Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 05, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | TrueCar, Inc. | |
Entity Central Index Key | 1,327,318 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 82,375,077 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 125,969 | $ 147,539 |
Accounts receivable, net of allowances of $2,648 and $2,069 at June 30, 2015 and December 31, 2014, respectively (includes related party receivables of $1,988 and $1,865 at June 30, 2015 and December 31, 2014, respectively) | 30,627 | 28,748 |
Prepaid expenses (includes related party prepaid expenses of $1,788 and $906 at June 30, 2015 and December 31, 2014, respectively) | 8,533 | 5,193 |
Other current assets (includes deposits paid to a related party of $570 and $0 at June 30, 2015 and December 31, 2014, respectively) | 3,106 | 3,040 |
Total current assets | 168,235 | 184,520 |
Property and equipment, net | 60,362 | 30,731 |
Goodwill | 53,270 | 53,270 |
Intangible assets, net | 25,881 | 27,949 |
Other assets | 691 | 482 |
Total assets | 308,439 | 296,952 |
Current liabilities | ||
Accounts payable (includes related party payables of $4,190 and $4,954 at June 30, 2015 and December 31, 2014, respectively) | 12,683 | 12,826 |
Accrued employee expenses | 5,820 | 14,245 |
Accrued expenses and other current liabilities (included related party accrued expenses of $190 and $0 at June 30, 2015 and December 31, 2014, respectively) | 14,086 | 11,783 |
Total current liabilities | 32,589 | 38,854 |
Deferred tax liabilities | 2,496 | 2,245 |
Lease financing obligations, net of current portion | 26,535 | 6,093 |
Other liabilities | 572 | 562 |
Total liabilities | $ 62,192 | $ 47,754 |
Commitments and contingencies (Note 7) | ||
Stockholders’ Equity | ||
Preferred stock — $0.0001 par value; 20,000,000 shares authorized at June 30, 2015 and December 31, 2014; no shares issued and outstanding at June 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
Common stock — $0.0001 par value; 1,000,000,000 shares authorized at June 30, 2015 and December 31, 2014; 82,254,303 and 79,811,769 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 8 | 8 |
Additional paid-in capital | 483,590 | 460,179 |
Accumulated deficit | (237,351) | (210,989) |
Total stockholders’ equity | 246,247 | 249,198 |
Total liabilities and stockholders’ equity | $ 308,439 | $ 296,952 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables- current | $ 2,648,000 | $ 2,069,000 |
Related party accounts receivable- current | 1,988,000 | 1,865,000 |
Related party prepaid expenses- current | 1,788,000 | 906,000 |
Related party other current assets - current | 570,000 | 0 |
Related party accounts payable- current | 4,190,000 | 4,954,000 |
Related party accrued expenses and other current liabilities | $ 190,000 | $ 0 |
Preferred stock, par value ( in dollar per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, share issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per shares) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 82,254,303 | 79,811,769 |
Common stock, shares outstanding (in shares) | 82,254,303 | 79,811,769 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 65,291 | $ 50,497 | $ 123,845 | $ 94,427 |
Costs and operating expenses: | ||||
Cost of revenue (exclusive of depreciation and amortization presented separately below; includes related party expenses of $0 for the three months ended June 30, 2015 and 2014, and $0 and $405 for the six months ended June 30, 2015 and 2014, respectively) | 5,927 | 4,137 | 11,718 | 7,858 |
Sales and marketing (includes related party expenses of $6,253 and $4,507 for the three months ended June 30, 2015 and 2014, and $10,171 and $7,843 for the six months ended June 30, 2015 and 2014, respectively) | 40,457 | 33,292 | 72,166 | 61,059 |
Technology and development | 10,979 | 8,513 | 20,739 | 15,843 |
General and administrative | 18,407 | 16,439 | 37,176 | 27,955 |
Depreciation and amortization | 4,119 | 2,972 | 8,044 | 6,086 |
Total costs and operating expenses | 79,889 | 65,353 | 149,843 | 118,801 |
Loss from operations | (14,598) | (14,856) | (25,998) | (24,374) |
Interest income | 24 | 10 | 44 | 27 |
Interest expense | (118) | (131) | (163) | (301) |
Other income | 3 | 10 | 14 | 10 |
Loss before provision for income taxes | (14,689) | (14,967) | (26,103) | (24,638) |
Provision for income taxes | 50 | 67 | 259 | 317 |
Net loss | $ (14,739) | $ (15,034) | $ (26,362) | $ (24,955) |
Net loss per share attributable to common stockholders: | ||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.18) | $ (0.22) | $ (0.32) | $ (0.39) |
Weighted average common shares outstanding, basic and diluted (in shares) | 82,012 | 67,784 | 81,241 | 63,962 |
Other comprehensive loss: | ||||
Comprehensive loss | $ (14,739) | $ (15,034) | $ (26,362) | $ (24,955) |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Cost of revenue | ||||
Costs and expenses with related parties | $ 0 | $ 0 | $ 0 | $ 405 |
Sales and marketing | ||||
Costs and expenses with related parties | $ 6,253 | $ 4,507 | $ 10,171 | $ 7,843 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common stock | APIC | Accumulated Deficit |
Balance at December 31, 2014 at Dec. 31, 2014 | $ 249,198 | $ 8 | $ 460,179 | $ (210,989) |
Balance (in shares) at Dec. 31, 2014 | 79,811,769 | 79,811,769 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | $ (26,362) | (26,362) | ||
Stock-based compensation | 19,295 | 19,295 | ||
Issuance of warrants and change in fair value of unvested warrants relating to marketing agreements | (480) | (480) | ||
Net exercise of warrants to purchase common stock (in shares) | 959,676 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | 4,596 | 4,596 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 1,482,858 | |||
Balance at June 30, 2015 at Jun. 30, 2015 | $ 246,247 | $ 8 | $ 483,590 | $ (237,351) |
Balance (in shares) at Jun. 30, 2015 | 82,254,303 | 82,254,303 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (26,362) | $ (24,955) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 8,020 | 5,875 |
Deferred income taxes | 251 | 317 |
Bad debt expense and other reserves | 172 | 109 |
Stock-based compensation | 18,620 | 11,540 |
Common stock warrant expense | (480) | 4,668 |
Imputed interest on notes receivable | 0 | 10 |
Interest income on notes receivable | 0 | (18) |
Accretion of beneficial conversion feature on convertible notes payable and discount on revolving line of credit | 0 | 236 |
Loss on disposal of fixed assets | 25 | 211 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,051) | (6,183) |
Prepaid expenses | (3,340) | (3,319) |
Other current assets | 351 | 457 |
Other assets | (209) | (62) |
Accounts payable | (274) | 491 |
Accrued employee expenses | (8,192) | (410) |
Accrued expenses and other liabilities | 1,001 | 4,700 |
Other liabilities | 11 | (97) |
Net cash used in operating activities | (12,457) | (6,430) |
Cash flows from investing activities | ||
Purchase of property and equipment | (14,032) | (4,790) |
Purchase of intangible assets | 0 | (350) |
Payments for Advance to Affiliate | 0 | (60) |
Repayment of notes receivable from related parties | 0 | 3,761 |
Net cash used in investing activities | (14,032) | (1,439) |
Cash flows from financing activities | ||
Payments of initial public offering costs | 0 | 69,674 |
Repayments under credit agreement | 0 | (5,000) |
Proceeds from exercise of common stock options | 5,206 | 1,760 |
Proceeds from Warrant Exercises | 0 | 9,461 |
Taxes paid related to net share settlement of equity awards | (610) | 0 |
Proceeds from financing obligation drawdown | 345 | 0 |
Payments related to build-to-suit financing obligations | (22) | 0 |
Net cash provided by financing activities | 4,919 | 75,895 |
Net (decrease) increase in cash and cash equivalents | (21,570) | 68,026 |
Cash and cash equivalents at beginning of period | 147,539 | 43,819 |
Cash and cash equivalents at end of period | 125,969 | 111,845 |
Cash paid during the year for: | ||
Recognition of leased facility asset acquired and lease financing obligation | 22,871 | 0 |
Stock-based compensation capitalized for software development | 675 | 614 |
Capitalized assets included in accounts payable, accrued employee expenses and other accrued expenses | $ (257) | $ 370 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and nature of business | Organization and Nature of Business TrueCar, Inc. (“TrueCar”) is an Internet-based information, technology, and communication services company. Hereinafter, TrueCar, Inc. and its wholly owned subsidiaries TrueCar.com, Inc. and ALG, Inc. are collectively referred to as “TrueCar” or the “Company”; TrueCar.com, Inc. is referred to as “TrueCar.com” and ALG, Inc. is referred to as “ALG”. TrueCar was incorporated in the state of Delaware in February 2005 and began business operations in April 2005. Its principal corporate offices are located in Santa Monica, California. TrueCar has established an intelligent, data driven platform that allows users to obtain market based pricing data on new and used cars and to connect with TrueCar’s network of Certified Dealers. TrueCar’s platform operates on a common technology infrastructure, powered by proprietary data and analytics. Users access TrueCar’s platform through the TrueCar.com website and TrueCar mobile applications or through the car buying websites and mobile applications that TrueCar operates for its affinity group marketing partners (“Auto Buying Programs”). An affinity group is comprised of a network of members or employees that provide discounts to its members. ALG provides forecasts and consulting services regarding determination of the residual value of an automobile at future given points in time, which are used to underwrite automotive loans and leases and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. ALG also obtains automobile purchase data from a variety of sources and uses this data to provide consumers and dealers with highly accurate, geographically specific, real-time pricing information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, some information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2014 and include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented. The condensed consolidated balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC on March 12, 2015. Revision of Prior Period Amounts The Company has identified and corrected immaterial errors in its prior period disclosures of related party cost of revenue and related party sales and marketing expense. The parenthetical information within the consolidated statement of comprehensive loss for the three and six months ended June 30, 2014 and Note 12 presented herein have been revised to reflect the correction of this error. The results of this correction were a decrease to related party sales and marketing expenses of $2.3 million and $3.2 million , respectively, for the three and six months ended June 30, 2014 . Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, the fair value of assets and liabilities assumed in business combinations, fair value of the capitalized facility leases, the recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, contingencies, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engaged valuation specialists to assist with management’s determination of the valuation of its capitalized facility leases, fair values of assets and liabilities assumed in business combinations, and in periods prior to the Company’s initial public offering, valuation of common stock. Segments The Company has one operating segment. The Company’s Chief Operating Decision Makers (“CODM”), the Chief Executive Officer, the President, and the Chief Financial Officer, manage the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The CODM review financial information on a consolidated basis, accompanied by information about transaction revenue and data and other revenue (Note 13). All of the Company’s principal operations, decision-making functions and assets are located in the United States. Recent Accounting Pronouncements Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In April 2015, the FASB issued new guidance related to the presentation of debt issuance costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction for the associated debt liability. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued new guidance related to the customer’s accounting for fees paid in a cloud computing arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements. In May 2014, the FASB issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In July 2015, the FASB voted to defer the effective date to January 1, 2018, with early adoption beginning January 1, 2017. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting standards describe a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: • Level 1 — Quoted prices in active markets for identical assets or liabilities or funds. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value because of the short maturity of these items. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at June 30, 2015 and December 31, 2014 by level within the fair value hierarchy. Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): At June 30, 2015 At December 31, 2014 Level 1 Total Fair Level 1 Total Fair Cash equivalents $ 125,294 $ 125,294 $ 145,284 $ 145,284 Total Assets $ 125,294 $ 125,294 $ 145,284 $ 145,284 |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and Equipment, net Property and equipment consisted of the following at June 30, 2015 and December 31, 2014 (in thousands): June 30, December 31, Computer equipment, software, and internally developed software $ 46,315 $ 37,110 Furniture and fixtures 2,764 2,335 Leasehold improvements 6,007 4,611 Capitalized facility leases 29,743 6,599 84,829 50,655 Less: Accumulated depreciation (24,467 ) (19,924 ) Total property and equipment, net $ 60,362 $ 30,731 The Company is considered the owner, for accounting purposes only, of one of its Santa Monica, California leased office spaces and of its San Francisco, California leased office space (collectively, the “Premises”) as it has taken on certain risks of construction build cost overages above normal tenant improvement allowances. Accordingly, at June 30, 2015 and December 31, 2014 , the Company has capitalized $29.7 million and $6.6 million , respectively, related to the Premises, which represents the estimated fair value of the leased properties and additions for capitalized interest incurred during the construction periods and capitalized costs related to structural improvements to the building. For the three and six months ended June 30, 2015 , the Company capitalized approximately $0.5 million and $1.2 million of interest costs related to the Premises, respectively. Additionally, at June 30, 2015 and December 31, 2014 , the Company recognized a corresponding lease financing obligation of approximately $28.4 million and $6.6 million , respectively. Refer to Note 7 for additional information. Normal leasehold improvements related to the facilities are recorded in leasehold improvements in the table above. Included in the table above are property and equipment of $24.4 million and $8.1 million at June 30, 2015 and December 31, 2014 , respectively, which are capitalizable, but had not yet been placed in service. The $24.4 million balance at June 30, 2015 was comprised primarily of the Santa Monica capitalized facility lease of $22.6 million . The $8.1 million balance at December 31, 2014 was comprised primarily of the San Francisco capitalized facility lease of $6.6 million . Total depreciation and amortization expense of property and equipment was $3.1 million and $1.9 million for the three months ended June 30, 2015 and 2014 , respectively. Total depreciation and amortization expense of property and equipment was $6.0 million and $3.9 million for the six months ended June 30, 2015 and 2014 , respectively. Amortization of internal use capitalized software development costs was $2.2 million and $1.2 million for the three months ended June 30, 2015 and 2014 , respectively. Amortization of internal use capitalized software development costs was $4.1 million and $2.3 million for the six months ended June 30, 2015 and 2014 , respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible assets | Intangible Assets Intangible assets consisted of the following at June 30, 2015 and December 31, 2014 (in thousands): At June 30, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 31,090 $ (12,312 ) $ 18,778 Customer relationships 6,300 (2,872 ) 3,428 Tradenames 4,900 (1,225 ) 3,675 Total $ 42,290 $ (16,409 ) $ 25,881 At December 31, 2014 Gross Carrying Accumulated Net Carrying Acquired technology and domain name $ 31,090 $ (10,788 ) $ 20,302 Customer relationships 6,300 (2,491 ) 3,809 Tradenames 4,900 (1,062 ) 3,838 Total $ 42,290 $ (14,341 ) $ 27,949 Amortization expense for the three months ended June 30, 2015 and 2014 was $1.0 million and $1.1 million , respectively. For the six months ended June 30, 2015 and 2014 , amortization expense was $2.1 million and $2.2 million , respectively. Amortization expense with respect to intangible assets at June 30, 2015 for each of the five years through December 31, 2019 and thereafter is as follows (in thousands): Six months ending December 31, 2015 $ 2,066 2016 4,041 2017 3,862 2018 3,861 2019 3,791 Thereafter 8,260 Total amortization expense $ 25,881 |
Credit Facility
Credit Facility | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Credit facility | Credit Facility The Company had previously entered into a credit facility with a financial institution that provided for advances under a formula-based revolving line of credit and had no amounts outstanding at December 31, 2014. In February 2015, the Company amended its credit facility and entered into a third amended and restated loan and security agreement (“Third Amended Credit Facility”) with the same financial institution, effective as of February 18, 2015, for a $35.0 million secured revolving credit facility that expires on February 18, 2018. The Third Amended Credit Facility provides a $10.0 million subfacility for the issuance of letters of credit and contains an increase option permitting the Company, subject to the lenders consent, to increase the revolving credit facility by up to $15.0 million , to an aggregate maximum of $50 million . The Third Amended Credit Facility bears interest, at the Company’s option, at either (i) the prime rate published by The Wall Street Journal, plus a spread of -0.25% to 0.50% , or (ii) a LIBOR rate determined in accordance with the terms of the Third Amended Credit Facility, plus a spread of 1.75% to 2.50% . In each case, the spread is based on the Company’s adjusted quick ratio, which is a ratio of the Company’s cash and cash equivalents plus net billed accounts receivable to current liabilities plus all borrowings under the credit facility. Interest is due and payable quarterly in arrears for prime rate loans and on the earlier of the last day of each quarter or the end of an interest period, as defined in the Third Amended Credit Facility, for LIBOR rate loans. The Company is also obligated to pay an unused revolving