Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | 1401 Ocean Avenue | ||
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 | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 229,737,867 | ||
Entity Common Stock, Shares Outstanding | 88,693,998 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement on Schedule 14A for the 2023 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, 2022. 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 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 175,518 | $ 245,217 |
Accounts receivable, net of allowances of $1,073 and $3,099 at December 31, 2022 and 2021, respectively | 13,786 | 16,710 |
Prepaid expenses | 5,969 | 6,145 |
Other current assets | 2,562 | 1,866 |
Total current assets | 197,835 | 269,938 |
Property and equipment, net | 18,902 | 19,155 |
Operating lease right-of-use assets | 16,940 | 23,605 |
Goodwill | 0 | 51,205 |
Intangible assets, net | 13,969 | 4,950 |
Equity method investment | 0 | 14,500 |
Other assets | 3,881 | 4,317 |
Total assets | 251,527 | 387,670 |
Current liabilities | ||
Accounts payable (includes related party payables of $— and $1,128 at December 31, 2022 and 2021, respectively) | 8,655 | 11,364 |
Accrued employee expenses | 7,378 | 5,187 |
Operating lease liabilities, current | 4,514 | 5,253 |
Accrued expenses and other current liabilities | 10,232 | 9,677 |
Total current liabilities | 30,779 | 31,481 |
Deferred tax liabilities | 0 | 103 |
Operating lease liabilities, net of current portion | 18,500 | 26,300 |
Other liabilities | 4,981 | 0 |
Total liabilities | 54,260 | 57,884 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Preferred stock — $0.0001 par value; 20,000,000 shares authorized at December 31, 2022 and 2021, respectively; no shares issued and outstanding at December 31, 2022 and 2021 | 0 | 0 |
Common stock — $0.0001 par value; 1,000,000,000 shares authorized at December 31, 2022 and 2021, respectively; 88,439,088 and 96,213,243 shares issued and outstanding at December 31, 2022 and 2021, respectively | 9 | 10 |
Additional paid-in capital | 709,790 | 723,623 |
Accumulated deficit | (512,532) | (393,847) |
Total stockholders’ equity | 197,267 | 329,786 |
Total liabilities and stockholders’ equity | $ 251,527 | $ 387,670 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,073 | $ 3,099 |
Related party payables | $ 0 | $ 1,128 |
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 | 88,439,088 | 96,213,243 |
Common stock, shares outstanding | 88,439,088 | 96,213,243 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 161,524 | $ 231,698 | $ 278,678 |
Costs and operating expenses: | |||
Cost of revenue | 16,213 | 22,239 | 21,549 |
Sales and marketing | 104,534 | 136,479 | 151,915 |
Technology and development | 46,090 | 41,432 | 44,930 |
General and administrative | 44,087 | 48,747 | 49,989 |
Depreciation and amortization | 16,520 | 16,279 | 20,547 |
Goodwill impairment | 59,775 | 0 | 8,264 |
Total costs and operating expenses | 287,219 | 265,176 | 297,194 |
Loss from operations | (125,695) | (33,478) | (18,516) |
Interest income | 2,565 | 52 | 462 |
Other income | 40 | 667 | 198 |
Gain (loss) from equity method investment | 1,845 | (5,404) | (1,989) |
Loss from continuing operations before income taxes | (121,245) | (38,163) | (19,845) |
Provision for (benefit from) income taxes | (2,560) | 206 | (6) |
Loss from continuing operations | (118,685) | (38,369) | (19,839) |
Income from discontinued operations, net of taxes | 0 | 40 | 96,383 |
Net (loss) income | $ (118,685) | $ (38,329) | $ 76,544 |
(Loss) income per share, basic and diluted | |||
Continuing operations (in dollars per share) | $ (1.30) | $ (0.39) | $ (0.19) |
Discontinued operations (in dollars per share) | $ 0 | $ 0 | $ 0.91 |
Weighted average common shares outstanding, basic and diluted | 91,452 | 97,352 | 106,315 |
Other comprehensive income (loss): | |||
Comprehensive (loss) income | $ (118,685) | $ (38,329) | $ 76,544 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | APIC | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2019 | 106,865,830 | |||||
Beginning balance at Dec. 31, 2019 | $ 327,271 | $ 76,544 | $ 11 | $ 759,322 | $ (432,062) | $ 76,544 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | 76,544 | |||||
Repurchase of common stock (in shares) | (9,282,485) | |||||
Repurchase of common stock | (42,335) | $ (1) | (42,334) | |||
Stock-based compensation | 25,456 | 25,456 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 2,107,597 | |||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | (4,154) | $ 0 | (4,154) | |||
Ending balance (in shares) at Dec. 31, 2020 | 99,690,942 | |||||
Ending balance at Dec. 31, 2020 | 382,782 | $ 10 | 738,290 | (355,518) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (38,329) | (38,329) | ||||
Repurchase of common stock (in shares) | (6,137,734) | |||||
Repurchase of common stock | (32,429) | $ 0 | (32,429) | |||
Stock-based compensation | 21,691 | 21,691 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 2,660,035 | |||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | $ (3,929) | (3,929) | ||||
Ending balance (in shares) at Dec. 31, 2021 | 96,213,243 | 96,213,243 | ||||
Ending balance at Dec. 31, 2021 | $ 329,786 | $ 10 | 723,623 | (393,847) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (118,685) | (118,685) | ||||
Repurchase of common stock (in shares) | (9,838,785) | |||||
Repurchase of common stock | (29,783) | $ (1) | (29,782) | |||
Stock-based compensation | 18,700 | 18,700 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 2,064,630 | |||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | $ (2,751) | (2,751) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 88,439,088 | 88,439,088 | ||||
Ending balance at Dec. 31, 2022 | $ 197,267 | $ 9 | $ 709,790 | $ (512,532) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net (loss) income | $ (118,685) | $ (38,329) | $ 76,544 |
Income from discontinued operations, net of taxes | 0 | 40 | 96,383 |
Loss from continuing operations | (118,685) | (38,369) | (19,839) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 16,520 | 16,279 | 20,372 |
Goodwill impairment | 59,775 | 0 | 8,264 |
Deferred income taxes | (2,358) | 63 | (743) |
Bad debt expense and other reserves | 718 | 528 | 2,984 |
Stock-based compensation | 17,681 | 20,395 | 23,077 |
Changes in fair value | 359 | 41 | 182 |
Amortization of lease right-of-use assets | 3,940 | 4,295 | 5,408 |
(Gain) loss from equity method investment | (1,845) | 5,404 | 1,989 |
Impairment of right-of-use assets and write-off and net loss on disposal of finite-lived assets | 0 | 1,682 | 2,436 |
Other noncash expenses | 230 | 408 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,210 | 15,685 | 2,332 |
Prepaid expenses and other assets | (210) | 2,733 | 1,297 |
Accounts payable | (2,750) | (1,806) | (8,221) |
Accrued employee expenses | 1,863 | (1,754) | 357 |
Operating lease liabilities | (5,214) | (5,192) | (6,257) |
Accrued expenses and other current liabilities | (1,371) | (5,630) | (4,128) |
Other liabilities | 0 | (388) | 388 |
Net cash (used in) provided by operating activities - continuing operations | (29,137) | 14,374 | 29,898 |
Net cash (used in) provided by operating activities - discontinued operations | 0 | (180) | 9,219 |
Net cash (used in) provided by operating activities | (29,137) | 14,194 | 39,117 |
Cash flows from investing activities | |||
Purchase of property and equipment | (11,680) | (10,689) | (10,277) |
Initial cash consideration | 15,745 | 0 | |
Cash paid for acquisition, net of cash acquired | (12,093) | 0 | 0 |
Net cash used in investing activities - continuing operations | (8,028) | (10,689) | (10,277) |
Net cash provided by investing activities - discontinued operations | 0 | 6,484 | 112,178 |
Net cash (used in) provided by investing activities | (8,028) | (4,205) | 101,901 |
Cash flows from financing activities | |||
Payment of contingent consideration liability | 0 | (2,214) | (2,263) |
Proceeds from exercise of common stock options | 179 | 1,391 | 97 |
Taxes paid related to net share settlement of equity awards | (2,930) | (5,320) | (4,251) |
Payments for the repurchase of common stock | (29,783) | (31,943) | (42,821) |
Net cash used in financing activities | (32,534) | (38,086) | (49,238) |
Net (decrease) increase in cash and cash equivalents | (69,699) | (28,097) | 91,780 |
Cash and cash equivalents at beginning of year | 245,217 | 273,314 | 181,534 |
Cash and cash equivalents at end of year | 175,518 | 245,217 | 273,314 |
Supplemental disclosure of cash flow information | |||
Income taxes | (131) | 1,554 | 43 |
Supplemental disclosures of non-cash activities | |||
Stock-based compensation capitalized for software development | 1,019 | 1,296 | 1,322 |
Capitalized assets included in accounts payable, accrued employee expenses and other accrued expenses | 1,311 | 1,239 | 643 |
Capitalized asset retirement costs included in property and equipment | 0 | 0 | 498 |
Changes in right-of-use assets for operating lease obligations | 3,047 | 0 | 0 |
Changes in lease liabilities for operating lease obligations | $ 3,636 | $ 0 | $ 0 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2022 | |
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 TrueCar Dealer Solutions, Inc., Digital Motors, Inc., DealerScience, LLC (dissolved and rolled up to TCDS in 2022), and ALG, Inc. (up to the date of disposition) 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”, Digital Motors, Inc. is referred to as “Digital Motors”, 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 office is 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. Through its subsidiary TCDS, the Company provides its Trade and Payments solutions. TCDS also supports the Company’s Sell Your Car product. The Sell Your Car and Trade solutions give consumers information on the value of the vehicle they wish to sell or trade-in 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. The Company’s Payments solution helps consumers calculate accurate monthly payments. ALG provided 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. On November 30, 2020, the Company completed the sale of its 100% interest in ALG to J.D. Power, a Delaware corporation (“J.D. Power”). Refer to Note 5 for further discussion of this divestiture. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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”). The Company is reporting the historical results of the divested ALG subsidiary, including its results of operations and cash flows, as discontinued operations for all periods presented. Unless otherwise noted, the accompanying notes to the consolidated financial statements have all been revised to reflect continuing operations only. 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. Divestitures are included in the Company’s consolidated financial statements through the date of disposition. 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 assets and liabilities assumed in business combinations, the recoverability and related impairment of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, right-of-use assets and operating lease 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 single reporting unit related to goodwill impairment, right-of-use assets and lease liabilities, assets and liabilities assumed in business combinations, assets and liabilities of its equity method investment and performance-based stock units. Segments The Company has one operating segment. For the year ended December 31, 2022, the Company’s chief operating decision maker (“CODM”) was solely comprised of the President and Chief Executive Officer and the Chief Financial Officer and Chief Operating Officer who jointly managed the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The CODM reviews financial information on a consolidated basis, accompanied by information about dealer revenue, OEM incentive revenue, and other revenue (Note 6). 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 Compa ny recognizes its p roportional 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 $22.9 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 income and 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-l ine method. These intangible assets are am ortized over a weighted-average useful life of approximately 5 years measured at the transaction date. Th e Company assesses the carrying value of its investment in Accu-Trade for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value. On February 2, 2022, the Company entered into a redemption agreement with Accu-Trade to redeem the Company’s 20% ownership interest in Accu-Trade. As a result of the events and circumstances leading up to the Company’s entry into the redemption agreement with Accu-Trade, the Company concluded that the investment in Accu-Trade was impaired and recorded a $4.1 million impairment charge in its equity method investment for the year ended December 31, 2021, which is included within Gain (loss) from equity method investment on the accompanying consolidated statements of comprehensive income (loss). On March 1, 2022, the Company sold its 20% ownership interests in Accu-Trade at the investment’s carrying value and recorded a derivative asset for the right to receive escrow payments. For the year ended December 31, 2022, we recognized a gain of $1.8 million from changes in fair value of the derivative asset from inception till its settlement in Q2 2022. The gain is included within Gain (loss) from equity method investment on the accompanying consolidated statements of comprehensive income (loss) 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. Certain assets, including the equity method investment, 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, 2021 and 2020, the Company recorded right-of-use asset impairment charges of $1.7 million and $2.1 million, respectively, related to office operating leases. For the year ended December 31, 2021, the Company recorded an impairment charge of $4.1 million related to its equity method investment in Accu-Trade. For the years ended December 31, 2022 and 2020, the Company recorded goodwill impairment charges of $59.8 million and $10.2 million, respectively. Of the $10.2 million goodwill impairment recorded in 2020, $1.9 million was included in discontinued operations. The Company recorded a contingent consideration liability upon the acquisition of Digital Motors in 2022. 