Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36449 | ||
Entity Registrant Name | TRUECAR, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 04-3807511 | ||
Entity Address, Address Line One | 120 Broadway | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Santa Monica | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90401 | ||
City Area Code | 800 | ||
Local Phone Number | 200‑2000 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | TRUE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 528,887,252 | ||
Entity Common Stock, Shares Outstanding | 107,082,458 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement on Schedule 14A for the 2020 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. That Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2019 . Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K. | ||
Entity Central Index Key | 0001327318 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 181,534 | $ 196,128 |
Accounts receivable, net of allowances of $6,759 and $3,382 at December 31, 2019 and 2018, respectively (includes related party receivables of $209 and $349 at December 31, 2019 and 2018, respectively) | 44,888 | 47,760 |
Prepaid expenses | 7,215 | 7,468 |
Other current assets | 6,104 | 4,103 |
Total current assets | 239,741 | 255,459 |
Property and equipment, net | 29,797 | 61,511 |
Operating lease right-of-use assets | 36,064 | 0 |
Goodwill | 73,311 | 73,311 |
Intangible assets, net | 17,260 | 23,451 |
Equity method investment | 21,894 | 0 |
Other assets | 3,620 | 7,228 |
Total assets | 421,687 | 420,960 |
Current liabilities | ||
Accounts payable (includes related party payables of $6,439 and $5,039 at December 31, 2019 and 2018, respectively) | 21,336 | 26,305 |
Accrued employee expenses | 5,969 | 4,349 |
Operating Lease, Liability, Current | 5,875 | 0 |
Accrued expenses and other current liabilities (includes related party accrued expenses of $1,299 and $218 at December 31, 2019 and 2018, respectively) | 20,990 | 10,908 |
Total current liabilities | 54,170 | 41,562 |
Deferred tax liabilities | 783 | 568 |
Lease financing obligation, net of current portion | 0 | 22,987 |
Operating Lease, Liability, Noncurrent | 37,127 | 0 |
Other liabilities | 2,336 | 9,290 |
Total liabilities | 94,416 | 74,407 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Preferred stock — $0.0001 par value; 20,000,000 shares authorized at December 31, 2019 and 2018, respectively; no shares issued and outstanding at December 31, 2019 and 2018 | 0 | 0 |
Common stock — $0.0001 par value; 1,000,000,000 shares authorized at December 31, 2019 and 2018, respectively; 106,865,830 and 104,337,508 shares issued and outstanding at December 31, 2019 and 2018, respectively | 11 | 10 |
Additional paid-in capital | 759,322 | 720,025 |
Accumulated deficit | (432,062) | (373,482) |
Total stockholders’ equity | 327,271 | 346,553 |
Total liabilities and stockholders’ equity | $ 421,687 | $ 420,960 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 6,759 | $ 3,382 |
Related party receivables | 209 | 349 |
Related party payables | 6,439 | 5,039 |
Related party accrued expense and other current liabilities | $ 1,299 | $ 218 |
Preferred stock, par value (in dollar per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 106,865,830 | 104,337,508 |
Common stock, shares outstanding | 106,865,830 | 104,337,508 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenues (includes related party contra revenue of $1,189, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | $ 353,880 | $ 353,571 | $ 323,149 |
Costs and operating expenses: | |||
Cost of revenue (exclusive of depreciation and amortization presented separately below and includes related party expenses of $966, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | 33,427 | 31,154 | 28,227 |
Sales and marketing (includes related party expenses of $23,191, $22,128, and $16,531, for the years ended December 31, 2019, 2018, and 2017, respectively) | 229,342 | 213,415 | 185,397 |
Technology and development | 57,188 | 61,348 | 59,070 |
General and administrative | 65,148 | 54,140 | 61,646 |
Depreciation and amortization | 25,591 | 22,677 | 22,472 |
Total costs and operating expenses | 410,696 | 382,734 | 356,812 |
Loss from operations | (56,816) | (29,163) | (33,663) |
Interest income | 3,495 | 3,314 | 1,260 |
Interest expense | 0 | (2,649) | (2,610) |
Loss before income taxes | (54,601) | (28,498) | (35,013) |
Provision for / (benefit from) income taxes | 289 | (177) | (2,164) |
Net loss | $ (54,890) | $ (28,321) | $ (32,849) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.52) | $ (0.28) | $ (0.35) |
Weighted average common shares outstanding, basic and diluted | 105,805 | 102,149 | 94,865 |
Other comprehensive loss: | |||
Comprehensive loss | $ (54,890) | $ (28,321) | $ (32,849) |
Income (Loss) from Equity Method Investments | $ (1,280) | $ 0 | $ 0 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cost of revenue with related parties | $ 33,427 | $ 31,154 | $ 28,227 |
Sales and Marketing | |||
Costs and expenses with related parties | 23,191 | 22,128 | 16,531 |
Related party | |||
Contra revenue with related parties | 1,189 | 0 | 0 |
Cost of revenue with related parties | $ 966 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | APIC | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 86,159,527 | |||
Beginning balance at Dec. 31, 2016 | $ 224,581 | $ 9 | $ 542,807 | $ (318,235) |
Increase (Decrease) in Stockholders' Equity | ||||
Comprehensive loss | (32,849) | |||
Net loss | (32,849) | (32,849) | ||
Issuance of common stock in follow-on offering, net of underwriting discounts and offering costs (in shares) | 1,150,000 | |||
Issuance of common stock in follow-on offering, net of underwriting discounts and offering costs | 17,398 | 17,398 | ||
Stock-based compensation | 33,648 | 33,648 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 13,119,129 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | 70,340 | $ 1 | 70,339 | |
Ending balance (in shares) at Dec. 31, 2017 | 100,428,656 | |||
Ending balance at Dec. 31, 2017 | 313,118 | $ 10 | 664,192 | (351,084) |
Increase (Decrease) in Stockholders' Equity | ||||
Comprehensive loss | (28,321) | |||
Net loss | (28,321) | (28,321) | ||
Stock-based compensation | 39,109 | 39,109 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 3,908,852 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | $ 16,724 | 16,724 | ||
Ending balance (in shares) at Dec. 31, 2018 | 104,337,508 | 104,337,508 | ||
Ending balance at Dec. 31, 2018 | $ 346,553 | $ 10 | 720,025 | (373,482) |
Increase (Decrease) in Stockholders' Equity | ||||
Comprehensive loss | (54,890) | |||
Net loss | (54,890) | |||
Stock-based compensation | 39,785 | 39,785 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 2,528,322 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | $ (487) | $ 1 | (488) | |
Ending balance (in shares) at Dec. 31, 2019 | 106,865,830 | 106,865,830 | ||
Ending balance at Dec. 31, 2019 | $ 327,271 | $ 11 | $ 759,322 | $ (432,062) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net loss | $ (54,890) | $ (28,321) | $ (32,849) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 25,620 | 22,661 | 22,391 |
Deferred income taxes | 215 | (244) | (2,182) |
Bad debt expense | 1,432 | 1,688 | 1,385 |
Stock-based compensation | 37,974 | 37,219 | 32,241 |
Changes in fair value | 300 | 0 | 0 |
Amortization of lease right-of-use assets | 5,946 | ||
Loss from equity method investment | 1,280 | 0 | 0 |
Non-cash interest expense on lease financing obligation | 0 | 332 | 370 |
Impairment or write-off and net loss on disposal of finite-lived assets | 1,109 | 311 | 194 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,440 | (10,039) | (3,687) |
Prepaid expenses | (747) | (1,964) | 569 |
Other current assets | (1,820) | 87 | 765 |
Other assets | 2,524 | (1,644) | 162 |
Accounts payable | (4,940) | 7,543 | 4,803 |
Accrued employee expenses | 1,494 | (2,177) | (2,683) |
Operating lease liabilities | (6,846) | ||
Accrued expenses and other current liabilities | 10,650 | (642) | (479) |
Other liabilities | (397) | 23 | 1,118 |
Net cash provided by operating activities | 20,344 | 24,833 | 22,118 |
Cash flows from investing activities | |||
Purchase of property and equipment | (11,284) | (17,099) | (19,809) |
Cash received from lease financing obligation exit | 0 | 800 | 0 |
Cash paid for acquisition, net of cash acquired | 0 | (26,891) | 0 |
Payments to Acquire Equity Method Investments | (23,174) | 0 | 0 |
Net cash used in investing activities | (34,458) | (43,190) | (19,809) |
Cash flows from financing activities | |||
Proceeds from public offering, net of underwriting discounts and offering costs | 0 | 0 | 17,398 |
Proceeds from exercise of common stock options | 2,859 | 19,757 | 73,543 |
Taxes paid related to net share settlement of equity awards | (3,339) | (3,034) | (3,209) |
Net cash (used in) provided by financing activities | (480) | 16,723 | 87,732 |
Net (decrease) increase in cash and cash equivalents | (14,594) | (1,634) | 90,041 |
Cash and cash equivalents at beginning of year | 196,128 | 197,762 | 107,721 |
Cash and cash equivalents at end of year | 181,534 | 196,128 | 197,762 |
Cash paid during the year for: | |||
Interest | 0 | 2,323 | 2,099 |
Income taxes | 78 | 30 | 43 |
Supplemental disclosures of non-cash activities | |||
Stock-based compensation capitalized for software development | 1,811 | 1,890 | 1,407 |
De-recognition of leased facility asset and lease financing obligation | 0 | 6,889 | 0 |
Recognition of warrant asset and related liability | 0 | 1,231 | 0 |
Additions | 0 | 4,477 | 0 |
Capitalized assets included in accounts payable, accrued employee expenses and other accrued expenses | $ 363 | $ 312 | $ 1,980 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business TrueCar, Inc. is an Internet-based information, technology, and communication services company. Hereinafter, TrueCar, Inc. and its wholly owned subsidiaries ALG, Inc., TrueCar Dealer Solutions, Inc. and DealerScience, LLC are collectively referred to as “TrueCar” or the “Company”; ALG, Inc. is referred to as “ALG,” TrueCar Dealer Solutions, Inc. is referred to as “TCDS” and DealerScience, LLC is referred to as “DealerScience.” 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 is a digital automotive marketplace that (i) provides pricing transparency about what other people paid for their cars and enables consumers to engage with TrueCar Certified Dealers who are committed to providing a superior purchase experience; (ii) empowers Certified Dealers to attract these informed, in-market consumers in a cost-effective, accountable manner; and (iii) allows automobile manufacturers (“OEMs”) to more effectively target their incentive spending at deep-in-market consumers during their purchase process. TrueCar has established a diverse software ecosystem on a common technology infrastructure, powered by proprietary data and analytics. Consumers 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 provides discounts to its members. ALG provides forecasts, consulting, and other 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. Through its subsidiary TCDS, the Company provides its TrueCar Trade product, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership. This valuation is, in turn, backed by a third-party guarantee to dealers that the vehicles will be repurchased at the indicated price if the dealer does not want to keep them. Additionally, in December 2018, the Company acquired DealerScience, which, through TCDS, provides dealers with advanced digital retailing software tools that allow them to calculate accurate monthly payments, expedite vehicle desking, which is the process of presenting and agreeing upon financial terms and financing options, and streamline the consumer’s experience from shopping to showroom. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company’s consolidated financial statements from the date of the acquisition. The Company’s purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. 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 that are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, contract assets, the fair value of a warrant asset and the related liability, the fair value of assets and liabilities assumed in business combinations, the 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, lease exit liabilities, 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 fair values of its right-of-use assets and lease liabilities, capitalized facility leases, assets and liabilities assumed in business combinations, warrant asset and related liability, assets and liabilities of its equity method investment, performance-based stock units, and in periods prior to the Company’s initial public offering, valuation of common stock. Segments The Company has one operating segment. During the first quarter of 2019, the Company’s chief operating decision maker (“CODM”) was the President and Chief Executive Officer and the Interim Chief Financial Officer and Chief Accounting Officer, who managed the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. Effective April 1, 2019, the Company’s Interim Chief Financial Officer and Chief Accounting Officer resigned from his positions. From April 1, 2019, through May 31, 2019, the Company’s CODM was solely comprised of the President and Chief Executive Officer until his resignation on May 31, 2019. From June 1, 2019 through June 16, 2019, the CODM was comprised of the Interim President and Chief Executive Officer. Upon the hiring of the Chief Financial Officer on June 17, 2019 and through December 31, 2019, the CODM was comprised of both the Interim President and Chief Executive Officer and the Chief Financial Officer. During the year ended December 31, 2019, the Company’s operations were managed based on consolidated financial information for purposes of evaluating financial performance and allocating resources by the various CODM in place. The CODM reviews financial information on a consolidated basis, accompanied by information about dealer revenue, OEM incentive revenue, and forecasts, consulting and other revenue (Note 4). All of the Company’s principal operations, decision-making functions and assets are located in the United States. Equity Method Investment On February 8, 2019, the Company acquired 20% of the outstanding equity interests of Accu-Trade, LLC, a Delaware limited liability company (“Accu-Trade”), from R.M. Hollenshead Auto Sales & Leasing, Inc., a Florida corporation (“RHAS”), Robert M. Hollenshead (“Hollenshead”) and Jeffrey J. Zamora (“Zamora” and, together with RHAS and Hollenshead, the “Sellers”), pursuant to a Membership Interest Purchase Agreement, dated as of February 8, 2019 (the “Purchase Agreement”), by and among Accu-Trade, RHAS, Hollenshead, Zamora and the Company. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, the Company paid the Sellers $17.9 million in cash consideration and made a $5 million capital contribution to Accu-Trade. The Company recognizes its proportional share of the income or loss from the equity method investment on a one-quarter lag due to the timing and availability of financial information from Accu-Trade. Included in the initial carrying value of $22.9 million , which represents the fair value on the transaction date, was a basis difference of $21.0 million related to the difference between the cost of the investment and the Company’s proportionate share of the net assets of Accu-Trade. The carrying value of the equity method investment is primarily adjusted for the Company’s share in the losses of Accu-Trade and amortization of the basis difference. The Company amortizes its basis difference between the estimated fair value and the underlying book value of Accu-Trade’s technology and guarantor relationship over their respective useful lives using the straight-line method. The weighted-average life of these intangible assets is approximately 5 years . 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. Fair Value Methods Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally-developed models that primarily use market-based or independently sourced market parameters as inputs. For assets and liabilities measured at fair value, the following section describes the valuation methodologies, key inputs, and significant assumptions. Cash equivalents, consisting primarily of money market instruments and debt securities, represent highly liquid investments with maturities of three months or less at purchase. Generally, market prices are used to determine the fair value of money market instruments and debt securities. The carrying amounts of cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these items. The fair value of the Company’s revolving line of credit approximates carrying value based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements. Certain assets, including the equity method investment, warrant asset, right-of-use assets, property and equipment, goodwill, and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2019 , 2018 , and 2017 , no impairments were identified on those assets required to be measured at fair value on a non-recurring basis. The Company recorded a contingent consideration liability upon the acquisition of DealerScience in 2018 (Note 5). Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair-value hierarchy. The valuation of contingent consideration uses assumptions the Company believes a market participant would make. The Company assesses these estimates on an ongoing basis as it obtains additional data impacting the assumptions. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the consolidated statements of comprehensive loss. The Company determined the fair value of the contingent consideration using the probability-adjusted discounted cash flow method. Because the DealerScience purchase agreement makes payment of the contingent consideration contingent on achievement of certain revenue milestones, the significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of achieving those milestones and discount rates. Significant increases or decreases in the probabilities of achieving the milestones would result in a significantly higher or lower fair value measurement, respectively. The following table summarizes the Company’s assets and liabilities at fair value on a recurring basis at December 31, 2019 and 2018 by level within the fair-value hierarchy. These assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): At December 31, 2019 At December 31, 2018 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 174,429 $ — $ — $ 174,429 $ 192,207 $ — $ — $ 192,207 Total Assets $ 174,429 $ — $ — $ 174,429 $ 192,207 $ — $ — $ 192,207 Liabilities: Contingent consideration, current $ — $ — $ 2,441 $ 2,441 $ — $ — $ — $ — Contingent consideration, non-current — — 2,336 2,336 — — 4,477 4,477 Total Liabilities $ — $ — $ 4,777 $ 4,777 $ — $ — $ 4,477 $ 4,477 Contingent Consideration Obligations The following table summarizes the changes in the fair value of the contingent consideration obligation (in thousands): Year Ended December 31, 2019 2018 Fair value, at beginning of year $ 4,477 $ — Additions — 4,477 Changes in fair value 300 — Fair value, at end of year $ 4,777 $ 4,477 Concentrations of Credit and Business Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company, at times, maintains cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. The Company places its cash and cash equivalents with high credit quality financial institutions. Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts based on these evaluations. No single customer comprised more than 10% of the Company’s total revenues for the years ended December 31, 2019 , 2018 , and 2017 . No single customer comprised more than 10% of the Company’s accounts receivable balance at December 31, 2019 and 2018 . The Company’s largest source of unique visitors and unit sales from affinity group marketing partners in 2019 comes from its relationship with United Services Automobile Association (“USAA”), a related party (Note 15). See Note 16 for further details on a short-term agreement executed subsequent to December 31, 2019. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity at the date of purchase of three months or less to be cash equivalents. At December 31, 2019 and 2018 , cash and cash equivalents were comprised of cash held in money market funds and checking accounts. Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances The Company extends credit in the normal course of business to its customers and performs credit evaluations on a case-by-case basis. The Company does not obtain collateral or other security related to its accounts receivable. Accounts receivable are recorded based on the amount due from the customer and do not bear interest. The Company reduces accounts receivable for sales allowances and its allowance for doubtful accounts. For contract assets, the Company records the assets net of sales allowances and an allowance for doubtful accounts, which are estimated in the same manner as for accounts receivable balances. The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its network of dealers. Sales allowances relate primarily to credits issued where a dealer claims that an introduction was previously identified by the dealer from a source other than the Company. While the dealer is contractually obligated to pay the invoice, the Company may issue a credit against the invoice to maintain overall dealer relations. In assessing the adequacy of its sales allowances, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments and credits and ultimate losses may vary from actual results which could be material to the financial statements; however, to date, actual sales allowances have been materially consistent with the Company’s estimates. The Company determines its allowance for doubtful accounts based on its historical write-off experience and specific circumstances that make it likely that recovery will not occur in a particular case. The Company reviews the allowance for doubtful accounts each reporting period and assesses the aging of account balances, with an emphasis on those that are past due over ninety days . Account balances are charged off against the allowance when the Company determines that it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. The following table summarizes the changes in the allowance for doubtful accounts and sales allowances (in thousands): Year Ended December 31, 2019 2018 2017 Allowances, at beginning of year $ 3,382 $ 3,030 $ 2,600 Charged as a reduction of revenue 11,751 8,703 7,734 Charged to bad debt expense in general and administrative expenses 1,432 1,688 1,385 Write-offs, net of recoveries (9,806 ) (10,039 ) (8,689 ) Allowances, at end of year $ 6,759 $ 3,382 $ 3,030 Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software, five years for furniture and equipment, and over the shorter of the lease term or the useful life of the assets for leasehold improvements. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s results of operations. Leases On January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition method applied at the effective date of the standard. The Company determines if an arrangement is a lease at inception and determine the classification of the lease, as either operating or finance, at commencement. The Company does not have any finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of secured borrowing over the expected term of the leases based on the information available at the later of the initial date of adoption or the lease commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. See Note 3 for additional information. Software and Website Development Costs The Company accounts for the costs of computer software obtained or developed for internal use in accordance with FASB ASC 350, Intangibles — Goodwill and Other . Computer software development costs and website development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include certain employee related expenses, including salaries, bonuses, benefits and stock-based compensation expenses; costs of computer hardware and software; and costs incurred in developing features and functionality. These capitalized costs are included in property and equipment on the consolidated balance sheets. The Company expenses costs incurred in the preliminary project and post-implementation stages of software development and capitalizes costs incurred in the application development stage and costs associated with significant enhancements to existing internal use software applications. Software costs are amortized using the straight-line method over an estimated useful life of three years commencing when the software project is ready for its intended use. Costs incurred related to less significant modifications and enhancements as well as maintenance are expensed as incurred. At December 31, 2019 and 2018 , capitalized software costs were $50.4 million and $86.0 million , respectively, before accumulated amortization of $28.2 million and $62.2 million , respectively. During the years ended December 31, 2019 and 2018 , the Company recorded accelerated amortization of $1.1 million and $1.0 million , respectively, related to software assets that were determined to have shortened useful lives due to upgrades to the Company’s technology infrastructure. Expected amortization expense with respect to capitalized software costs at December 31, 2019 for each of the years through December 31, 2022 is as follows (in thousands): Years ended December 31, 2020 $ 12,302 2021 7,504 2022 2,364 Total amortization expense $ 22,170 Intangible Assets Acquired in Business Combinations The Company values assets acquired and liabilities assumed on each acquisition accounted for as a business combination, and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on its best estimate of fair value. Acquired intangible assets include: trade names, customer relationships, and developed technology. The Company determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for trade names, customer relationships, and technology are generally, one to fifteen years , two to ten years , and three to ten years , respectively. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets with finite useful lives for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable and the expected undiscounted future cash flows attributable to the asset group are less than the carrying amount of the asset group, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based upon estimated discounted future cash flows. During the years ended December 31, 2019 , 2018 , and 2017 , there were no impairment charges recorded on the Company’s long-lived assets. Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the identifiable assets and liabilities acquired in the Company’s business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of use of the acquired assets or the Company’s overall business strategy, significant negative industry or economic trends, significant underperformance relative to expected historical or projected future results of operations, or a decline in the Company’s stock price and market capitalization. During 2019, the Company’s stock price experienced high volatility ranging from a high of $10.39 to a low of $3.01 per share, causing a decline in its enterprise market capitalization. If the Company’s stock price declines further, material write-downs or impairment charges may be required in the future. The magnitude and timing of those charges would be dependent on the severity and duration of the decline and cannot be determined at this time. Any material non-cash impairment charges related to goodwill would have a material adverse effect on the Company’s results of operations and financial condition. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. The quantitative test involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, an impairment loss is recognized in an amount equal to the excess. The Company tests for goodwill impairment annually at December 31st. During the years ended December 31, 2019 , 2018 , and 2017 , there were no impairment charges recorded on goodwill. In 2019 and 2018, we elected to conduct a quantitative goodwill assessment at December 31, 2019 and 2018 , respectively. The fair value significantly exceeded the carrying value and, accordingly, we concluded that there was no impairment of goodwill at December 31, 2019 and 2018 . During the year ended December 31, 2018, goodwill increased $20.0 million as a result of the DealerScience acquisition. See Note 5 for further details. Warrant On November 19, 2018, TrueCar entered into a warrant agreement with DealerSync, Inc. (“DealerSync”) that entitles TrueCar to purchase up to 2,500,000 shares of DealerSync common stock at $1.60 per share. The warrant expires on November 19, 2020. The fair value was determined using a Monte-Carlo simulation. The Company recorded the fair value of the DealerSync warrant of $1.2 million in “other assets” and corresponding liabilities (the current portion of the liability of $0.2 million recorded in “accrued expenses and other current liabilities” and the non-current portion of $1.0 million recorded in “other liabilities”) in the consolidated balance sheet as of December 31, 2018, reflecting the benefit received as part of its commercial sales agent agreement with DealerSync. In June 2019, the Company terminated its commercial sales agent agreement with DealerSync, resulting in the write-off of the warrant asset and corresponding liability. The net impact of the write-offs was immaterial to the Company’s consolidated statements of comprehensive loss during the year ended December 31, 2019. Revenue Recognition 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 replaces all existing revenue recognition guidance under GAAP. The Company adopted the new revenue standard as of January 1, 2018 using the modified retrospective transition method. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with prior revenue guidance. See Note 4 for further details. Under the new revenue standard, the Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the performance obligation or obligations are satisfied. Dealer Revenue Dealer revenue is comprised of Auto Buying Program revenue as well as revenue from TrueCar Trade and DealerScience. Auto Buying Program revenues include fees paid by customers participating in the Company’s dealer network with which the Company has an agreement (“TrueCar Certified Dealers” or “Dealers”). TrueCar Certified Dealers pay the Company fees in one of three ways: on a per-vehicle basis for sales to Auto Buying Program users, on a per-introduction basis for sales to Auto Buying Program users, or under a subscription arrangement. Contracts are cancellable by the Dealer or the Company at any time. The Company does not provide significant Dealer financing terms. The Company’s performance obligation to TrueCar Certified Dealers is the same for all payment types for our Auto Buying Program revenues: to provide Dealers with introductions to in-market consumers through the use of the TrueCar platform, so that those Dealers have the opportunity to sell vehicles to those consumers. Control transfers to Dealers upon delivery of introductions, which is the point at which the Company recognizes revenue. When a user decides to proceed with a vehicle purchase through the Company, the user provides his or her name, address, email, and phone number during the process of obtaining price offers on actual vehicle inventory, which gives the Company the identity and source of a TrueCar introduction provided to a specific Dealer before an actual sale occurs. After a sale occurs, the Company receives information regarding the sale, including the identity of the purchaser, through the Dealer Management System used by the Dealer that made the sale. The Company also receives information regarding vehicle sales from a variety of other data sources, including third-party car sales aggregators, car dealer networks, and other publicly available sources (collectively, “sales data”) and uses this sales data to further verify that a sale has occurred between an Auto Buying Program user and a TrueCar Certified Dealer, as well as to invoice the Dealer shortly after the completion of the sales transaction. Actual vehicle sales data is reported on a daily basis shortly following the date of sale. Pay-Per-Sale. Under the old revenue standard, in years prior to 2018, the Company recognized revenue for fee arrangements based on a per-vehicle basis when the vehicle sale had occurred between the Auto Buying Program user and the Dealer. Under the new revenue standard for fee arrangements based on a pay-per-sale billing model, revenue for the Auto Buying Program is recognized when introductions are delivered to the Dealer and for the amount that the Company estimates it will be able to earn. To formulate this estimate, the Company uses the expected value method based primarily on an analysis of the expected number of sales resulting from in-period introductions. This estimate is based on historical introductions to vehicle sale close rate trends as well as actual sales measured in period. Under the contractual terms and conditions of arrangements with TrueCar Certified Dealers that pay on a per-vehicle-sale basis, the Dealer is not obligated to pay the Company until a vehicle sale has occurred between the Auto Buying Program user and the Dealer, for which the introduction was provided to the Dealer by the Company. Contractually, the Dealers’ obligation to pay is not contingent on verification or acceptance of the transaction by the Dealer. As a result, revenue recognition occurs earlier than billing as an estimate of the variable consideration to be received upon control transfer of the delivered introduction, resulting in a contract asset. Pay-Per-Introduction. Under fee arrangements based on a pay-per-introduction billing model, revenue for the Auto Buying Program is recognized when introductions are delivered. The Company also recognizes revenue from Dealers under subscription agreements. Subscription fee arrangements are short-term in nature with terms ranging from one to six months and are also cancellable by the Dealer or the Company at any time. Subscription arrangements fall into three types: flat-rate subscriptions, subscriptions subject to downward adjustment based on a minimum number of vehicle sales (“guaranteed sales”), and subscriptions based on introduction volume, including those subject to downward adjustment based on a minimum number of introductions (“guaranteed introductions”). For all subscription arra |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Adoption of the New Lease Accounting Standard On January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition method applied at the effective date of the standard. Results for reporting periods beginning after January 1, 2019 are presented under the new leasing standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting. The Company has elected to utilize the package of practical expedients at the time of adoption, which allows the Company to (1) not reassess whether any expired or existing contracts are or contain leases, (2) not reassess the lease classification of any expired or existing leases, and (3) not reassess initial direct costs for any existing leases. The Company also has elected to utilize the short-term lease recognition exemption and, for those leases that qualified, the Company did not recognize right-of-use (“ROU”) assets or lease liabilities. Adoption Impact As a result of adoption, the Company recorded a material impact as ROU assets and lease liabilities are recognized on the consolidated balance sheet related to office facility leases. The ROU assets and lease liabilities were valued using the incremental borrowing rate as of the adoption date. Additionally, the Company expects to recognize greater rent expense in operating expenses and less interest expense as the Company’s prior build-to-suit leases are now classified as operating leases. Additionally, the change related to build-to-suit leases resulted in the removal of build-to-suit assets from the consolidated balance sheet, which reduced property and equipment, net by $28.3 million and eliminated the lease financing obligation of $1.8 million within accrued expenses and other liabilities and $23.0 million within lease financing obligation, net of current portion. See Note 6 for further details. The cumulative effects of the changes made to the Company’s January 1, 2019 consolidated balance sheet were as follows (in thousands): December 31, 2018 Adjustments Due to Adoption of New Leasing Standard January 1, 2019 Assets Other current assets $ 4,103 $ 188 $ 4,291 Property and equipment, net 61,511 (25,461 ) 36,050 Operating lease right-of-use assets — 42,010 42,010 Other assets 7,228 147 7,375 Liabilities Operating lease liabilities, current $ — $ 6,498 $ 6,498 Accrued expenses and other current liabilities 10,908 (2,637 ) 8,271 Lease financing obligation, net of current portion 22,987 (22,987 ) — Operating lease liabilities, net of current portion — 43,351 43,351 Other liabilities 9,290 (3,651 ) 5,639 Stockholders ’ Equity Accumulated deficit $ (373,482 ) $ (3,690 ) $ (377,172 ) Lease Costs For the year ended December 31, 2019 , the Company recorded operating lease costs, excluding subleases, that were included in the consolidated statements of comprehensive loss as follows (in thousands): Operating lease costs recorded within: Year Ended December 31, 2019 Cost of revenue $ 740 Sales and marketing 1,741 Technology and development 2,462 General and administrative 3,597 Total operating lease costs $ 8,540 The Company did not include short term or variable lease costs in the table above as these amounts were immaterial. For the years ended December 31, 2018 and 2017 , the Company recorded lease costs, excluding subleases, of $4.9 million and $4.8 million , respectively. The Company made cash payments of $9.4 million , $9.5 million and $8.5 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively, all of which were included in cash flows from operating activities within the consolidated statements of cash flows. The Company’s operating leases have a weighted average remaining lease term of 6.9 years and weighted average discount rate of 5.7% . For its subleases, the Company recorded contra rent expense of $2.0 million , $2.1 million and $1.9 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. The existing operating leases have remaining lease terms ranging from two months to 10.1 years. Certain lease agreements contain options to renew, with renewal terms that generally extend the lease terms by 3 to 5 years for each option. Lease Commitments Future undiscounted lease payments for the Company’s operating lease liabilities, a reconciliation of these payments to its operating lease liabilities, and related sublease income at December 31, 2019 are as follows (in thousands): Years ended December 31, 2020 $ 7,762 2021 7,152 2022 7,369 2023 7,628 2024 7,860 Thereafter 14,702 Total lease payments $ 52,473 Less: imputed interest (9,471 ) Total lease liabilities (discounted) $ 43,002 Year ended December 31, Sublease Income 2020 $ (1,299 ) Total sublease income $ (1,299 ) As previously disclosed in the Company’s 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for the Company’s operating leases at December 31, 2018 , on an undiscounted basis, were as follows (in thousands): Years ended December 31, Lease Commitments Sublease Income 2019 $ 9,220 $ (2,180 ) 2020 8,716 (1,282 ) 2021 7,145 — 2022 7,362 — 2023 7,621 — Thereafter 22,532 — Total minimum lease payments $ 62,596 $ (3,462 ) |
Revenue Information
