Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 Ave | |
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 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | TRUE | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 90,780,216 | |
Entity Central Index Key | 0001327318 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents (includes restricted cash of $2,205 and $0 at September 30, 2023 and December 31, 2022, respectively) | $ 145,474 | $ 175,518 |
Accounts receivable, net of allowances of $1,001 and $1,073 at September 30, 2023 and December 31, 2022, respectively | 14,046 | 13,786 |
Prepaid expenses | 6,086 | 5,969 |
Other current assets | 1,775 | 2,562 |
Total current assets | 167,381 | 197,835 |
Property and equipment, net | 19,535 | 18,902 |
Operating lease right-of-use assets | 11,247 | 16,940 |
Intangible assets, net | 9,978 | 13,969 |
Other assets | 3,801 | 3,881 |
Total assets | 211,942 | 251,527 |
Current liabilities | ||
Accounts payable | 9,956 | 8,655 |
Accrued employee expenses | 7,969 | 7,378 |
Operating lease liabilities, current | 5,282 | 4,514 |
Accrued expenses and other current liabilities | 10,455 | 10,232 |
Total current liabilities | 33,662 | 30,779 |
Operating lease liabilities, net of current portion | 14,559 | 18,500 |
Other Liabilities, Noncurrent | 3,847 | 4,981 |
Total liabilities | 52,068 | 54,260 |
Commitments and contingencies (Note 5) | ||
Stockholders’ Equity | ||
Preferred stock — $0.0001 par value; 20,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively; no shares issued and outstanding at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock — $0.0001 par value; 1,000,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively; 90,542,616 and 88,439,088 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 9 | 9 |
Additional paid-in capital | 720,261 | 709,790 |
Accumulated deficit | (560,396) | (512,532) |
Total stockholders’ equity | 159,874 | 197,267 |
Total liabilities and stockholders’ equity | $ 211,942 | $ 251,527 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 2,205 | $ 0 |
Allowance for doubtful accounts receivables- current | $ 1,001 | $ 1,073 |
Preferred stock, par value ( in dollar per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, share issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per shares) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 90,542,616 | 88,439,088 |
Common stock, shares outstanding (in shares) | 90,542,616 | 88,439,088 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 41,146 | $ 39,052 | $ 117,419 | $ 124,860 |
Costs and operating expenses: | ||||
Cost of revenue (exclusive of depreciation and amortization presented separately below) | 3,813 | 3,880 | 11,590 | 12,643 |
Sales and marketing | 23,153 | 25,130 | 77,099 | 78,535 |
Technology and development | 9,341 | 12,742 | 35,349 | 34,377 |
General and administrative | 9,525 | 11,364 | 33,099 | 34,025 |
Depreciation and amortization | 4,894 | 4,284 | 13,176 | 11,729 |
Goodwill impairment | 0 | 59,775 | 0 | 59,775 |
Total costs and operating expenses | 50,726 | 117,175 | 170,313 | 231,084 |
Loss from operations | (9,580) | (78,123) | (52,894) | (106,224) |
Interest income | 1,706 | 879 | 5,044 | 1,185 |
Gain from equity method investment | 0 | 0 | 0 | 1,845 |
Loss before income taxes | (7,874) | (77,244) | (47,850) | (103,194) |
Provision for (benefit from) income taxes | 1 | (131) | 14 | (2,648) |
Net loss | $ (7,875) | $ (77,113) | $ (47,864) | $ (100,546) |
Net loss per share, basic and diluted | ||||
Continuing operations, basic (in dollars per share) | $ (0.09) | $ (0.85) | $ (0.54) | $ (1.09) |
Continuing operations, diluted (in dollars per share) | $ (0.09) | $ (0.85) | $ (0.54) | $ (1.09) |
Weighted average common shares outstanding, basic and diluted | ||||
Basic (in shares) | 90,176 | 90,687 | 89,407 | 92,508 |
Diluted (in shares) | 90,176 | 90,687 | 89,407 | 92,508 |
Other comprehensive loss: | ||||
Comprehensive loss | $ (7,875) | $ (77,113) | $ (47,864) | $ (100,546) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | APIC | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 96,213,243 | |||
Beginning balance at Dec. 31, 2021 | $ 329,786 | $ 10 | $ 723,623 | $ (393,847) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (12,414) | (12,414) | ||
Repurchase of common stock (in shares) | (3,107,370) | |||
Repurchase of common stock | (11,028) | (11,028) | ||
Stock-based compensation | 3,744 | 3,744 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 481,122 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | (861) | (861) | ||
Ending balance (in shares) at Mar. 31, 2022 | 93,586,995 | |||
Ending balance at Mar. 31, 2022 | 309,227 | $ 10 | 715,478 | (406,261) |
Beginning balance (in shares) at Dec. 31, 2021 | 96,213,243 | |||
Beginning balance at Dec. 31, 2021 | 329,786 | $ 10 | 723,623 | (393,847) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (100,546) | |||
Ending balance (in shares) at Sep. 30, 2022 | 90,956,585 | |||
Ending balance at Sep. 30, 2022 | 215,850 | $ 10 | 710,233 | (494,393) |
Beginning balance (in shares) at Mar. 31, 2022 | 93,586,995 | |||
Beginning balance at Mar. 31, 2022 | 309,227 | $ 10 | 715,478 | (406,261) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (11,019) | (11,019) | ||
Repurchase of common stock (in shares) | (3,731,415) | |||
Repurchase of common stock | (14,075) | (14,075) | ||
Stock-based compensation | 4,777 | 4,777 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 654,005 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | (849) | (849) | ||
Ending balance (in shares) at Jun. 30, 2022 | 90,509,585 | |||
Ending balance at Jun. 30, 2022 | 288,061 | $ 10 | 705,331 | (417,280) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (77,113) | (77,113) | ||