line facility fee of 0.0% to 0.20% per annum based on the Company’s adjusted quick ratio. Third Amended Credit Facility requires the Company to maintain an adjusted quick ratio of at least 1.5 to 1 on the last day of each quarter. If this adjusted quick ratio is not maintained, then the facility requires the Company to maintain, as measured at each quarter end, a maximum consolidated leverage ratio of 3.00 or 2.50 to 1.00 , and a fixed charge coverage ratio of at least 1.25 to 1.00 . Consolidated leverage ratio is a ratio of all funded indebtedness, including all capital lease obligations, plus all letters of credit under the facility to the Company’s Adjusted EBITDA for the trailing twelve months. Fixed charge coverage ratio is the ratio of our Adjusted EBITDA less cash paid for income taxes to our cash paid for interest plus capital expenditures for the trailing twelve months. This credit facility also limits the Company’s ability to pay dividends. At June 30, 2015 , the Company was in compliance with all financial covenants. The Company’s future material domestic subsidiaries are required, upon the lender’s request, to become co-borrowers under the credit facility. The credit facility contains acceleration clauses that accelerate any borrowings in the event of default. The obligations of the Company and its future material domestic subsidiaries are collateralized by substantially all of their respective assets, subject to certain exceptions and limitations. At June 30, 2015 , the Company had no outstanding amounts under the Third Amended Credit Facility and the amount available was $35.0 million . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies Office Lease Commitments At June 30, 2015 , the Company had various non-cancellable leases related to the Company’s office facilities which expire through 2030. The Company recorded rent expense of $1.1 million and $0.7 million for the three months ended June 30, 2015 and 2014 , respectively. For the six months ended June 30, 2015 and 2014 , total rent expense was $2.1 million and $1.3 million , respectively. San Francisco Office Lease In May 2014, the Company entered into a new facility lease in San Francisco (the “San Francisco Office”) with total future minimum lease commitments over 10 years, beginning August 1, 2014 of $7.0 million . In connection with this lease, the Company was required to obtain an irrevocable standby letter of credit in the amount of $0.8 million for the benefit of the landlord. Beginning August 1, 2017 through August 1, 2020, the letter of credit is subject to an annual reduction to as little as $0.2 million . The Company concluded that it was deemed the owner (for accounting purposes only) of the San Francisco Office during the construction period under build-to-suit lease accounting. As the Company assumed control of the construction project in the third quarter of 2014, the Company recorded the fair value of the leased property in “Property and equipment, net” and a corresponding liability in “Lease financing obligations” on the accompanying consolidated balance sheets. The Company recognized increases in the asset as additional building costs were incurred during the construction period. Additionally, imputed interest during the construction period was capitalized. At June 30, 2015 and December 31, 2014 , the Company has capitalized $7.1 million and $6.6 million , respectively, in “Property and equipment, net” and a corresponding current and non-current lease financing obligation of $6.4 million and $6.6 million , respectively. Upon completion of the construction during the first quarter of 2015, the Company had retained the fair value of the lease property and the obligation on its balance sheet as it did not qualify for sales and leaseback accounting due to requirements to maintain collateral in the lease. The Company records the rent payments as a reduction of the lease financing obligation and imputed interest expense; ground rent will be recorded as an operating expense. The fair value of the lease property is being depreciated over the building’s estimated useful life of forty years. At the conclusion of the lease term, the Company will de-recognize both the then carrying values of the asset and financing obligation. Santa Monica Office Lease In July 2014, the Company entered into a new facility lease in Santa Monica (the “Santa Monica Office”) with total future minimum lease commitments over fifteen years, beginning in January 2015, of $36.0 million . In connection with this lease, the Company obtained an irrevocable standby letter of credit in the amount of $3.5 million for the benefit of the landlord. Beginning October 1, 2019 through October 1, 2025, the letter of credit is subject to an annual reduction to as little as $1.2 million . The Company has concluded that it is deemed the owner (for accounting purposes only) of the Santa Monica Office during the construction period under build-to-suit lease accounting. As the Company assumed control of the construction project in the first quarter of 2015, the Company recorded the fair value of the leased property in “Property and equipment, net” and a corresponding liability in “Lease financing obligations” on the accompanying consolidated balance sheets. The Company recognizes increases in the asset as additional building costs are incurred during the construction period. Additionally, imputed interest is capitalized during the construction period. At June 30, 2015 , the Company has capitalized $22.6 million in “Property and equipment, net” and a corresponding current and non-current lease financing obligation of $22.0 million . Upon completion of the construction, which is estimated to be completed in the fourth quarter of 2015, the Company will retain the fair value of the Santa Monica Office lease property and the obligation on its balance sheet as it does not qualify for sales leaseback accounting due to requirements to maintain collateral in the lease. The Company will record the rent payments as a reduction of the lease financing obligation and imputed interest expense; ground rent will be recorded as an operating lease. The fair value of the lease property will be depreciated over the building’s estimated useful life of forty years. At the conclusion of the lease term, the Company will de-recognize both the then carrying values of the asset and financing obligation. Other Lease Amendments and New Lease In February 2015, the Company amended an office lease for approximately 17,000 square feet in Santa Monica, California, to extend the lease term from June 2016 to December 2025. Additionally, beginning in 2016, the Company will lease approximately 21,000 additional square feet in the building through December 2025. The Company has the option to extend the lease term for portions of the space, or the entire space, for an additional five year period. The cumulative base rent over the lease term is expected to be approximately $26.0 million . In connection with the original lease for this space, the Company was required to obtain an irrevocable standby letter of credit, in the amount of $0.5 million for the benefit of its landlord. The current letter of credit expires June 30, 2016. In February 2015, the Company entered into a new five year office lease for approximately 6,000 square feet in Los Angeles, California which commenced in April 2015. The Company has the option to extend the lease for two additional five year periods. The cumulative base rent over the initial lease term is $3.0 million . Also in February 2015, the Company amended an office lease for approximately 5,000 square feet in Santa Monica, California to extend the lease term from May 2016 to March 2020. Additionally, in March 2015 the Company leased approximately 7,000 additional square feet through March 2020. The cumulative base rent over the lease term is expected to be approximately $3.6 million . Legal Proceedings From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings, other than as described below. The Company filed a complaint against Sonic Automotive and Sonic Divisional Operations (collectively “Sonic”) on August 9, 2013 in the U.S. District Court for the Central District of California. The litigation concerns Sonic’s commercial use of the “True Price” mark. The Company is seeking an injunction prohibiting Sonic from using the “True Price” mark, as well as monetary damages incurred by the Company due to Sonic’s unlawful infringement. On July 29, 2015, the Company and Sonic reached an agreement in principle to settle the litigation and entered into a “Term Sheet” reflecting the material terms of settlement. On August 4, 2015, we entered into a settlement agreement with Sonic. Pursuant to the settlement agreement, Sonic will discontinue use of the “True Price” mark and will transfer all of its rights to that mark to the Company, and the lawsuit will be dismissed. On March 9, 2015, the Company was named as a defendant in a lawsuit filed in the U.S. District Court in the Southern District of New York (the "NY Lanham Act Litigation"). The complaint in the NY Lanham Act Litigation, purportedly filed on behalf of numerous automotive dealers who are not participating on the TrueCar platform, alleges that the Company has violated the Lanham Act as well as various state laws prohibiting unfair competition and deceptive acts or practices related to the Company’s advertising and promotional activities. The complaint seeks injunctive relief in addition to over $250 million in damages as a result of the alleged diversion of customers from the plaintiffs’ dealerships to