Revenue Information | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Information and Deferred Sales Commissions | Revenue Information and Deferred Sales Commissions On January 1, 2018, the Company adopted the new revenue standard using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting. Deferred Sales Commissions Deferred sales commissions within other assets were $2.8 million and $3.2 million as of December 31, 2019 and 2018 , respectively. For the years ended December 31, 2019 and 2018 , amortization expense for deferred sales commissions was $2.1 million and $1.7 million , respectively. There was no impairment loss in relation to the costs capitalized in either period. Contract Balances The Company’s contract asset balance for estimated variable consideration to be received upon the occurrence of subsequent vehicle sales is included within other current assets and is distinguished from accounts receivable in that these amounts are conditional upon subsequent sales and not only upon the passage of time. Substantially all of the contract asset balances of $3.3 million at January 1, 2018 and 2019 were transferred to accounts receivable during the years ended December 31, 2019 and 2018 as vehicle sales occurred, with no significant changes in the estimate. A contract asset of $2.8 million and $3.3 million was recorded as of December 31, 2019 and 2018 , respectively, for leads delivered where consideration to be received was still conditional upon subsequent vehicle sales. Disaggregation of Revenue The Company disaggregates revenue into three revenue streams: dealer revenue, OEM incentives revenue, and forecasts, consulting and other revenue. Prior to adoption of the new revenue standard, dealer revenue and OEM incentives revenue had been disclosed together as “transaction revenue.” The following table presents the Company’s revenue categories during the periods presented (in thousands): Year Ended December 31, 2019 2018 2017(1) Dealer revenue $ 317,965 $ 304,596 $ 280,563 OEM incentives revenue 16,569 30,012 23,277 Forecasts, consulting and other revenue 19,346 18,963 19,309 Total revenues $ 353,880 $ 353,571 $ 323,149 (1) Prior period amounts have not been adjusted under the modified retrospective method. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On December 7, 2018, the Company acquired the assets and assumed the liabilities of DealerScience for $27.9 million in cash and contingent cash consideration of up to $5.0 million based on achievement of future revenues. The acquisition of DealerScience allows the Company to more quickly expand into the digital retailing space in efforts to build out its end-to-end user experience. At the date of the acquisition, the Company assessed the probabilities of DealerScience meeting future revenues and recorded contingent consideration of $4.5 million . From the acquisition date through December 31, 2019, there were no significant changes to the value of the contingent consideration, which was recorded within accrued expenses and other current liabilities and other long-term liabilities as of December 31, 2019, and within other long-term liabilities as of December 31, 2018. The Company recorded goodwill of $20.0 million , which represents the excess of the purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise from the Company’s acquisition of DealerScience. Goodwill attributed to the acquisition is deductible for income tax purposes. The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of DealerScience during the year ended December 31, 2018 (in thousands): DealerScience Assets acquired Cash $ 1,037 Accounts receivable 240 Prepaid expenses 29 Acquired technology 9,900 Customer relationships 1,500 Goodwill 20,041 Total assets acquired $ 32,747 Liabilities assumed 342 Net assets acquired $ 32,405 Consideration paid Cash paid $ 27,928 Contingent consideration 4,477 Total consideration $ 32,405 The weighted average useful life of all identified acquired intangible assets is 5 years. The estimated useful lives for acquired technology and customer relationships are 6 years and 2 years, respectively. For the year ended December 31, 2018, the Company incurred transaction costs of $0.4 million in connection with the DealerScience acquisition which were expensed as incurred and included in general and administrative expense in the accompanying consolidated statements of comprehensive loss. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consisted of the following at December 31, 2019 and 2018 (in thousands): December 31, 2019 2018 Computer equipment, software, and internally developed software $ 60,049 $ 99,204 Furniture and fixtures 4,927 4,758 Leasehold improvements 15,839 8,602 Capitalized facility leases — 30,632 80,815 143,196 Less: Accumulated depreciation (51,018 ) (81,685 ) Total property and equipment, net $ 29,797 $ 61,511 Prior to the adoption of the new lease guidance, the Company was considered the owner, for accounting purposes only, of one of its Santa Monica, California leased office spaces as it had taken on certain risks of construction build cost overages above normal tenant improvement allowances. This capitalized facility lease was removed from the balance sheet at adoption on January 1, 2019. Refer to Note 3 for further details. Prior to the adoption of the new lease guidance and as of December 31, 2018 , the Company had capitalized $30.6 million related to the capitalized facility lease, which represents the estimated fair value of the leased properties, additions for capitalized interest incurred during the construction periods, and capitalized costs related to improvements to the building. No interest costs related to this capitalized facility lease was capitalized for the year ended December 31, 2018 . At December 31, 2018 , the Company had recorded accumulated amortization of $2.3 million . Additionally, at December 31, 2018 , the Company recognized a corresponding lease financing obligation of approximately $24.8 million . Included in the table above are property and equipment of $1.4 million and $1.1 million as of December 31, 2019 and 2018 , respectively, which are capitalizable but had not yet been placed in service. These balances were comprised primarily of capitalized software not ready for its intended use. Total depreciation and amortization expense of property and equipment was $19.4 million , $18.8 million , and $18.6 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. Amortization of internal use capitalized software development costs was $14.0 million , $13.4 million , and $13.5 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. During the year ended December 31, 2019 , the Company disposed of or retired certain fully depreciated computer equipment, software, and internally developed software with an original cost basis of $52.1 million , that resulted in the recognition of an immaterial gain. Amortization of capitalized facility leases was $1.0 million for the years ended December 31, 2018 and 2017 . |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following at December 31, 2019 and 2018 (in thousands, except years): At December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 40,990 $ (27,560 ) $ 13,430 Customer relationships 7,800 (6,175 ) 1,625 Trade names 4,900 (2,695 ) 2,205 Total $ 53,690 $ (36,430 ) $ 17,260 At December 31, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 40,990 $ (22,946 ) $ 18,044 Customer relationships 7,800 (4,925 ) 2,875 Trade names 4,900 (2,368 ) 2,532 Total $ 53,690 $ (30,239 ) $ 23,451 Amortization expense by asset type for the years ended December 31, 2019 , 2018 , and 2017 is shown below (in thousands): Year Ended December 31, 2019 2018 2017 Acquired technology and domain name $ 4,614 $ 3,034 $ 3,035 Customer relationships 1,250 500 500 Trade names 327 327 327 Total amortization $ 6,191 $ 3,861 $ 3,862 Expected amortization expense with respect to intangible assets at December 31, 2019 for each of the five years through December 31, 2024 and thereafter is as follows (in thousands): Years ended December 31, 2020 $ 6,187 2021 4,572 2022 1,977 2023 1,977 2024 1,977 Thereafter 570 Total amortization expense $ 17,260 |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility The Company is party to a third amended and restated loan and security agreement (the “Credit Facility”) with a financial institution that provides for advances under a $35.0 million revolving line of credit. In February 2018, the Company entered into a first amendment to the Credit Facility that, among other things, extended the expiration of the Credit Facility from February 18, 2018 to February 18, 2021. In December 2018, the Company entered into a second amendment to the Credit Facility to make certain other revisions that do not alter the borrowing amounts, interest rates, or required ratios. The Credit Facility provides a $10.0 million subfacility for the issuance of letters of credit and contained an increase option permitting the Company, subject to the lender’s consent, to increase the revolving credit facility by up to $15.0 million , to an aggregate maximum of $50 million . The 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 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 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. The Credit Facility requires the Company to maintain an adjusted quick ratio of at least 1.5 to 1.00 on the last day of each quarter. If the adjusted quick ratio is not maintained, the Credit Facility requires the Company to maintain, as measured at each quarter end, a maximum consolidated leverage ratio 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 the Company’s Adjusted EBITDA minus cash income taxes to its cash interest payments for the trailing twelve months. The Credit Facility also limits the Company’s ability to pay dividends. At December 31, 2019 and 2018 , the Company was in compliance with the Credit Facility’s financial covenants. The Company’s future material domestic subsidiaries are required, upon the lender’s request, to become co-borrowers under the Credit Facility. Additionally, the Credit Facility contains acceleration clauses that accelerate any borrowings in the event of default. The Company’s obligations and those of its future material domestic subsidiaries are collateralized by substantially all of their respective assets, subject to certain exceptions and limitations. At December 31, 2019 and 2018 , the Company had no outstanding amounts under the Credit Facility. At December 31, 2019 and 2018 , the amounts available were $31.9 million and $31.0 million , reduced for letters of credit issued and outstanding under the subfacility of $3.1 million and $4.0 million |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Exit Costs The Company had historically accounted for exit and disposal activities through the use of a lease exit liability. Under the new leasing guidance, the remaining lease exit liability was eliminated and the remaining balance was included as an adjustment to reduce the ROU assets for the relevant properties. Refer to Note 3 for further details. At December 31, 2018 , the lease exit liability was $0.8 million . Reorganization and Executive Departures In January 2019, the Company initiated and completed a restructuring plan (the “Reorganization Plan”) to improve efficiency and reduce expenses. The Company recorded severance costs of approximately $3.3 million in the first quarter of 2019 in connection with the Reorganization Plan. Of the total, the Company recorded $0.4 million in cost of revenue, $1.1 million in sales and marketing, $1.6 million in technology and development and $0.2 million in general and administrative expenses within the Company’s consolidated statements of comprehensive loss during the year ended December 31, 2019. The Company does not expect to incur significant additional charges in future periods related to this Reorganization Plan. In the second quarter of 2019, the Company incurred severance costs totaling $4.6 million associated with the separations of executive-level employees, including its former chief executive officer. Of the total, the Company recorded $0.4 million in sales and marketing, $0.9 million in technology and development and $3.3 million in general and administrative expenses in the Company’s consolidated statements of comprehensive loss during the year ended December 31, 2019. The following table presents a roll forward of the severance liability for the year ended December 31, 2019 (in thousands): Severance Liability Accrual at December 31, 2018 $ — Expense 7,871 Cash Payments (7,843 ) Accrual at December 31, 2019 $ 28 Legal Proceedings From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. The Company is not currently a party to any material legal proceedings, other than as described below. Stockholder Litigation Milbeck Federal Securities Litigation On March 30, 2018, Leon Milbeck filed a putative securities class action against the Company in the U.S. District Court for the Central District of California (the “Milbeck Federal Securities Litigation”). On June 27, 2018, the court appointed the Oklahoma Police Pension and Retirement Fund as lead plaintiff, who filed an amended complaint on August 24, 2018. The amended complaint sought an award of unspecified damages, interest, attorney’s fees and equitable relief based on allegations that the defendants made false or misleading statements about the Company’s business, operations, prospects and performance during a purported class period of February 16, 2017 through November 6, 2017 in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder and that the defendants made actionable misstatements in violation of Section 11 of the Securities Act in connection with our secondary offering that occurred during the class period. The amended complaint named the Company, certain of its then-current and former officers and directors and the underwriters for its secondary offering as defendants. On October 31, 2018, the plaintiff dismissed the underwriters from the litigation “without prejudice,” meaning that they could be reinstated as defendants at a later time, and on November 5, 2018, the Company filed a motion to dismiss the amended complaint, which the court denied on February 5, 2019. On May 9, 2019, the court granted the lead plaintiff’s motion for class certification. On August 2, 2019, the parties entered into an agreement to settle the Milbeck Federal Securities Litigation on a class-wide basis for $28.25 million , all of which was paid by the Company’s directors’ and officers’ liability insurance. On October 15, 2019, the court granted preliminary approval of the proposed settlement, and on January 27, 2020, the court issued a minute order granting final approval to the settlement. As a result, the Milbeck Federal Securities Litigation is resolved. Because the settlement was fully funded by the Company’s directors’ and officers’ liability insurance, the Company removed the settlement liability and offsetting insurance receivable of $28.25 million from its consolidated balance sheet at December 31, 2019 . California Derivative Litigation On March 6, 2019, the Company, certain of its then-current and former officers and directors and USAA were named as defendants in a derivative action filed by Dean Drulias nominally on behalf of the Company in the U.S. District Court for the Central District of California (the “California Derivative Litigation”). On March 12, 2019, the plaintiff filed an amended complaint, which alleged breach of fiduciary duties, unjust enrichment and violation of Section 10(b) and Section 29(b) of the Exchange Act and sought contribution for damages awarded against us in the Milbeck Federal Securities Litigation and an award of unspecified damages, interest, attorney’s fees and equitable relief based on substantially the same factual allegations as the Milbeck Federal Securities Litigation. On May 13, 2019, the Company filed motions to dismiss the amended complaint on the grounds of forum non conveniens based upon the exclusive forum provision of the Company’s certificate of incorporation, failure to make a pre-suit demand on the Company’s board of directors and failure to state a claim upon which relief may be granted. On October 23, 2019, the court granted the Company’s motion to dismiss the state-law claims with prejudice on the grounds of forum non conveniens and granted the Company’s motion to dismiss the federal-law claims without prejudice for failure to state a claim. In light of these rulings, the court declined to address the Company’s motion to dismiss for failure to show pre-suit demand futility. The court permitted the plaintiff to amend his complaint with respect to the dismissed federal-law claims, but on November 5, 2019, he informed the court that he declined to do so and stated his intent to appeal the court’s ruling. On November 18, 2019, the court entered judgment in favor of the defendants and against the plaintiff, and on December 13, 2019, the plaintiff appealed that judgment. The Company believes that the appeal is without merit, and intends to vigorously defend itself in this matter. The Company has not recorded an accrual related to this matter as of December 31, 2019 as the Company does not believe a loss is probable or reasonably estimable. Delaware Consolidated Derivative Litigation In August 2019, three purported stockholder derivative actions were filed in Delaware alleging a variety of claims nominally on the Company’s behalf arising out of alleged breaches of fiduciary duty under Delaware law based upon substantially the same factual allegations as the Milbeck Federal Securities Litigation. The complaints named the Company, certain of its then-current and former directors and officers, USAA and, in one of the actions, certain entities affiliated with USAA and certain of our current and former directors as defendants. On October 7, 2019, the Delaware Court of Chancery consolidated the cases into a single action in that court bearing the caption In re TrueCar, Inc. Stockholder Derivative Litigation (the “Delaware Consolidated Derivative Litigation”). On November 6, 2019, the plaintiffs filed a consolidated complaint against all of the defendants named in the prior actions, asserting claims for breach of fiduciary duty, unjust enrichment, contribution and indemnification against the Company’s current and former officers and directors, and claims for aiding and abetting breaches of fiduciary duty against the entities affiliated with USAA and with certain of the Company’s current and former directors. The plaintiffs seek an award of damages against the defendants on behalf of the Company and various alleged corporate governance reforms. On December 19, 2019, the defendants filed motions to dismiss for failure to make a pre-suit demand. The Company believes that the consolidated complaint is without merit, and intends to vigorously defend itself in this matter. The Company has not recorded an accrual related to this matter as of December 31, 2019 as the Company does not believe a loss is probable or reasonably estimable. Lee Derivative Litigation In December 2019, Sulgi Lee, a purported stockholder, filed a derivative action in the Delaware Court of Chancery alleging a variety of claims nominally on the Company’s behalf arising out of alleged breaches of fiduciary duty under Delaware law based upon substantially the same factual allegations as the Milbeck Federal Securities Litigation. The complaint named the Company, certain of its then-current and former directors and officers and USAA as defendants. The plaintiff seeks an award of damages against the defendants on the Company’s behalf and various alleged corporate governance reforms. The Company believes that the complaint is without merit, and intends to vigorously defend itself in this matter. The Company has not recorded an accrual related to this matter as of December 31, 2019 as the Company does not believe a loss is probable or reasonably estimable. Delaware Federal Derivative Litigation In April 2019, the Company, certain of its then-current and former directors and officers and USAA were named as defendants in derivative actions nominally on behalf of the Company filed by Ara Afarian and Shelley Niemi in the U.S. District Court for the District of Delaware. The complaints alleged breach of Section 29(b) of the Exchange Act as well as breach of fiduciary duties and unjust enrichment and sought contribution for damages awarded against the Company in the Milbeck Federal Securities Litigation and an award of unspecified damages, interest, attorney’s fees and equitable relief based on substantially the same factual allegations as the Milbeck Federal Securities Litigation. The Niemi complaint also sought rescission of certain contracts. On April 17, 2019, the cases were consolidated into a single action bearing the caption In re TrueCar, Inc. Shareholder Derivative Litigation . On September 4, 2019, the court granted the plaintiffs’ unopposed motion to voluntarily dismiss the litigation without prejudice, meaning it could be re-filed at a later date. In light of the termination of the litigation on this basis, the Company has not recorded an accrual related to this matter as of December 31, 2019 as the Company does not believe a loss is probable. The Lanham Act Litigation On March 9, 2015, the Company was named as a defendant in a lawsuit purportedly filed on behalf of numerous automotive dealers who are not on the TrueCar platform in the U.S. District Court for the Southern District of New York (the “NY Lanham Act Litigation”). The complaint in the NY Lanham Act Litigation alleged that the Company 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 sought 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. On January 6, 2016, the court granted in part and denied in part the Company’s motion to dismiss with respect to some, but not all, of the advertising and promotional activities challenged in the amended complaint. On July 2, 2018, the Company filed a motion for summary judgment seeking dismissal of the amended complaint in its entirety. On March 27, 2019, the court granted in part and denied in part the Company’s motion, allowing the plaintiffs to pursue disgorgement of the Company’s profits on a deterrence theory but granting summary judgment to the Company on the other aspects of the plaintiffs’ claims. On April 9, 2019, the Company filed a motion for reconsideration of the court’s ruling, which the court granted on July 12, 2019. As a result, the court granted the Company’s motion for summary judgment in its entirety as to the plaintiffs’ Lanham Act claim. In light of the dismissal of the plaintiffs’ sole federal claim, the court declined to exercise supplemental jurisdiction over the state-law claims alleged by the amended complaint and therefore dismissed them without prejudice, meaning that the state-law claims could be re-filed in state court at a later date. The plaintiffs did not appeal the dismissal of their claims, and the deadline for doing so passed in August 2019, so the NY Lanham Act Litigation is currently resolved. In light of the termination of the litigation, the Company has not recorded an accrual related to this matter as of December 31, 2019 , as it does not believe a loss is probable. The California Consumer Class Action On December 23, 2015, the Company was named as a defendant in a putative class action lawsuit filed by Gordon Rose in the California Superior Court for the County of Los Angeles. The complaint asserted claims for unjust enrichment, violation of the California Consumer Legal Remedies Act and violation of the California Business and Professions Code, based principally on allegations that the Company was operating in the State of California as an unlicensed automobile dealer and autobroker as well as factual allegations similar to those asserted in the NY Lanham Act Litigation. The complaint sought an award of unspecified damages, interest, disgorgement, injunctive relief and attorney’s fees. In the complaint, the plaintiff sought to represent a class of California consumers defined as “[a]ll California consumers who purchased an automobile by using TrueCar, Inc.’s price certificate during the applicable statute of limitations.” On July 13, 2016, the plaintiff amended his complaint. The amended complaint continued to assert claims for unjust enrichment, violation of the California Consumer Legal Remedies Act and violation of the California Business and Professions Code. The amended complaint retained the same proposed class definition as the initial complaint. Like the initial complaint, the amended complaint sought an award of unspecified damages, punitive and exemplary damages, interest, disgorgement, injunctive relief and attorney’s fees. On September 12, 2016, the Company filed a demurrer to the amended complaint. On October 13, 2016, the court granted in part and denied in part the Company’s demurrer to the amended complaint, dismissing the unjust enrichment claim but declining to dismiss the balance of the claims at the demurrer stage of the litigation. On February 7, 2018, the plaintiff filed a motion for class certification, which the court denied on July 27, 2018. On September 26, 2018, the plaintiff appealed the trial court’s denial of its motion for class certification, which the California Court of Appeal affirmed on December 16, 2019. On February 19, 2020, the plaintiff voluntarily dismissed the California Consumer Class Action. As a result, the California Consumer Class Action is resolved. In light of the termination of the litigation, the Company has not recorded an accrual related to this matter as of December 31, 2019 , as it does not believe a loss is probable. 