Stock-based compensation | 5,437 | 5,437 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 447,000 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | (535) | (535) | ||
Ending balance (in shares) at Sep. 30, 2022 | 90,956,585 | |||
Ending balance at Sep. 30, 2022 | $ 215,850 | $ 10 | 710,233 | (494,393) |
Beginning balance (in shares) at Dec. 31, 2022 | 88,439,088 | 88,439,088 | ||
Beginning balance at Dec. 31, 2022 | $ 197,267 | $ 9 | 709,790 | (512,532) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (19,565) | (19,565) | ||
Stock-based compensation | 4,930 | 4,930 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 622,680 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | (1,006) | (1,006) | ||
Ending balance (in shares) at Mar. 31, 2023 | 89,061,768 | |||
Ending balance at Mar. 31, 2023 | $ 181,626 | $ 9 | 713,714 | (532,097) |
Beginning balance (in shares) at Dec. 31, 2022 | 88,439,088 | 88,439,088 | ||
Beginning balance at Dec. 31, 2022 | $ 197,267 | $ 9 | 709,790 | (512,532) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | $ (47,864) | |||
Ending balance (in shares) at Sep. 30, 2023 | 90,542,616 | 90,542,616 | ||
Ending balance at Sep. 30, 2023 | $ 159,874 | $ 9 | 720,261 | (560,396) |
Beginning balance (in shares) at Mar. 31, 2023 | 89,061,768 | |||
Beginning balance at Mar. 31, 2023 | 181,626 | $ 9 | 713,714 | (532,097) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (20,424) | (20,424) | ||
Stock-based compensation | 4,116 | 4,116 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 903,574 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | (1,009) | (1,009) | ||
Ending balance (in shares) at Jun. 30, 2023 | 89,965,342 | |||
Ending balance at Jun. 30, 2023 | 164,309 | $ 9 | 716,821 | (552,521) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (7,875) | (7,875) | ||
Stock-based compensation | 3,477 | 3,477 | ||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 577,274 | |||
Shares issued in connection with employee stock plan, net of shares withheld for employee taxes | $ (37) | (37) | ||
Ending balance (in shares) at Sep. 30, 2023 | 90,542,616 | 90,542,616 | ||
Ending balance at Sep. 30, 2023 | $ 159,874 | $ 9 | $ 720,261 | $ (560,396) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (47,864) | $ (100,546) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 13,176 | 11,729 |
Goodwill impairment | 0 | 59,775 |
Deferred income taxes | 0 | (2,661) |
Bad debt expense and other reserves | 465 | 421 |
Stock-based compensation | 11,872 | 13,174 |
Increase in the fair value of contingent consideration liability | 771 | 179 |
Amortization of lease right-of-use assets | 2,350 | 3,031 |
Gain from equity method investment | 0 | (1,845) |
Impairment of right-of-use assets | 2,376 | 0 |
Other noncash expense (gain) | 382 | (14) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (725) | 3,250 |
Prepaid expenses and other assets | 1,471 | (1,741) |
Accounts payable | 1,254 | (2,538) |
Accrued employee expenses | 742 | 1,978 |
Operating lease liabilities | (3,173) | (4,036) |
Accrued expenses and other current liabilities | 245 | (368) |
Other liabilities | 43 | 0 |
Net cash used in operating activities | (16,615) | (20,212) |
Cash flows from investing activities | ||
Purchase of property and equipment | (9,469) | (8,332) |
Proceeds from Sale of Equity Method Investments | 0 | 15,745 |
Cash paid for acquisition, net of cash acquired | 0 | (12,093) |
Net cash used in investing activities | (9,469) | (4,680) |
Cash flows from financing activities | ||
Payment for Contingent Consideration Liability, Financing Activities | (1,908) | 0 |
Proceeds from exercise of common stock options | 502 | 179 |
Taxes paid related to net share settlement of equity awards | (2,554) | (2,422) |
Payments for the repurchase of common stock | 0 | (25,103) |
Net cash used in financing activities | (3,960) | (27,346) |
Net decrease in cash, cash equivalents and restricted cash | (30,044) | (52,238) |
Cash, cash equivalents and restricted cash at beginning of period | 145,474 | 192,979 |
Cash, cash equivalents and restricted cash at end of period | 175,518 | 245,217 |
Supplemental disclosures of non-cash activities | ||
Stock-based compensation capitalized for software development | 651 | 784 |
Capitalized assets included in accounts payable, accrued employee expenses and other accrued expenses | 1,009 | 1,198 |
Changes in right-of-use assets for operating lease obligations | 136 | 3,047 |
Changes in lease liabilities for operating lease obligations | $ 136 | $ 3,636 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2023 | |
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 Corporation, and TrueCar Wholesale Solutions, Inc. are collectively referred to as “TrueCar” or the “Company”; TrueCar Dealer Solutions, Inc. is referred to as “TCDS,” Digital Motors Corporation is referred to as “Digital Motors,” and TrueCar Wholesale Solutions, Inc. is referred to as “TCWS.” TrueCar was incorporated in the state of Delaware in February 2005 and began business operations in April 2005. Its principal corporate offices are located in Santa Monica, California. TrueCar is a digital automotive marketplace that (i) provides pricing transparency about what other people paid for their cars and enables consumers to engage with TrueCar Certified Dealers who are committed to providing a superior purchase experience; (ii) empowers Certified Dealers to attract these informed, in-market consumers in a cost-effective, accountable manner; and (iii) allows automobile manufacturers (“OEMs”) to more effectively target their incentive spending at deep-in-market consumers during their purchase process. TrueCar has established a diverse software ecosystem on a common technology infrastructure, powered by proprietary data and analytics. Consumers access TrueCar’s platform through the TrueCar.com website and TrueCar mobile applications or through the car buying websites and mobile applications that TrueCar operates for its affinity group marketing partners (“Auto Buying Programs”). An affinity group is comprised of a network of members or employees that provides discounts to its members. 