TrueCar Certified Dealers. On April 7, 2015, the Company filed an answer to the complaint. Thereafter, the plaintiffs amended their complaint, and on July 13, 2015, the Company filed a motion to dismiss the amended complaint. The Company believes that the complaint is without merit and it intends to vigorously defend itself in this matter. Based on the preliminary nature of the proceedings in this case, the outcome of this legal proceeding, including the anticipated legal defense costs, remains uncertain; accordingly, the Company cannot predict the ultimate outcome, or reasonably estimate the probability of or the range of loss, if any, for this action. As a result, no loss accrual has been recorded in the Company’s consolidated financial statements related to this matter. If this matter is not resolved in the Company’s favor, losses arising from the results of litigation or settlements, as well as ongoing defense costs, could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. On May 20, 2015, the Company was named as a defendant in a lawsuit filed by the California New Car Dealers Association in the Superior Court for the County of Los Angeles (the "CNCDA Litigation"). The complaint in the CNCDA Litigation seeks declaratory and injunctive relief based on allegations that the Company is operating in the State of California as an unlicensed automobile dealer and autobroker. On July 20, 2015, the Company filed a "demurrer" to the complaint, which is a pleading that requests the court to dismiss the case. The Company believes that the complaint is without merit, and it intends to vigorously defend itself in this matter. Based on the preliminary nature of the proceedings in this case, the outcome of this legal proceeding, including the anticipated legal defense costs, remains uncertain; accordingly, the Company cannot predict the ultimate outcome or reasonably estimate the probability of or the range of loss, if any, for this action. As a result, no loss accrual has been recorded in the Company’s consolidated financial statements related to this matter. If this matter is not resolved in the Company’s favor, losses arising from the results of litigation or settlements, as well as ongoing defense costs, could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. On May 27, 2015, a purported securities class action complaint was filed in the U.S. District Court for the Central District of California (the “Securities Litigation”) by Satyabrata Mahapatra naming the Company and two other individuals not affiliated with the Company as defendants. On June 15, 2015, the plaintiff filed a Notice of Errata and Correction purporting to name Scott Painter and Michael Guthrie as individual defendants in lieu of the two individual defendants named in the complaint. The complaint in the Securities Litigation seeks an award of unspecified damages, interest and attorneys' fees based on allegations that the defendants made false and/or misleading statements, and failed to disclose material adverse facts about the Company’s business, operations, prospects and performance. Specifically, the complaint alleges that during the putative class period, the defendants made false and/or misleading statements and/or failed to disclose that: (i) TrueCar’s business practices violated unfair competition and deceptive trade practice laws (i.e., the issues raised in the NY Lanham Act Litigation); (ii) TrueCar acts as a dealer and broker in car sales transactions without proper licensing, in violation of various states’ laws that govern car sales (i.e., the issues raised in the CNCDA Litigation); and (iii) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times. The complaint asserts a putative class period stemming from May 16, 2014 to May 20, 2015. The Company believes that the complaint is without merit and it intends to vigorously defend itself in this matter. Based on the preliminary nature of the proceedings in this case, the outcome of this legal proceeding, including the anticipated legal defense costs, remains uncertain; accordingly, the Company cannot predict the ultimate outcome or reasonably estimate the probability of or the range of loss, if any, for this action. As a result, no loss accrual has been recorded in the Company’s consolidated financial statements related to this matter. If this matter is not resolved in the Company’s favor, losses arising from the results of litigation or settlements, as well as ongoing defense costs, could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. On July 30, 2015, the Company was named as a defendant in a lawsuit filed in the Superior Court for the County of Los Angeles by numerous automotive dealers who are participating on the TrueCar platform (the "Participating Dealer Litigation"). The complaint in the Participating Dealer Litigation seeks declaratory and injunctive relief based on allegations that the Company is engaging in unfairly competitive practices and is operating as an unlicensed automobile dealer and autobroker in contravention of various state laws. The Company believes that the complaint is without merit and it intends to vigorously defend itself in this matter. Based on the preliminary nature of the proceedings in this case, the outcome of this legal proceeding, including the anticipated legal defense costs, remains uncertain; accordingly, the Company cannot predict the ultimate outcome or reasonably estimate the probability of or the range of loss, if any, for this action. As a result, no loss accrual has been recorded in the Company’s consolidated financial statements related to this matter. If this matter is not resolved in the Company’s favor, losses arising from the results of litigation or settlements, as well as ongoing defense costs, could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Employment Contracts The Company has entered into employment contracts with certain executives of the Company. Employment under these contracts is at-will employment. However, under the provisions of the contracts, the Company would incur severance obligations up to twelve months of the executive’s annual base salary for certain events such as involuntary terminations. Indemnifications In the ordinary course of business, the Company may provide indemnities of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss provisions. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. To date, there has not been a material claim paid by the Company, nor has the Company been sued in connection with these indemnification arrangements. At June 30, 2015 and December 31, 2014 , the Company has not accrued a liability for these guarantees, because the likelihood of incurring a payment obligation, if any, in connection with these guarantees is not probable or reasonably estimable. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' equity | Stockholders’ Equity Warrants to Purchase Common Stock Warrants Issued to USAA Beginning in March 2009, the Company entered into various agreements with USAA, an affinity partner and significant stockholder of the Company, which agreements provided for the issuance of warrants to purchase shares of the Company’s common stock if minimum performance milestones, based on the level of vehicle sales, were achieved. The Company issues warrants to USAA in exchange for marketing services performed by USAA under the Company’s affinity group marketing program. The purpose of the marketing services performed by USAA is to create awareness and to acquire traffic for, and drive users to, the Company’s auto buying platforms. Warrants issued to USAA are recorded as sales and marketing expenses in the Company’s consolidated statements of comprehensive loss. In May 2014, the Company and USAA agreed to an extension of the affinity group marketing agreement. As part of the agreement, the Company issued to USAA a warrant to purchase 1,458,979 shares of the Company’s common stock, which will be exercisable in two tranches. The first tranche of 392,313 shares has an exercise price of $7.95 per share and the second tranche of 1,066,666 shares has an exercise price of $15.00 per share. The warrant becomes exercisable based on the achievement of performance milestones based on the level of vehicle sales of USAA members through the Company’s auto buying platforms. The warrant terminates on the earlier of the eighth anniversary of the date of issuance, the first anniversary of the termination of the USAA car-buying program or the date on which the Company no longer operates the USAA car-buying program. In addition, the agreement provides for the Company to spend marketing program funds with the actual level of marketing spend to be mutually agreed upon by USAA and the Company, subject to limits based on the number of actual vehicle sales generated through the affinity marketing program (Note 12). For the three months ended June 30, 2015 and 2014 , the Company recognized expense of $0.1 million and $1.6 million related to warrants to purchase 17,332 shares and 201,056 shares of common stock that have been earned and are vested, respectively. For the six months ended June 30, 2015 and 2014 , the Company recognized expense of $0.1 million and $1.9 million related to warrants to purchase 19,998 shares and 340,558 shares of common stock that have been earned and are vested, respectively. Warrants Issued to Third Party Marketing Firm On February 25, 2011, the Company entered into a media and marketing services agreement with a direct marketing firm. Under the arrangement, the marketing firm will provide media purchasing, production, advertising, and marketing