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 of 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 intellectual property infringement claims made by third parties. While the Company’s future obligations under certain of these agreements may contain limitations on liability for indemnification, other agreements do not contain such limitations and under such agreements it is not possible to predict the maximum potential amount of future payments due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under such indemnities have not had a material effect on the Company’s business, financial condition, results of operations or cash flows. Additionally, the Company does not believe that any amounts that it may be required to pay under these indemnities in the future will be material to the Company’s business, financial position, results of operations, or cash flows. Purchase Obligations At December 31, 2019 , the Company had the following purchase obligations (in thousands): Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Purchase obligations $ 19,519 $ 7,568 $ 10,173 $ 1,578 $ 200 Purchase obligations include long-term agreements to purchase data information, software-related licenses, and support services, and other obligations that are enforceable and legally binding as of December 31, 2019 . Purchase obligations exclude agreements that are cancellable without penalty. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Follow-on Public Offering On April 26, 2017, the Company entered into an underwriting agreement to sell up to 1,150,000 shares of its common stock at $16.50 per share in a public offering (including shares subject to the underwriters’ option to purchase additional shares). The Company sold 1,150,000 shares in the offering with aggregate net proceeds to the Company of $17.4 million , net of underwriting discounts and commissions and offering costs of $1.6 million . Selling stockholders party to the underwriting agreement also sold an aggregate of 9,200,000 shares of common stock in the offering (including shares subject to the underwriters’ option to purchase additional shares). The Company did not receive any proceeds from the shares sold by the selling stockholders. The offering closed on May 2, 2017. Warrants Issued to USAA In May 2014, the Company extended our affinity group marketing agreement with USAA, the largest affinity partner and a significant stockholder of the Company. As part of the agreement, on May 1, 2014, 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 (i) the eighth anniversary of the date of issuance, (ii) the first anniversary of the termination of the USAA car-buying program, or (iii) the first anniversary of the date on which the Company no longer operates the USAA car-buying program. As a result, the Company expects the warrant to terminate on October 1, 2021. 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 group marketing program (Note 15). For the years ended December 31, 2019 , 2018 , and 2017 , there was no warrant expense recognized. At December 31, 2019 , there were 509,642 shares that were earned and outstanding under the warrant with an additional 949,337 remaining shares that are available for issuance upon the achievement of minimum performance milestones. Reserve for Unissued Shares of Common Stock The Company is required to reserve and keep available out of its authorized but unissued shares of common stock such number of shares sufficient for the exercise of all outstanding warrants, plus shares granted and available for grant under the Company’s equity incentive plans. The number of shares of the Company’s common stock reserved for these purposes at December 31, 2019 is as follows: Number of Shares Outstanding stock options 10,625,980 Outstanding restricted stock units 5,890,992 Outstanding common stock warrants 1,458,979 Additional shares available for grant under the equity plan 10,521,842 Total 28,497,793 |
Stock-based Awards
Stock-based Awards | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Awards | Stock-based Awards The Company has four equity incentive plans: the Amended and Restated 2005 Stock Plan (the “2005 Plan”), the 2008 Stock Plan (the “2008 Plan”), the 2014 Equity Incentive Plan (the “2014 Plan”), and the 2015 Inducement Equity Incentive Plan (the “Inducement Plan”). In connection with the Company’s initial public offering in May 2014 (the “IPO”), the 2005 Plan and the 2008 Plan were terminated. Upon the IPO, the shares reserved for issuance under the 2014 Plan include (i) shares that have been reserved but not issued pursuant to any awards granted under the 2005 Plan, plus (ii) shares subject to stock options or similar awards granted under the 2005 Plan or the 2008 Plan that, after the registration date, expire or terminate without having been exercised in full and shares issued pursuant to awards granted under the 2005 Plan or the 2008 Plan are forfeited to or repurchased by the Company. In addition, the shares available for issuance under the 2014 Plan include an annual increase on January 1 of each year equal to the least of: (x) 10,000,000 shares; (y) 5% of the total outstanding shares of TrueCar common stock as of the last day of the previous fiscal year; or (z) such other amount as determined by the Company’s Board of Directors. As of December 31, 2019 , the total number of shares available for future issuance under the 2014 Plan was 10,521,842 shares. In accordance with the evergreen provision, effective January 1, 2020, an additional 5,343,291 shares of common stock were authorized to be issued under the 2014 Plan. Under the Inducement Plan, there were 1,840,000 shares of common stock reserved for the issuance of nonqualified stock options. In December 2015, in conjunction with the hiring of the Company’s then president and CEO, the Company granted a stock option to purchase 1,840,000 shares of the Company’s common stock under the Inducement Plan that vest over a four year period and expire 10 years from the date of grant. There are no shares available for future issuance under the Inducement Plan. Under the 2014 Plan, the Company has the ability to issue incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares. The exercise price of stock options granted under the 2014 Plan must at least equal the fair market value of the Company’s common stock on the date of grant. Stock options granted generally vest monthly over a four year period and expire ten years from the date of grant. Restricted stock units generally vest quarterly over a four to five year period. Stock Options A summary of the Company’s stock option activity for the year ended December 31, 2019 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (1) (in years) (in millions) Outstanding at December 31, 2018 14,114,651 $ 12.32 7.0 Granted 2,128,069 6.94 Exercised (364,525 ) 7.82 Forfeited/expired (5,252,215 ) 12.68 Outstanding at December 31, 2019 10,625,980 $ 11.22 5.2 $ 0.3 Vested and expected to vest at December 31, 2019 10,625,980 $ 11.22 5.2 $ 0.3 Exercisable at December 31, 2019 7,927,239 $ 11.18 4.2 $ 0.2 (1) The aggregate intrinsic value represents the excess of the closing price of the Company’s common stock of $4.75 on December 31, 2019 over the exercise price of in-the-money stock option awards. At December 31, 2019 , total remaining stock-based compensation expense for unvested option awards was $12.5 million , which is expected to be recognized over a weighted-average period of 2.2 years. The weighted-average grant-date fair value per share of options granted for the years ended December 31, 2019 , 2018 , and 2017 was $3.97 , $4.60 , and $8.77 , respectively. The Company recorded stock-based compensation expense for stock option awards of $13.7 million , $16.0 million , and $17.3 million , for the years ended December 31, 2019 , 2018 , and 2017 , respectively. The total intrinsic value of options exercised in 2019 , 2018 , and 2017 was $0.5 million , $6.6 million , and $120.4 million , respectively. Restricted Stock Units A summary of the Company’s restricted stock unit (“RSU”) activity for the year ended December 31, 2019 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Non-vested — December 31, 2018 5,375,963 $ 11.01 Granted 5,436,368 6.36 Vested (2,830,183 ) 9.44 Forfeited (2,091,156 ) 9.63 Non-vested — December 31, 2019 5,890,992 $ 7.96 The total fair market value of RSUs that vested for the years ended December 31, 2019 , 2018 , and 2017 was $16.0 million , $22.4 million , and $25.6 million , respectively. The weighted-average grant-date fair value of RSUs granted for the years ended December 31, 2019 , 2018 , and 2017 was $6.36 , $10.00 , and $18.26 , respectively. For the years ended December 31, 2019 , 2018 , and 2017 , the Company recorded $24.3 million , $21.2 million , and $14.9 million in compensation expense, respectively. At December 31, 2019 , total remaining stock-based compensation expense for non-vested RSUs is $43.8 million , which is expected to be recognized over a weighted-average period of 2.7 years . Valuation Assumptions and Stock-based Compensation Cost The fair value of stock options granted to employees is estimated on the grant date using the Black-Scholes option-pricing model. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term, the volatility of the Company’s common stock, risk-free interest rate, and expected dividends. The Company uses the simplified method under the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate expected term for plain vanilla share options. The Company’s computation of volatility is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses an expected dividend of zero , as it does not anticipate paying any dividends in the foreseeable future. The fair value of each stock option award was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.32 % 2.85 % 1.89 % Expected term (years) 6.07 5.94 6.25 Expected volatility 60 % 46 % 47 % Dividend yield — — — As a result of the Company’s early adoption of the revised share-based payment guidance in 2016, forfeitures are recognized as they occur. Prior to the adoption of this guidance, forfeitures were estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company recorded stock-based compensation cost relating to stock options and RSUs in the following categories on the accompanying consolidated statements of comprehensive loss (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 2,157 $ 1,726 $ 1,105 Sales and marketing 13,362 13,950 10,353 Technology and development 8,256 10,589 8,060 General and administrative 14,199 10,954 12,723 Total stock-based compensation expense 37,974 37,219 32,241 Amount capitalized to internal-use software 1,811 1,890 1,407 Total stock-based compensation cost $ 39,785 $ 39,109 $ 33,648 As referenced in Note 9, certain executive-level employees, including the Company’s former chief executive officer, separated from the Company in the second quarter of 2019. Benefits provided associated with these terminations include severance payments, acceleration of certain equity awards and extension of the exercise period for certain vested stock options. As a result of these termination benefits, the Company recognized $7.2 million in additional stock-based compensation expense for the year ended December 31, 2019 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State 75 67 18 Total current provision 75 67 18 Deferred: Federal 173 (282 ) 410 State 41 38 40 Tax Act impact — — (2,632 ) Total deferred provision (benefit) 214 (244 ) (2,182 ) Total income tax provision (benefit) $ 289 $ (177 ) $ (2,164 ) The 2019 income tax provision of $0.3 million primarily reflects the amortization of tax-deductible goodwill that is not an available source of income to realized deferred tax assets. The 2018 income tax benefit of $0.2 million primarily reflects decrease in valuation allowance in partial recognition of deferred tax assets associated with 2018 indefinite-lived net operating losses. The 2017 income tax benefit of $2.2 million included a $2.6 million impact from the change in tax law. Of the $2.6 million impact of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), $1.2 million results from the remeasurement of our U.S. federal deferred tax assets and liabilities at the tax rate expected to apply when the temporary differences are realized/settled (remeasured at a rate of 21% versus 34% for the majority of the deferred tax assets and liabilities), and $1.4 million resulted from the decrease in valuation allowance associated with the partial recognition of our tax-deductible goodwill amortization as an available source of income to realize certain indefinite-lived deferred tax assets. The overall effective income tax rate differs from the statutory federal rate as follows: Year Ended December 31, 2019 2018 2017 Income tax benefit based on the federal statutory rate 21.0 % 21.0 % 34.0 % State income taxes, net of federal benefit (1.5 ) 1.4 9.4 Nondeductible expenses (3.5 ) (4.7 ) (1.2 ) Change in valuation allowance, excluding Tax Act impact (4.5 ) (14.2 ) (130.0 ) Stock-based compensation (12.0 ) (2.9 ) 86.5 Tax Act impact — — 7.5 Overall effective income tax rate (0.5 )% 0.6 % 6.2 % The components of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 103,188 $ 101,763 Stock-based compensation 10,954 13,227 Accrued expenses 2,261 1,950 Research and development tax credits 569 569 Operating leases liabilities 10,724 — Other 619 656 Gross deferred tax assets 128,315 118,165 Valuation allowance (111,193 ) (109,625 ) Net deferred tax assets 17,122 8,540 Deferred tax liabilities: Property, equipment and software (3,800 ) (3,477 ) Intangible assets and goodwill (4,075 ) (4,274 ) Capitalized commissions (692 ) (791 ) §481(a) Adjustment - ASC 606 (380 ) (566 ) Operating lease assets (8,958 ) — Gross deferred tax liabilities (17,905 ) (9,108 ) Total net deferred tax liabilities $ (783 ) $ (568 ) The net deferred tax liability at December 31, 2019 and 2018 relates to amortization of tax-deductible goodwill that is not an available source of income to realize deferred tax assets. Accordingly, the net deferred tax liability does not reduce the need for a valuation allowance related to the Company’s net deferred tax assets. At December 31, 2019 , the Company had federal and state net operating loss carryforwards of $415.1 million and $242.5 million , respectively. The Company’s federal and state net operating loss carryforwards begin to expire in the years ending December 31, 2025 and 2020, respectively. At December 31, 2019 , the Company had federal and state research and development tax credit carryforwards of approximately $0.8 million and $0.4 million , respectively. The federal tax credit carryforwards begin to expire in the year ending December 31, 2028. The state tax credit carryforward can be carried forward indefinitely. The Internal Revenue Code of 1986, as amended (the “IRC”), imposes substantial restrictions on the utilization of net operating losses and other tax attributes in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use pre-change net operating loss and research tax credits may be limited as prescribed under IRC Sections 382 and 383. Events that may cause a limitation in the amount of the net operating losses and credits that the Company uses in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. During 2019, the Company experienced a cumulative ownership change. This ownership change could have materially impaired the Company’s ability to utilize its net operating losses and tax credits. Upon receipt of certain additional information from investors, the Company will determine the amount of potential limitation. Any decrease in deferred tax assets associated with these tax attributes would be fully offset by a corresponding decrease in our valuation allowance, with no net tax provision impact. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2019 . Such objective evidence limits the ability to consider other subjective evidence such as its projections for future growth. On the basis of this evaluation, at December 31, 2019 , a valuation allowance of $111.2 million has been recorded since it is more likely than not that the deferred tax assets will not be realized. The change in the valuation allowance for the years ended December 31, 2019 , 2018 , and 2017 is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Valuation allowance, at beginning of year $ 109,625 $ 107,046 $ 115,689 Decrease in valuation allowance - ASC 606 impact — (1,457 ) — Increase in valuation allowance - operating lease impact (915 ) — — Valuation allowance, at beginning of year, as adjusted $ 108,710 $ 105,589 $ 115,689 Increase in valuation allowance, excluding Tax Act impact 2,483 4,036 45,512 Decrease in valuation allowance - federal tax rate change — — (52,757 ) Release of valuation allowance due to the Tax Act — — (1,398 ) Valuation allowance, at end of year $ 111,193 $ 109,625 $ 107,046 The $2.5 million increase in valuation allowance is primarily related to an increase in the tax-effected amount of unrealized net operating loss carryforwards. It is reasonably possible that a material adjustment to the valuation allowance will occur within one year upon finalization of the Company’s IRC Sections 382 and 383 analyses. The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2019 2018 2017 Unrecognized tax benefit, beginning of year $ (3 ) $ (3 ) $ 3 Additions for prior years’ tax positions — — 1 Settlements with tax authorities — — (7 ) Unrecognized tax benefit, end of year $ (3 ) $ (3 ) $ (3 ) The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. At December 31, 2019 , no interest and penalties related to uncertain tax positions have been accrued. The Company is subject to United States federal and state taxation. Due to the presence of net operating loss carryforwards, all income tax years remain open for examination by the Internal Revenue Service and various state taxing authorities. The Company is not currently under Internal Revenue Service or state tax examination. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic earnings per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding, net of the weighted average unvested restricted stock subject to repurchase by the Company, if any, during the period. Diluted earnings per share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common stock, which are comprised of stock options, restricted stock units and stock warrants, using the treasury-stock method, and convertible preferred stock, using the if-converted method. Because the Company reported losses attributable to common stockholders for all periods presented, all potentially dilutive common stock is antidilutive for those periods. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders during the years ended December 31, 2019 , 2018 , and 2017 (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net loss $ (54,890 ) $ (28,321 ) $ (32,849 ) Weighted-average common shares outstanding 105,805 102,149 94,865 Net loss per share — basic and diluted $ (0.52 ) $ (0.28 ) $ (0.35 ) The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders at December 31, 2019 , 2018 , and 2017 (in thousands): December 31, 2019 2018 2017 Options to purchase common stock 10,626 14,115 16,714 Common stock warrants 1,459 1,459 1,459 Unvested restricted stock units 5,891 5,376 4,284 Total shares excluded from net loss per share attributable to common stockholders 17,976 20,950 22,457 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company has a 401(k) Savings Retirement Plan that covers substantially all full-time employees who meet the plan’s eligibility requirements and provides for an employee elective contribution. The Company made matching contributions to the plan of $2.5 million , $2.4 million , and $2.3 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with USAA USAA is a large stockholder in the Company and the Company’s most significant affinity marketing partner. The Company has entered into arrangements with USAA pursuant to which the Company operates its Auto Buying Program through a white-labeled website available to USAA’s members. At the time that the Company entered into these arrangements, USAA met the definition of a related party. The Company has amounts due from USAA at December 31, 2019 and 2018 of $0.2 million and $0.3 million , respectively. In addition, the Company has amounts due to USAA at December 31, 2019 and 2018 of $7.3 million and $5.3 million , respectively. At December 31, 2019 and 2018 , $6.0 million and $5.0 million , respectively, was included in accounts payable, while $1.3 million and $0.2 million , respectively, was included in accrued expenses and other current liabilities. The Company recorded sales and marketing expense of $23.2 million , $22.1 million , and $16.5 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively, related to service arrangements entered into with USAA. Transactions with Accu-Trade During the first quarter of 2019, the Company became a 20% owner of Accu-Trade and accounts for the investment using the equity method, as the Company has significant influence over the investee. The Company had amounts due to Accu-Trade at December 31, 2019 of $0.4 million . The Company recognized contra-revenue of $1.2 million and cost of revenue of $1.0 million during the year ended December 31, 2019 related to a software and data licensing agreement entered into with Accu-Trade. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company entered into a short-term agreement effective February 14, 2020 to extend its partnership with USAA Federal Savings Bank (“USAA FSB”) to continue to power the USAA Car Buying Service through September 30, 2020. Revenue share from USAA FSB to the Company will remain the same as it was under the previous agreement. In addition, USAA FSB will pay the Company a $20 million transition services fee that will be earned over the term of the agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company’s consolidated financial statements from the date of the acquisition. The Company’s purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. |