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 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, some information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2022, and include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC on February 24, 2023. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company’s condensed consolidated financial statements from the date of the acquisition. The Company’s purchase accounting results in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed 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 condensed 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 long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and intangible assets, measurement of right-of-use assets and operating lease liabilities, contingencies, and the valuation and assumptions underlying stock-based compensation awards. 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 assets and liabilities assumed in business combinations and performance-based stock units. Segments The Company has one operating segment. The Company has gone through various organizational changes in the current year, including the appointment of a new President and Chief Executive Officer (“CEO”) on June 15, 2023 and the appointment of a new Chief Financial Officer (“CFO”) on February 16, 2023, who was subsequently terminated on September 23, 2023, with such termination effective on October 2, 2023. On September 23, 2023 the Company appointed a new CFO, with such appointment effective on October 30, 2023. As a result of these organizational changes, the Company’s chief operating decision maker (the "CODM") was comprised of the President and CEO and the CFO and Chief Operating Officer ("COO") from January 1, 2023 through February 15, 2023; the President and CEO, the COO, and the CFO from February 16, 2023 through June 14, 2023; and the President and CEO and the CFO from June 15, 2023 through September 30, 2023; 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 10). All of the Company’s principal operations, decision-making functions and assets are located in the United States. 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 September 30, 2023, cash and cash equivalents included $2.2 million of restricted cash that is used to collateralize a letter of credit to secure certain of the Company’s obligations under one of its office leases. Allowance for Doubtful Accounts The Company determines its allowance for doubtful accounts based on historical write-off experience and specific circumstances that make it likely that recovery will not occur. The Company reviews the allowance for doubtful accounts periodically 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 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 following table summarizes the changes in the allowance for doubtful accounts and sales allowances (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Allowances, at beginning of period $ 1,172 $ 1,605 $ 1,073 $ 3,099 Charged as a reduction of revenue 585 601 2,081 2,070 Charged to bad debt expense in general and administrative expenses 125 243 465 421 Write-offs, net of recoveries (881) (1,185) (2,618) (4,326) Allowances, at end of period $ 1,001 $ 1,264 $ 1,001 $ 1,264 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting standards describe a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value because of the short maturity of these items. The Company recorded a contingent consideration liability upon the acquisition of Digital Motors in 2022. The contingent consideration is measured at fair value and is based on significant inputs not observable in the market which include the probability of achieving certain future targets. This 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 condensed consolidated statements of comprehensive loss. During the second quarter of 2023 the Company amended the purchase agreement in connection with its Restructuring Plan (Note 5) such that the future targets were considered 100% achieved, and as a result, there were no significant unobservable inputs used to measure the contingent considerations liability a s of September 30, 2023. For the nine months ended September 30, 2022, the Company recognized a gain of $1.8 million from changes in fair value of a derivative asset recognized from the sale of its equity method investment in Accu-Trade. The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2023 and December 31, 2022 by level within the fair value hierarchy. The current and non-current portions of contingent consideration reside within “Accrued expenses and other current liabilities” and “Other liabilities”, respectively, within the condensed consolidated balance sheet. 