services in connection with the advertising and marketing of the Company’s services. In addition to cash consideration, the Company agreed to issue a warrant to the marketing firm to purchase up to 1,433,333 shares of the Company’s common stock at a price of $6.02 per share. All shares under the warrant agreement were earned and outstanding at December 31, 2014 . In March 2015, warrants to purchase 1,433,333 shares of the Company’s common stock were exercised through a net settlement election. The Company issued 959,676 shares of its common stock to the third party marketing firm. For the three months ended June 30, 2014 , the Company recognized $0.4 million of expense related to 104,992 warrants earned. For the six months ended June 30, 2014 , the Company recognized $2.3 million of expense related to 343,665 warrants earned. The expense has been reflected as sales and marketing expense on the accompanying consolidated statements of comprehensive loss. Warrants Issued to Vulcan In November 2013, in a private placement to Vulcan Capital Growth Equity LLC (“Vulcan”), the Company issued a warrant to purchase 666,666 shares of its common stock at an exercise price of $15.00 per share. The warrant is immediately exercisable and expires in November 2015. The warrant remains outstanding as of June 30, 2015 . Warrants Issued to Service Provider In May 2014, the Company entered into a consulting agreement with an individual to provide marketing services to the Company. The Company agreed to issue a warrant to the individual to purchase up to 333,333 shares of the Company’s common stock at a price of $12.81 per share. All shares under the warrant agreement will become exercisable in accordance with the vesting schedule over a four year period. The warrant expires five years from the issuance date or, if earlier, twelve months following the termination of the consulting agreement. For the three and six months ended June 30, 2015 , the Company recorded a reduction in warrant expense of $0.4 million and $0.6 million , respectively, due to the remeasurement to fair value of the unvested warrants and warrants earned during the period, which was primarily related to the reduction in the Company’s stock price. The reduction in expense has been reflected as a reduction to sales and marketing expense on the accompanying consolidated statements of comprehensive loss. For the three and six months ended June 30, 2014 , the Company recognized expense of $0.4 million and $0.4 million , respectively. At June 30, 2015 and December 31, 2014 , warrants earned under this agreement totaled 114,583 shares and 33,333 shares, respectively. |
Stock-based Awards
Stock-based Awards | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock based awards | Stock-based Awards Stock Options A summary of the Company’s stock option activity for the six months ended June 30, 2015 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Outstanding at December 31, 2014 25,589,876 $ 9.79 7.55 Granted 1,538,184 16.17 Exercised (1,268,087 ) 4.11 Canceled/forfeited (509,987 ) 12.14 Outstanding at June 30, 2015 25,349,986 $ 10.41 7.26 At June 30, 2015 , total remaining stock-based compensation expense for unvested stock option awards was $57.4 million , which is expected to be recognized over a weighted-average period of 2.8 years . For the three months ended June 30, 2015 and 2014 , the Company recorded stock-based compensation expense for stock option awards of $7.3 million and $7.1 million , respectively. For the six months ended June 30, 2015 and 2014 , the Company recorded stock-based compensation expense for stock option awards of $14.3 million and $11.2 million , respectively. Restricted Stock Units Activity in connection with restricted stock units is as follows for the six months ended June 30, 2015 : Number of Shares Weighted- Average Grant Date Fair Value Non-vested — December 31, 2014 827,997 $ 12.36 Granted 825,884 15.92 Vested (256,025 ) 15.17 Canceled/forfeited (126,552 ) 11.44 Non-vested — June 30, 2015 1,271,304 $ 14.20 At June 30, 2015 , total remaining stock-based compensation expense for non-vested restricted stock units is $14.5 million , which is expected to be recognized over a weighted-average period of 3.5 years . The Company recorded $1.8 million and $0.3 million in stock-based compensation expense for restricted stock units for the three months ended June 30, 2015 and 2014 , respectively. The Company recorded $4.3 million and $0.3 million in stock-based compensation expense for restricted stock units for the six months ended June 30, 2015 and 2014 , respectively. Stock-based Compensation Cost The Company recorded stock-based compensation cost relating to stock options and restricted stock awards in the following categories on the accompanying consolidated statements of comprehensive loss (in thousands): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Cost of revenue $ 187 $ 113 $ 364 $ 163 Sales and marketing 1,218 1,307 2,608 2,344 Technology and development 1,227 1,156 2,153 1,865 General and administrative 6,535 4,820 13,495 7,168 Total stock-based compensation expense 9,167 7,396 18,620 11,540 Amount capitalized to internal software use 344 321 675 614 Total stock-based compensation cost $ 9,511 $ 7,717 $ 19,295 $ 12,154 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss. The Company’s annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, tax amortization of goodwill and changes in the Company’s valuation allowance. The Company recorded $0.1 million income tax expense for the three months ended June 30, 2015 and 2014 . The Company recorded $0.3 million income tax expense for the six months ended June 30, 2015 and 2014 . There were no material changes to the Company’s unrecognized tax benefits in the three and six months ended June 30, 2015 , and the Company does not expect to have any significant changes to unrecognized tax benefits through the end of the fiscal year. Due to the presence of net operating loss carryforwards, all income tax years remain open for examination by the Internal Revenue Service (“IRS") and various state taxing authorities. During the second quarter of 2015, the Company settled an IRS tax examination for the 2011 and 2012 tax years. Given the Company’s net operating losses, the IRS tax examination adjustments did not result in a tax assessment. The Company believes its income tax accruals at June 30, 2015 are reasonable. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net loss per share | Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Net loss $ (14,739 ) $ (15,034 ) $ (26,362 ) $ (24,955 ) Weighted-average common shares outstanding 82,012 67,784 81,241 63,962 Net loss per share - basic and diluted $ (0.18 ) $ (0.22 ) $ (0.32 ) $ (0.39 ) The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share at June 30, 2015 and 2014 (in thousands): June 30, 2015 2014 Options to purchase common stock 25,350 26,665 Common stock warrants 2,492 3,981 Non-vested restricted stock awards 1,271 741 Total shares excluded from net loss per share 29,113 31,387 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related Party Transactions Transactions with Stockholders In October 2011, as part of the acquisition of ALG, the Company entered into various data licensing and transition services agreements with Dealertrack, a former significant stockholder of the Company. In the first quarter of 2014, Dealertrack divested its holdings in the Company and was no longer a related party. Costs under these agreements included in cost of revenue for the six months ended June 30, 2014 were $0.4 million . Service Provider An executive officer of the Company is an officer of a firm that provides marketing services to the Company. For the three months ended June 30, 2015 and 2014 , the Company recorded sales and marketing expense of $2.8 million and $1.3 million , respectively, related to this marketing firm. For the six months ended June 30, 2015 and 2014 , the Company recorded sales and marketing expenses of $4.1 million and $1.6 million , respectively. At June 30, 2015 and December 31, 2014 , the Company recorded $1.8 million and $0.9 million in prepaid expenses related to this marketing firm. At June 30, 2015 , the Company recorded $0.6 million in other current assets for deposits paid to this marketing firm. The Company had no other current assets related to this marketing firm at December 31, 2014 . The Company had amounts due to this marketing firm of $0.2 million at June 30, 2015 . No amounts were due to this marketing firm at December 31, 2014 . Additionally, for the three and six months ended June 30, 2015 , the Company capitalized as property and equipment amounts paid to this marketing firm of $0.6 million . No amounts paid to this marketing firm were capitalized for the three and six months ended June 30, 2014 . Transactions with USAA A former member of the Company’s board of directors is the current Head of Corporate Development at USAA, the largest stockholder and most significant affinity marketing partner of the Company. The Company has entered into arrangements with USAA to operate its Auto Buying Program. The Company has amounts due from USAA at June 30, 2015 and December 31, 2014 of $2.0 million and $1.9 million , respectively. In addition, the Company has amounts due to USAA at June 30, 2015 and December 31, 2014 of $4.2 million and $4.7 million , respectively. The Company recorded sales and marketing expense of $3.5 million and $3.2 million for the three months ended June 30, 2015 and 2014 , respectively, related to service arrangements entered into with USAA, including non-cash expense associated with warrants to purchase shares of common stock (Note 8). The Company recorded sales and marketing expenses of $6.1 million and $6.2 million for the six months ended June 30, 2015 and 2014 , respectively. |