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 that are subject to judgment and use of estimates include sales allowances and allowances for doubtful accounts, contract assets, the fair value of a warrant asset and the related liability, the fair value of assets and liabilities assumed in business combinations, the 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, lease exit liabilities, 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 fair values of its right-of-use assets and lease liabilities, capitalized facility leases, assets and liabilities assumed in business combinations, warrant asset and related liability, assets and liabilities of its equity method investment, performance-based stock units, and in periods prior to the Company’s initial public offering, valuation of common stock. |
Segments | Segments The Company has one operating segment. During the first quarter of 2019, the Company’s chief operating decision maker (“CODM”) was the President and Chief Executive Officer and the Interim Chief Financial Officer and Chief Accounting Officer, who managed the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. Effective April 1, 2019, the Company’s Interim Chief Financial Officer and Chief Accounting Officer resigned from his positions. From April 1, 2019, through May 31, 2019, the Company’s CODM was solely comprised of the President and Chief Executive Officer until his resignation on May 31, 2019. From June 1, 2019 through June 16, 2019, the CODM was comprised of the Interim President and Chief Executive Officer. Upon the hiring of the Chief Financial Officer on June 17, 2019 and through December 31, 2019, the CODM was comprised of both the Interim President and Chief Executive Officer and the Chief Financial Officer. During the year ended December 31, 2019, the Company’s operations were managed based on consolidated financial information for purposes of evaluating financial performance and allocating resources by the various CODM in place. The CODM reviews financial information on a consolidated basis, accompanied by information about dealer revenue, OEM incentive revenue, and forecasts, consulting and other revenue (Note 4). All of the Company’s principal operations, decision-making functions and assets are located in the United States. |
Equity Method Investment | The Company recognizes its proportional share of the income or loss from the equity method investment on a one-quarter lag due to the timing and availability of financial information from Accu-Trade. Included in the initial carrying value of $22.9 million , which represents the fair value on the transaction date, was a basis difference of $21.0 million |
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. Fair Value Methods Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally-developed models that primarily use market-based or independently sourced market parameters as inputs. For assets and liabilities measured at fair value, the following section describes the valuation methodologies, key inputs, and significant assumptions. Cash equivalents, consisting primarily of money market instruments and debt securities, represent highly liquid investments with maturities of three months or less at purchase. Generally, market prices are used to determine the fair value of money market instruments and debt securities. The carrying amounts of cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these items. The fair value of the Company’s revolving line of credit approximates carrying value based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements. |
Concentrations of Credit and Business Risk | Concentrations of Credit and Business Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company, at times, maintains cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. The Company places its cash and cash equivalents with high credit quality financial institutions. Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts based on these evaluations. No single customer comprised more than 10% of the Company’s total revenues for the years ended December 31, 2019 , 2018 , and 2017 . No single customer comprised more than 10% of the Company’s accounts receivable balance at December 31, 2019 and 2018 . |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances | Accounts Receivable, Allowance for Doubtful Accounts, and Sales Allowances The Company extends credit in the normal course of business to its customers and performs credit evaluations on a case-by-case basis. The Company does not obtain collateral or other security related to its accounts receivable. Accounts receivable are recorded based on the amount due from the customer and do not bear interest. The Company reduces accounts receivable for sales allowances and its allowance for doubtful accounts. For contract assets, the Company records the assets net of sales allowances and an allowance for doubtful accounts, which are estimated in the same manner as for accounts receivable balances. The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its network of dealers. Sales allowances relate primarily to credits issued where a dealer claims that an introduction was previously identified by the dealer from a source other than the Company. While the dealer is contractually obligated to pay the invoice, the Company may issue a credit against the invoice to maintain overall dealer relations. In assessing the adequacy of its sales allowances, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments and credits and ultimate losses may vary from actual results which could be material to the financial statements; however, to date, actual sales allowances have been materially consistent with the Company’s estimates. The Company determines its allowance for doubtful accounts based on its historical write-off experience and specific circumstances that make it likely that recovery will not occur in a particular case. The Company reviews the allowance for doubtful accounts each reporting period and assesses the aging of account balances, with an emphasis on those that are past due over ninety days . Account balances are charged off against the allowance when the Company determines that it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software, five years for furniture and equipment, and over the shorter of the lease term or the useful life of the assets for leasehold improvements. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s results of operations. |
Leases | Leases On January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition method applied at the effective date of the standard. The Company determines if an arrangement is a lease at inception and determine the classification of the lease, as either operating or finance, at commencement. The Company does not have any finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of secured borrowing over the expected term of the leases based on the information available at the later of the initial date of adoption or the lease commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. See Note 3 for additional information. |
Software and Website Development Costs | Software and Website Development Costs The Company accounts for the costs of computer software obtained or developed for internal use in accordance with FASB ASC 350, Intangibles — Goodwill and Other . Computer software development costs and website development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include certain employee related expenses, including salaries, bonuses, benefits and stock-based compensation expenses; costs of computer hardware and software; and costs incurred in developing features and functionality. These capitalized costs are included in property and equipment on the consolidated balance sheets. The Company expenses costs incurred in the preliminary project and post-implementation stages of software development and capitalizes costs incurred in the application development stage and costs associated with significant enhancements to existing internal use software applications. Software costs are amortized using the straight-line method over an estimated useful life of three years commencing when the software project is ready for its intended use. |
Intangible Assets Acquired in Business Combinations | ntangible Assets Acquired in Business Combinations The Company values assets acquired and liabilities assumed on each acquisition accounted for as a business combination, and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on its best estimate of fair value. Acquired intangible assets include: trade names, customer relationships, and developed technology. The Company determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for trade names, customer relationships, and technology are generally, one to fifteen years , two to ten years , and three to ten years , respectively. |
Long Lived Assets | Long-Lived Assets |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the identifiable assets and liabilities acquired in the Company’s business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of use of the acquired assets or the Company’s overall business strategy, significant negative industry or economic trends, significant underperformance relative to expected historical or projected future results of operations, or a decline in the Company’s stock price and market capitalization. During 2019, the Company’s stock price experienced high volatility ranging from a high of $10.39 to a low of $3.01 per share, causing a decline in its enterprise market capitalization. If the Company’s stock price declines further, material write-downs or impairment charges may be required in the future. The magnitude and timing of those charges would be dependent on the severity and duration of the decline and cannot be determined at this time. Any material non-cash impairment charges related to goodwill would have a material adverse effect on the Company’s results of operations and financial condition. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. The quantitative test involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, an impairment loss is recognized in an amount equal to the excess. |
Revenue Recognition | Revenue Recognition 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 replaces all existing revenue recognition guidance under GAAP. The Company adopted the new revenue standard as of January 1, 2018 using the modified retrospective transition method. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with prior revenue guidance. See Note 4 for further details. Under the new revenue standard, the Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the performance obligation or obligations are satisfied. Dealer Revenue Dealer revenue is comprised of Auto Buying Program revenue as well as revenue from TrueCar Trade and DealerScience. Auto Buying Program revenues include fees paid by customers participating in the Company’s dealer network with which the Company has an agreement (“TrueCar Certified Dealers” or “Dealers”). TrueCar Certified Dealers pay the Company fees in one of three ways: on a per-vehicle basis for sales to Auto Buying Program users, on a per-introduction basis for sales to Auto Buying Program users, or under a subscription arrangement. Contracts are cancellable by the Dealer or the Company at any time. The Company does not provide significant Dealer financing terms. The Company’s performance obligation to TrueCar Certified Dealers is the same for all payment types for our Auto Buying Program revenues: to provide Dealers with introductions to in-market consumers through the use of the TrueCar platform, so that those Dealers have the opportunity to sell vehicles to those consumers. Control transfers to Dealers upon delivery of introductions, which is the point at which the Company recognizes revenue. When a user decides to proceed with a vehicle purchase through the Company, the user provides his or her name, address, email, and phone number during the process of obtaining price offers on actual vehicle inventory, which gives the Company the identity and source of a TrueCar introduction provided to a specific Dealer before an actual sale occurs. After a sale occurs, the Company receives information regarding the sale, including the identity of the purchaser, through the Dealer Management System used by the Dealer that made the sale. The Company also receives information regarding vehicle sales from a variety of other data sources, including third-party car sales aggregators, car dealer networks, and other publicly available sources (collectively, “sales data”) and uses this sales data to further verify that a sale has occurred between an Auto Buying Program user and a TrueCar Certified Dealer, as well as to invoice the Dealer shortly after the completion of the sales transaction. Actual vehicle sales data is reported on a daily basis shortly following the date of sale. Pay-Per-Sale. Under the old revenue standard, in years prior to 2018, the Company recognized revenue for fee arrangements based on a per-vehicle basis when the vehicle sale had occurred between the Auto Buying Program user and the Dealer. Under the new revenue standard for fee arrangements based on a pay-per-sale billing model, revenue for the Auto Buying Program is recognized when introductions are delivered to the Dealer and for the amount that the Company estimates it will be able to earn. To formulate this estimate, the Company uses the expected value method based primarily on an analysis of the expected number of sales resulting from in-period introductions. This estimate is based on historical introductions to vehicle sale close rate trends as well as actual sales measured in period. Under the contractual terms and conditions of arrangements with TrueCar Certified Dealers that pay on a per-vehicle-sale basis, the Dealer is not obligated to pay the Company until a vehicle sale has occurred between the Auto Buying Program user and the Dealer, for which the introduction was provided to the Dealer by the Company. Contractually, the Dealers’ obligation to pay is not contingent on verification or acceptance of the transaction by the Dealer. As a result, revenue recognition occurs earlier than billing as an estimate of the variable consideration to be received upon control transfer of the delivered introduction, resulting in a contract asset. Pay-Per-Introduction. Under fee arrangements based on a pay-per-introduction billing model, revenue for the Auto Buying Program is recognized when introductions are delivered. The Company also recognizes revenue from Dealers under subscription agreements. Subscription fee arrangements are short-term in nature with terms ranging from one to six months and are also cancellable by the Dealer or the Company at any time. Subscription arrangements fall into three types: flat-rate subscriptions, subscriptions subject to downward adjustment based on a minimum number of vehicle sales (“guaranteed sales”), and subscriptions based on introduction volume, including those subject to downward adjustment based on a minimum number of introductions (“guaranteed introductions”). For all subscription arrangements, the Company recognizes the fees as revenue when introductions are delivered by allocating a portion of the monthly subscription fee to each delivered introduction. For guaranteed sales and guaranteed introduction subscriptions, the amount allocated is adjusted at the end of each month for any credits, as described below. Total revenue recognized in any given month remains unchanged from the old revenue standard for subscription arrangements. Flat-Rate Subscription. Under flat-rate subscription arrangements, fees are charged at a monthly flat rate regardless of the number of introductions provided by the Company to the Dealer or sales made to users of the Company’s platform by the Dealer. Guaranteed-Sales Subscription. Under guaranteed-sales subscription arrangements, monthly fees are charged based on the number of guaranteed sales multiplied by a fixed amount per vehicle. To the extent that the actual number of vehicles sold by the Dealers to users of the Company’s platform is less than the number of guaranteed sales, the Company provides a credit to the Dealer. If the actual number of vehicles sold exceeds the number of guaranteed sales, the Company is not entitled to any additional fees. As of January 1, 2019, the Company no longer offers guaranteed sales subscription arrangements in California, and it transferred all California dealers from this billing method to flat-rate subscription arrangements before that date. Guaranteed-Introductions Subscription. Under guaranteed-introductions subscription arrangements, monthly fees are charged based on a periodically-updated formula that considers, among other things, the introductions anticipated to be provided to the Dealer. To the extent that the number of actual introductions is less than the number of guaranteed introductions, the Company provides a credit to the Dealer. If the actual number of introductions provided exceeds the number guaranteed, the Company is not entitled to any additional fees. TrueCar Trade . TrueCar Trade provides consumers with information on the value of their trade-in vehicles, while providing Dealers with introductions to these in-market consumers so that those Dealers have the opportunity to buy trade-in vehicles from those consumers. Dealers pay monthly subscription fees for access to TrueCar Trade that vary depending on the level of service selected. Depending on their subscription terms, some Dealers pay additional transaction fees for each vehicle purchased from a consumer that was introduced through TrueCar Trade. Subscription fees are recognized on a monthly basis, while transaction fees for vehicles purchased by a Dealer are estimated and recognized at the point in time the introduction between the Dealer and consumer occurs. DealerScience. DealerScience revenues consist of monthly subscription fees paid by dealers for access to DealerScience’s products and services. DealerScience provides dealers with advanced digital retailing software tools that allow them to calculate accurate monthly payments, expedite vehicle desking, which is the process of presenting and agreeing upon financial terms and financing options, and streamline the consumers’ experience from shopping to showroom. Subscription fees are recognized on a monthly basis. OEM Incentives Revenue The Company enters into arrangements with OEMs to promote the sale of their vehicles primarily through the offering of additional consumer incentives. These manufacturers pay a per-vehicle fee to the Company for promotion of the incentive after the sale of the vehicle has occurred between the Auto Buying Program user and the Dealer. Under the old revenue standard, in years prior to 2018, the Company recognized as revenue the per-vehicle incentive