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 September 30, 2023 At December 31, 2022 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 124,477 $ — $ — $ 124,477 $ 57,518 $ — $ — $ 57,518 Total assets $ 124,477 $ — $ — $ 124,477 $ 57,518 $ — $ — $ 57,518 At September 30, 2023 At December 31, 2022 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Liabilities: Contingent consideration, current $ — $ — $ 1,932 $ 1,932 $ — $ — $ 1,983 $ 1,983 Contingent consideration, non-current — — 3,500 3,500 — — 4,678 4,678 Total liabilities $ — $ — $ 5,432 $ 5,432 $ — $ — $ 6,661 $ 6,661 Contingent Consideration Obligations The following table summarizes the changes in the fair value of the contingent consideration obligation related to the Company’s acquisition of Digital Motors (in thousands): Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Fair value, beginning of period $ 5,316 $ 6,661 Cash payments — (2,000) Changes in fair value 116 771 Fair value, end of period $ 5,432 $ 5,432 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consisted of the following at September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Computer equipment and internally developed software $ 85,657 $ 88,638 Furniture and fixtures 2,457 3,013 Leasehold improvements 11,740 11,740 99,854 103,391 Less: Accumulated depreciation (80,319) (84,489) Total property and equipment, net $ 19,535 $ 18,902 Included in the table above are property and equipment of $1.3 million and $1.5 million at September 30, 2023 and December 31, 2022, 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 $3.3 million and $3.0 million for the three months ended September 30, 2023 and 2022, respectively. Total depreciation and amortization expense of property and equipment was $9.2 million and $9.4 million for the nine months ended September 30, 2023 and 2022, respectively. Amortization of internal use capitalized software development costs was $2.8 million and $2.9 million for the three months ended September 30, 2023 and 2022, respectively. Amortization of internal use capitalized software development costs was $8.4 million and $8.7 million for the nine months ended September 30, 2023 and 2022, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Reorganization In June 2023, 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 $7.1 million in the second quarter of 2023 in connection with the Restructuring Plan. Of the total, the Company recorded $0.2 million in cost of revenue, $2.2 million in sales and marketing, $2.7 million in technology and development and $2.0 million in general and administrative expenses within the Company’s condensed consolidated statements of comprehensive loss during the nine months ended September 30, 2023 . The majority of the liability for the restructuring costs was paid as of September 30, 2023. The Company does not expect to incur significant additional charges in future periods related to the Restructuring Plan. The following table presents a roll forward of the Restructuring Plan costs liability for the nine months ended September 30, 2023 (in thousands): Restructuring Costs Liability Accrual at December 31, 2022 $ — Expense 7,141 Cash Payments (6,005) Accrual at September 30, 2023 $ 1,136 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. 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 |
Stock-based Awards
Stock-based Awards | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Awards | Stock-based Awards Stock Options A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Number of Weighted-Average Exercise Price Weighted-Average (in years) Outstanding at December 31, 2022 5,114,490 $ 9.50 4.7 Granted — — Exercised (212,867) 2.36 Forfeited/expired (2,507,929) 9.30 Outstanding at September 30, 2023 2,393,694 $ 10.35 3.1 At September 30, 2023, total remaining stock-based compensation expense for unvested stock option awards was $0.4 million, which is expected to be recognized over a weighted-average period of 1.4 years. For the three months ended September 30, 2023 and 2022, the Company recorded stock-based compensation expense for stock option awards of $0.2 million and $0.3 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company recorded stock-based compensation expense for stock option awards of $0.9 million and $1.1 million, respectively. Restricted Stock Units Activity in connection with restricted stock units is as follows for the nine months ended September 30, 2023: Number of Weighted- Average Grant Date Fair Value Non-vested — December 31, 2022 10,007,869 $ 4.04 Granted 6,541,317 2.45 Vested (2,927,643) 3.64 Forfeited (4,184,764) 3.35 Non-vested — September 30, 2023 9,436,779 $ 3.37 At September 30, 2023, total remaining stock-based compensation expense for non-vested restricted stock units was $21.5 million, which is expected to be recognized over a weighted-average period of 2.4 years. For the three months ended September 30, 2023 and 2022, the Company recorded $3.1 million and $4.8 million in stock-based compensation expense for restricted stock units, respectively. For the nine months ended September 30, 2023 and 2022, the Company recorded $11.0 million and $12.1 million in stock-based compensation expense for restricted stock units, respectively. Stock-based Compensation Cost The Company recorded stock-based compensation cost relating to stock options and restricted stock units in the following categories on the accompanying condensed consolidated statements of comprehensive loss (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenue $ 44 $ 51 $ 148 $ 134 Sales and marketing 493 1,219 3,215 3,627 Technology and development 1,031 1,126 3,028 3,082 General and administrative 1,705 2,793 5,481 6,331 Total stock-based compensation expense 3,273 5,189 11,872 13,174 Amount capitalized to internal software use 204 248 651 784 Total stock-based compensation cost $ 3,477 $ 5,437 $ 12,523 $ 13,958 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items, if any, that are taken into account in the relevant period. The Company’s annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes and changes in the Company’s valuation allowance. The Company recorded income tax expense of less than $0.1 million and an income tax benefit of $0.1 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, the Company recorded income tax expense of less than $0.1 million and an income tax benefit of $2.6 million, respectively. The Company’s provision for income taxes for the three and nine months ended September 30, 2023 reflects state income tax expense. For the three months ended September 30, 2022, the Company’s income tax benefit primarily reflects the discrete impact for reduction of indefinite-lived deferred tax liabilities resulting from the impairment of book goodwill. For the nine months ended September 30, 2022, the Company’s income tax benefit 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 the Company’s consolidated net deferred tax assets. The Company continues to maintain a full valuation allowance as it is more likely than not that the Company’s net deferred tax assets will not be realized. There were no material changes to the Company’s unrecognized tax benefits in the nine months ended September 30, 2023, and the Company does not expect to have significant changes to unrecognized tax benefits through the end of the fiscal year. 