optimizing its dealer network by adding the right dealers and improving network efficiency. Efforts are being made to enhance partnerships and improve the dealer experience to increase dealer retention.
Adjusted EBITDA Still Negative
Despite the positive revenue growth, TrueCar’s adjusted EBITDA remained negative at $1.2 million, indicating ongoing profitability challenges on an adjusted EBITDA basis.
Challenges in Dealer Engagement
The company faced challenges in dealer engagement, with a decline of 44 franchise dealers in the quarter. This highlights the need for continued efforts to improve dealer network efficiency.
Uncertainty in Revenue Growth
TrueCar acknowledged uncertainties in revenue growth due to macroeconomic factors and the evolving tariff landscape, which could impact future performance.
Forward-Looking Guidance
Looking ahead, TrueCar is optimistic about achieving adjusted EBITDA profitability and positive free cash flow in the second half of 2025. The company continues to focus on enhancing its product offerings and dealer network to drive future growth.
In conclusion, TrueCar’s earnings call reflected a mix of optimism and caution. While the company celebrated significant achievements in revenue growth and product enhancements, challenges remain in achieving profitability and optimizing the dealer network. Nevertheless, TrueCar’s forward-looking guidance suggests a positive outlook for the future, with expectations of achieving profitability and cash flow improvements by the latter half of 2025.