fee at the time the sale of the vehicle occurred between the Auto Buying Program user and the Dealer. Under the new revenue standard, the Company’s performance obligation to OEMs is to deliver incentive offers to consumers. Control transfers upon delivery of incentive offers, which is the point at which the Company recognizes revenue. The Company recognizes revenue for the amount that the Company estimates it will be able to earn. To formulate this estimate, the Company uses the expected value method based primarily on an analysis of the expected number of sales resulting from in-period incentive offers delivered. This estimate is based on historical incentive offers to vehicle sale close rate trends as well as delivered incentive offers resulting in actual sales measured in period. As a result, revenue recognition occurs earlier than billing as an estimate of the variable consideration to be received upon control transfer, resulting in a contract asset. Forecasts, Consulting and Other Revenues Revenues are generated from the sale of forecasts of lease residual value data for new and used leased automobiles, guidebooks, and consulting projects. Sales are principally made to vehicle manufacturers, vehicle financing companies, investment banks, automobile dealers, and insurance companies. Forecasts and consulting project sales arrangements may include multiple promises to deliver goods and services, such as sale of lease residual forecasts from guidebooks and consulting projects. For revenue arrangements containing multiple promises to transfer goods or services, the Company first determines which of the goods or services are distinct and therefore separate performance obligations. If multiple distinct performance obligations are identified, the total transaction price for a contract is allocated to each performance obligation on a relative standalone selling price basis. In most cases, the goods and services we promise to deliver are sold on a stand-alone basis, which is determined to be the standalone selling price. Revenue allocated to each performance obligation from the sale of lease residual value forecasts, guidebooks, and consulting projects is recognized when each performance obligation is satisfied. Some residual value data is available via subscription with updated data provided as available during the subscription period or as part of discrete delivered data packages. Sales attributed to residual value data and guidebooks are recognized either over time during the subscription period or when the data or guidebooks are delivered, depending on the terms of the contract, and consulting projects are recognized when the project is delivered. The Company has elected to use the practical expedient of not disclosing the remaining performance obligations for contracts that have durations of one year or less. The Company does not have significant remaining performance obligations in excess of one year. Incremental Costs to Obtain a Contract The new revenue standard requires the deferral of the recognition of incremental costs to obtain a contract, which the Company has identified as certain of its sales commissions paid to internal sales representatives for the sale of TrueCar’s services to Dealers. These costs are deferred and then amortized over the expected customer life, which has been determined to be three years based on an analysis of historical and expected customer life. Amortization expense is included within sales and marketing on the accompanying consolidated statements of comprehensive loss. Prior to adoption of the new revenue standard, sales commissions were expensed when incurred. Cost of Revenue (exclusive of depreciation and amortization) Cost of revenue includes expenses related to the fulfillment of the Company’s services, consisting primarily of data costs and licensing fees paid to third-party service providers and expenses related to operating the Company’s website and mobile applications, including those associated with its data centers, hosting fees, data processing costs required to deliver introductions to its network of TrueCar Certified Dealers, employee costs related to certain dealer operations, sales matching, and employee and consulting costs related to delivering data and consulting services to the Company’s customers. Cost of revenue excludes depreciation and amortization of software development costs and other hosting and data infrastructure equipment used to operate the Company’s platforms, which are included in the depreciation and amortization line item on its statements of comprehensive loss. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses consist primarily of: television, digital, and radio advertising; media production costs; affinity group partner marketing fees, which also includes loan subvention costs where the Company pays certain affinity group marketing partners a portion of consumers’ borrowing costs for car loan products offered by these affinity group marketing partners; common stock warrants issued to USAA; marketing sponsorship programs; and digital customer acquisition. In addition, sales and marketing expenses include employee-related expenses for sales, customer support, marketing, and public relations employees, including salaries, bonuses, benefits, severance, and stock-based compensation expenses; third-party contractor fees; and facilities costs. |
Technology and Development | Technology and Development Technology and development expenses consist primarily of employee-related expenses for technology and development staff, including salaries, benefits, bonuses, severance, and stock-based compensation; the cost of certain third-party service providers; and facilities costs. Technology and development expenses are expensed as incurred. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of employee-related expenses for administrative, legal, finance, and human resource staffs, including salaries, benefits, bonuses, severance, and stock-based compensation; professional fees; insurance premiums; other corporate expenses; lease-exit charges; and facilities costs. |
Stock Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense related to employee stock options and restricted stock units based on the fair value of the awards on the grant date. Stock-based compensation for employee awards is recognized on a straight-line basis over the requisite period, except for performance-based awards which are recognized using the graded-vesting model. The Company estimates the grant-date fair value of option grants, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. For issuances of restricted stock units, the Company determines the fair value of the award based on the closing market value of its common stock at the date of grant Compensation expense for non-employee stock-based awards is recognized in accordance with Accounting Standards Update ("ASU") No. 2018-07, Stock-based Compensation - Improvements to Nonemployee Share-based Payment Accounting , which the Company adopted on January 1, 2019. This ASU aligns much of the guidance on measuring and classifying nonemployee awards with that of awards to employees. Under this new guidance, the measurement of nonemployee equity awards is fixed on the grant date. Stock option awards issued to non-employees are accounted for at fair value using the Black-Scholes option-pricing model. Restricted stock unit awards are measured based on the closing market value of the Company’s common stock at grant date. Stock-based compensation is recognized over the service period. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, under which deferred tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if any, in its income tax provision in the accompanying statements of comprehensive loss. |
Comprehensive Loss | Comprehensive Loss |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification Topic 740, Income Taxes. This standard is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of this guidance but the adoption is not expected to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued new guidance that modifies the disclosure requirements in fair value measurements by removing, modifying and adding certain disclosures. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued new guidance that aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued new guidance to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of Accounting Standards Codification Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued new guidance that replaces the existing model for measuring the allowance for credit losses for financial assets measured at amortized cost (including trade accounts receivable) to a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecast information. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued guidance amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. On January 1, 2019, the Company adopted the new leasing standard using the modified retrospective transition method. See Note 3 for further details. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of financial assets measured at fair value on a recurring basis | The following table summarizes the Company’s assets and liabilities at fair value on a recurring basis at December 31, 2019 and 2018 by level within the fair-value hierarchy. These assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): At December 31, 2019 At December 31, 2018 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 174,429 $ — $ — $ 174,429 $ 192,207 $ — $ — $ 192,207 Total Assets $ 174,429 $ — $ — $ 174,429 $ 192,207 $ — $ — $ 192,207 Liabilities: Contingent consideration, current $ — $ — $ 2,441 $ 2,441 $ — $ — $ — $ — Contingent consideration, non-current — — 2,336 2,336 — — 4,477 4,477 Total Liabilities $ — $ — $ 4,777 $ 4,777 $ — $ — $ 4,477 $ 4,477 |
Schedule of changes in fair value of contingent consideration obligation | The following table summarizes the changes in the fair value of the contingent consideration obligation (in thousands): Year Ended December 31, 2019 2018 Fair value, at beginning of year $ 4,477 $ — Additions — 4,477 Changes in fair value 300 — Fair value, at end of year $ 4,777 $ 4,477 |
Summary of changes in the allowance for doubtful accounts and sales allowances | The following table summarizes the changes in the allowance for doubtful accounts and sales allowances (in thousands): Year Ended December 31, 2019 2018 2017 Allowances, at beginning of year $ 3,382 $ 3,030 $ 2,600 Charged as a reduction of revenue 11,751 8,703 7,734 Charged to bad debt expense in general and administrative expenses 1,432 1,688 1,385 Write-offs, net of recoveries (9,806 ) (10,039 ) (8,689 ) Allowances, at end of year $ 6,759 $ 3,382 $ 3,030 |
Schedule of expected amortization expense with respect to capitalized software costs | Expected amortization expense with respect to capitalized software costs at December 31, 2019 for each of the years through December 31, 2022 is as follows (in thousands): Years ended December 31, 2020 $ 12,302 2021 7,504 2022 2,364 Total amortization expense $ 22,170 Expected amortization expense with respect to intangible assets at December 31, 2019 for each of the five years through December 31, 2024 and thereafter is as follows (in thousands): Years ended December 31, 2020 $ 6,187 2021 4,572 2022 1,977 2023 1,977 2024 1,977 Thereafter 570 Total amortization expense $ 17,260 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of cumulative effects | The cumulative effects of the changes made to the Company’s January 1, 2019 consolidated balance sheet were as follows (in thousands): December 31, 2018 Adjustments Due to Adoption of New Leasing Standard January 1, 2019 Assets Other current assets $ 4,103 $ 188 $ 4,291 Property and equipment, net 61,511 (25,461 ) 36,050 Operating lease right-of-use assets — 42,010 42,010 Other assets 7,228 147 7,375 Liabilities Operating lease liabilities, current $ — $ 6,498 $ 6,498 Accrued expenses and other current liabilities 10,908 (2,637 ) 8,271 Lease financing obligation, net of current portion 22,987 (22,987 ) — Operating lease liabilities, net of current portion — 43,351 43,351 Other liabilities 9,290 (3,651 ) 5,639 Stockholders ’ Equity Accumulated deficit $ (373,482 ) $ (3,690 ) $ (377,172 ) |
Lease costs | For the year ended December 31, 2019 , the Company recorded operating lease costs, excluding subleases, that were included in the consolidated statements of comprehensive loss as follows (in thousands): Operating lease costs recorded within: Year Ended December 31, 2019 Cost of revenue $ 740 Sales and marketing 1,741 Technology and development 2,462 General and administrative 3,597 Total operating lease costs $ 8,540 |
Future minimum payments under non-cancellable lease obligations | Future undiscounted lease payments for the Company’s operating lease liabilities, a reconciliation of these payments to its operating lease liabilities, and related sublease income at December 31, 2019 are as follows (in thousands): Years ended December 31, 2020 $ 7,762 2021 7,152 2022 7,369 2023 7,628 2024 7,860 Thereafter 14,702 Total lease payments $ 52,473 Less: imputed interest (9,471 ) Total lease liabilities (discounted) $ 43,002 |
Sublease income | Year ended December 31, Sublease Income 2020 $ (1,299 ) Total sublease income $ (1,299 ) |
Future minimum lease payments under previous guidance | As previously disclosed in the Company’s 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for the Company’s operating leases at December 31, 2018 , on an undiscounted basis, were as follows (in thousands): Years ended December 31, Lease Commitments Sublease Income 2019 $ 9,220 $ (2,180 ) 2020 8,716 (1,282 ) 2021 7,145 — 2022 7,362 — 2023 7,621 — Thereafter 22,532 — Total minimum lease payments $ 62,596 $ (3,462 ) |
Revenue Information and Deferre
Revenue Information and Deferred Sales Commissions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of cumulative effects | The cumulative effects of the changes made to the Company’s January 1, 2019 consolidated balance sheet were as follows (in thousands): December 31, 2018 Adjustments Due to Adoption of New Leasing Standard January 1, 2019 Assets Other current assets $ 4,103 $ 188 $ 4,291 Property and equipment, net 61,511 (25,461 ) 36,050 Operating lease right-of-use assets — 42,010 42,010 Other assets 7,228 147 7,375 Liabilities Operating lease liabilities, current $ — $ 6,498 $ 6,498 Accrued expenses and other current liabilities 10,908 (2,637 ) 8,271 Lease financing obligation, net of current portion 22,987 (22,987 ) — Operating lease liabilities, net of current portion — 43,351 43,351 Other liabilities 9,290 (3,651 ) 5,639 Stockholders ’ Equity Accumulated deficit $ (373,482 ) $ (3,690 ) $ (377,172 ) |
Disaggregation of Revenue | The Company disaggregates revenue into three revenue streams: dealer revenue, OEM incentives revenue, and forecasts, consulting and other revenue. Prior to adoption of the new revenue standard, dealer revenue and OEM incentives revenue had been disclosed together as “transaction revenue.” The following table presents the Company’s revenue categories during the periods presented (in thousands): Year Ended December 31, 2019 2018 2017(1) Dealer revenue $ 317,965 $ 304,596 $ 280,563 OEM incentives revenue 16,569 30,012 23,277 Forecasts, consulting and other revenue 19,346 18,963 19,309 Total revenues $ 353,880 $ 353,571 $ 323,149 (1) Prior period amounts have not been adjusted under the modified retrospective method. |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Purchase Consideration | The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of DealerScience during the year ended December 31, 2018 (in thousands): DealerScience Assets acquired Cash $ 1,037 Accounts receivable 240 Prepaid expenses 29 Acquired technology 9,900 Customer relationships 1,500 Goodwill 20,041 Total assets acquired $ 32,747 Liabilities assumed 342 Net assets acquired $ 32,405 Consideration paid Cash paid $ 27,928 Contingent consideration 4,477 Total consideration $ 32,405 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following at December 31, 2019 and 2018 (in thousands): December 31, 2019 2018 Computer equipment, software, and internally developed software $ 60,049 $ 99,204 Furniture and fixtures 4,927 4,758 Leasehold improvements 15,839 8,602 Capitalized facility leases — 30,632 80,815 143,196 Less: Accumulated depreciation (51,018 ) (81,685 ) Total property and equipment, net $ 29,797 $ 61,511 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following at December 31, 2019 and 2018 (in thousands, except years): At December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 40,990 $ (27,560 ) $ 13,430 Customer relationships 7,800 (6,175 ) 1,625 Trade names 4,900 (2,695 ) 2,205 Total $ 53,690 $ (36,430 ) $ 17,260 At December 31, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 40,990 $ (22,946 ) $ 18,044 Customer relationships 7,800 (4,925 ) 2,875 Trade names 4,900 (2,368 ) 2,532 Total $ 53,690 $ (30,239 ) $ 23,451 |
Schedule of amortization expense | Amortization expense by asset type for the years ended December 31, 2019 , 2018 , and 2017 is shown below (in thousands): Year Ended December 31, 2019 2018 2017 Acquired technology and domain name $ 4,614 $ 3,034 $ 3,035 Customer relationships 1,250 500 500 Trade names 327 327 327 Total amortization $ 6,191 $ 3,861 $ 3,862 |
Schedule of expected amortization expense with respect to intangible assets | Expected amortization expense with respect to capitalized software costs at December 31, 2019 for each of the years through December 31, 2022 is as follows (in thousands): Years ended December 31, 2020 $ 12,302 2021 7,504 2022 2,364 Total amortization expense $ 22,170 Expected amortization expense with respect to intangible assets at December 31, 2019 for each of the five years through December 31, 2024 and thereafter is as follows (in thousands): Years ended December 31, 2020 $ 6,187 2021 4,572 2022 1,977 2023 1,977 2024 1,977 Thereafter 570 Total amortization expense $ 17,260 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments under previous guidance | As previously disclosed in the Company’s 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for the Company’s operating leases at December 31, 2018 , on an undiscounted basis, were as follows (in thousands): Years ended December 31, Lease Commitments Sublease Income 2019 $ 9,220 $ (2,180 ) 2020 8,716 (1,282 ) 2021 7,145 — 2022 7,362 — 2023 7,621 — Thereafter 22,532 — Total minimum lease payments $ 62,596 $ (3,462 ) |
Schedule of lease exit liability | The following table presents a roll forward of the severance liability for the year ended December 31, 2019 (in thousands): Severance Liability Accrual at December 31, 2018 $ — Expense 7,871 Cash Payments (7,843 ) Accrual at December 31, 2019 $ 28 |
Schedule of purchase obligations | At December 31, 2019 , the Company had the following purchase obligations (in thousands): Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Purchase obligations $ 19,519 $ 7,568 $ 10,173 $ 1,578 $ 200 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of reserve for unissued shares of common stock | The number of shares of the Company’s common stock reserved for these purposes at December 31, 2019 is as follows: Number of Shares Outstanding stock options 10,625,980 Outstanding restricted stock units 5,890,992 Outstanding common stock warrants 1,458,979 Additional shares available for grant under the equity plan 10,521,842 Total 28,497,793 |
Stock-based Awards (Tables)
Stock-based Awards (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 year ended December 31, 2019 is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (1) (in years) (in millions) Outstanding at December 31, 2018 14,114,651 $ 12.32 7.0 Granted 2,128,069 6.94 Exercised (364,525 ) 7.82 Forfeited/expired (5,252,215 ) 12.68 Outstanding at December 31, 2019 10,625,980 $ 11.22 5.2 $ 0.3 Vested and expected to vest at December 31, 2019 10,625,980 $ 11.22 5.2 $ 0.3 Exercisable at December 31, 2019 7,927,239 $ 11.18 4.2 $ 0.2 (1) The aggregate intrinsic value represents the excess of the closing price of the Company’s common stock of $4.75 on December 31, 2019 over the exercise price of in-the-money stock option awards. |
Schedule of activity in connection with the restricted stock units | A summary of the Company’s restricted stock unit (“RSU”) activity for the year ended December 31, 2019 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Non-vested — December 31, 2018 5,375,963 $ 11.01 Granted 5,436,368 6.36 Vested (2,830,183 ) 9.44 Forfeited (2,091,156 ) 9.63 Non-vested — December 31, 2019 5,890,992 $ 7.96 |
Schedule of fair value of stock option awards | The fair value of each stock option award was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.32 % 2.85 % 1.89 % Expected term (years) 6.07 5.94 6.25 Expected volatility 60 % 46 % 47 % Dividend yield — — — |