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 (the “IRS’) and various state taxing authorities. The Company is not currently under IRS or state tax examination. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net loss $ (7,875) $ (77,113) $ (47,864) $ (100,546) Weighted average common shares outstanding, basic and diluted 90,176 90,687 89,407 92,508 Net loss per share, basic and diluted $ (0.09) $ (0.85) $ (0.54) $ (1.09) The following table presents the number of anti-dilutive shares excluded from the calculation of diluted loss per share at September 30, 2023 and 2022 (in thousands): September 30, 2023 2022 Options to purchase common stock 2,394 5,203 Non-vested restricted stock unit awards 9,437 10,452 Total shares excluded from net loss per share 11,831 15,655 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. The Company had no share repurchases during the nine months ended September 30, 2023. As of September 30, 2023, the Company had a remaining authorization of $45.8 million for future share repurchases. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with Accu-Trade On March 1, 2022, the Company sold its 20% ownership interests in Accu-Trade at the investment’s carrying value and no longer considers Accu-Trade a related party after the sale. The Company recognized contra-revenue of $0.1 million and cost of revenue of $1.1 million for the two months ended March 1, 2022 related to a software and data licensing agreement that was terminated as part of the sale. No amounts were due to Accu-Trade at September 30, 2023 or at December 31, 2022. |
Revenue Information
Revenue Information | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Information | Revenue Information Disaggregation of Revenue The Company disaggregates revenue into three revenue streams: dealer revenue, OEM incentives revenue, and other revenue. The following table presents the Company’s revenue categories during the periods presented (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Dealer revenue $ 36,068 $ 37,722 $ 107,553 $ 120,713 OEM incentives revenue 4,944 1,189 9,490 3,613 Other revenue 134 141 376 534 Total revenues $ 41,146 $ 39,052 $ 117,419 $ 124,860 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 at December 31, 2022 were transferred to accounts receivable during the nine months ended September 30, 2023 as vehicle sales occurred, with no significant changes in the estimate. A contract asset of $1.0 million and $0.9 million was recorded as of September 30, 2023 and December 31, 2022, respectively, for leads delivered where consideration to be received was still conditional upon subsequent vehicle sales. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, some information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2022, and include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC on February 24, 2023. |
Principles of consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of TrueCar and its wholly owned subsidiaries. Business acquisitions are included in the Company’s condensed consolidated financial statements from the date of the acquisition. The Company’s purchase accounting results in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of Estimates The preparation of condensed 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses |
Segments | Segments The Company has one operating segment. The Company has gone through various organizational changes in the current year, including the appointment of a new President and Chief Executive Officer (“CEO”) on June 15, 2023 and the appointment of a new Chief Financial Officer (“CFO”) on February 16, 2023, who was subsequently terminated on September 23, 2023, with such termination effective on October 2, 2023. On September 23, 2023 the Company appointed a new CFO, with such appointment effective on October 30, 2023. As a result of these organizational changes, the Company’s chief operating decision maker (the "CODM") was comprised of the President and CEO and the CFO and Chief Operating Officer ("COO") from January 1, 2023 through February 15, 2023; the President and CEO, the COO, and the CFO from February 16, 2023 through June 14, 2023; and the President and CEO and the CFO from June 15, 2023 through September 30, 2023; 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 10). All of the Company’s principal operations, decision-making functions and assets are located in the United States. |
Allowance for doubtful accounts | Allowance for Doubtful Accounts The Company determines its allowance for doubtful accounts based on historical write-off experience and specific circumstances that make it likely that recovery will not occur. The Company reviews the allowance for doubtful accounts periodically 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 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. |