Revenue Information
Revenue Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Revenue information | Revenue Information The CODM reviews separate revenue information for its Transaction and Forecasts, Consulting and Other service offerings. All other financial information is reviewed by the CODM on a consolidated basis. Data and other revenue as disclosed in prior periods is now referred to as "forecasts, consulting and other revenue" as the Company believes this description is more accurate and reflective of the actual service offerings that the Company provides. The following table presents the Company’s revenue categories during the periods presented (in thousands): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Transaction revenue $ 60,408 $ 46,127 $ 114,676 $ 86,119 Forecasts, consulting and other revenue 4,883 4,370 9,169 8,308 Total revenues $ 65,291 $ 50,497 $ 123,845 $ 94,427 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent Events On August 4, 2015, the Company and Sonic entered into a settlement agreement. Pursuant to the settlement agreement, Sonic will discontinue use of the “True Price” mark and will transfer all of its rights to that mark to the Company, and the lawsuit will be dismissed. On July 30, 2015, the Company was named as a defendant in a lawsuit filed in the Superior Court for the County of Los Angeles by numerous automotive dealers who are participating on the TrueCar platform. Refer to Note 7 herein for further details of this lawsuit. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, some information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2014 and include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented. The condensed consolidated balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC on March 12, 2015. |
Revision of prior period amounts | Revision of Prior Period Amounts The Company has identified and corrected immaterial errors in its prior period disclosures of related party cost of revenue and related party sales and marketing expense. The parenthetical information within the consolidated statement of comprehensive loss for the three and six months ended June 30, 2014 and Note 12 presented herein have been revised to reflect the correction of this error. The results of this correction were a decrease to related party sales and marketing expenses of $2.3 million and $3.2 million , respectively, for the three and six months ended June 30, 2014 . |
Use of estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, the fair value of assets and liabilities assumed in business combinations, fair value of the capitalized facility leases, the recoverability of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, contingencies, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engaged valuation specialists to assist with management’s determination of the valuation of its capitalized facility leases, fair values of assets and liabilities assumed in business combinations, and in periods prior to the Company’s initial public offering, valuation of common stock. |
Segments | Segments The Company has one operating segment. The Company’s Chief Operating Decision Makers (“CODM”), the Chief Executive Officer, the President, and the Chief Financial Officer, manage the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The CODM review financial information on a consolidated basis, accompanied by information about transaction revenue and data and other revenue (Note 13). All of the Company’s principal operations, decision-making functions and assets are located in the United States. |
Recent accounting pronouncements | Recent Accounting Pronouncements Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In April 2015, the FASB issued new guidance related to the presentation of debt issuance costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction for the associated debt liability. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued new guidance related to the customer’s accounting for fees paid in a cloud computing arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements. In May 2014, the FASB issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In July 2015, the FASB voted to defer the effective date to January 1, 2018, with early adoption beginning January 1, 2017. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of financial assets measured at fair value on a recurring basis | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at June 30, 2015 and December 31, 2014 by level within the fair value hierarchy. Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): At June 30, 2015 At December 31, 2014 Level 1 Total Fair Level 1 Total Fair Cash equivalents $ 125,294 $ 125,294 $ 145,284 $ 145,284 Total Assets $ 125,294 $ 125,294 $ 145,284 $ 145,284 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following at June 30, 2015 and December 31, 2014 (in thousands): June 30, December 31, Computer equipment, software, and internally developed software $ 46,315 $ 37,110 Furniture and fixtures 2,764 2,335 Leasehold improvements 6,007 4,611 Capitalized facility leases 29,743 6,599 84,829 50,655 Less: Accumulated depreciation (24,467 ) (19,924 ) Total property and equipment, net $ 60,362 $ 30,731 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following at June 30, 2015 and December 31, 2014 (in thousands): At June 30, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 31,090 $ (12,312 ) $ 18,778 Customer relationships 6,300 (2,872 ) 3,428 Tradenames 4,900 (1,225 ) 3,675 Total $ 42,290 $ (16,409 ) $ 25,881 At December 31, 2014 Gross Carrying Accumulated Net Carrying Acquired technology and domain name $ 31,090 $ (10,788 ) $ 20,302 Customer relationships 6,300 (2,491 ) 3,809 Tradenames 4,900 (1,062 ) 3,838 Total $ 42,290 $ (14,341 ) $ 27,949 |
Amortization expense with respect to intangible assets | Amortization expense with respect to intangible assets at June 30, 2015 for each of the five years through December 31, 2019 and thereafter is as follows (in thousands): Six months ending December 31, 2015 $ 2,066 2016 4,041 2017 3,862 2018 3,861 2019 3,791 Thereafter 8,260 Total amortization expense $ 25,881 |
Stock-based Awards (Tables)
Stock-based Awards (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | A summary of the Company’s stock option activity for the six months ended June 30, 2015 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Outstanding at December 31, 2014 25,589,876 $ 9.79 7.55 Granted 1,538,184 16.17 Exercised (1,268,087 ) 4.11 Canceled/forfeited (509,987 ) 12.14 Outstanding at June 30, 2015 25,349,986 $ 10.41 7.26 |
Schedule of activity in connection with restricted stock | Activity in connection with restricted stock units is as follows for the six months ended June 30, 2015 : Number of Shares Weighted- Average Grant Date Fair Value Non-vested — December 31, 2014 827,997 $ 12.36 Granted 825,884 15.92 Vested (256,025 ) 15.17 Canceled/forfeited (126,552 ) 11.44 Non-vested — June 30, 2015 1,271,304 $ 14.20 |
Schedule of stock-based compensation cost relating to stock options and restricted stock awards | The Company recorded stock-based compensation cost relating to stock options and restricted stock awards in the following categories on the accompanying consolidated statements of comprehensive loss (in thousands): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Cost of revenue $ 187 $ 113 $ 364 $ 163 Sales and marketing 1,218 1,307 2,608 2,344 Technology and development 1,227 1,156 2,153 1,865 General and administrative 6,535 4,820 13,495 7,168 Total stock-based compensation expense 9,167 7,396 18,620 11,540 Amount capitalized to internal software use 344 321 675 614 Total stock-based compensation cost $ 9,511 $ 7,717 $ 19,295 $ 12,154 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Net loss $ (14,739 ) $ (15,034 ) $ (26,362 ) $ (24,955 ) Weighted-average common shares outstanding 82,012 67,784 81,241 63,962 Net loss per share - basic and diluted $ (0.18 ) $ (0.22 ) $ (0.32 ) $ (0.39 ) |
Anti-dilutive shares excluded from the calculation of diluted net loss per share | The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share at June 30, 2015 and 2014 (in thousands): June 30, 2015 2014 Options to purchase common stock 25,350 26,665 Common stock warrants 2,492 3,981 Non-vested restricted stock awards 1,271 741 Total shares excluded from net loss per share 29,113 31,387 |
Revenue Information (Tables)
Revenue Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenue categories | The following table presents the Company’s revenue categories during the periods presented (in thousands): Three Months Ended Six Months Ended June 30, 2015 2014 2015 2014 Transaction revenue $ 60,408 $ 46,127 $ 114,676 $ 86,119 Forecasts, consulting and other revenue 4,883 4,370 9,169 8,308 Total revenues $ 65,291 $ 50,497 $ 123,845 $ 94,427 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Segment | Jun. 30, 2014USD ($) | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||
Number of operating segments | Segment | 1 | |||
Selling and marketing expense | ||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||
Related party sales and marketing expense | $ 6,253 | $ 4,507 | $ 10,171 | $ 7,843 |
Restatement adjustment | Related party sales and marketing expenses | Selling and marketing expense | ||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||||