Schedule of stock-based compensation cost relating to stock options, restricted stock awards and RSUs | The Company recorded stock-based compensation cost relating to stock options and RSUs in the following categories on the accompanying consolidated statements of comprehensive loss (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 2,157 $ 1,726 $ 1,105 Sales and marketing 13,362 13,950 10,353 Technology and development 8,256 10,589 8,060 General and administrative 14,199 10,954 12,723 Total stock-based compensation expense 37,974 37,219 32,241 Amount capitalized to internal-use software 1,811 1,890 1,407 Total stock-based compensation cost $ 39,785 $ 39,109 $ 33,648 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the income tax provision | The components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State 75 67 18 Total current provision 75 67 18 Deferred: Federal 173 (282 ) 410 State 41 38 40 Tax Act impact — — (2,632 ) Total deferred provision (benefit) 214 (244 ) (2,182 ) Total income tax provision (benefit) $ 289 $ (177 ) $ (2,164 ) |
Schedule of overall effective income tax rate | The overall effective income tax rate differs from the statutory federal rate as follows: Year Ended December 31, 2019 2018 2017 Income tax benefit based on the federal statutory rate 21.0 % 21.0 % 34.0 % State income taxes, net of federal benefit (1.5 ) 1.4 9.4 Nondeductible expenses (3.5 ) (4.7 ) (1.2 ) Change in valuation allowance, excluding Tax Act impact (4.5 ) (14.2 ) (130.0 ) Stock-based compensation (12.0 ) (2.9 ) 86.5 Tax Act impact — — 7.5 Overall effective income tax rate (0.5 )% 0.6 % 6.2 % |
Schedule of components of deferred tax assets (liabilities) | The components of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 103,188 $ 101,763 Stock-based compensation 10,954 13,227 Accrued expenses 2,261 1,950 Research and development tax credits 569 569 Operating leases liabilities 10,724 — Other 619 656 Gross deferred tax assets 128,315 118,165 Valuation allowance (111,193 ) (109,625 ) Net deferred tax assets 17,122 8,540 Deferred tax liabilities: Property, equipment and software (3,800 ) (3,477 ) Intangible assets and goodwill (4,075 ) (4,274 ) Capitalized commissions (692 ) (791 ) §481(a) Adjustment - ASC 606 (380 ) (566 ) Operating lease assets (8,958 ) — Gross deferred tax liabilities (17,905 ) (9,108 ) Total net deferred tax liabilities $ (783 ) $ (568 ) |
Schedule of change in the valuation allowance | The change in the valuation allowance for the years ended December 31, 2019 , 2018 , and 2017 is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Valuation allowance, at beginning of year $ 109,625 $ 107,046 $ 115,689 Decrease in valuation allowance - ASC 606 impact — (1,457 ) — Increase in valuation allowance - operating lease impact (915 ) — — Valuation allowance, at beginning of year, as adjusted $ 108,710 $ 105,589 $ 115,689 Increase in valuation allowance, excluding Tax Act impact 2,483 4,036 45,512 Decrease in valuation allowance - federal tax rate change — — (52,757 ) Release of valuation allowance due to the Tax Act — — (1,398 ) Valuation allowance, at end of year $ 111,193 $ 109,625 $ 107,046 |
Schedule of reconciliation of the total amounts of unrecognized tax benefits | The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2019 2018 2017 Unrecognized tax benefit, beginning of year $ (3 ) $ (3 ) $ 3 Additions for prior years’ tax positions — — 1 Settlements with tax authorities — — (7 ) Unrecognized tax benefit, end of year $ (3 ) $ (3 ) $ (3 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net loss per share attributable to common stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders during the years ended December 31, 2019 , 2018 , and 2017 (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net loss $ (54,890 ) $ (28,321 ) $ (32,849 ) Weighted-average common shares outstanding 105,805 102,149 94,865 Net loss per share — basic and diluted $ (0.52 ) $ (0.28 ) $ (0.35 ) |
Schedule of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders at December 31, 2019 , 2018 , and 2017 (in thousands): December 31, 2019 2018 2017 Options to purchase common stock 10,626 14,115 16,714 Common stock warrants 1,459 1,459 1,459 Unvested restricted stock units 5,891 5,376 4,284 Total shares excluded from net loss per share attributable to common stockholders 17,976 20,950 22,457 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segments and Equity Methods Narrative (Details) $ in Thousands | Jun. 30, 2019 | Feb. 08, 2019USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Accounting Policies [Abstract] | |||||
Number of operating segments | segment | 1 | ||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash paid | $ 23,174 | $ 0 | $ 0 | ||
Equity method investment | $ 21,894 | $ 0 | |||
Accu-Trade, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 20.00% | ||||
Equity method investment | $ 22,900 | ||||
Basis difference | 21,000 | ||||
Weighted average useful live | 5 years | ||||
Cash consideration paid | Accu-Trade, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash paid | 17,900 | ||||
Capital contribution | Accu-Trade, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash paid | $ 5,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Impairments | $ 0 | $ 0 | $ 0 |
Fair Value, Measurements, Recurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 174,429,000 | 192,207,000 | |
Total Assets | 174,429,000 | 192,207,000 | |
Contingent Consideration, Current, Fair Value Disclosure | 2,441,000 | 0 | |
Contingent Consideration, Noncurrent, Fair Value Disclosure | 2,336,000 | 4,477,000 | |
Total Liabilities | 4,777,000 | 4,477,000 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 174,429,000 | 192,207,000 | |
Total Assets | 174,429,000 | 192,207,000 | |
Contingent Consideration, Current, Fair Value Disclosure | 0 | 0 | |
Contingent Consideration, Noncurrent, Fair Value Disclosure | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 0 | 0 | |
Total Assets | 0 | 0 | |
Contingent Consideration, Current, Fair Value Disclosure | 0 | 0 | |
Contingent Consideration, Noncurrent, Fair Value Disclosure | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 0 | 0 | |
Total Assets | 0 | 0 | |
Contingent Consideration, Current, Fair Value Disclosure | 2,441,000 | 0 | |
Contingent Consideration, Noncurrent, Fair Value Disclosure | 2,336,000 | 4,477,000 | |
Total Liabilities | $ 4,777,000 | $ 4,477,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Changes in Fair Value of Contingent Consideration Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
usiness Combination, Contingent Consideration, Liability [Roll Forward] | |||
Fair value, at beginning of year | $ 4,477 | $ 0 | |
Additions | 0 | 4,477 | $ 0 |
Changes in fair value | 300 | 0 | 0 |
Fair value, at end of year | $ 4,777 | $ 4,477 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Changes in Allowance for Doubtful Accounts and Sales Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Review period for past due accounts | 90 days | ||
Allowance for Doubtful Accounts | |||
Allowances, at beginning of year | $ 3,382 | $ 3,030 | $ 2,600 |
Charged as a reduction of revenue | 11,751 | 8,703 | 7,734 |
Charged to bad debt expense in general and administrative expenses | 1,432 | 1,688 | 1,385 |
Write-offs, net of recoveries | (9,806) | (10,039) | (8,689) |
Allowances, at end of year | $ 6,759 | $ 3,382 | $ 3,030 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment, Net Narrative (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Software and Website Development Costs Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Technology and development | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software costs write off amount | $ 0 | |
Software and Software Development Costs | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Capitalized software costs | $ 50,400,000 | $ 86,000,000 |
Accumulated amortization of computer software | 28,200,000 | 62,200,000 |
Acceleration of amortization | $ 1,100,000 | 1,000,000 |
Software and Software Development Costs, Assets Not Yet Placed in Service | ||
Property, Plant and Equipment [Line Items] | ||
Accumulated amortization written off | 0 | |
Acceleration of amortization | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
2020 | $ 4,572 | |
2021 | 1,977 | |
Total amortization expense | 17,260 | $ 23,451 |
Software Costs | ||
Property, Plant and Equipment [Line Items] | ||
2019 | 12,302 | |
2020 | 7,504 | |
2021 | 2,364 | |
Total amortization expense | $ 22,170 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Intangible Assets Acquired in Business Combinations Narrative (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | Trade Names | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 1 year |
Minimum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 2 years |
Minimum | Acquired technology | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Maximum | Trade Names | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 15 years |
Maximum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Maximum | Acquired technology | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Long-Lived Assets, Goodwill, Revenue Recognition Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
High stock price (in dollars per share) | $ 10.39 | ||
Low stock price (in dollars per share) | $ 3.01 | ||
Asset Impairment Charges | $ 0 | $ 0 | $ 0 |
Impairment charges recorded on long lived assets | 0 | 0 | 0 |
Impairment charges recorded on goodwill | 0 | $ 0 | $ 0 |
Goodwill acquired | $ 20,000,000 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Warrant (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Nov. 19, 2018 |
Investment [Line Items] | ||||
Accrued expenses and other current liabilities (includes related party accrued expenses of $1,299 and $218 at December 31, 2019 and 2018, respectively) | $ 20,990 | $ 8,271 | $ 10,908 | |
Other liabilities | 2,336 | $ 5,639 | $ 9,290 | |
Common stock warrants | DealerSync | ||||
Investment [Line Items] | ||||
Warrant agreement (shares) | 2,500,000 | |||
Exercise price of warrants (in dollars per share) | $ 1.60 | |||
Other assets | 1,200 | |||
Accrued expenses and other current liabilities (includes related party accrued expenses of $1,299 and $218 at December 31, 2019 and 2018, respectively) | 200 | |||
Other liabilities | $ 1,000 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Incremental Costs to Obtain a Contract (Details) | Dec. 31, 2019 |
Accounting Policies [Abstract] | |
Expected customer life | 3 years |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Sales and Marketing Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Marketing and advertising expenses | $ 82.6 | $ 75.9 | $ 71 |
Prepaid media costs | 1 | 1.3 | |
Accrued marketing and advertising expenses | $ 7.5 | $ 1.8 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Recent Accounting Pronouncements Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | $ 6,104 | $ 4,291 | $ 4,103 |
Property and equipment, net | 29,797 | 36,050 | 61,511 |
Operating lease right-of-use assets | 36,064 | 42,010 | 0 |
Other assets | 3,620 | 7,375 | 7,228 |
Operating Lease, Liability, Current | 5,875 | 6,498 | 0 |
Accrued expenses and other liabilities | 20,990 | 8,271 | 10,908 |
Lease financing obligation, net of current portion | 0 | 0 | 22,987 |
Operating Lease, Liability, Noncurrent | 37,127 | 43,351 | 0 |
Other liabilities | 2,336 | 5,639 | 9,290 |
Accumulated deficit | $ (432,062) | (377,172) | $ (373,482) |
Adjustments Due to Adoption of New Leasing Standard | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 188 | ||
Property and equipment, net | (25,461) | ||
Operating lease right-of-use assets | 42,010 | ||
Other assets | 147 | ||
Operating Lease, Liability, Current | 6,498 | ||
Accrued expenses and other liabilities | (2,637) | ||
Lease financing obligation, net of current portion | (22,987) | ||
Operating Lease, Liability, Noncurrent | 43,351 | ||
Other liabilities | (3,651) | ||
Accumulated deficit | $ (3,690) |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Property and equipment, net | $ (29,797) | $ (61,511) | $ (36,050) | |
Accrued expenses and other current liabilities | (20,990) | (10,908) | (8,271) | |
Lease financing obligations, net of current portion | 0 | (22,987) | 0 | |
Total operating lease costs | 8,540 | 4,900 | $ 4,800 | |
Cash payments for operating leases | $ 9,400 | 9,500 | 8,500 | |
Weighted average remaining lease term | 6 years 10 months 24 days | |||
Weighted average discount rate | 5.70% | |||
Sublease income | $ 2,000 | $ 2,100 | $ 1,900 | |
Adjustments Due to Adoption of New Leasing Standard | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Property and equipment, net | 25,461 | |||
Accrued expenses and other current liabilities | 2,637 | |||
Lease financing obligations, net of current portion | 22,987 | |||
Adjustments Due to Adoption of New Leasing Standard | Capitalized facility leases | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Property and equipment, net | 28,300 | |||
Accrued expenses and other current liabilities | 1,800 | |||
Lease financing obligations, net of current portion | $ 23,000 | |||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Remaining lease terms | 2 months | |||
Lease renewal term | 3 years | |||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Remaining lease terms | 10 years 1 month 6 days | |||
Lease renewal term | 5 years |
Leases - Schedule of Cumulative
Leases - Schedule of Cumulative Effects (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Other current assets | $ 6,104 | $ 4,291 | $ 4,103 |
Property and equipment, net | 29,797 | 36,050 | 61,511 |
Operating lease right-of-use assets | 36,064 | 42,010 | 0 |
Other assets | 3,620 | 7,375 | 7,228 |
Liabilities | |||
Operating lease liabilities, current | 5,875 | 6,498 | 0 |
Accrued expenses and other liabilities | 20,990 | 8,271 | 10,908 |
Lease financing obligation, net of current portion | 0 | 0 | 22,987 |
Operating lease liabilities, net of current portion | 37,127 | 43,351 | 0 |
Other liabilities | 2,336 | 5,639 | 9,290 |
Stockholders’ Equity | |||
Accumulated deficit | $ (432,062) | (377,172) | $ (373,482) |
Adjustments Due to Adoption of New Leasing Standard | |||
Assets | |||
Other current assets | 188 | ||
Property and equipment, net | (25,461) | ||
Operating lease right-of-use assets | 42,010 | ||
Other assets | 147 | ||
Liabilities | |||
Operating lease liabilities, current | 6,498 | ||
Accrued expenses and other liabilities | (2,637) | ||
Lease financing obligation, net of current portion | (22,987) | ||
Operating lease liabilities, net of current portion | 43,351 | ||
Other liabilities | (3,651) | ||
Stockholders’ Equity | |||
Accumulated deficit | $ (3,690) |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | $ 8,540 | $ 4,900 | $ 4,800 |
Cost of revenue | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 740 | ||
Sales and Marketing | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 1,741 | ||
Technology and development | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 2,462 | ||
General and administrative | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | $ 3,597 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments Under Non-cancellable Lease Obligations (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 7,762 |
2021 | 7,152 |
2022 | 7,369 |
2023 | 7,628 |
2024 | 7,860 |
Thereafter | 14,702 |
Total lease payments | 52,473 |
Less: imputed interest | (9,471) |
Total lease liabilities (discounted) | $ 43,002 |
Leases - Sublease Income (Detai
Leases - Sublease Income (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ (1,299) |
Total sublease income | $ (1,299) |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Under Previous Guidance (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Lease Commitments | |
2019 | $ 9,220 |
2020 | 8,716 |
2021 | 7,145 |
2022 | 7,362 |
2023 | 7,621 |
Thereafter | 22,532 |
Total minimum lease payments | 62,596 |
Sublease Income | |
2019 | (2,180) |
2020 | (1,282) |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total minimum lease payments | $ (3,462) |
Revenue Information and Defer_2
Revenue Information and Deferred Sales Commissions - Schedule of Cumulative Effects of Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Assets | ||||
Other current assets | $ 6,104 | $ 4,103 | $ 4,291 | |
Other assets | 3,620 | 7,228 | 7,375 | |
Liabilities | ||||
Accounts payable | 21,336 | 26,305 | ||
Accrued expenses and other liabilities | 20,990 | 10,908 | 8,271 | |
Stockholders’ Equity | ||||
Accumulated deficit | (432,062) | (373,482) | $ (377,172) | |
Revenues | 353,880 | 353,571 | $ 323,149 | |
Sales and marketing | 229,342 | 213,415 | 185,397 | |
Net loss | $ (54,890) | $ (28,321) | $ (32,849) |
Revenue Information and Defer_3
Revenue Information and Deferred Sales Commissions - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with Customer, Asset, Reclassified to Receivable | $ 3,300,000 | $ 3,300,000 |
Contract asset balance | 2,800,000 | 3,300,000 |
Sales commission | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred sales commission | 2,800,000 | 3,200,000 |
Amortization of capitalized contract costs | 2,100,000 | $ 1,700,000 |
Impairment loss | $ 0 |
Revenue Information and Defer_4
Revenue Information and Deferred Sales Commissions Revenue Information and Deferred Sales Commissions - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Information | |||
Revenues (includes related party contra revenue of $1,189, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | $ 353,880 | $ 353,571 | $ 323,149 |
Dealer revenue | |||
Revenue Information | |||
Revenues (includes related party contra revenue of $1,189, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | 317,965 | 304,596 | 280,563 |
OEM incentives revenue | |||
Revenue Information | |||
Revenues (includes related party contra revenue of $1,189, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | 16,569 | 30,012 | 23,277 |
Forecasts, consulting and other revenue | |||
Revenue Information | |||
Revenues (includes related party contra revenue of $1,189, $0, and $0, for the years ended December 31, 2019, 2018, and 2017, respectively) | $ 19,346 | $ 18,963 | $ 19,309 |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ in Thousands | Dec. 07, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 4,777 | $ 4,477 | $ 0 | |
Goodwill | $ 73,311 | $ 73,311 | ||
DealerScience | ||||
Business Acquisition [Line Items] | ||||
Cash and contingent cash consideration | $ 27,928 | |||
Contingent consideration | 4,477 | |||
Goodwill | 20,041 | |||
Weighted average useful live | 5 years | |||
Transaction costs | 400 | |||
DealerScience | Future sales | ||||
Business Acquisition [Line Items] | ||||
Contingent cash consideration (up to) | $ 5,000 | |||
DealerScience | Acquired technology | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful live | 6 years | |||
DealerScience | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful live | 2 years |
Business Combination - Schedule
Business Combination - Schedule of Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands | Dec. 07, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets acquired | ||||
Goodwill | $ 73,311 | $ 73,311 | ||
Contingent consideration | $ 4,777 | $ 4,477 | $ 0 | |
DealerScience | ||||
Assets acquired | ||||
Cash | $ 1,037 | |||
Accounts receivable | 240 | |||
Prepaid expenses | 29 | |||
Goodwill | 20,041 | |||
Total assets acquired | 32,747 | |||
Liabilities assumed | 342 | |||
Net assets acquired | 32,405 | |||
Cash paid | 27,928 | |||
Contingent consideration | 4,477 | |||
Total consideration | 32,405 | |||
DealerScience | Acquired technology | ||||
Assets acquired | ||||
Intangible assets | 9,900 | |||
DealerScience | Customer relationships | ||||
Assets acquired | ||||
Intangible assets | $ 1,500 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 80,815 | $ 143,196 | |
Less: Accumulated depreciation | (51,018) | (81,685) | |
Total property and equipment, net | 29,797 | $ 36,050 | 61,511 |
Computer equipment, software, and internally developed software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 60,049 | 99,204 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4,927 | 4,758 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 15,839 | 8,602 | |
Capitalized facility leases | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 0 | 30,632 | |
Less: Accumulated depreciation | $ (2,300) |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 80,815,000 | $ 143,196,000 | |
Accumulated amortization | 51,018,000 | 81,685,000 | |
Lease financing obligation | 24,800,000 | ||
Property and equipment capitalized but not placed in service | 1,400,000 | 1,100,000 | |
Total depreciation and amortization expense | 25,591,000 | 22,677,000 | $ 22,472,000 |
Property and equipment disposals | 52,100,000 | ||
Capitalized Facility Lease | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 0 | 30,632,000 | |
Interest Costs Capitalized | 0 | ||
Accumulated amortization | 2,300,000 | ||
Depreciation and amortization expense | 1,000,000 | 1,000,000 | |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 19,400,000 | 18,800,000 | 18,600,000 |
Software Development | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 14,000,000 | $ 13,400,000 | $ 13,500,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible assets | ||
Gross Carrying Value | $ 53,690 | $ 53,690 |
Accumulated amortization | (36,430) | (30,239) |
Total amortization expense | 17,260 | 23,451 |
Acquired technology and domain name | ||
Intangible assets | ||
Gross Carrying Value | 40,990 | 40,990 |
Accumulated amortization | (27,560) | (22,946) |
Total amortization expense | 13,430 | 18,044 |
Customer relationships | ||