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 Scenario-Based model. Because the Digital Motors purchase agreement makes payment of the contingent consideration contingent on achievement of certain product development milestones and future revenue targets, the significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of achieving those targets. Significant increases or decreases in the probabilities of achieving the targets 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, 2022 and 2021 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, 2022 At December 31, 2021 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 57,518 $ — $ — $ 57,518 $ 234,763 $ — $ — $ 234,763 Total Assets $ 57,518 $ — $ — $ 57,518 $ 234,763 $ — $ — $ 234,763 Liabilities: Contingent consideration, current $ — $ — $ 1,983 $ 1,983 $ — $ — $ — $ — Contingent consideration, non-current — — 4,678 4,678 — — — — Total Liabilities $ — $ — $ 6,661 $ 6,661 $ — $ — $ — $ — Contingent Consideration Obligations The following table summarizes the changes in the fair value of the contingent consideration obligation (in thousands): Year Ended December 31, 2022 Fair value, at beginning of year $ — Additions 6,302 Changes in fair value 359 Fair value, at end of year $ 6,661 The following table summarizes the significant unobservable inputs and valuation technique in the fair value measurement of the contingent consideration liability at December 31, 2022: Valuation Technique Unobservable Inputs Value Range Scenario-Based model Probabilities of achievement 91.2% to 100.0% 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 ba sed on these evaluations. No single customer comprised more than 10% of the Company’s total revenues for the years ended December 31, 2022, 2021 and 2020. At December 31, 2022 and 2021 no single customer comprised more than 10% of the Company’s accounts receivable balance. The Company’s largest source of unit sales and one of the largest sources of visitors from affinity group marketing partners in 2020 came from its relationship with United Services Automobile Association (“USAA”), a related party until its partnership with the Company terminated on September 30, 2020. See Note 17 for further details. 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, 2022 and 2021, 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. On January 1, 2020, the Company adopted the new accounting guidance on measuring credit losses on its trade accounts receivable using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Under the new guidance, the Company considers the need to adjust historical information to reflect the extent to which the Company expects current conditions and reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The primary current and future economic indicators that the Company uses to develop its current estimate of expected credit losses include the current and forecast U.S. Gross Domestic Product (GDP). The Company calculates the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include revenue billing model and aging status. 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, 2022 2021 2020 Allowances, at beginning of year $ 3,099 $ 7,147 $ 6,591 Charged as a reduction of revenue 2,661 4,205 8,365 Charged to bad debt expense in general and administrative expenses 718 528 2,984 Write-offs, net of recoveries (5,405) (8,781) (10,793) Allowances, at end of year $ 1,073 $ 3,099 $ 7,147 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 4 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, 2022 and 2021, capitalized software costs were $79.0 million and $67.9 million, respectively, before accumulated amortization of $61.6 million and $50.6 million, respectively. Expected amortization expense with respect to capitalized software costs at December 31, 2022 for each of the years through December 31, 2025 is as follows (in thousands): Years ended December 31, 2023 $ 9,335 2024 5,834 2025 2,208 Total amortization expense $ 17,377 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: 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 customer relationships and technology are generally two one Long-Lived Assets The Company evaluates the recoverability of its long-lived assets, including its ROU 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, 2021 and 2020, the Company recorded ROU asset impairment charges of $1.7 million and $2.1 million, respectively, related to certain operating leases. See Note 4 for additional information. During the year December 31, 2022, 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. 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 assesses recoverability of goodwill on an annual basis at December 31 or when events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable, such as a decline in stock price and market capitalization. During the first quarter of 2020, as a result of the recent global economic disruption and uncertainty due to the COVID-19 pandemic, along with the Company’s announcement that it had entered into a short-term agreement to extend its partnership with USAA Federal Savings Bank to continue to power the USAA Car Buying Service through September 30, 2020, the Company concluded a triggering event had occurred. In light of these factors, the Company performed an interim quantitative impairment test as of March 31, 2020, in which the Company estimated the fair value of its single reporting unit by utilizing an income approach which uses a discounted cash flow analysis. Given the high degree of market volatility and lack of reliable market data as of March 31, 2020, the Company determined that the income approach provided the best approximation of fair value. Determining fair value requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including the revenue growth rates, workforce cost savings, long-term growth rates and the discount rate. The Company bases cash flow projections on management’s estimates of revenue growth rates and operating margins, taking into consideration market conditions. The discount rate is based on the weighted-average cost of capital, which represents the average rate a business must pay its providers of debt and equity, plus a risk premium. Based on the results of the interim impairment test, the Company concluded that the carrying value of its reporting unit was greater than the fair value and, accordingly, recognized a non-cash impairment charge of $10.2 million during the three months ended March 31, 2020, of which $1.9 million was included in discontinued operations. During the second quarter of 2022, as a result of the continued economic disruption as well as a decline in the Company’s stock price and market capitalization, the Company concluded a triggering event had occurred as of June 30, 2022. The Company performed an interim quantitative impairment test, in which the Company estimated the fair value of its single reporting unit by utilizing a market approach, which is based on the market capitalization of the Company using its share price in the Nasdaq Global Select Market and an appropriate control premium. Determining the control premium requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including expected future cash flows, which were based on the synergies market participants could realize if they acquire the reporting unit, and the discount rate. Based on the results of the interim impairment test, the Company concluded that the fair value of its reporting unit was greater than the carrying value and that goodwill was not impaired as of June 30, 2022. During the third quarter of 2022, as a result of additional macroeconomic disruptions, including rising interests rates, and a further decline in market capitalization, the Company concluded a triggering event had occurred. The Company performed an interim quantitative impairment test as of September 30, 2022 utilizing an income approach. Under the income approach, the Company used a discounted cash flow analysis. Determining fair value requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including the amount and timing of expected future cash flows, long-term growth rates, and the discount rates. The Company also performed a reconciliation of the fair value of the reporting unit to the Company’s market capitalization as of September 30, 2022. The market capitalization reconciliation included the estimation of a reasonable control premium and other market factors such as control premiums observed in market transactions. Based on the results of the impairment test, the Company concluded that the carrying value of its single reporting unit exceeded the fair value and, accordingly, recorded a non-cash impairment charge of $59.8 million during the three months ended September 30, 2022. The Company does not have a goodwill balance as of December 31, 2022. Revenue Recognition 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- |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination On May 31, 2022 (the “Acquisition Date”), the Company acquired all of the outstanding shares of Digital Motors for $15.5 million in cash and up to $8.0 million of contingent cash consideration based on the occurrence of certain events including the achievement of product development milestones and future revenues. The acquisition of Digital Motors is intended to accelerate TrueCar's plan to deliver a robust digital car buying and selling experience with its TrueCar+ marketplace. At the Acquisition Date, the Company assessed the probabilities of Digital Motors meeting product development milestones and future revenue targets and recorded contingent consideration of $6.3 million. At December 31, 2022, the contingent consideration liability was remeasured to $6.7 million, with $4.7 million recorded in Other liabilities and $2.0 million recorded in Accrued expenses and other current liabilities . The Company recorded goodwill of $8.6 million on the Acquisition Date , whic h represented 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 Digital Motors. Goodwill attributed to the acquisition is not deductible for income tax purposes. The purchase consideration was preliminarily allocated to the assets acquired and liabilities assumed based on their fair value as of the Acquisition Date. The following table summarizes the preliminary allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of Digital Motors as of the Acquisition Date (in thousands). The purchase price allocation is preliminary and is subject to revision as additional information about the fair value of the assets acquired and liabilities assumed become available. Digital Motors Assets acquired Cash $ 5,201 Acquired technology 12,500 Other assets acquired 548 Goodwill 8,570 Total assets acquired $ 26,819 Liabilities assumed Accounts payable $ 1,244 Accrued employee expenses 984 Deferred tax liabilities 2,298 Other liabilities assumed 507 Total liabilities assumed $ 5,033 Net assets acquired 21,786 Consideration paid Cash paid $ 15,484 Contingent consideration 6,302 Total consideration $ 21,786 The purchase price allocation was adjusted subsequent to the Acquisition Date to reflect certain working capital adjustments and tax adjustments. This measurement period adjustment results in a $0.2 million increase in other assets acquired, $0.1 million increase in accounts payable, $0.4 million increase in other liabilities assumed, and $0.3 million decrease in deferred tax liabilities. The adjusted purchase price allocation is reflected in the condensed consolidated balance sheet as of December 31, 2022. The estimated useful life for acquired technology is 4 years. Total liabilities assumed include $1.8 million of accrued Digital Motors transaction expenses, which were paid by the Company shortly after the Acquisition Date and included in cash paid for acquisition, net of cash acquired on the accompanying condensed consolidated statements of cash flows. The Company incurred transaction co sts of $1.0 million in connection with the Digital Motors acquisition which were expensed as incurred and included in general and administrative expense in the accompanying consolidated statements of comprehensive loss. The Company’s consolidated financial statements include the operating results of Digital Motors from the Acquisition Date through December 31, 2022. Separate operating results and pro forma results of operations for Digital Motors have not been presented as the effect of the acquisition is not material to the Company’s financial results. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