Related party sales and marketing expense | $ 2,300 | $ 3,200 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Level 1 | ||
Fair Value Measurements | ||
Cash equivalents | $ 125,294 | $ 145,284 |
Total assets | 125,294 | 145,284 |
Total fair value | ||
Fair Value Measurements | ||
Cash equivalents | 125,294 | 145,284 |
Total assets | $ 125,294 | $ 145,284 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Property and Equipment, net | |||||
Property and equipment, gross | $ 84,829 | $ 84,829 | $ 50,655 | ||
Less: Accumulated depreciation | (24,467) | (24,467) | (19,924) | ||
Total property and equipment, net | 60,362 | 60,362 | 30,731 | ||
Property and equipment capitalized but not placed in service | 24,400 | 24,400 | 8,100 | ||
Total depreciation and amortization expense | 4,119 | $ 2,972 | 8,044 | $ 6,086 | |
Property and Equipment | |||||
Property and Equipment, net | |||||
Total depreciation and amortization expense | 3,100 | 1,900 | 6,000 | 3,900 | |
Computer equipment, software, and internally developed software | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 46,315 | 46,315 | 37,110 | ||
Furniture and fixtures | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 2,764 | 2,764 | 2,335 | ||
Leasehold Improvements | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 6,007 | 6,007 | 4,611 | ||
Capitalized facility leases | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 29,743 | 29,743 | 6,599 | ||
Interest costs related to premises | 500 | 1,200 | |||
Lease financing obligation | 28,400 | 28,400 | 6,600 | ||
Internally developed software | |||||
Property and Equipment, net | |||||
Amortization | 2,200 | $ 1,200 | 4,100 | $ 2,300 | |
Santa Monica capitalized facility lease | |||||
Property and Equipment, net | |||||
Property and equipment capitalized but not placed in service | $ 22,600 | $ 22,600 | |||
San Francisco capitalized facility lease | |||||
Property and Equipment, net | |||||
Property and equipment capitalized but not placed in service | $ 6,600 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Intangible assets | |||||
Gross carrying value | $ 42,290 | $ 42,290 | $ 42,290 | ||
Accumulated amortization | (16,409) | (16,409) | (14,341) | ||
Net carrying value | 25,881 | 25,881 | 27,949 | ||
Amortization expense | 1,000 | $ 1,100 | 2,100 | $ 2,200 | |
Acquired technology and domain name | |||||
Intangible assets | |||||
Gross carrying value | 31,090 | 31,090 | 31,090 | ||
Accumulated amortization | (12,312) | (12,312) | (10,788) | ||
Net carrying value | 18,778 | 18,778 | 20,302 | ||
Customer relationships | |||||
Intangible assets | |||||
Gross carrying value | 6,300 | 6,300 | 6,300 | ||
Accumulated amortization | (2,872) | (2,872) | (2,491) | ||
Net carrying value | 3,428 | 3,428 | 3,809 | ||
Trade names | |||||
Intangible assets | |||||
Gross carrying value | 4,900 | 4,900 | 4,900 | ||
Accumulated amortization | (1,225) | (1,225) | (1,062) | ||
Net carrying value | $ 3,675 | $ 3,675 | $ 3,838 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Amortization expense for each of the five years through December 31, 2019 and thereafter | ||
Six months ending December 31, 2015 | $ 2,066 | |
2,016 | 4,041 | |
2,017 | 3,862 | |
2,018 | 3,861 | |
2,019 | 3,791 | |
Thereafter | 8,260 | |
Net carrying value | $ 25,881 | $ 27,949 |
Credit Facility (Details)
Credit Facility (Details) | 1 Months Ended | |||
Feb. 28, 2015 | Jun. 30, 2015USD ($) | Feb. 18, 2015USD ($) | Dec. 31, 2014USD ($) | |
Credit facility | ||||
Amount outstanding | $ 0 | $ 0 | ||
Remaining borrowing capacity | $ 35,000,000 | |||
Revolving line of credit | ||||
Credit facility | ||||
Maximum borrowing capacity | $ 35,000,000 | |||
Increase in maximum borrowing capacity, subject to lender's consent | 15,000,000 | |||
Maximum borrowing capacity, subject to lender's consent | 50,000,000 | |||
Quick ratio minimum | 1.5 | |||
Maximum consolidated leverage ratio, upper end of range | 3 | |||
Maximum consolidated leverage ratio, lower end of range | 2.50 | |||
Minimum fixed charge coverage ratio | 1.25 | |||
Revolving line of credit | Minimum | ||||
Credit facility | ||||
Unused facility fee (as a percent) | 0.00% | |||
Revolving line of credit | Maximum | ||||
Credit facility | ||||
Unused facility fee (as a percent) | 0.20% | |||
Revolving line of credit | Prime rate | Minimum | ||||
Credit facility | ||||
Variable rate basis spread (as a percent) | (0.25%) | |||
Revolving line of credit | Prime rate | Maximum | ||||
Credit facility | ||||
Variable rate basis spread (as a percent) | 0.50% | |||
Revolving line of credit | LIBOR | Minimum | ||||
Credit facility | ||||
Variable rate basis spread (as a percent) | 1.75% | |||
Revolving line of credit | LIBOR | Maximum | ||||
Credit facility | ||||
Variable rate basis spread (as a percent) | 2.50% | |||
Letters of credit | ||||
Credit facility | ||||
Maximum borrowing capacity | $ 10,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Feb. 28, 2015USD ($)ft²Period | Jul. 31, 2014USD ($) | May. 31, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jan. 01, 2016USD ($)ft² | Mar. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | |
Rent expense and other operating lease disclosures | ||||||||||
Rent expense | $ 1,100,000 | $ 700,000 | $ 2,100,000 | $ 1,300,000 | ||||||
Property and equipment, gross | 84,829,000 | 84,829,000 | $ 50,655,000 | |||||||
Capitalized facility leases | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Property and equipment, gross | 29,743,000 | 29,743,000 | 6,599,000 | |||||||
Lease financing obligation | 28,400,000 | 28,400,000 | 6,600,000 | |||||||
San Francisco office | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Lease term | 10 years | |||||||||
Irrevocable stand-by letter of credit | $ 800,000 | |||||||||
Lease financing obligation | 6,400,000 | 6,400,000 | 6,600,000 | |||||||
San Francisco office | Debt redemption period August 2017 to August 2020 | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Letter of credit that is subject to annual reduction | 200,000 | |||||||||
San Francisco office | Office lease obligations | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Total minimum lease payments | $ 7,000,000 | |||||||||
San Francisco office | Capitalized facility leases | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Property and equipment, gross | 7,100,000 | 7,100,000 | $ 6,600,000 | |||||||
Lease property, useful life | 40 years | |||||||||
Santa Monica office | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Lease term | 15 years | |||||||||
Irrevocable stand-by letter of credit | $ 3,500,000 | |||||||||
Lease financing obligation | 22,000,000 | 22,000,000 | ||||||||
Santa Monica office | October, 2019 to October, 2025 | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Letter of credit that is subject to annual reduction | 1,200,000 | |||||||||
Santa Monica office | Office lease obligations | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Total minimum lease payments | $ 36,000,000 | |||||||||
Santa Monica office | Capitalized facility leases | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Property and equipment, gross | $ 22,600,000 | $ 22,600,000 | ||||||||
Lease property, useful life | 40 years | |||||||||
Office lease one, Santa Monica, California | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Irrevocable stand-by letter of credit | $ 500,000 | |||||||||
Area of office building leased | ft² | 17 | |||||||||
Optional lease extension term | 5 years | |||||||||
Office lease one, Santa Monica, California | Scenario forecast | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Additional area leased | ft² | 21 | |||||||||
Office lease one, Santa Monica, California | Office lease obligations | Scenario forecast | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Total minimum lease payments | $ 26,000,000 | |||||||||
Office lease, Los Angeles | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Lease term | 5 years | |||||||||
Area of office building leased | ft² | 6 | |||||||||
Number of lease extension periods | Period | 2 | |||||||||
Optional lease extension term | 5 years | |||||||||
Office lease, Los Angeles | Office lease obligations | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Total minimum lease payments | $ 3,000,000 | |||||||||
Office lease two, Santa Monica, California | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Area of office building leased | ft² | 5 | |||||||||
Additional area leased | ft² | 7 | |||||||||
Office lease two, Santa Monica, California | Office lease obligations | ||||||||||
Rent expense and other operating lease disclosures | ||||||||||
Total minimum lease payments | $ 3,600,000 |
Commitments and Contingencies36
Commitments and Contingencies (Details 2) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | |
Lawsuit alleging violations of lanham act and other state laws | |||
Legal Proceedings | |||
Loss contingency | $ 0 | ||
Lawsuit alleging violations of lanham act and other state laws | Minimum | |||
Legal Proceedings | |||
Damages sought | $ 250,000,000 | ||
CNCDA Litigation [Member] | |||
Legal Proceedings | |||
Loss contingency | $ 0 | ||
Securities Litigation [Member] | |||
Legal Proceedings | |||
Loss contingency | 0 | ||
Participating Dealer Litigation [Member] | |||
Legal Proceedings | |||
Loss contingency | $ 0 |
Commitments and Contingencies37
Commitments and Contingencies (Details 3) | 6 Months Ended |
Jun. 30, 2015 | |
Employment contracts | |
Commitment and contingencies | |