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 the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value because of the short maturity of these items. The Company recorded a contingent consideration liability upon the acquisition of Digital Motors in 2022. The contingent consideration is measured at fair value and is based on significant inputs not observable in the market which include the probability of achieving certain future targets. This 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 condensed consolidated statements of comprehensive loss. During the second quarter of 2023 the Company amended the purchase agreement in connection with its Restructuring Plan (Note 5) such that the future targets were considered 100% achieved, and as a result, there were no significant unobservable inputs used to measure the contingent considerations liability a s of September 30, 2023. For the nine months ended September 30, 2022, the Company recognized a gain of $1.8 million from changes in fair value of a derivative asset recognized from the sale of its equity method investment in Accu-Trade. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
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): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Allowances, at beginning of period $ 1,172 $ 1,605 $ 1,073 $ 3,099 Charged as a reduction of revenue 585 601 2,081 2,070 Charged to bad debt expense in general and administrative expenses 125 243 465 421 Write-offs, net of recoveries (881) (1,185) (2,618) (4,326) Allowances, at end of period $ 1,001 $ 1,264 $ 1,001 $ 1,264 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of financial assets measured at fair value on a recurring basis | The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2023 and December 31, 2022 by level within the fair value hierarchy. The current and non-current portions of contingent consideration reside within “Accrued expenses and other current liabilities” and “Other liabilities”, respectively, within the condensed consolidated balance sheet. 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 September 30, 2023 At December 31, 2022 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Assets: Cash equivalents $ 124,477 $ — $ — $ 124,477 $ 57,518 $ — $ — $ 57,518 Total assets $ 124,477 $ — $ — $ 124,477 $ 57,518 $ — $ — $ 57,518 At September 30, 2023 At December 31, 2022 Total Fair Total Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Liabilities: Contingent consideration, current $ — $ — $ 1,932 $ 1,932 $ — $ — $ 1,983 $ 1,983 Contingent consideration, non-current — — 3,500 3,500 — — 4,678 4,678 Total liabilities $ — $ — $ 5,432 $ 5,432 $ — $ — $ 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 related to the Company’s acquisition of Digital Motors (in thousands): Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Fair value, beginning of period $ 5,316 $ 6,661 Cash payments — (2,000) Changes in fair value 116 771 Fair value, end of period $ 5,432 $ 5,432 |
Fair Value Measurement Inputs and Valuation Techniques |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following at September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Computer equipment and internally developed software $ 85,657 $ 88,638 Furniture and fixtures 2,457 3,013 Leasehold improvements 11,740 11,740 99,854 103,391 Less: Accumulated depreciation (80,319) (84,489) Total property and equipment, net $ 19,535 $ 18,902 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of roll forward of Restructuring Plan | The following table presents a roll forward of the Restructuring Plan costs liability for the nine months ended September 30, 2023 (in thousands): Restructuring Costs Liability Accrual at December 31, 2022 $ — Expense 7,141 Cash Payments (6,005) Accrual at September 30, 2023 $ 1,136 |
Stock-based Awards (Tables)
Stock-based Awards (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Number of Weighted-Average Exercise Price Weighted-Average (in years) Outstanding at December 31, 2022 5,114,490 $ 9.50 4.7 Granted — — Exercised (212,867) 2.36 Forfeited/expired (2,507,929) 9.30 Outstanding at September 30, 2023 2,393,694 $ 10.35 3.1 |
Schedule of activity in connection with restricted stock | Activity in connection with restricted stock units is as follows for the nine months ended September 30, 2023: Number of Weighted- Average Grant Date Fair Value Non-vested — December 31, 2022 10,007,869 $ 4.04 Granted 6,541,317 2.45 Vested (2,927,643) 3.64 Forfeited (4,184,764) 3.35 Non-vested — September 30, 2023 9,436,779 $ 3.37 |
Schedule of stock-based compensation cost relating to stock options and restricted stock awards | The Company recorded stock-based compensation cost relating to stock options and restricted stock units in the following categories on the accompanying condensed consolidated statements of comprehensive loss (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenue $ 44 $ 51 $ 148 $ 134 Sales and marketing 493 1,219 3,215 3,627 Technology and development 1,031 1,126 3,028 3,082 General and administrative 1,705 2,793 5,481 6,331 Total stock-based compensation expense 3,273 5,189 11,872 13,174 Amount capitalized to internal software use 204 248 651 784 Total stock-based compensation cost $ 3,477 $ 5,437 $ 12,523 $ 13,958 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net loss $ (7,875) $ (77,113) $ (47,864) $ (100,546) Weighted average common shares outstanding, basic and diluted 90,176 90,687 89,407 92,508 Net loss per share, basic and diluted $ (0.09) $ (0.85) $ (0.54) $ (1.09) |
Anti-dilutive shares excluded from the calculation of diluted net loss per share | The following table presents the number of anti-dilutive shares excluded from the calculation of diluted loss per share at September 30, 2023 and 2022 (in thousands): September 30, 2023 2022 Options to purchase common stock 2,394 5,203 Non-vested restricted stock unit awards 9,437 10,452 Total shares excluded from net loss per share 11,831 15,655 |
Revenue Information (Tables)