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 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. Lease Costs For the years ended December 31, 2022, 2021, and 2020, the Company recorded operating lease costs of corporate offices, excluding subleases, in the consolidated statements of comprehensive income (loss) as follows (in thousands): Operating lease costs recorded within: Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Cost of revenue $ 12 $ 62 $ 489 Sales and marketing 583 1,356 1,680 Technology and development 1,104 2,082 2,420 General and administrative 3,837 2,793 2,887 Total operating lease costs $ 5,536 $ 6,293 $ 7,476 The Company did not include short term or variable lease costs in the table above as these amounts were immaterial. The Company made cash payments of $6.7 million, $7.2 million and $8.3 million for the years ended December 31, 2022, 2021, and 2020, respectively, 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 4.9 years and weighted average discount rate of 5.8%. For its subleases, the Company recorded contra rent expense of $3.4 million, $1.1 million and $1.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Company recognized ROU asset group impairment charges of $1.7 million and $2.1 million for the years ended December 31, 2021 and 2020, respectively, reducing the carrying value of the related lease assets to its estimated fair value. Fair value was estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on current sublease market rent. The impairment charge is included in general and administrative expenses in the consolidated statements of comprehensive income (loss). In June 2022, TrueCar signed a lease amendment to exit certain floors of a leased office space effective July 31, 2022 and to settle the asset retirement obligation associated with exiting the leased space for a lower amount than previously recognized. To account for the reduction in lease term, TrueCar remeasured the lease liability, using the incremental borrowing rate in place at the date of modification, with a corresponding reduction to the right of use asset. A total gain of $0.8 million was recognized which included the $0.6 million difference in reduction of lease liability of $3.7 million and right-of-use asset of $3.1 million and the $0.2 million gain on settlement of the asset retirement obligation. The existing operating leases have remaining lease terms ranging from 0.6 to 7.1 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, 2022 are as follows (in thousands): Years ended December 31, 2023 $ 5,627 2024 6,248 2025 5,978 2026 2,853 2027 1,986 Thereafter 3,923 Total lease payments $ 26,615 Less: imputed interest (3,601) Total lease liabilities (discounted) $ 23,014 Year ended December 31, Sublease Income 2023 $ 3,698 2024 4,006 2025 3,505 2026 654 2027 56 Thereafter — Total sublease income $ 11,919 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On November 30, 2020, the Company completed the sale of its 100% interest (the “Divestiture”) in ALG to J.D. Power for $112.5 million in cash (subject to customary working capital and other adjustments) pursuant to the Membership Interest Purchase Agreement, dated as of July 31, 2020 (the “Purchase Agreement”). The Purchase Agreement provides for J.D. Power to pay the Company (i) a potential cash earnout of up to $7.5 million based upon ALG’s achievement of certain revenue metrics in 2020 and (ii) a potential cash earnout of up to $15 million based upon ALG’s achievement of certain revenue metrics in 2022. The Company received cash proceeds of $111.5 million, net of working capital adjustments, and transactions costs of approximately $1.9 million. As part of the Divestiture, the Company also received a five-year data license from J.D. Power for use of certain ALG data in the Company’s products and services. The Company recorded the fair value of the data license of $1.9 million in other current assets and other assets in the accompanying consolidated balance sheets. The data license is being treated as additional consideration received and is being amortized on a straight-line basis over five years. The Company accounts for the future earnouts as gain contingencies and recognizes the contingent consideration associated with the Divestiture when the consideration is determined to be realizable. The Divestiture resulted in a pre-tax gain of $92.5 million for the year ended December 31, 2020. During the first quarter of 2021, the Company received a cash payment of $7.5 million related to the first earnout and is reflected within investing activities of discontinued operations on the accompanying consolidated statements of cash flows. During the third quarter of 2021, the Company finalized its net working capital adjustments associated with the Divestiture. The resolution resulted in additional gain on sale of $0.2 million offset by additional administrative costs of $0.2 million for the year ended December 31, 2021. The Divestiture represents a strategic shift in the Company’s business and meets the criteria of discontinued operations. As a result, the operating results and cash flows from ALG have been reflected as discontinued operations in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Cash Flows for all periods presented. The following table presents the detail of “Income from discontinued operations, net of taxes” within the Statements of Comprehensive Income (Loss) (in thousands): 2021 2020 Revenues $ — $ 17,361 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization presented separately below) — 4,286 Sales and marketing — 1,625 Technology and development — 1,188 General and administrative 180 971 Depreciation and amortization — 2,910 Goodwill impairment — 1,923 Total costs and operating expenses 180 12,903 Income from operations (180) 4,458 Gain on sale 220 92,528 Interest income — 171 Income from discontinued operations before income taxes 40 97,157 Provision for income taxes — 774 Income from discontinued operations, net of taxes $ 40 $ 96,383 |
Revenue Information
Revenue Information | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Information and Deferred Sales Commissions | Revenue Information and Deferred Sales Commissions Deferred Sales Commissions Deferred sales commissions within other assets were $1.5 million and $1.8 million as of December 31, 2022 and 2021, respectively. For the years ended December 31, 2022, 2021 and 2020, amortization expense for deferred sales commissions was $1.2 million, $1.6 million and $1.8 million, respectively. There was no impairment loss in relation to the costs capitalized in any 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 $0.9 million and $2.3 million at January 1, 2022 and 2021, respectively, were transferred to accounts receivable during the years ended December 31, 2022 and 2021 as vehicle sales occurred, with no significant changes in the estimate. A contract asset of $0.9 million and $0.9 million was recorded as of December 31, 2022 and 2021, 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 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, 2022 2021 2020 Dealer revenue $ 156,485 $ 222,000 $ 252,928 OEM incentives revenue 4,390 8,676 16,833 Other revenue 649 1,022 8,917 Total revenues $ 161,524 $ 231,698 $ 278,678 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in goodwill for the year ended December 31, 2022 (in thousands): Goodwill Balance at December 31, 2021 $ 51,205 Additions 8,570 Impairment (59,775) Balance at December 31, 2022 $ — The Company assesses recoverability of goodwill on an annual basis as of December 31 or when events or changes in circumstances indicate that the carrying value may not be recoverable, such as a deterioration in macroeconomic conditions and a sustained decrease in stock price. Since 2021, the Company’s business has been negatively impacted by the global automotive semiconductor chip shortage, and more recently, by rising interest rates. During the third quarter, the Company’s stock price experienced high volatility, causing a further decline in its market capitalization since the Company last tested the goodwill for |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Computer equipment and internally developed software $ 88,638 $ 77,237 Furniture and fixtures 3,013 3,794 Leasehold improvements 11,740 15,664 103,391 96,695 Less: Accumulated depreciation (84,489) (77,540) Total property and equipment, net $ 18,902 $ 19,155 Included in the table above are property and equipment of $1.5 million and $1.3 million as of December 31, 2022 and 2021, 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 $13.0 million, $14.6 million, and $18.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Amortization of internal use capitalized software development costs was $12.2 million, $12.2 million, and $13.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. During the year ended December 31, 2022, the Company disposed of or retired certain fully depreciated leasehold improvements, furniture and fixtures, and computer equipment with an original cost basis of $5.0 million. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following at December 31, 2022 and 2021 (in thousands): At December 31, 2022 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 22,890 $ (8,921) $ 13,969 Customer relationships 1,300 (1,300) — Total $ 24,190 $ (10,221) $ 13,969 At December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 11,390 $ (6,440) $ 4,950 Customer relationships 1,300 (1,300) — Total $ 12,690 $ (7,740) $ 4,950 During the year ended December 31, 2022, the Company disposed of certain fully amortized acquired technology with an original cost basis of $1.0 million. Amortization expense by asset type for the years ended December 31, 2022, 2021, and 2020 is shown below (in thousands): Year Ended December 31, 2022 2021 2020 Acquired technology and domain name $ 3,481 $ 1,650 $ 1,650 Customer relationships — — 750 Total amortization $ 3,481 $ 1,650 $ 2,400 Expected amortization expense with respect to intangible assets at December 31, 2022 is as follows (in thousands): Years ended December 31, 2023 $ 4,775 2024 4,775 2025 3,125 2026 1,294 Thereafter — Total amortization expense $ 13,969 |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2022 | |
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 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 did not alter the borrowing amounts, interest rates, or required ratios. In February 2021, the Company entered into a third amendment to the Credit Facility to extend the expiration date to April 19, 2021 that did not alter the borrowing amounts, interest rates, or required ratios. In April 2021, the Company entered into a fourth amendment to the Credit Facility to extend the maturity date to April 12, 2024 that did not alter the borrowing amounts, interest rates, or required ratios. The Credit Facility provided 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 0.25%, or (ii) a LIBOR rate determined in accordance with the terms of the Credit Facility, plus a spread of 1.75% to 2.25%. 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, excluding operating lease obligations, plus all obligations and liabilities to the financial institution including issued and outstanding letters of credit. 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 0.15% 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 1.25 to 1.00 on the last day of each quarter. The Credit Facility also limits the Company’s ability to pay dividends. At December 31, 2022 and 2021, 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. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Reorganization In May 2020, the Company committed to a restructuring plan (the “Restructuring Plan”) in furtherance of its efforts to enhance productivity and efficiency, preserve profitability and streamline its organizational structure to better align operations with its long-term commitment to providing an enhanced consumer experience. The Company recorded restructuring costs of approximately $8.3 million in the second quarter of 2020 in connection with the Restructuring Plan. Of the total, the Company recorded $0.6 million in cost of revenue, $5.3 million in sales and marketing, $1.6 million in technology and development and $0.8 million in general and administrative expenses within the Company’s consolidated statements of comprehensive income (loss) during the year ended December 31, 2020. Included in discontinued operations are restructuring costs of $0.2 million for the year ended December 31, 2020. The majority of the restructuring costs liability was paid during the year ended December 31, 2020 with the remaining accrual reversed in 2021 upon the expiration of the unexercised health benefits. The Company does not expect to incur significant additional charges in future periods related to the Restructuring Plan. 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. The court entered the final judgment and order of dismissal on May 26, 2020. As a result, the Milbeck Federal Securities Litigation is resolved. 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 sought 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. On September 30, 2020, the court dismissed the Delaware Consolidated Derivative Litigation with prejudice for failure to make a pre-suit demand and failure to state a claim and the plaintiffs did not appeal the ruling. As a result, the Delaware Consolidated Derivative Litigation is resolved. Following the court’s decision, the plaintiffs sent a letter to the Company demanding that it pursue claims against certain current and former officers for various alleged breaches of their fiduciary duties, based substantially on the same factual allegations as the Milbeck Federal Securities Litigation. On November 18, 2020, the Company’s Board of Directors (the “Board”) established a special committee of the Board (the “Special Committee”) to investigate the claims contained in the Delaware Consolidated Derivative Litigation, the Lee Derivative Litigation and other related stockholder demands. In October 2021, following the aforementioned investigation, the Board adopted the Special Committee’s recommendation that the Board refuse the demands in their entirety and conclude that no further action is necessary. 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. On May 5, 2020, the court entered the parties’ stipulation to stay this litigation pending the outcome of the motions to dismiss in the Delaware Consolidated Derivative Litigation. Following the dismissal of the Delaware Consolidated Derivative Litigation, on December 22, 2020, the court entered the parties’ further stipulation to stay the Lee Derivative Litigation pending the outcome of the Special Committee’s investigation. Following the Board’s action on the Special Committee’s recommendation, which is described in greater details above, the plaintiff dismissed her claims on June 22, 2022. As a result, the Lee Derivative Litigation is resolved, and the Company does not anticipate a loss related to this matter. Trademark Litigation On April 9, 2020, the Company was named as a defendant in a lawsuit filed by Six Star, Inc. (“Six Star”) in the U.S. District Court for the Middle District of Florida (the “Trademark Litigation”). The complaint in the Trademark Litigation alleges that the Company’s new “BUY SMARTER DRIVE HAPPIER” tagline infringed and diluted Six Star’s “BUY SMART BE HAPPY” trademark and included claims of false advertising and deceptive and unfair trade practices. The complaint seeks injunctive relief in addition to certain monetary awards. On June 25, 2021, the parties entered into a settlement agreement pursuant to which the parties agreed to dismiss the Trademark Litigation in exchange for the Company agreeing not to use Six Star’s “BUY SMART BE HAPPY” trademark and to only use its own trademark in conjunction with the word “TrueCar.” The settlement agreement did not provide for either party to pay the other any amounts. On June 28, 2021, the court dismissed the Trademark Litigation pursuant to the settlement agreement. As a result, the Trademark Litigation is currently resolved. 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, 2022, 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 $ 22,254 $ 9,995 $ 12,241 $ 18 $ — 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, 2022. Purchase obligations exclude agreements that are cancellable without penalty. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Repurchase Program In July 2020, the Company’s board of directors authorized an open market stock repurchase program (the “Program”) of up to $75 million to allow for the repurchase of shares of the Company’s common stock through September 30, 2022. In May 2021, the Company’s board of directors increased the authorization of the Program by an additional $75 million, bringing the total authorization to $150 million. In July 2022, the Company’s board of directors extended the expiration of the Program until September 30, 2024. The timing and amount of any repurchases will be determined by Company management based on its evaluation of market conditions and other factors. Repurchases of the Company’s common stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws, open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws. The Program may be suspended or discontinued at any time and does not obligate the Company to purchase any minimum number of shares. During the year ended December 31, 2022, 2021, and 2020 the Company repurchased and retired a total of 9.8 million, 6.1 million and 9.3 million shares under the Program for $29.7 million, $32.3 million and $42.2 million respectively. As of December 31, 2022, the Company had a remaining authorization of $45.8 million for future share repurchases. Warrant 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 date on which the Company no longer operates the USAA car-buying program. As a result of the termination of the USAA car-buying program on September 30, 2020, the warrant expired on September 30, 2021. For the years ended December 31, 2022, 2021, and 2020, there was no warrant expense recognized. 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 awards, plus shares available for grant under the Company’s equity incentive plan. The number of shares of the Company’s common stock reserved for these purposes at December 31, 2022 is as follows: Number of Shares Outstanding stock options 5,114,490 Outstanding restricted stock units 10,007,869 Additional shares available for grant under the equity plan 16,733,525 Total 31,855,884 |