Maximum term of executive's annual base salary to determine severance obligations | 12 months |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | Feb. 25, 2011$ / sharesshares | Mar. 31, 2015shares | May. 31, 2014Tranche$ / sharesshares | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($)shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($)shares | Dec. 31, 2014shares | Nov. 30, 2013$ / sharesshares |
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Warrant expense (reduction) | $ | $ (480) | $ 4,668 | |||||||
Third party marketing firm | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Shares issued for exercise of warrants (in shares) | 959,676 | ||||||||
Common Stock purchase warrants | Vulcan | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Shares that may be purchased under warrant (in shares) | 666,666 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 15 | ||||||||
Common Stock purchase warrants | Third party marketing firm | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 6.02 | ||||||||
Warrant expense (reduction) | $ | $ 400 | $ 2,300 | |||||||
Number of shares under warrants that have been earned (in shares) | 104,992 | 343,665 | |||||||
Number of shares exercised through a net settlement (in shares) | 1,433,333 | ||||||||
Common Stock purchase warrants | Service provider | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 12.81 | ||||||||
Warrant expense (reduction) | $ | $ (400) | $ 400 | $ (600) | $ 400 | |||||
Number of shares under warrants that have been earned (in shares) | 114,583 | 33,333 | |||||||
Warrant vesting period | 4 years | ||||||||
Period of warrant | 5 years | ||||||||
Period of warrant from termination date of agreement | 12 months | ||||||||
Common Stock purchase warrants | USAA | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Warrant expense (reduction) | $ | $ 100 | $ 1,600 | $ 100 | $ 1,900 | |||||
Number of shares under warrants that have been earned (in shares) | 17,332 | 201,056 | 19,998 | 340,558 | |||||
Common Stock purchase warrants | USAA | Affinity group marketing agreement | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Shares that may be purchased under warrant (in shares) | 1,458,979 | ||||||||
Number of warrant tranches | Tranche | 2 | ||||||||
Common Stock purchase warrants | USAA | Affinity group marketing agreement | Tranche one | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Shares that may be purchased under warrant (in shares) | 392,313 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 7.95 | ||||||||
Common Stock purchase warrants | USAA | Affinity group marketing agreement | Tranche two | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Shares that may be purchased under warrant (in shares) | 1,066,666 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 15 | ||||||||
Maximum | Common Stock purchase warrants | Third party marketing firm | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Maximum number of shares under warrant agreement (in shares) | 1,433,333 | ||||||||
Maximum | Common Stock purchase warrants | Service provider | |||||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||||
Maximum number of shares under warrant agreement (in shares) | 333,333 |
Stock-based Awards (Details)
Stock-based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Additional disclosure | |||||
Stock-based compensation expense | $ 9,167 | $ 7,396 | $ 18,620 | $ 11,540 | |
Options | |||||
Number of Options | |||||
Outstanding at the beginning of period (in shares) | 25,589,876 | ||||
Granted (in shares) | 1,538,184 | ||||
Exercised (in shares) | (1,268,087) | ||||
Canceled/forfeited (in shares) | (509,987) | ||||
Outstanding at the end of the period (in shares) | 25,349,986 | 25,349,986 | 25,589,876 | ||
Weighted-Average Exercise Price | |||||
Outstanding at the beginning of period (in dollars per share) | $ 9.79 | ||||
Granted (in dollars per share) | 16.17 | ||||
Exercised (in dollars per share) | 4.11 | ||||
Canceled/forfeited (in dollars per share) | 12.14 | ||||
Outstanding at the end of the period (in dollars per share) | $ 10.41 | $ 10.41 | $ 9.79 | ||
Additional disclosure | |||||
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 7 years 3 months 5 days | 7 years 6 months 20 days | |||
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 7 years 3 months 5 days | 7 years 6 months 20 days | |||
Remaining stock-based compensation expense for unvested awards | $ 57,400 | $ 57,400 | |||
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized | 2 years 10 months 1 day | ||||
Stock-based compensation expense | 7,300 | 7,100 | $ 14,300 | 11,200 | |
Restricted stock units | |||||
Additional disclosure | |||||
Remaining stock-based compensation expense for unvested awards | 14,500 | $ 14,500 | |||
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized | 3 years 6 months 18 days | ||||
Stock-based compensation expense | $ 1,800 | $ 300 | $ 4,300 | $ 300 |
Stock-based Awards (Details 2)
Stock-based Awards (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock-based Awards | ||||
Stock based compensation expense | $ 9,167 | $ 7,396 | $ 18,620 | $ 11,540 |
Restricted stock units | ||||
Stock-based Awards | ||||
Remaining stock based compensation expense for non vested restricted stock units | 14,500 | $ 14,500 | ||
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized | 3 years 6 months 18 days | |||
Stock based compensation expense | $ 1,800 | $ 300 | $ 4,300 | $ 300 |
Number of Shares | ||||
Non-vested at the beginning of period (in shares) | 827,997 | |||
Granted (in shares) | 825,884 | |||
Vested (in shares) | (256,025) | |||
Canceled/forfeited (in shares) | (126,552) | |||
Non-vested at the end of the period (in per share) | 1,271,304 | 1,271,304 | ||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at the beginning of period (in dollars per share) | $ 12.36 | |||
Granted (in dollars per share) | 15.92 | |||
Vested (in dollars per share) | 15.17 | |||
Canceled/forfeited (in dollars per share) | 11.44 | |||
Non-vested at the end of the period (in dollars per share) | $ 14.20 | $ 14.20 |
Stock-based Awards (Details 3)
Stock-based Awards (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock-based Compensation Cost | ||||
Stock-based compensation expense | $ 9,167 | $ 7,396 | $ 18,620 | $ 11,540 |
Amount capitalized to internal software use | 344 | 321 | 675 | 614 |
Total stock-based compensation cost | 9,511 | 7,717 | 19,295 | 12,154 |
Cost of revenue | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 187 | 113 | 364 | 163 |
Sales and marketing | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 1,218 | 1,307 | 2,608 | 2,344 |
Technology and development | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 1,227 | 1,156 | 2,153 | 1,865 |
General and administrative | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | $ 6,535 | $ 4,820 | $ 13,495 | $ 7,168 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 50 | $ 67 | $ 259 | $ 317 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (14,739) | $ (15,034) | $ (26,362) | $ (24,955) |
Weighted average common shares outstanding (in shares) | 82,012 | 67,784 | 81,241 | 63,962 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.18) | $ (0.22) | $ (0.32) | $ (0.39) |
Net Loss Per Shares (Details 2)
Net Loss Per Shares (Details 2) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Total shares excluded from net loss per share | 29,113 | 31,387 |
Options to purchase common stock | ||
Anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Total shares excluded from net loss per share | 25,350 | 26,665 |
Common stock warrants | ||
Anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Total shares excluded from net loss per share | 2,492 | 3,981 |
Non-vested restricted stock awards | ||
Anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Total shares excluded from net loss per share | 1,271 | 741 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Related Party Transactions | |||||
Prepaid expenses | $ 8,533,000 | $ 8,533,000 | $ 5,193,000 | ||
Other Assets, Current | 3,106,000 | 3,106,000 | 3,040,000 | ||
Receivable from related party | 1,988,000 | 1,988,000 | 1,865,000 | ||
Payable to related party | 4,190,000 | 4,190,000 | 4,954,000 | ||
Dealertrack | Cost of revenue | |||||
Related Party Transactions | |||||
Costs under related party agreements | $ 400,000 | ||||
Marketing firm with related officer | |||||
Related Party Transactions | |||||
Prepaid expenses | 1,800,000 | 1,800,000 | 900,000 | ||
Amounts due to related party | 200,000 | 200,000 | 0 | ||
Marketing firm with related officer | Sales and marketing | |||||
Related Party Transactions | |||||
Costs under related party agreements | 2,800,000 | $ 1,300,000 | 4,100,000 | 1,600,000 | |
USAA | |||||
Related Party Transactions | |||||
Receivable from related party | 2,000,000 | 2,000,000 | 1,900,000 | ||
Payable to related party | 4,200,000 | 4,200,000 | 4,700,000 | ||
USAA | Sales and marketing | |||||
Related Party Transactions | |||||
Costs under related party agreements | 3,500,000 | $ 3,200,000 | 6,100,000 | 6,200,000 | |
Deposits paid to marketing firm | |||||
Related Party Transactions | |||||
Other Assets, Current | 600,000 | 600,000 | $ 0 | ||
Amounts paid to marketing firm | |||||
Related Party Transactions | |||||
Property, Plant and Equipment, Additions | $ 600,000 | $ 600,000 | $ 0 |
Revenue Information (Details)
Revenue Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue Information | ||||
Revenue | $ 65,291 | $ 50,497 | $ 123,845 | $ 94,427 |
Transaction revenue | ||||
Revenue Information | ||||
Revenue | 60,408 | 46,127 | 114,676 | 86,119 |
Forecasts, consulting and other revenue | ||||
Revenue Information | ||||
Revenue | $ 4,883 | $ 4,370 | $ 9,169 | $ 8,308 |