Revenue Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue categories | The following table presents the Company’s revenue categories during the periods presented (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Dealer revenue $ 36,068 $ 37,722 $ 107,553 $ 120,713 OEM incentives revenue 4,944 1,189 9,490 3,613 Other revenue 134 141 376 534 Total revenues $ 41,146 $ 39,052 $ 117,419 $ 124,860 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | Segment | 1 | |
Restricted cash | $ | $ 2,205 | $ 0 |
Accounting Policies - Summary o
Accounting Policies - Summary of Changes in Allowance for Doubtful Accounts and Sales Allowances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Allowances, at beginning of period | $ 1,172 | $ 1,605 | $ 1,073 | $ 3,099 |
Charged as a reduction of revenue | 585 | 601 | 2,081 | 2,070 |
Charged to bad debt expense in general and administrative expenses | 125 | 243 | 465 | 421 |
Write-offs, net of recoveries | (881) | (1,185) | (2,618) | (4,326) |
Allowances, at end of period | $ 1,001 | $ 1,264 | $ 1,001 | $ 1,264 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value Disclosures [Abstract] | |
Recognized gain from changes in fair value of derivative asset | $ 1.8 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Measurements | ||
Contingent consideration, current | $ 1,932 | $ 1,983 |
Contingent consideration, non-current | 3,500 | 4,678 |
Total liabilities | 5,432 | 6,661 |
Level 1 | ||
Fair Value Measurements | ||
Cash equivalents | 124,477 | 57,518 |
Total assets | 124,477 | 57,518 |
Contingent consideration, current | 0 | 0 |
Contingent consideration, non-current | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value Measurements | ||
Cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Contingent consideration, current | 0 | 0 |
Contingent consideration, non-current | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Fair Value Measurements | ||
Cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Contingent consideration, current | 1,932 | 1,983 |
Contingent consideration, non-current | 3,500 | 4,678 |
Total liabilities | 5,432 | 6,661 |
Total fair value | ||
Fair Value Measurements | ||
Cash equivalents | 124,477 | 57,518 |
Total assets | $ 124,477 | $ 57,518 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Changes in Fair Value of Contingent Consideration Obligations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||
Increase in the fair value of contingent consideration liability | $ 771,000 | $ 179,000 | |
Level 3 | Recurring | |||
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||
Fair value, beginning of period | $ 5,316,000 | 6,661,000 | |
Cash payments | 0 | (2,000,000) | |
Increase in the fair value of contingent consideration liability | 116,000 | 771,000 | |
Fair value, end of period | $ 5,432,000 | $ 5,432,000 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property and Equipment, net | |||||
Property and equipment, gross | $ 99,854 | $ 99,854 | $ 103,391 | ||
Less: Accumulated depreciation | (80,319) | (80,319) | (84,489) | ||
Total property and equipment, net | 19,535 | 19,535 | 18,902 | ||
Property and equipment capitalized but not placed in service | 1,300 | 1,300 | 1,500 | ||
Total depreciation and amortization expense | 4,894 | $ 4,284 | 13,176 | $ 11,729 | |
Property and Equipment | |||||
Property and Equipment, net | |||||
Total depreciation and amortization expense | 3,300 | 3,000 | 9,200 | 9,400 | |
Computer equipment and internally developed software | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 85,657 | 85,657 | 88,638 | ||
Furniture and fixtures | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 2,457 | 2,457 | 3,013 | ||
Leasehold improvements | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 11,740 | 11,740 | $ 11,740 | ||
Internally developed software | |||||
Property and Equipment, net | |||||
Amortization | $ 2,800 | $ 2,900 | 8,400 | $ 8,700 | |
Computer Equipment, Internally Developed Software And Furniture And Fixtures | |||||
Property and Equipment, net | |||||
Total depreciation and amortization expense | 400 | ||||
Property and equipment disposals | 13,300 | ||||
Accumulated depreciation | $ 12,900 |
Commitments and Contingencies -
Commitments and Contingencies - Reorganization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 7,100 | $ 7,141 |
Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 200 | |
Sales and marketing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 2,200 | |
Technology and development | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 2,700 | |
General and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 2,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Employment Contracts (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Employment contracts | |
Restructuring Cost and Reserve [Line Items] | |
Maximum term of executive's annual base salary to determine severance obligations (in months) | 12 months |
Commitments and Contingencies_3
Commitments and Contingencies - Restructuring Plan Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Accrual at December 31, 2022 | $ 0 | |
Expense | $ 7,100 | 7,141 |
Cash Payments | (6,005) | |
Accrual at September 30, 2023 | $ 1,136 | $ 1,136 |
Stock-based Awards (Details - O
Stock-based Awards (Details - Options) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Weighted-Average Remaining Contractual Life | |||||
Stock-based compensation expense | $ 3,273 | $ 5,189 | $ 11,872 | $ 13,174 | |
Options | |||||
Number of Options | |||||
Outstanding at the beginning of period (in shares) | 5,114,490 | ||||
Granted (in shares) | 0 | ||||
Exercised (in shares) | (212,867) | ||||
Canceled/forfeited (in shares) | (2,507,929) | ||||
Outstanding at the end of the period (in shares) | 2,393,694 | 2,393,694 | 5,114,490 | ||