Stock-based Awards
Stock-based Awards | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement [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. In February 2022, the Inducement Plan was 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 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, 2022, the total number of shares available for future issuance under the 2014 Plan was 16,733,525 shares. In accordance with the evergreen provision, effective January 1, 2023, an additional 4,421,954 shares of common stock were authorized to be issued under the 2014 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 Stock Options A summary of the Company’s stock option activity for the year ended December 31, 2022 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, 2021 6,078,180 $ 9.24 6.2 Granted — — Exercised (66,904) 2.68 Forfeited/expired (896,786) 8.16 Outstanding at December 31, 2022 5,114,490 $ 9.50 4.7 $ 0.1 Vested and expected to vest at December 31, 2022 5,114,490 $ 9.50 4.7 $ 0.1 Exercisable at December 31, 2022 4,290,935 $ 10.52 4.1 $ — (1) The aggregate intrinsic value represents the excess of the closing price of the Company’s common stock of $2.51 on December 31, 2022 over the exercise price of in-the-money stock option awards. At December 31, 2022, total remaining stock-based compensation expense for unvested option awards was $1.9 million, which is expected to be recognized over a weighted-average period of 2.1 years. The weighted-average grant-date fair value per share of options granted for the years ended 2021 and 2020 was $2.78 and $1.88, respectively. There were no option grants in 2022. The Company recorded stock-based compensation expense for stock option awards of $1.5 million, $3.7 million, and $5.5 million, for the years ended December 31, 2022, 2021, and 2020, respectively. The total intrinsic value of options exercised in 2022, 2021, and 2020 was less than $0.1 million, $0.7 million, and $0.1 million, respectively. Restricted Stock Units A summary of the Company’s restricted stock unit (“RSU”) activity for the year ended December 31, 2022 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Non-vested — December 31, 2021 7,536,114 $ 4.60 Granted 7,436,267 3.80 Vested (3,033,474) 4.56 Forfeited (1,931,038) 4.46 Non-vested — December 31, 2022 10,007,869 $ 4.04 The total fair market value of RSUs that vested for the years ended December 31, 2022, 2021, and 2020 was $8.5 million, $15.8 million, and $11.6 million, respectively. The weighted-average grant-date fair value of RSUs granted for the years ended December 31, 2022, 2021, and 2020 was $3.80, $4.64, and $3.08, respectively. For the years ended December 31, 2022, 2021, and 2020, the Company recorded $16.2 million, $16.7 million, and $17.6 million in compensation expense, respectively. At December 31, 2022, total remaining stock-based compensation expense for non-vested RSUs is $32.5 million, which is expected to be recognized over a weighted-average period of 2.6 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, as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The computation of expected volatility is based on the historical volatility of the Company’s common stock. 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. Forfeitures on share-based awards are recognized as they occur. 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 for grants in 2021 and 2020: Year Ended December 31, 2021 2020 Risk-free interest rate 0.95 % 0.52 % Expected term (years) 6.05 6.02 Expected volatility 65 % 65 % Dividend yield — — The Company recorded stock-based compensation cost relating to stock options and RSUs in the following categories on the accompanying consolidated statements of comprehensive income (loss) (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 185 $ 227 $ 556 Sales and marketing 4,884 6,958 8,258 Technology and development 4,186 4,489 4,966 General and administrative 8,426 8,721 9,297 Total stock-based compensation expense 17,681 20,395 23,077 Amount capitalized to internal-use software 1,019 1,296 1,322 Total stock-based compensation cost $ 18,700 $ 21,691 $ 24,399 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Current: Federal $ — $ (119) $ — State (202) 262 88 Total current provision (benefit) (202) 143 88 Deferred: Federal (2,046) 43 (60) State (312) 20 (34) Total deferred provision (benefit) (2,358) 63 (94) Total income tax provision (benefit) $ (2,560) $ 206 $ (6) The 2022 income tax benefit of $2.6 million primarily reflects the release of valuation allowance resulting from net deferred tax liabilities recorded in Digital Motors acquisition accounting providing a source of income in assessing realization of consolidated net deferred tax assets. The 2021 income tax expense of $0.2 million primarily reflects state income taxes and the amortization of tax-deductible goodwill that is not an available source of income to realize deferred tax assets. The 2020 income tax benefit of less than $0.1 million primarily arose in connection with the impairment of goodwill, resulting in reduction of indefinite-lived deferred tax liabilities. The overall effective income tax rate differs from the statutory federal rate as follows: Year Ended December 31, 2022 2021 2020 Income tax benefit based on the federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.8 4.4 35.7 Nondeductible expenses (0.3) 3.2 (3.2) Change in valuation allowance (12.7) 2.4 (49.9) Stock-based compensation (1.3) (8.6) (23.2) Research and development tax credits — (20.1) 25.1 Uncertain tax positions 0.6 (2.8) — Goodwill impairment (7.0) — (5.5) Overall effective income tax rate 2.1 % (0.5) % — % The components of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2022 2021 Deferred income tax assets: Net operating loss carryforwards $ 80,688 $ 77,634 Stock-based compensation 6,827 6,550 Accrued expenses 1,303 914 Research and development tax credits 6,558 6,405 Operating leases liabilities 5,457 7,662 Intangible assets and goodwill 2,953 1,205 Property, equipment and software 1,104 — Capitalized research and development costs 8,792 — Other 652 1,176 Gross deferred tax assets 114,334 101,546 Valuation allowance (109,876) (94,117) Net deferred tax assets 4,458 7,429 Deferred tax liabilities: Property, equipment and software — (1,363) Capitalized commissions (365) (427) Operating lease assets (4,093) (5,742) Gross deferred tax liabilities (4,458) (7,532) Total net deferred tax assets (liabilities) $ — $ (103) At December 31, 2022, the Company had federal and state net operating loss carryforwards of $309.8 million and $242.0 million, respectively. Of the Company’s federal net operating loss carryforwards, $248.2 million will begin to expire in 2034 and $61.6 million does not expire. The Company’s state net operating loss carryforwards will begin to expire in 2022. At December 31, 2022, the Company had federal and state research and development tax credit carryforwards of approximately $1.1 million and $11.2 million, respectively. The federal tax credit carryforwards begin to expire in the year ending December 31, 2040. The state tax credit carryforwards can be carried forward indefinitely. The Internal Revenue Code (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. The Company experienced a cumulative ownership change as of December 31, 2019. The Company estimates that up to $15.2 million and $0.5 million of federal and state net operating loss carryforwards, respectively, may expire unused. The Section 382 limitation resulted in a reduction of deferred tax assets of $3.2 million as of December 31, 2020 and was fully offset by a corresponding decrease in the Company’s valuation allowance, with no net tax provision impact. Additionally, with the finalization of the 2011 - 2020 research and development tax credit study in 2021, the Company estimates that certain of the federal research and development credit carryforwards may expire unused. The Section 383 limitation resulted in a reduction of deferred tax assets of $12.3 million as of December 31, 2021 and was fully offset by a corresponding decrease in 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, 2022. 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, 2022, a valuation allowance of $109.9 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, 2022, 2021, and 2020 is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Valuation allowance, at beginning of year $ 94,117 $ 95,042 $ 111,193 Increase in valuation allowance 15,759 — — Decrease in valuation allowance — (925) (16,151) Valuation allowance, at end of year $ 109,876 $ 94,117 $ 95,042 The $15.8 million increase in valuation allowance is primarily related to the increase in deferred tax assets for capitalized research and development costs and net operating losses, offset by net deferred tax liabilities recorded in Digital Motors acquisition accounting. The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2022 2021 2020 Unrecognized tax benefit, beginning of year $ 5,237 $ 7,640 $ (3) Increase (decrease) based on tax positions in prior period (1,101) (3,504) 1,447 Increase based on tax positions in current period 434 1,101 6,196 Unrecognized tax benefit, end of year $ 4,570 $ 5,237 $ 7,640 The December 31, 2022 balance includes $0.3 million, that, if recognized would affect the effective income tax rate. The December 31, 2022, 2021, and 2020 balances include tax benefits of $3.4 million, $3.3 million, and $7.6 million, respectively, which if recognized, would be in the form of net operating loss or tax credit carryforwards and expected to require a full valuation allowance based on present circumstances. These amounts are net of offsetting benefits from other tax jurisdictions. The $1.1 million decrease in the prior period unrecognized tax benefit is primarily related to the Company’s application for a change in accounting method related to bonus expense that does not qualify as a federal income tax deduction when accrued for financial reporting purposes. The $0.4 million increase in the current period unrecognized tax benefit is primarily related to uncertain tax positions recorded in Digital Motors acquisition accounting. 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, 2022, 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 Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (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) income per share attributable to common stockholders during the years ended December 31, 2022, 2021, and 2020 (in thousands, except per share data): Year Ended December 31, 2022 2021 2020 Net (loss) income $ (118,685) $ (38,329) $ 76,544 Loss from continuing operations $ (118,685) $ (38,369) $ (19,839) Income from discontinuing operations, net of taxes $ — $ 40 $ 96,383 Weighted-average common shares outstanding, basic and diluted 91,452 97,352 106,315 (Loss) income per share, basic and diluted Continuing operations $ (1.30) $ (0.39) $ (0.19) Discontinued operations $ — $ — $ 0.91 The following table presents the number of anti-dilutive shares excluded from the calculation of diluted net (loss) income per share attributable to common stockholders at December 31, 2022, 2021, and 2020 (in thousands): December 31, 2022 2021 2020 Options to purchase common stock 5,114 6,078 10,009 Common stock warrants — — 510 Unvested restricted stock units 10,008 7,536 6,918 Total shares excluded from net loss per share attributable to common stockholders 15,122 13,614 17,437 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe 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 $1.8 million, $1.7 million, and $1.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with USAA USAA is a large stockholder in the Company and was the Company’s most significant affinity marketing partner. At the time that the Company entered into arrangements with USAA to operate its Auto Buying Program, USAA met the definition of a related party. In February 2020, the Company entered into a short-term agreement to extend its partnership with USAA Federal Savings Bank (“USAA FSB”) to continue to power the USAA Car Buying Service through September 30, 2020. USAA FSB paid the Company a $20 million transition services fee that was earned over the term of the agreement. Revenue share from USAA FSB to the Company remained the same as it was under the previous agreement except that amounts earned after March 1, 2020 were settled net of the transaction service fee. The Company recognized net revenue of $9.3 million for the year ended December 31, 2020 related to the transition services fee. The Company recorded sales and marketing expense of $1.9 million for the years ended December 31, 2020 related to service arrangements entered into with USAA. Transactions with Accu-Trade On March 1, 2022, the Company sold its 20% ownership interests in Accu-Trade and no longer considers Accu-Trade a related party after the sale. See Note 2 to our consolidated financial statements included herein for further details. The Company had amounts due to Accu-Trade of $1.1 million at December 31, 2021. The Company recognized contra-revenue of $0.1 million, $1.0 million, and $1.2 million and cost of revenue of $1.1 million, $5.4 million, and $1.7 million during the years ended December 31, 2022, 2021, and 2020, respectively, related to a software and data licensing agreement entered into with Accu-Trade. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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. Divestitures are included in the Company’s consolidated financial statements through the date of disposition. 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 assets and liabilities assumed in business combinations, the recoverability and related impairment of goodwill and long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, right-of-use assets and operating lease 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 single reporting unit related to goodwill impairment, right-of-use assets and lease liabilities, assets and liabilities assumed in business combinations, assets and liabilities of its equity method investment and performance-based stock units. |