Intangible assets | ||
Gross Carrying Value | 7,800 | 7,800 |
Accumulated amortization | (6,175) | (4,925) |
Total amortization expense | 1,625 | 2,875 |
Trade names | ||
Intangible assets | ||
Gross Carrying Value | 4,900 | 4,900 |
Accumulated amortization | (2,695) | (2,368) |
Total amortization expense | $ 2,205 | $ 2,532 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 6,191 | $ 3,861 | $ 3,862 |
Acquired technology and domain name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 4,614 | 3,034 | 3,035 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 1,250 | 500 | 500 |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 327 | $ 327 | $ 327 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Expected Amortization Expense with Respect to Intangible Assets (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortization expense for each of the five years through December 31, 2023 and thereafter | ||
2019 | $ 6,187 | |
2020 | 4,572 | |
2021 | 1,977 | |
2022 | 1,977 | |
2023 | 1,977 | |
Thereafter | 570 | |
Total amortization expense | $ 17,260 | $ 23,451 |
Credit Facility - February 2015
Credit Facility - February 2015 Amended Credit Facility (Details) - USD ($) | Feb. 18, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility | $ 10,000,000 | ||
Third Amended Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility | 35,000,000 | ||
Increase in revolving credit facility (up to) | 15,000,000 | ||
Aggregate maximum of revolving credit facility | $ 50,000,000 | ||
Adjusted quick ratio (at least) | 1.5 | ||
Maximum consolidated leverage ratio, upper end of the range | 3 | ||
Maximum consolidated leverage ratio, lower end of the range | 2.50 | ||
Fixed charge coverage ratio (at least) | 1.25 | ||
Outstanding Balance on Credit Facility | $ 0 | $ 0 | |
Amount available under the credit facility | 31,900,000 | 31,000,000 | |
Letters of credit outstanding under the subfacility | $ 3,100,000 | $ 4,000,000 | |
Third Amended Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused revolving line facility fee (as a percent) | 0.00% | ||
Third Amended Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused revolving line facility fee (as a percent) | 0.20% | ||
Third Amended Credit Facility | Prime Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | (0.25%) | ||
Third Amended Credit Facility | Prime Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 0.50% | ||
Third Amended Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 1.75% | ||
Third Amended Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 2.50% |
Commitments and Contingencies -
Commitments and Contingencies - Reorganization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Lease Exit Costs | |||
Restructuring Reserve [Roll Forward] | |||
Ending balance | $ 800 | ||
Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | $ 4,600 | ||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 0 | 0 | |
Expense | 7,871 | ||
Cash Payments | (7,843) | ||
Ending balance | $ 28 | ||
Sales and Marketing | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 400 | ||
Technology and development | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 900 | ||
General and administrative | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 3,300 | ||
Reorganization Plan | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | $ 3,300 | ||
Reorganization Plan | Cost of revenue | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 400 | ||
Reorganization Plan | Sales and Marketing | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 1,100 | ||
Reorganization Plan | Technology and development | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 1,600 | ||
Reorganization Plan | General and administrative | Employee severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | $ 200 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Proceedings (Details) $ in Thousands | Mar. 09, 2015USD ($) | Sep. 30, 2019USD ($) | Aug. 31, 2019action |
Loss Contingencies [Line Items] | |||
Stockholder derivative actions | action | 3 | ||
Minimum | NY Lanham Act Litigation | |||
Loss Contingencies [Line Items] | |||
Amount in damages (more than) | $ 250,000 | ||
Pending Litigation | Milbeck Federal Securities Litigation | |||
Loss Contingencies [Line Items] | |||
Agreement to settle | $ 28,250 | ||
Loss Contingency, Accrual, Current | $ 28,250 |
Commitments and Contingencies_3
Commitments and Contingencies - Employment Contracts (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Employment Contracts | |
Other Commitments [Line Items] | |
Period of severance obligations (up to) | 12 months |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Purchase Obligations (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Purchase obligations | |
Total | $ 19,519 |
Less Than 1 Year | 7,568 |
1 - 3 Years | 10,173 |
3 - 5 Years | 1,578 |
More Than 5 Years | $ 200 |
Stockholders' Equity - Follow-o
Stockholders' Equity - Follow-on Public Offering (Details) - Follow On Public Offering [Member] - USD ($) $ / shares in Units, $ in Millions | May 02, 2017 | Apr. 26, 2017 |
Class of Stock [Line Items] | ||
Shares sold by shareholders (shares) | 9,200,000 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Underwriting agreement to sell (shares) | 1,150,000 | |
Stock price (in dollars per share) | $ 16.50 | |
Shares sold | 1,150,000 | |
Net proceeds | $ 17.4 | |
Underwriting discounts and commissions and offering costs | $ 1.6 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants Issued to USAA and Third Party Marketing Firm (Details) - USAA | May 01, 2014tranche$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Convertible Preferred Stock and Stockholders' Equity | ||||
Warrants earned and outstanding (in shares) | 509,642 | |||
Remaining warrants available for issuance (in shares) | 949,337 | |||
Common Stock Purchase Warrants | ||||
Convertible Preferred Stock and Stockholders' Equity | ||||
Warrant expense | $ | $ 0 | $ 0 | $ 0 | |
Common Stock Purchase Warrants | Affinity Group Marketing Agreement | ||||
Convertible Preferred Stock and Stockholders' Equity | ||||
Maximum number of shares under warrant agreement | 1,458,979 | |||
Number of warrant tranches | tranche | 2 | |||
Common Stock Purchase Warrants | Affinity Group Marketing Agreement | Tranche One | ||||
Convertible Preferred Stock and Stockholders' Equity | ||||
Maximum number of shares under warrant agreement | 392,313 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 7.95 | |||
Common Stock Purchase Warrants | Affinity Group Marketing Agreement | Tranche Two | ||||
Convertible Preferred Stock and Stockholders' Equity | ||||
Maximum number of shares under warrant agreement | 1,066,666 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 15 |
Stockholders' Equity - Reserve
Stockholders' Equity - Reserve for Unissued Shares of Common Stock (Details) | Dec. 31, 2019shares |
Equity [Abstract] | |
Outstanding stock options | 10,625,980 |
Outstanding restricted stock units | 5,890,992 |
Outstanding common stock warrants | 1,458,979 |
Additional shares available for grant under the equity plan | 10,521,842 |
Total | 28,497,793 |
Stock-based Awards - Narrative
Stock-based Awards - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 01, 2020shares | Dec. 31, 2015shares | May 31, 2014shares | Dec. 31, 2019USD ($)equity_incentive_plan$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016shares |
Stock-based Awards | |||||||
Number of equity incentive plans | equity_incentive_plan | 4 | ||||||
Total stock-based compensation expense | $ | $ 37,974 | $ 37,219 | $ 32,241 | ||||
Outstanding stock options (in shares) | 10,625,980 | ||||||
Number of non-vested RSUs (in shares) | 5,890,992 | ||||||
Additional shares available for grant under the equity plan | 10,521,842 | ||||||
Dividend yield | 0.00% | 0.00% | 0.00% | ||||
Certain executive-level employees | |||||||
Stock-based Awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | $ | $ 7,200 | ||||||
Common Stock | |||||||
Stock-based Awards | |||||||
Closing price of common stock (in dollars per share) | $ / shares | $ 4.75 | ||||||
Options to Purchase Common Stock | |||||||
Stock-based Awards | |||||||
Shares of common stock, grants to purchase | 2,128,069 | ||||||
Total remaining stock-based compensation expense for unvested option awards | $ | $ 12,500 | ||||||
Weighted-average period | 2 years 2 months 12 days | ||||||
Weighted-average grant-date fair value per share of options granted (in dollars per share) | $ / shares | $ 3.97 | $ 4.60 | $ 8.77 | ||||
Total stock-based compensation expense | $ | $ 13,700 | $ 16,000 | $ 17,300 | ||||
Total intrinsic value of options exercised | $ | $ 500 | $ 6,600 | 120,400 | ||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 6.94 | ||||||
Outstanding stock options (in shares) | 10,625,980 | 14,114,651 | |||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 11.22 | $ 12.32 | |||||
Restricted Stock Units (RSUs) | |||||||
Stock-based Awards | |||||||
Total remaining stock-based compensation expense for unvested option awards | $ | $ 43,800 | ||||||
Weighted-average period | 2 years 8 months 12 days | ||||||
Total stock-based compensation expense | $ | $ 24,300 | $ 21,200 | 14,900 | ||||
Fair value of shares of restricted stock awards vested | $ | $ 16,000 | $ 22,400 | $ 25,600 | ||||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.36 | $ 10 | $ 18.26 | ||||
Shares granted | 5,436,368 | ||||||
Number of non-vested RSUs (in shares) | 5,890,992 | 5,375,963 | |||||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 7.96 | $ 11.01 | |||||
2014 Plan | |||||||
Stock-based Awards | |||||||
Annual increase in the number of shares available for future issuance under the terms of the plan agreement | 10,000,000 | ||||||
Annual increase in the number of shares available for future issuance expressed as a percentage of the total outstanding shares of common stock as of the last day of the previous fiscal year | 5.00% | ||||||
2014 Plan | Options to Purchase Common Stock | |||||||
Stock-based Awards | |||||||
Vesting period | 4 years | ||||||
Expiration period | 10 years | ||||||
2014 Plan | Restricted Stock Units (RSUs) | Minimum | |||||||
Stock-based Awards | |||||||
Vesting period | 4 years | ||||||
2014 Plan | Restricted Stock Units (RSUs) | Maximum | |||||||
Stock-based Awards | |||||||
Vesting period | 5 years | ||||||
2014 Plan | Subsequent event | |||||||
Stock-based Awards | |||||||
Additional shares registered (in shares) | 5,343,291 | ||||||
Inducement Plan | |||||||
Stock-based Awards | |||||||
Shares of common reserved for issuance under non-qualified stock options | 1,840,000 | ||||||
Shares of common stock, grants to purchase | 1,840,000 | ||||||
Vesting period | 4 years | ||||||
Expiration period | 10 years | ||||||
Additional shares available for grant under the equity plan | 0 |
Stock-based Awards - Schedule o
Stock-based Awards - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Options | ||
Outstanding at the end of the period (in shares) | 10,625,980 | |
Options to Purchase Common Stock | ||
Number of Options | ||
Outstanding at the beginning of period (in shares) | 14,114,651 | |
Granted (in shares) | 2,128,069 | |
Exercised (in shares) | (364,525) | |
Canceled/forfeited (in shares) | (5,252,215) | |
Outstanding at the end of the period (in shares) | 10,625,980 | 14,114,651 |
Vested and expected to vest at the end of the period (in shares) | 10,625,980 | |
Exercisable at the end of the period (in shares) | 7,927,239 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of period (in dollars per share) | $ 12.32 | |
Granted (in dollars per share) | 6.94 | |
Exercised (in dollars per share) | 7.82 | |
Canceled/forfeited (in dollars per share) | 12.68 | |
Outstanding at the end of the period (in dollars per share) | 11.22 | $ 12.32 |
Vested and expected to vest at the end of the period (in dollars per share) | 11.22 | |
Exercisable at the end of the period (in dollars per share) | $ 11.18 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding at the end of the period | 5 years 2 months 12 days | 7 years |
Vested and expected to vest at the end of the period | 5 years 2 months 12 days | |
Exercisable at the end of the period | 4 years 2 months 12 days | |
Aggregate Intrinsic Value | ||
Intrinsic value of all outstanding options | $ 0.3 | |
Intrinsic value of options vested and expected to vest | 0.3 | |
Intrinsic value of exercisable options | $ 0.2 |
Stock-based Awards - Schedule_2
Stock-based Awards - Schedule of Restricted Stock Units Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Non-vested at the end of the period (in dollars per share) | 5,890,992 | ||
Weighted-Average Grant Date Fair Value | |||
Total stock-based compensation expense | $ 37,974 | $ 37,219 | $ 32,241 |
Restricted Stock Units (RSUs) | |||
Stock-based Awards | |||
Fair value of shares of restricted stock awards vested | $ 16,000 | $ 22,400 | $ 25,600 |
Number of Shares | |||
Non-vested at the beginning of period (in shares) | 5,375,963 | ||
Granted (in shares) | 5,436,368 | ||
Vested (in shares) | (2,830,183) | ||
Canceled/forfeited (in shares) | (2,091,156) | ||
Non-vested at the end of the period (in dollars per share) | 5,890,992 | 5,375,963 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested at the beginning of period (in dollars per share) | $ 11.01 | ||
Granted (in dollars per share) | 6.36 | $ 10 | $ 18.26 |
Vested (in dollars per share) | 9.44 | ||
Canceled/forfeited (in dollars per share) | 9.63 | ||
Non-vested at the end of the period (in dollars per share) | $ 7.96 | $ 11.01 | |
Total stock-based compensation expense | $ 24,300 | $ 21,200 | $ 14,900 |
Stock-based Awards - Schedule_3
Stock-based Awards - Schedule of Fair Value of Stock Option Award (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Risk-free interest rate | 2.32% | 2.85% | 1.89% |
Expected term | 6 years 25 days | 5 years 11 months 8 days | 6 years 3 months |
Expected volatility (as a percent) | 60.00% | 46.00% | 47.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-based Awards - Schedule_4
Stock-based Awards - Schedule of Stock-based Compensation Cost Relating to Stock Options, Restricted Stock Awards, and RSUs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 37,974 | $ 37,219 | $ 32,241 |
Amount capitalized to internal-use software | 1,811 | 1,890 | 1,407 |
Total stock-based compensation cost | 39,785 | 39,109 | 33,648 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 2,157 | 1,726 | 1,105 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 13,362 | 13,950 | 10,353 |
Technology and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 8,256 | 10,589 | 8,060 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 14,199 | $ 10,954 | $ 12,723 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of the Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 75 | 67 | 18 |
Total current provision | 75 | 67 | 18 |
Deferred: | |||
Federal | 173 | (282) | 410 |
State | 41 | 38 | 40 |
Tax Act impact | 0 | 0 | (2,632) |
Total deferred provision (benefit) | 214 | (244) | (2,182) |
Total income tax provision (benefit) | $ 289 | $ (177) | $ (2,164) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Increase in valuation allowance, excluding Tax Act impact | $ 2,483 | $ 4,036 | $ 45,512 | |
Income tax (benefit) provision | 289 | (177) | (2,164) | |
Impact from the change in tax law | 0 | 0 | 2,632 | |
Remeasurement of our U.S. federal deferred tax assets and liabilities | 1,200 | |||
Release of valuation allowance due to the Tax Act | $ 0 | $ 0 | $ 1,398 | |
Statutory federal rate | 21.00% | 21.00% | 34.00% | |
Valuation allowance | $ 111,193 | $ 109,625 | $ 107,046 | $ 115,689 |
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 242,500 | |||
State and Local Jurisdiction | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Research and development tax credit carryforwards | 400 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 415,100 | |||
Federal | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Research and development tax credit carryforwards | $ 800 |
Income Taxes - Schedule of Over
Income Taxes - Schedule of Overall Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit based on the federal statutory rate | 21.00% | 21.00% | 34.00% |
State income taxes, net of federal benefit (as a percent) | (1.50%) | 1.40% | 9.40% |
Nondeductible expenses (as a percent) | (3.50%) | (4.70%) | (1.20%) |
Change in valuation allowance (as a percent) | (4.50%) | (14.20%) | (130.00%) |
Stock-based compensation (as a percent) | (12.00%) | (2.90%) | 86.50% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 0.00% | 0.00% | 7.50% |
Overall effective income tax rate | (0.50%) | 0.60% | 6.20% |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets: | ||||
Net operating loss carryforwards | $ 103,188 | $ 101,763 | ||
Stock-based compensation | 10,954 | 13,227 | ||
Accrued expenses | 2,261 | 1,950 | ||
Research and development tax credits | 569 | 569 | ||
Operating leases liabilities | 10,724 | 0 | ||
Other | 619 | 656 | ||
Gross deferred tax assets | 128,315 | 118,165 | ||
Valuation allowance | (111,193) | (109,625) | $ (107,046) | $ (115,689) |
Net deferred tax assets | 17,122 | 8,540 | ||
Deferred tax liabilities: | ||||
Property, equipment and software | (3,800) | (3,477) | ||
Intangible assets and goodwill | (4,075) | (4,274) | ||
Capitalized commissions | (692) | (791) | ||
§481(a) Adjustment - ASC 606 | (380) | (566) | ||
Operating lease assets | (8,958) | |||
Gross deferred tax liabilities | (17,905) | (9,108) | ||
Total net deferred tax liabilities | $ (783) | $ (568) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Change in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Tax Assets, Net of Valuation Allowance [Abstract] | ||||
Valuation allowance, at beginning of year | $ 109,625 | $ 107,046 | $ 115,689 | |
Decrease in valuation allowance - ASC 606 impact | 0 | (1,457) | $ 0 | |
Increase in valuation allowance - operating lease impact | (915) | 0 | 0 | |
Valuation allowance, at beginning of year, as adjusted | 108,710 | 105,589 | $ 115,689 | |
Increase in valuation allowance, excluding Tax Act impact | 2,483 | 4,036 | 45,512 | |
Decrease in valuation allowance - federal tax rate change | 0 | 0 | 52,757 | |
Release of valuation allowance due to the Tax Act | 0 | 0 | (1,398) | |
Valuation allowance, at end of year | $ 111,193 | $ 109,625 | $ 107,046 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Total Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of year | $ (3) | $ (3) | $ 3 |
Additions for prior years’ tax positions | 0 | 0 | 1 |
Settlements with tax authorities | 0 | 0 | (7) |
Unrecognized tax benefit, end of year | $ (3) | $ (3) | $ (3) |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (54,890) | $ (28,321) | $ (32,849) |
Weighted-average common shares outstanding | 105,805 | 102,149 | 94,865 |
Net loss per share — basic and diluted (in dollars per share) | $ (0.52) | $ (0.28) | $ (0.35) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Anti-dilutive Shares Excluded from the Calculation of Diluted Net Loss Per Share (Details 2) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 attributable to common stockholders | 17,976 | 20,950 | 22,457 |
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 attributable to common stockholders | 10,626 | 14,115 | 16,714 |
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 attributable to common stockholders | 1,459 | 1,459 | 1,459 |
Unvested restricted stock units | |||
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 attributable to common stockholders | 5,891 | 5,376 | 4,284 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Matching contributions to 401(k) savings retirement plan | $ 2.5 | $ 2.4 | $ 2.3 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with USAA (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Amounts due from related party | $ 209 | $ 349 | |
Related party payables | 6,439 | 5,039 | |
Related party accrued expense and other current liabilities | 1,299 | 218 | |
USAA | |||
Related Party Transaction [Line Items] | |||
Amounts due from related party | 200 | 300 | |
Total amounts due | 7,300 | 5,300 | |
Related party payables | 6,000 | 5,000 | |
Related party accrued expense and other current liabilities | 1,300 | 200 | |
USAA | Sales and marketing | |||
Related Party Transaction [Line Items] | |||
Sales and marketing expense | $ 23,200 | $ 22,100 | $ 16,500 |
Related Party Transactions - _2
Related Party Transactions - Transactions with Accu-Trade (Details) - Accu-Trade, LLC $ in Millions | 11 Months Ended |
Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |
Outstanding equity interest acquired, percent | 20.00% |
Due to related party | $ 0.4 |
Sales | |
Related Party Transaction [Line Items] | |
Costs under agreement | 1.2 |
Cost of revenue | |
Related Party Transaction [Line Items] | |
Costs under agreement | $ 1 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||||
Revenues | $ 353,880 | $ 353,571 | $ 323,149 | |
Forecast | USAA | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Revenues | $ 20,000 |
Uncategorized Items - truecar20
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 5,923,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,690,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,690,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 5,923,000 |