Weighted-Average Exercise Price | |||||
Outstanding at the beginning of period (in dollars per share) | $ 9.50 | ||||
Granted (in dollars per share) | 0 | ||||
Exercised (in dollars per share) | 2.36 | ||||
Canceled/forfeited (in dollars per share) | 9.30 | ||||
Outstanding at the end of the period (in dollars per share) | $ 10.35 | $ 10.35 | $ 9.50 | ||
Weighted-Average Remaining Contractual Life | |||||
Weighted average remaining contractual life (in years) | 3 years 1 month 6 days | 4 years 8 months 12 days | |||
Remaining stock-based compensation expense for unvested awards | $ 400 | $ 400 | |||
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized (in years) | 1 year 4 months 24 days | ||||
Stock-based compensation expense | $ 200 | $ 300 | $ 900 | $ 1,100 |
Stock-based Awards (Details 2 -
Stock-based Awards (Details 2 - RSUs) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Weighted-Average Grant Date Fair Value | ||||
Stock based compensation expense | $ 3,273 | $ 5,189 | $ 11,872 | $ 13,174 |
Non-vested restricted stock unit awards | ||||
Number of Shares | ||||
Non-vested at the beginning of period (in shares) | 10,007,869 | |||
Granted (in shares) | 6,541,317 | |||
Vested (in shares) | (2,927,643) | |||
Canceled/forfeited (in shares) | (4,184,764) | |||
Non-vested at the end of the period (in per share) | 9,436,779 | 9,436,779 | ||
Weighted-Average Grant Date Fair Value | ||||
Non-vested at the beginning of period (in dollars per share) | $ 4.04 | |||
Granted (in dollars per share) | 2.45 | |||
Vested (in dollars per share) | 3.64 | |||
Canceled/forfeited (in dollars per share) | 3.35 | |||
Non-vested at the end of the period (in dollars per share) | $ 3.37 | $ 3.37 | ||
Remaining stock based compensation expense for non vested restricted stock units | $ 21,500 | $ 21,500 | ||
Weighted average period over which remaining stock based compensation expense for unvested awards is expected to be recognized (in years) | 2 years 4 months 24 days | |||
Stock based compensation expense | $ 3,100 | $ 4,800 | $ 11,000 | $ 12,100 |
Stock-based Awards (Details 3 -
Stock-based Awards (Details 3 - Stock comp by FSLI) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock-based Compensation Cost | ||||
Stock-based compensation expense | $ 3,273 | $ 5,189 | $ 11,872 | $ 13,174 |
Amount capitalized to internal software use | 204 | 248 | 651 | 784 |
Total stock-based compensation cost | 3,477 | 5,437 | 12,523 | 13,958 |
Cost of revenue | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 44 | 51 | 148 | 134 |
Sales and marketing | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 493 | 1,219 | 3,215 | 3,627 |
Technology and development | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | 1,031 | 1,126 | 3,028 | 3,082 |
General and administrative | ||||
Stock-based Compensation Cost | ||||
Stock-based compensation expense | $ 1,705 | $ 2,793 | $ 5,481 | $ 6,331 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Examination [Line Items] | ||||
Provision for (benefit from) income taxes | $ 1 | $ (131) | $ 14 | $ (2,648) |
Maximum | ||||
Income Tax Examination [Line Items] | ||||
Provision for (benefit from) income taxes | $ 100 | $ (100) | $ 100 | $ (2,600) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (7,875) | $ (20,424) | $ (19,565) | $ (77,113) | $ (11,019) | $ (12,414) | $ (47,864) | $ (100,546) |
Weighted average common shares outstanding, basic and diluted | ||||||||
Diluted (in shares) | 90,176 | 90,687 | 89,407 | 92,508 | ||||
Basic (in shares) | 90,176 | 90,687 | 89,407 | 92,508 | ||||
Net loss per share, basic and diluted | ||||||||
Continuing operations, basic (in dollars per share) | $ (0.09) | $ (0.85) | $ (0.54) | $ (1.09) | ||||
Continuing operations, diluted (in dollars per share) | $ (0.09) | $ (0.85) | $ (0.54) | $ (1.09) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive shares excluded from the calculation of diluted net loss per share (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
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 | 11,831 | 15,655 |
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 | 2,394 | 5,203 |
Non-vested restricted stock unit awards | ||
Anti-dilutive shares excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Total shares excluded from net loss per share | 9,437 | 10,452 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - USD ($) shares in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | May 31, 2021 | Jul. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Authorized amount | $ 150,000,000 | $ 75,000,000 | |
Additional authorized amount | $ 75,000,000 | ||
Remaining authorized amount | $ 45,800,000 | ||
Share repurchases (in shares) | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 2 Months Ended | ||
Mar. 01, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Accu-Trade | |||
Related Party Transactions | |||
Ownership percent | 20% | ||
Accu-Trade | |||
Related Party Transactions | |||
Amounts due | $ 0 | $ 0 | |
Accu-Trade | Contra-revenue | |||
Related Party Transactions | |||
Related party, amounts of transaction | $ 0.1 | ||
Accu-Trade | Cost of revenue | |||
Related Party Transactions | |||
Related party, amounts of transaction | $ 1.1 |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue Categories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Information | ||||
Revenue | $ 41,146 | $ 39,052 | $ 117,419 | $ 124,860 |
Dealer revenue | ||||
Revenue Information | ||||
Revenue | 36,068 | 37,722 | 107,553 | 120,713 |
OEM incentives revenue | ||||
Revenue Information | ||||
Revenue | 4,944 | 1,189 | 9,490 | 3,613 |
Other revenue | ||||
Revenue Information | ||||
Revenue | $ 134 | $ 141 | $ 376 | $ 534 |
Revenue Information - Narrative
Revenue Information - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract asset | $ 1 | $ 0.9 |