Segments | Segments The Company has one operating segment. For the year ended December 31, 2022, the Company’s chief operating decision maker (“CODM”) was solely comprised of the President and Chief Executive Officer and the Chief Financial Officer and Chief Operating Officer who jointly managed the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The CODM reviews financial information on a consolidated basis, accompanied by information about dealer revenue, OEM incentive revenue, and other revenue (Note 6). All of the Company’s principal operations, decision-making functions and assets are located in the United States. |
Equity Method Investment | The Compa ny recognizes its p roportional 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. |
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. |
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 ba sed on these evaluations. No single customer comprised more than 10% of the Company’s total revenues for the years ended December 31, 2022, 2021 and 2020. At December 31, 2022 and 2021 no single customer comprised more than 10% of the Company’s accounts receivable balance. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe 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. |
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. On January 1, 2020, the Company adopted the new accounting guidance on measuring credit losses on its trade accounts receivable using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Under the new guidance, the Company considers the need to adjust historical information to reflect the extent to which the Company expects current conditions and reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The primary current and future economic indicators that the Company uses to develop its current estimate of expected credit losses include the current and forecast U.S. Gross Domestic Product (GDP). The Company calculates the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include revenue billing model and aging status. |
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 4 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 | 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: 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 customer relationships and technology are generally two one |
Long Lived Assets | Long-Lived AssetsThe Company evaluates the recoverability of its long-lived assets, including its ROU 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, 2021 and 2020, the Company recorded ROU asset impairment charges of $1.7 million and $2.1 million, respectively, related to certain operating leases. See Note 4 for additional information. D |
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. 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 assesses recoverability of goodwill on an annual basis at December 31 or when events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable, such as a decline in stock price and market capitalization. During the first quarter of 2020, as a result of the recent global economic disruption and uncertainty due to the COVID-19 pandemic, along with the Company’s announcement that it had entered into a short-term agreement to extend its partnership with USAA Federal Savings Bank to continue to power the USAA Car Buying Service through September 30, 2020, the Company concluded a triggering event had occurred. In light of these factors, the Company performed an interim quantitative impairment test as of March 31, 2020, in which the Company estimated the fair value of its single reporting unit by utilizing an income approach which uses a discounted cash flow analysis. Given the high degree of market volatility and lack of reliable market data as of March 31, 2020, the Company determined that the income approach provided the best approximation of fair value. Determining fair value requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including the revenue growth rates, workforce cost savings, long-term growth rates and the discount rate. The Company bases cash flow projections on management’s estimates of revenue growth rates and operating margins, taking into consideration market conditions. The discount rate is based on the weighted-average cost of capital, which represents the average rate a business must pay its providers of debt and equity, plus a risk premium. Based on the results of the interim impairment test, the Company concluded that the carrying value of its reporting unit was greater than the fair value and, accordingly, recognized a non-cash impairment charge of $10.2 million during the three months ended March 31, 2020, of which $1.9 million was included in discontinued operations. During the second quarter of 2022, as a result of the continued economic disruption as well as a decline in the Company’s stock price and market capitalization, the Company concluded a triggering event had occurred as of June 30, 2022. The Company performed an interim quantitative impairment test, in which the Company estimated the fair value of its single reporting unit by utilizing a market approach, which is based on the market capitalization of the Company using its share price in the Nasdaq Global Select Market and an appropriate control premium. Determining the control premium requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including expected future cash flows, which were based on the synergies market participants could realize if they acquire the reporting unit, and the discount rate. Based on the results of the interim impairment test, the Company concluded that the fair value of its reporting unit was greater than the carrying value and that goodwill was not impaired as of June 30, 2022. During the third quarter of 2022, as a result of additional macroeconomic disruptions, including rising interests rates, and a further decline in market capitalization, the Company concluded a triggering event had occurred. The Company performed an interim quantitative impairment test as of September 30, 2022 utilizing an income approach. Under the income approach, the Company used a discounted cash flow analysis. Determining fair value requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including the amount and timing of expected future cash flows, long-term growth rates, and the discount rates. The Company also performed a reconciliation of the fair value of the reporting unit to the Company’s market capitalization as of September 30, 2022. The market capitalization reconciliation included the estimation of a reasonable control premium and other market factors such as control premiums observed in market transactions. Based on the results of the impairment test, the Company concluded that the carrying value of its single reporting unit exceeded the fair value and, accordingly, recorded a non-cash impairment charge of $59.8 million during the three months ended September 30, 2022. The Company does not have a goodwill balance as of December 31, 2022. |
Revenue Recognition | Revenue Recognition 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 introductions to Auto Buying Program users, or under a subscription arrangement. Additionally, certain Dealers pay an incremental subscription fee for add-on products within our Auto Buying Program. 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 makes 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. Pay-Per-Sale. Under 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 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. 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. Auto Buying Program Add-On Features. We offer additional add-on products to eligible Dealers as part of the Auto Buying Program to increase traffic and retarget in-market consumers. These products include TrueCar Sponsored Listings (“Sponsored Listings”) and TrueCar Reach (“Reach”). Sponsored Listings enables a Dealer to place qualifying vehicles at more prominent positions within the used car search results page. Reach is a service offered to retarget in-market consumers on the Dealer’s behalf with co-branded emails. Fees are charged based on a monthly subscription rate for the right to sponsor up to a set number of vehicles at any time throughout the month under Sponsored Listings. Fees for the Reach product are also charged on a flat monthly rate regardless of the number of emails delivered. Subscription fees are recognized on a monthly basis. TrueCar Trade . TrueCar Trade provides consumers with information on the value of their vehicle, while providing Dealers with introductions to these in-market consumers so that those Dealers have the opportunity to buy vehicles from those consumers. Dealers pay a fee under a per-introduction or guaranteed-introductions model for access to the Company’s Sell Your Car product. Prior to offering Sell Your Car, the Company charged Dealers a monthly subscription fee for access to the Company’s Trade solution, which varied depending on the level of service provided. The Company phased out these subscription packages in 2022. Subscription fees were recognized on a monthly basis. Under the pay-per-introduction billing model, revenue is recognized when introductions are delivered. Under the guaranteed-introductions model, revenue is recognized based on the anticipated number of introductions 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. 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. 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. |
Cost of Revenue (exclusive of depreciation and amortization) | 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 and facilities costs. 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 income (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; 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 generally recognized on a straight-line basis over the requisite service period. 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 on the grant date. 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 |
Share Repurchase Program | Share Repurchase Program Shares repurchased pursuant to the Company’s share repurchase program are immediately retired upon purchase. Repurchased common stock is reflected as a reduction of stockholders’ equity. The Company’s accounting policy related to its share repurchases is to reduce its common stock based on the par value of the shares and to reduce its capital surplus for the excess of the repurchase price over the par value. Since the inception of its share repurchase program in the third quarter of 2020, the Company has had an accumulated deficit balance; therefore, the excess over the par value has been applied to additional paid-in-capital. Once the Company has retained earnings, the excess will be charged entirely to retained earnings. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. The Company determines deferred tax assets including net operating losses and liabilities, based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance is established to reduce net deferred tax assets to amounts that are more likely than not to be realized. The Company considers all available evidence, both positive and negative, in assessing the need for a valuation allowance. The Company has a full valuation allowance, and has concluded, based on the weight of all available evidence, that it is more likely than not that our net deferred tax assets will not be realized, primarily due to historical net operating losses. The Company uses a two-step approach for evaluating uncertain tax positions. Step one, recognition, requires the Company to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. If a tax position is not considered “more likely than not” to be sustained, no benefits of the position are recognized. If the Company determines that a position is “more likely than not” to be sustained, then the Company proceeds to step two, measurement, which is based on the largest amount of benefit which is more likely than not to be realized on effective settlement. 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 income (loss). |
Comprehensive Loss | Comprehensive Income (Loss) Comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2020, the Financial Accounting Standards Board (“FASB”) issued new guidance that updates various codification topics by clarifying or improving disclosure requirements. The Company adopted this guidance on January 1, 2021 using the prospective transition method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021 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, 2022 At December 31, 2021 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 57,518 $ — $ — $ 57,518 $ 234,763 $ — $ — $ 234,763 Total Assets $ 57,518 $ — $ — $ 57,518 $ 234,763 $ — $ — $ 234,763 Liabilities: Contingent consideration, current $ — $ — $ 1,983 $ 1,983 $ — $ — $ — $ — Contingent consideration, non-current — — 4,678 4,678 — — — — Total Liabilities $ — $ — $ 6,661 $ 6,661 $ — $ — $ — $ — |
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, 2022 Fair value, at beginning of year $ — Additions 6,302 Changes in fair value 359 Fair value, at end of year $ 6,661 |
Fair Value Measurement Inputs and Valuation Techniques | The following table summarizes the significant unobservable inputs and valuation technique in the fair value measurement of the contingent consideration liability at December 31, 2022: Valuation Technique Unobservable Inputs Value Range Scenario-Based model Probabilities of achievement 91.2% to 100.0% |
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, 2022 2021 2020 Allowances, at beginning of year $ 3,099 $ 7,147 $ 6,591 Charged as a reduction of revenue 2,661 4,205 8,365 Charged to bad debt expense in general and administrative expenses 718 528 2,984 Write-offs, net of recoveries (5,405) (8,781) (10,793) Allowances, at end of year $ 1,073 $ 3,099 $ 7,147 |
Schedule of expected amortization expense with respect to capitalized software costs | Expected amortization expense with respect to capitalized software costs at December 31, 2022 for each of the years through December 31, 2025 is as follows (in thousands): Years ended December 31, 2023 $ 9,335 2024 5,834 2025 2,208 Total amortization expense $ 17,377 Years ended December 31, 2023 $ 4,775 2024 4,775 2025 3,125 2026 1,294 Thereafter — Total amortization expense $ 13,969 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of Digital Motors as of the Acquisition Date (in thousands). The purchase price allocation is preliminary and is subject to revision as additional information about the fair value of the assets acquired and liabilities assumed become available. Digital Motors Assets acquired Cash $ 5,201 Acquired technology 12,500 Other assets acquired 548 Goodwill 8,570 Total assets acquired $ 26,819 Liabilities assumed Accounts payable $ 1,244 Accrued employee expenses 984 Deferred tax liabilities 2,298 Other liabilities assumed 507 Total liabilities assumed $ 5,033 Net assets acquired 21,786 Consideration paid Cash paid $ 15,484 Contingent consideration 6,302 Total consideration $ 21,786 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease costs | For the years ended December 31, 2022, 2021, and 2020, the Company recorded operating lease costs of corporate offices, excluding subleases, in the consolidated statements of comprehensive income (loss) as follows (in thousands): Operating lease costs recorded within: Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Cost of revenue $ 12 $ 62 $ 489 Sales and marketing 583 1,356 1,680 Technology and development 1,104 2,082 2,420 General and administrative 3,837 2,793 2,887 Total operating lease costs $ 5,536 $ 6,293 $ 7,476 |
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, 2022 are as follows (in thousands): Years ended December 31, 2023 $ 5,627 2024 6,248 2025 5,978 2026 2,853 2027 1,986 Thereafter 3,923 Total lease payments $ 26,615 Less: imputed interest (3,601) Total lease liabilities (discounted) $ 23,014 |
Sublease income | Year ended December 31, Sublease Income 2023 $ 3,698 2024 4,006 2025 3,505 2026 654 2027 56 Thereafter — Total sublease income $ 11,919 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following table presents the detail of “Income from discontinued operations, net of taxes” within the Statements of Comprehensive Income (Loss) (in thousands): 2021 2020 Revenues $ — $ 17,361 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization presented separately below) — 4,286 Sales and marketing — 1,625 Technology and development — 1,188 General and administrative 180 971 Depreciation and amortization — 2,910 Goodwill impairment — 1,923 Total costs and operating expenses 180 12,903 Income from operations (180) 4,458 Gain on sale 220 92,528 Interest income — 171 Income from discontinued operations before income taxes 40 97,157 Provision for income taxes — 774 Income from discontinued operations, net of taxes $ 40 $ 96,383 |
Revenue Information and Deferre
Revenue Information and Deferred Sales Commissions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company disaggregates revenue into three revenue streams: dealer revenue, OEM incentives revenue, 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, 2022 2021 2020 Dealer revenue $ 156,485 $ 222,000 $ 252,928 OEM incentives revenue 4,390 8,676 16,833 Other revenue 649 1,022 8,917 Total revenues $ 161,524 $ 231,698 $ 278,678 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table summarizes the changes in goodwill for the year ended December 31, 2022 (in thousands): Goodwill Balance at December 31, 2021 $ 51,205 Additions 8,570 Impairment (59,775) Balance at December 31, 2022 $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Computer equipment and internally developed software $ 88,638 $ 77,237 Furniture and fixtures 3,013 3,794 Leasehold improvements 11,740 15,664 103,391 96,695 Less: Accumulated depreciation (84,489) (77,540) Total property and equipment, net $ 18,902 $ 19,155 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following at December 31, 2022 and 2021 (in thousands): At December 31, 2022 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 22,890 $ (8,921) $ 13,969 Customer relationships 1,300 (1,300) — Total $ 24,190 $ (10,221) $ 13,969 At December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Acquired technology and domain name $ 11,390 $ (6,440) $ 4,950 Customer relationships 1,300 (1,300) — Total $ 12,690 $ (7,740) $ 4,950 |
Schedule of amortization expense | Amortization expense by asset type for the years ended December 31, 2022, 2021, and 2020 is shown below (in thousands): Year Ended December 31, 2022 2021 2020 Acquired technology and domain name $ 3,481 $ 1,650 $ 1,650 Customer relationships — — 750 Total amortization $ 3,481 $ 1,650 $ 2,400 |
Schedule of expected amortization expense with respect to intangible assets | Expected amortization expense with respect to capitalized software costs at December 31, 2022 for each of the years through December 31, 2025 is as follows (in thousands): Years ended December 31, 2023 $ 9,335 2024 5,834 2025 2,208 Total amortization expense $ 17,377 Years ended December 31, 2023 $ 4,775 2024 4,775 2025 3,125 2026 1,294 Thereafter — Total amortization expense $ 13,969 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of purchase obligations | At December 31, 2022, 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 $ 22,254 $ 9,995 $ 12,241 $ 18 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 is as follows: Number of Shares Outstanding stock options 5,114,490 Outstanding restricted stock units 10,007,869 Additional shares available for grant under the equity plan 16,733,525 Total 31,855,884 |
Stock-based Awards (Tables)
Stock-based Awards (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of the Company’s stock option activity for the year ended December 31, 2022 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, 2021 6,078,180 $ 9.24 6.2 Granted — — Exercised (66,904) 2.68 Forfeited/expired (896,786) 8.16 Outstanding at December 31, 2022 5,114,490 $ 9.50 4.7 $ 0.1 Vested and expected to vest at December 31, 2022 5,114,490 $ 9.50 4.7 $ 0.1 Exercisable at December 31, 2022 4,290,935 $ 10.52 4.1 $ — (1) The aggregate intrinsic value represents the excess of the closing price of the Company’s common stock of $2.51 on December 31, 2022 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, 2022 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Non-vested — December 31, 2021 7,536,114 $ 4.60 Granted 7,436,267 3.80 Vested (3,033,474) 4.56 Forfeited (1,931,038) 4.46 Non-vested — December 31, 2022 10,007,869 $ 4.04 |
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 for grants in 2021 and 2020: Year Ended December 31, 2021 2020 Risk-free interest rate 0.95 % 0.52 % Expected term (years) 6.05 6.02 Expected volatility 65 % 65 % 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 income (loss) (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 185 $ 227 $ 556 Sales and marketing 4,884 6,958 8,258 Technology and development 4,186 4,489 4,966 General and administrative 8,426 8,721 9,297 Total stock-based compensation expense 17,681 20,395 23,077 Amount capitalized to internal-use software 1,019 1,296 1,322 Total stock-based compensation cost $ 18,700 $ 21,691 $ 24,399 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Current: Federal $ — $ (119) $ — State (202) 262 88 Total current provision (benefit) (202) 143 88 Deferred: Federal (2,046) 43 (60) State (312) 20 (34) Total deferred provision (benefit) (2,358) 63 (94) Total income tax provision (benefit) $ (2,560) $ 206 $ (6) |
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, 2022 2021 2020 Income tax benefit based on the federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.8 4.4 35.7 Nondeductible expenses (0.3) 3.2 (3.2) Change in valuation allowance (12.7) 2.4 (49.9) Stock-based compensation (1.3) (8.6) (23.2) Research and development tax credits — (20.1) 25.1 Uncertain tax positions 0.6 (2.8) — Goodwill impairment (7.0) — (5.5) Overall effective income tax rate 2.1 % (0.5) % — % |
Schedule of components of deferred tax assets (liabilities) | The components of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2022 2021 Deferred income tax assets: Net operating loss carryforwards $ 80,688 $ 77,634 Stock-based compensation 6,827 6,550 Accrued expenses 1,303 914 Research and development tax credits 6,558 6,405 Operating leases liabilities 5,457 7,662 Intangible assets and goodwill 2,953 1,205 Property, equipment and software 1,104 — Capitalized research and development costs 8,792 — Other 652 1,176 Gross deferred tax assets 114,334 101,546 Valuation allowance (109,876) (94,117) Net deferred tax assets 4,458 7,429 Deferred tax liabilities: Property, equipment and software — (1,363) Capitalized commissions (365) (427) Operating lease assets (4,093) (5,742) Gross deferred tax liabilities (4,458) (7,532) Total net deferred tax assets (liabilities) $ — $ (103) |
Schedule of change in the valuation allowance | The change in the valuation allowance for the years ended December 31, 2022, 2021, and 2020 is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Valuation allowance, at beginning of year $ 94,117 $ 95,042 $ 111,193 Increase in valuation allowance 15,759 — — Decrease in valuation allowance — (925) (16,151) Valuation allowance, at end of year $ 109,876 $ 94,117 $ 95,042 |
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, 2022 2021 2020 Unrecognized tax benefit, beginning of year $ 5,237 $ 7,640 $ (3) Increase (decrease) based on tax positions in prior period (1,101) (3,504) 1,447 Increase based on tax positions in current period 434 1,101 6,196 Unrecognized tax benefit, end of year $ 4,570 $ 5,237 $ 7,640 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) income per share attributable to common stockholders during the years ended December 31, 2022, 2021, and 2020 (in thousands, except per share data): Year Ended December 31, 2022 2021 2020 Net (loss) income $ (118,685) $ (38,329) $ 76,544 Loss from continuing operations $ (118,685) $ (38,369) $ (19,839) Income from discontinuing operations, net of taxes $ — $ 40 $ 96,383 Weighted-average common shares outstanding, basic and diluted 91,452 97,352 106,315 (Loss) income per share, basic and diluted Continuing operations $ (1.30) $ (0.39) $ (0.19) Discontinued operations $ — $ — $ 0.91 |
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) income per share attributable to common stockholders at December 31, 2022, 2021, and 2020 (in thousands): December 31, 2022 2021 2020 Options to purchase common stock 5,114 6,078 10,009 Common stock warrants — — 510 Unvested restricted stock units 10,008 7,536 6,918 Total shares excluded from net loss per share attributable to common stockholders 15,122 13,614 17,437 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Details) | Nov. 30, 2020 |
Discontinued Operations, Disposed of by Sale | ALG Inc. | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Discontinued Operation, Ownership Interest Prior to Disposal | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segments and Equity Methods Narrative (Details) $ in Thousands | 12 Months Ended | |||
Feb. 08, 2019 USD ($) | Dec. 31, 2022 USD ($) segment | Mar. 01, 2022 | Dec. 31, 2021 USD ($) | |
Accounting Policies [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | $ 0 | $ 14,500 | ||
Accu-Trade, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Non-cash impairment charge | $ 4,100 | |||
Accu-Trade, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 20% | 20% | ||
Equity method investment | $ 22,900 | |||
Basis difference | $ 22,900 | |||
Weighted average useful live | 5 years | |||
Recognized gain | $ 1,800 | |||
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 - Fair Value Methods Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
ROU asset impairment charges | $ 1,700 | $ 2,100 | |||
Impairment charges recorded on goodwill | $ 59,800 | $ 59,775 | 0 | 8,264 | |
Accu-Trade, LLC | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment charges recorded on goodwill | 59,775 | $ 4,100 | $ 10,200 | ||
Discontinued Operations | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment charges recorded on goodwill | $ 1,900 | ||||
Discontinued Operations | Accu-Trade, LLC | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment charges recorded on goodwill | $ 1,900 | ||||
Discontinued And Continuing Operations | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment charges recorded on goodwill | $ 10,200 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Impairments | $ 1,700 | $ 2,100 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Contingent consideration, current | 0 | $ 1,983 | |
Contingent consideration, non-current | 0 | 4,678 | |
Total Liabilities | 0 | 6,661 | |
Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 234,763 | 57,518 | |
Total Assets | 234,763 | 57,518 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 234,763 | 57,518 | |
Total Assets | 234,763 | 57,518 | |
Contingent consideration, current | 0 | 0 | |
Contingent consideration, non-current | 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 | 0 | 0 | |
Contingent consideration, non-current | 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 | 0 | 1,983 | |
Contingent consideration, non-current | 0 | 4,678 | |
Total Liabilities | $ 0 | $ 6,661 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Changes in Fair Value of Contingent Consideration Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
usiness Combination, Contingent Consideration, Liability [Roll Forward] | |||
Fair value, at beginning of year | $ 0 | ||
Fair value, at end of year | 6,302 | ||
Changes in fair value | 359 | $ 41 | $ 182 |
Fair value, at end of year | $ 6,661 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Significant Unobservable Inputs and Valuation Technique (Details) - Measurement Input, Probability Of Achieving Milestones And Revenue Targets | Dec. 31, 2022 |
Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Probabilities of achievement | 0.912 |
Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Probabilities of achievement | 1 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Concentrations of Credit and Business Risk Narrative (Details) - Customer Concentration Risk - Zero Customers | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10% | |
Revenue Benchmark | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10% |
Summary of Significant Accou_10
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Review period for past due accounts | 90 days | ||
Allowance for Doubtful Accounts | |||
Allowances, at beginning of year | $ 3,099 | $ 7,147 | $ 6,591 |
Charged as a reduction of revenue | 2,661 | 4,205 | 8,365 |
Charged to bad debt expense in general and administrative expenses | 718 | 528 | 2,984 |
Write-offs, net of recoveries | (5,405) | (8,781) | (10,793) |
Allowances, at end of year | $ 1,073 | $ 3,099 | $ 7,147 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Property and Equipment, Net Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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 Accou_12
Summary of Significant Accounting Policies - Software and Website Development Costs Narrative (Details) - Software and Software Development Costs - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Capitalized software costs | $ 79 | $ 67.9 |
Accumulated amortization of computer software | $ 61.6 | $ 50.6 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
2023 | $ 4,775 | |
2024 | 4,775 | |
2025 | 3,125 | |
Total amortization expense | 13,969 | $ 4,950 |
Software Costs | ||
Property, Plant and Equipment [Line Items] | ||
2023 | 9,335 | |
2024 | 5,834 | |
2025 | 2,208 | |
Total amortization expense | $ 17,377 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Intangible Assets Acquired in Business Combinations Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 2 years |
Minimum | Technology-Based Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 1 year |
Maximum | Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Maximum | Technology-Based Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Long-Lived Assets, Goodwill, Revenue Recognition Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||||
ROU asset impairment charges | $ 1,700,000 | $ 2,100,000 | |||
Impairment charges recorded on long lived assets | 0 | ||||
Impairment charges recorded on goodwill | $ 59,800,000 | $ 59,775,000 | 0 | $ 8,264,000 | |
Goodwill [Roll Forward] | |||||
Goodwill, Beginning balance | 51,205,000 | ||||
Goodwill, Ending balance | 0 | 51,205,000 | |||
ROU asset impairment | $ 1,700,000 | $ 2,100,000 | |||
Discontinued Operations | |||||
Goodwill [Line Items] | |||||
Impairment charges recorded on goodwill | $ 1,900,000 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Transaction Revenues Narrative (Details) | Dec. 31, 2022 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Expected customer life | 1 month |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Expected customer life | 6 months |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Sales and Marketing Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Marketing and advertising expenses | $ 34.5 | $ 57.2 | $ 57 |
Accrued marketing and advertising expenses | $ 2.9 | $ 2.7 |
Business Combination - Addition
Business Combination - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Contingent consideration | $ 6,661 | $ 0 | |
Goodwill | $ 0 | $ 51,205 | |
Digital Motors | |||
Business Acquisition [Line Items] | |||
Cash paid | $ 15,484 | ||
Contingent liability, cash | 8,000 | ||
Contingent consideration | 6,302 | ||
Goodwill | 8,570 | ||
Estimated useful lives of intangible assets | 4 years | ||
Other assets acquired | 548 | $ 200 | |
Accounts payable | 1,244 | 100 | |
Other liabilities assumed | $ 507 | 400 | |
Accrued transaction expenses | 1,800 | ||
Transaction costs | $ 1,000 |
Business Combination- Schedule
Business Combination- Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets acquired | |||
Goodwill | $ 0 | $ 51,205 | |
Liabilities assumed | |||
Contingent consideration | 6,661 | $ 0 | |
Digital Motors | |||
Assets acquired | |||
Cash | $ 5,201 | ||
Other assets acquired | 548 | 200 | |
Goodwill | 8,570 | ||
Total assets acquired | 26,819 | ||
Liabilities assumed | |||
Accounts payable | 1,244 | 100 | |
Accrued employee expenses | 984 | ||
Deferred tax liabilities | 2,298 | 300 | |
Other liabilities assumed | 507 | $ 400 | |
Total liabilities assumed | 5,033 | ||
Net assets acquired | 21,786 | ||
Cash paid | 15,484 | ||
Contingent consideration | 6,302 | ||
Total consideration | 21,786 | ||
Digital Motors | Technology-Based Intangible Assets [Member] | |||
Assets acquired | |||
Acquired technology | $ 12,500 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash payments for operating leases | $ 6,700 | $ 7,200 | $ 8,300 | |
Weighted average discount rate | 5.80% | |||
Weighted average remaining lease term | 4 years 10 months 24 days | |||
Sublease income | $ 3,400 | 1,100 | 1,200 | |
ROU asset impairment | 1,700 | 2,100 | ||
Gain due to amended lease | $ 800 | |||
Difference in reduction of lease liability and right-of-use asset | 600 | |||
Difference in lease liability | 3,700 | |||
Difference in right-of-use asset | 3,100 | |||
Gain on settlement of asset retirement obligation | $ 200 | $ 0 | $ (1,682) | $ (2,436) |
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Remaining lease terms | 7 months 6 days | |||
Lease renewal term | 3 years | |||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Remaining lease terms | 7 years 1 month 6 days | |||
Lease renewal term | 5 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | $ 5,536 | $ 6,293 | $ 7,476 |
Cost of revenue | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 12 | 62 | 489 |
Sales and marketing | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 583 | 1,356 | 1,680 |
Technology and development | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | 1,104 | 2,082 | 2,420 |
General and administrative | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease costs | $ 3,837 | $ 2,793 | $ 2,887 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments Under Non-cancellable Lease Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 5,627 |
2024 | 6,248 |
2025 | 5,978 |
2026 | 2,853 |
2027 | 1,986 |
Thereafter | 3,923 |
Total lease payments | 26,615 |
Less: imputed interest | (3,601) |
Total lease liabilities (discounted) | $ 23,014 |
Leases - Sublease Income (Detai
Leases - Sublease Income (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 3,698 |
2024 | 4,006 |
2025 | 3,505 |
2026 | 654 |
Lessor, Operating Lease, Payment to be Received, Year Five | 56 |
Lessor, Operating Lease, Payment to be Received, after Year Five | 0 |
Total sublease income | $ 11,919 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Nov. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2024 | Jun. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income from discontinued operations, net of taxes | $ 0 | $ 40 | $ 96,383 | |||
Disposal Group, Including Discontinued Operation, Transaction Costs, Period | 5 years | |||||
Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal Group, Including Discontinued Operation, Contingent Consideration, Intangible Asset | $ 1,900 | |||||
ALG Inc. | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Discontinued Operation, Ownership Interest Prior to Disposal | 100% | |||||
Disposal Group, Including Discontinued Operation, Consideration | $ 112,500 | $ 7,500 | ||||
Disposal Group, Including Discontinued Operation, Contingent Consideration, Asset | 7,500 | |||||
Disposal Group, Including Discontinued Operation, Consideration, Net Of Working Capital Adjustments And Transaction Costs | $ 111,500 | |||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | $ 200 | 220 | 92,528 | |||
Disposal Group, Including Discontinued Operation, Revenue | 0 | 17,361 | ||||
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 0 | 4,286 | ||||
Disposal Group, Including Discontinued Operation, Sales and Marketing Expense | 0 | 1,625 | ||||
Disposal Group, Including Discontinued Operation, Technology and Development Expense | 0 | 1,188 | ||||
Disposal Group, Including Discontinued Operation, General and Administrative Expense | $ 200 | 180 | 971 | |||
Disposal Group, Including Discontinued Operation, Depreciation and Amortization | 0 | 2,910 | ||||
Disposal Group, Including Discontinued Operation, Goodwill Impairment Loss | 0 | 1,923 | ||||
Disposal Group, Including Discontinued Operation, Operating Expense | 180 | 12,903 | ||||
Disposal Group, Including Discontinued Operation, Operating Income (Loss) | (180) | 4,458 | ||||
Disposal Group, Including Discontinued Operation, Interest Income | 0 | 171 | ||||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 40 | 97,157 | ||||
Discontinued Operation, Tax Effect of Discontinued Operation | 0 | 774 | ||||
Income from discontinued operations, net of taxes | $ 40 | $ 96,383 | ||||
ALG Inc. | Forecast | Subsequent event | Discontinued Operations, Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal Group, Including Discontinued Operation, Contingent Consideration, Asset | $ 15,000 |
Revenue Information and Defer_2
Revenue Information and Deferred Sales Commissions - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract with Customer, Asset, Reclassified to Receivable | $ 900,000 | $ 2,300,000 | |
Contract asset balance | 900,000 | 900,000 | |
Sales commission | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred sales commission | 1,500,000 | 1,800,000 | |
Amortization of capitalized contract costs | 1,200,000 | $ 1,600,000 | $ 1,800,000 |
Impairment loss | $ 0 |
Revenue Information and Defer_3
Revenue Information and Deferred Sales Commissions Revenue Information and Deferred Sales Commissions - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Information | |||
Revenues | $ 161,524 | $ 231,698 | $ 278,678 |
Contract with Customer, Asset, Reclassified to Receivable | 900 | 2,300 | |
Dealer revenue | |||
Revenue Information | |||
Revenues | 156,485 | 222,000 | 252,928 |
OEM incentives revenue | |||
Revenue Information | |||
Revenues | 4,390 | 8,676 | 16,833 |
Other revenue | |||
Revenue Information | |||
Revenues | $ 649 | $ 1,022 | $ 8,917 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||||
Goodwill, Beginning balance | $ 51,205 | |||
Additions | 8,570 | |||
Impairment charges recorded on goodwill | $ (59,800) | (59,775) | $ 0 | $ (8,264) |
Goodwill, Ending balance | $ 0 | $ 51,205 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 103,391 | $ 96,695 |
Less: Accumulated depreciation | (84,489) | (77,540) |
Total property and equipment, net | 18,902 | 19,155 |
Computer equipment and internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 88,638 | 77,237 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,013 | 3,794 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,740 | $ 15,664 |
Leasehold Improvements, Furniture And Fixtures And Computer Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,000 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment capitalized but not placed in service | $ 1,500 | $ 1,300 | |
Total depreciation and amortization expense | 16,520 | 16,279 | $ 20,547 |
Original cost basis | 103,391 | 96,695 | |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 13,000 | 14,600 | 18,100 |
Software Development | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | 12,200 | $ 12,200 | $ 13,100 |
Leasehold Improvements, Furniture And Fixtures And Computer Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Original cost basis | $ 5,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible assets | ||
Gross Carrying Value | $ 24,190 | $ 12,690 |
Accumulated amortization | (10,221) | (7,740) |
Total amortization expense | 13,969 | 4,950 |
Acquired technology and domain name | ||
Intangible assets | ||
Gross Carrying Value | 22,890 | 11,390 |
Accumulated amortization | (8,921) | (6,440) |
Total amortization expense | 13,969 | 4,950 |
Customer relationships | ||
Intangible assets | ||
Gross Carrying Value | 1,300 | 1,300 |
Accumulated amortization | (1,300) | (1,300) |
Total amortization expense | $ 0 | $ 0 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Acquired technology and domain name | |
Finite-Lived Intangible Assets [Line Items] | |
Disposal Group, Including Discontinued Operation, Intangible Assets | $ 1 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 3,481 | $ 1,650 | $ 2,400 |
Acquired technology and domain name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 3,481 | 1,650 | 1,650 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 0 | $ 0 | $ 750 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Expected Amortization Expense with Respect to Intangible Assets (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
2023 | $ 4,775 | |
2024 | 4,775 | |
2025 | 3,125 | |
2026 | 1,294 | |
Thereafter | 0 | |
Total amortization expense | $ 13,969 | $ 4,950 |
Credit Facility - February 2015
Credit Facility - February 2015 Amended Credit Facility (Details) | Apr. 30, 2021 | Feb. 18, 2018 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
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) | 1.25 | |||
Outstanding Balance on Credit Facility | $ 0 | |||
Amount available under the credit facility | 32,600,000 | $ 32,600,000 | ||
Letters of credit outstanding under the subfacility | $ 2,400,000 | $ 2,400,000 | ||
Third Amended Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Unused revolving line facility fee (as a percent) | 0% | |||
Third Amended Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Unused revolving line facility fee (as a percent) | 0.15% | |||
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 | 0.25% | |||
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 | 2.25% |
Commitments and Contingencies -
Commitments and Contingencies - Reorganization (Details) - Restructuring Plan - Employee severance - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | $ 8.3 | |
Discontinued Operations | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | $ 0.2 | |
Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | 0.6 | |
Sales and marketing | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | 5.3 | |
Technology and development | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | 1.6 | |
General and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | $ 0.8 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Proceedings (Details) $ in Thousands | Aug. 02, 2019 USD ($) |
Milbeck Federal Securities Litigation | |
Loss Contingencies [Line Items] | |
Agreement to settle | $ 28,250 |
Commitments and Contingencies_3
Commitments and Contingencies - Employment Contracts (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 USD ($) |
Purchase obligations | |
Total | $ 22,254 |
Less Than 1 Year | 9,995 |
1 - 3 Years | 12,241 |
3 - 5 Years | 18 |
More Than 5 Years | $ 0 |
Stockholders' Equity - Series A
Stockholders' Equity - Series A Preferred Stock and Stock Repurchases (Details) - USD ($) shares in Millions | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | May 31, 2021 | |
Convertible Preferred Stock and Stockholders' Equity | |||||
Authorized amount | $ 75,000,000 | $ 150,000,000 | |||
Stock Repurchase Program, Additional Authorized Amount | $ 75,000,000 | ||||
Repurchase and retired (in shares) | 9.8 | 6.1 | 9.3 | ||
Repurchase of common stock | $ 29,700,000 | $ 32,300,000 | $ 42,200,000 | ||
Remaining authorized amount | $ 45,800,000 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants Issued to USAA and Third Party Marketing Firm (Details) - USAA - Common Stock Purchase Warrants | 12 Months Ended | |||
May 01, 2014 tranche $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Convertible Preferred Stock and Stockholders' Equity | ||||
Warrant expense | $ | $ 0 | $ 0 | $ 0 | |
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 | |||
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 | |||
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, 2022 shares |
Equity [Abstract] | |
Outstanding stock options | 5,114,490 |
Outstanding restricted stock units | 10,007,869 |
Additional shares available for grant under the equity plan | 16,733,525 |
Total | 31,855,884 |
Stock-based Awards - Narrative
Stock-based Awards - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2023 shares | May 31, 2014 shares | Dec. 31, 2022 USD ($) equity_incentive_plan $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | |
Stock-based Awards | |||||
Number of equity incentive plans | equity_incentive_plan | 4 | ||||
Future issuance | 31,855,884 | ||||
Total stock-based compensation expense | $ | $ 17,681 | $ 20,395 | $ 23,077 | ||
Outstanding stock options (in shares) | 5,114,490 | ||||
Number of non-vested RSUs (in shares) | 10,007,869 | ||||
Additional shares available for grant under the equity plan | 16,733,525 | ||||
Dividend yield | 0% | 0% | 0% | ||
Common Stock | |||||
Stock-based Awards | |||||
Closing price of common stock (in dollars per share) | $ / shares | $ 2.51 | ||||
Options to Purchase Common Stock | |||||
Stock-based Awards | |||||
Shares of common stock, grants to purchase | 0 | ||||
Total remaining stock-based compensation expense for unvested option awards | $ | $ 1,900 | ||||
Weighted-average period | 2 years 1 month 6 days | ||||
Weighted-average grant-date fair value per share of options granted (in dollars per share) | $ / shares | $ 2.78 | $ 1.88 | |||
Total stock-based compensation expense | $ | $ 1,500 | $ 3,700 | $ 5,500 | ||
Total intrinsic value of options exercised | $ | $ 100 | $ 700 | 100 | ||
Weighted average exercise price (in dollars per share) | $ / shares | $ 0 | ||||
Outstanding stock options (in shares) | 5,114,490 | 6,078,180 | |||
Weighted average exercise price (in dollars per share) | $ / shares | $ 9.50 | $ 9.24 | |||
Restricted Stock Units (RSUs) | |||||
Stock-based Awards | |||||
Total remaining stock-based compensation expense for unvested option awards | $ | $ 32,500 | ||||
Weighted-average period | 2 years 7 months 6 days | ||||
Total stock-based compensation expense | $ | $ 16,200 | $ 16,700 | 17,600 | ||
Fair value of shares of restricted stock awards vested | $ | $ 8,500 | $ 15,800 | $ 11,600 | ||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 3.80 | $ 4.64 | $ 3.08 | ||
Shares granted | 7,436,267 | ||||
Number of non-vested RSUs (in shares) | 10,007,869 | 7,536,114 | |||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.04 | $ 4.60 | |||
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% | ||||
Future issuance | 16,733,525 | ||||
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) | 4,421,954 |
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, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Outstanding at the end of the period (in shares) | 5,114,490 | |
Options to Purchase Common Stock | ||
Number of Options | ||
Outstanding at the beginning of period (in shares) | 6,078,180 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (66,904) | |
Canceled/forfeited (in shares) | (896,786) | |
Outstanding at the end of the period (in shares) | 5,114,490 | 6,078,180 |
Vested and expected to vest at the end of the period (in shares) | 5,114,490 | |
Exercisable at the end of the period (in shares) | 4,290,935 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of period (in dollars per share) | $ 9.24 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 2.68 | |
Canceled/forfeited (in dollars per share) | 8.16 | |
Outstanding at the end of the period (in dollars per share) | 9.50 | $ 9.24 |
Vested and expected to vest at the end of the period (in dollars per share) | 9.50 | |
Exercisable at the end of the period (in dollars per share) | $ 10.52 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding at the end of the period | 4 years 8 months 12 days | 6 years 2 months 12 days |
Vested and expected to vest at the end of the period | 4 years 8 months 12 days | |
Exercisable at the end of the period | 4 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Intrinsic value of all outstanding options | $ 0.1 | |
Intrinsic value of options vested and expected to vest | 0.1 | |
Intrinsic value of exercisable options | $ 0 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Non-vested at the end of the period (in dollars per share) | 10,007,869 | ||
Weighted-Average Grant Date Fair Value | |||
Total stock-based compensation expense | $ 17,681 | $ 20,395 | $ 23,077 |
Restricted Stock Units (RSUs) | |||
Stock-based Awards | |||
Fair value of shares of restricted stock awards vested | $ 8,500 | $ 15,800 | $ 11,600 |
Number of Shares | |||
Non-vested at the beginning of period (in shares) | 7,536,114 | ||
Granted (in shares) | 7,436,267 | ||
Vested (in shares) | (3,033,474) | ||
Canceled/forfeited (in shares) | (1,931,038) | ||
Non-vested at the end of the period (in dollars per share) | 10,007,869 | 7,536,114 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested at the beginning of period (in dollars per share) | $ 4.60 | ||
Granted (in dollars per share) | 3.80 | $ 4.64 | $ 3.08 |
Vested (in dollars per share) | 4.56 | ||
Canceled/forfeited (in dollars per share) | 4.46 | ||
Non-vested at the end of the period (in dollars per share) | $ 4.04 | $ 4.60 | |
Total stock-based compensation expense | $ 16,200 | $ 16,700 | $ 17,600 |
Stock-based Awards - Schedule_3
Stock-based Awards - Schedule of Fair Value of Stock Option Award (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |||
Risk-free interest rate | 0.95% | 0.52% | |
Expected term | 6 years 18 days | 6 years 7 days | |
Expected volatility (as a percent) | 65% | 65% | |
Dividend yield | 0% | 0% | 0% |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 17,681 | $ 20,395 | $ 23,077 |
Amount capitalized to internal-use software | 1,019 | 1,296 | 1,322 |
Total stock-based compensation cost | 18,700 | 21,691 | 24,399 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 185 | 227 | 556 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 4,884 | 6,958 | 8,258 |
Technology and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 4,186 | 4,489 | 4,966 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 8,426 | $ 8,721 | $ 9,297 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of the Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 0 | $ (119) | $ 0 |
State | (202) | 262 | 88 |
Total current provision (benefit) | (202) | 143 | 88 |
Deferred: | |||
Federal | (2,046) | 43 | (60) |
State | (312) | 20 | (34) |
Total deferred provision (benefit) | (2,358) | 63 | (94) |
Total income tax provision (benefit) | $ (2,560) | $ 206 | $ (6) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax (benefit) provision | $ (2,560) | $ 206 | $ (6) | |
Cumulative Ownership Change, Period | 3 years | |||
Reduction of deferred tax assets | $ 12,300 | 3,200 | ||
Valuation allowance | 109,876 | 94,117 | 95,042 | $ 111,193 |
Increase (decrease) based on tax positions in prior period | 1,101 | 1,100 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 300 | |||
Unrecognized Tax Benefits | 4,570 | 5,237 | 7,640 | $ (3) |
Net Operating Loss Or Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized Tax Benefits | 3,400 | 3,300 | $ 7,600 | |
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 309,800 | |||
Operating loss carryforwards, subject to expiration | 248,200 | |||
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | 61,600 | |||
Federal | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Research and development tax credit carryforwards | 1,100 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 242,000 | |||
State and Local Jurisdiction | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Research and development tax credit carryforwards | 11,200 | |||
Maximum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax (benefit) provision | $ (200) | |||
Maximum | Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards, subject to expiration | 15,200 | |||
Maximum | State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards, subject to expiration | $ 500 |
Income Taxes - Schedule of Over
Income Taxes - Schedule of Overall Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit based on the federal statutory rate (as a percent) | 21% | 21% | 21% |
State income taxes, net of federal benefit (as a percent) | 1.80% | 4.40% | 35.70% |
Nondeductible expenses (as a percent) | (0.30%) | 3.20% | (3.20%) |
Change in valuation allowance (as a percent) | (12.70%) | 2.40% | (49.90%) |
Stock-based compensation (as a percent) | (1.30%) | (8.60%) | (23.20%) |
Research and development tax credits (as a percent) | 0% | (20.10%) | 25.10% |
Effective Income Tax Rate Reconciliation, Tax Contingency, Percent | 0.60% | (2.80%) | 0% |
Goodwill impairment (as a percent) | (7.00%) | 0% | (5.50%) |
Overall effective income tax rate (as a percent) | 2.10% | (0.50%) | 0% |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred income tax assets: | ||||
Net operating loss carryforwards | $ 80,688 | $ 77,634 | ||
Stock-based compensation | 6,827 | 6,550 | ||
Accrued expenses | 1,303 | 914 | ||
Research and development tax credits | 6,558 | 6,405 | ||
Operating leases liabilities | 5,457 | 7,662 | ||
Intangible assets and goodwill | 2,953 | 1,205 | ||
Property, equipment and software | 1,104 | 0 | ||
Capitalized research and development costs | 8,792 | 0 | ||
Other | 652 | 1,176 | ||
Gross deferred tax assets | 114,334 | 101,546 | ||
Valuation allowance | (109,876) | (94,117) | $ (95,042) | $ (111,193) |
Net deferred tax assets | 4,458 | 7,429 | ||
Deferred tax liabilities: | ||||
Property, equipment and software | 0 | (1,363) | ||
Capitalized commissions | (365) | (427) | ||
Operating lease assets | (4,093) | (5,742) | ||
Gross deferred tax liabilities | (4,458) | (7,532) | ||
Total net deferred tax assets (liabilities) | 0 | (103) | ||
Reduction of deferred tax assets | $ 12,300 | $ 3,200 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Change in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance, at beginning of year | $ 94,117 | $ 95,042 | $ 111,193 |
Increase in valuation allowance | 15,759 | 0 | 0 |
Decrease in valuation allowance | 0 | (925) | (16,151) |
Valuation allowance, at end of year | $ 109,876 | $ 94,117 | $ 95,042 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of year | $ 5,237 | $ 7,640 | $ (3) |
Increase (decrease) based on tax positions in prior period | (3,504) | 1,447 | |
Increase (decrease) based on tax positions in prior period | (1,101) | (1,100) | |
Increase based on tax positions in current period | 434 | 1,101 | 6,196 |
Unrecognized tax benefit, end of year | 4,570 | 5,237 | 7,640 |
Deferred income taxes | (2,358) | 63 | (743) |
Provision for (benefit from) income taxes | $ (2,560) | $ 206 | $ (6) |
Net Income (Loss) Per Share - S
Net Income (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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net (loss) income | $ (118,685) | $ (38,329) | $ 76,544 |
Loss from continuing operations | (118,685) | (38,369) | (19,839) |
Income from discontinued operations, net of taxes | $ 0 | $ 40 | $ 96,383 |
Weighted-average common shares outstanding, basic and diluted | 91,452 | 97,352 | 106,315 |
(Loss) income per share, basic and diluted | |||
Continuing operations (in dollars per share) | $ (1.30) | $ (0.39) | $ (0.19) |
Discontinued operations (in dollars per share) | $ 0 | $ 0 | $ 0.91 |
Net Income (Loss) Per Share -_2
Net Income (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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | 15,122 | 13,614 | 17,437 |
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 | 5,114 | 6,078 | 10,009 |
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 | 0 | 0 | 510 |
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 | 10,008 | 7,536 | 6,918 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Matching contributions to 401(k) savings retirement plan | $ 1.8 | $ 1.7 | $ 1.7 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with USAA (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 161,524 | $ 231,698 | $ 278,678 | |
USAA | ||||
Related Party Transaction [Line Items] | ||||
Revenues | $ 20,000 | |||
USAA | ||||
Related Party Transaction [Line Items] | ||||
Revenue from Related Parties | 9,300 | |||
USAA | Sales and marketing | ||||
Related Party Transaction [Line Items] | ||||
Costs under agreement | $ 1,900 |
Related Party Transactions - _2
Related Party Transactions - Transactions with Accu-Trade (Details) - Accu-Trade, LLC - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Due to related party | $ 1.1 | ||
Sales | |||
Related Party Transaction [Line Items] | |||
Costs under agreement | $ 1.2 | $ 0.1 | 1 |
Cost of revenue | |||
Related Party Transaction [Line Items] | |||
Costs under agreement | $ 1.7 | $ 1.1 | $ 5.4 |