TRUE - Earnings call transcript Q4 2017

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Operator

Greetings, and welcome to the TrueCar Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now turn the conference over to your host Alison Sternberg. now may you you, begin. Thank

Alison Sternberg

Hello, Thank quarter to fourth welcome earnings you, conference operator. XXXX call. TrueCar's and

Joining me today Officer; are Chip Perry, President Pierantoni, Chief and and Interim Financial Officer. John Chief Executive

ability to to our statements our core the strategies, we customer OEM of of management's expectations dealer be of not reminder, offerings, USAA ability our beliefs grow replatforming to, our future and and the first an regarding event, trade, as it's grow product base, revenue impact grow for accounts incentive statements call, and it's our completion and redemptions, and channel full experience, a As our year limited revenue, innovate making dealer-networking in forward-looking the XXXX build and increase including, expansion revenue initiatives, on offering impact planned litigation. will dealer to to technology plans our end-to-end outcome conversion and but and the quarter of future close and outlook ability business to on our TrueCar this longer term; results outstanding on rates,

cause us today's to of on required on update call obligation statements statements materially. Reports from SEC as with results. Forward-looking results information the as Report guarantees on XX-K differ XXXX Risk we and any Exchange Factors based or relied this that for date, fied Annual by could Form available on statements could our should filed Report upon on We The the Quarterly not Commission future XX-Q results to our and our disclaim Form to performance for differ to are be a Form of forward-looking by review XXXX the of and forward-looking not to those with law. our XX-K materially the statements. our you contemplated Actual any forward-looking Annual except as and caution discussion sections Securities be subsequent are factors for of and

Reconciliations Investor discuss In GAAP not our Relations non-GAAP addition, also as a financial the we non-GAAP for are to be measures GAAP. intended will measures The or measures. most with comparable forth considered to GAAP certain the in true.com. results are in measures set section of substitute non-GAAP of at website in all financial isolation prepared and accordance directly

over I'll to Chip. turn call the Now,

Chip Perry

Thank and XXXX we fiscal you, guidance afternoon, by everyone. TrueCar exceeding last good our revenue and on Alison, closed year call. margin the gave

of million fourth million. million, quarter guidance For fiscal guidance and was to million revenue our EBITDA of the was adjusted $XX million of $XX XXXX, $X.X above $XX $XX.X our above

For year-over-year the and $XXX.X as of was revenue, $XX.X up totaled or XX% whole, up a million, million X.X% EBITDA year-over-year. revenue adjusted XX% year

share car market to also our We record year year-over-year. growing up by out new retail XX% the a X.X%, closed

Now since let's last our review call. progress our

changes USAA; USAA. First, QX business out that with to coming to the focus one USAA partner, pleased our we of expected, I'm as the USAA USAA and better affinity in came the to service, channel more a into the move made expected. easily as of quarter, in buying units end those at started of business report of level the and fourth result, than XXXX largest areas made improvement of our the numbers show car primary was

channel support USAA unit their digits families. to plan have return that in this a we to More single partner developed high growth detailed in XXXX. and fiscal look believe forward sessions will mutually upon to USAA importantly, serve of members our mission with agreed we to their through with We planning continuing business

pricing monetization. and Second,

in measured dealer made revenue growth to per of QX I'm attention both, and this well. core our that XXXX we area as we business, as pleased dealer. report key regard on and Another energy by the franchise focused monetization significant progress is in

During fourth be of who been we commensurate for with better value we've were continue dealers the to to delivering the third pricing and more the segment underperforming quarters, align versus target.

disciplined we've and $XX.X integrity. with XX% healthy or contributed in rate the we by efforts rate some year-over-year. these count That's experience churn anticipated said, in associated franchise to million XXXX to efforts did recent following seen growth Our revenue QX of in months dealer XXXX but accompanied reactivation return the good cancellation growth

OEM. Third,

Ford incentive and Turning for to QX in ever [ph] OEM our with than our established TrueCar Volvo. run and Mercedes FCA, manufacturers joining program platform program our Hyundai OEM XXXX business, testing and more with

in redemption our year. success drove XXXX. a given Fifth, Florida, trade Fourth; incentive by we set over ramp XXXX of Over of generating the Capsella. a process In late target nearly in trade nationwide the with product having over TrueCar course of XXXX, and we Northeast of year network OEM the of in initial million continue set up to and XX,XXX QX pilot the pilot. have in to the $XX begin targeted XX% revenue, QX place end prior of fiscal dealers the up XXXX,

project, to in conversion stimulate released funnel we We our growth our made leading technology our discovery very sales features be foundation upper edge product the tools significant both completing provide the major soon us Finishing will system. will powerful site [indiscernible], in OEM unlock further including car consumer a and product in new experience. addition have out end-to-end more incorporating XXXX. inventory replatforming including enable based rate, new our features to significant our retailing and the experience, management to that digital to-date dealer updated add product our addition to levers progress and for further post-prospect has in to DIM tools we've made trading and new products, research new particularly our of beginning and enabled drive components believe build close rate It new increases and pricing progress Capsella will analyzer priced towards to new us to Capsella an and

be rolling these XXXX. in anticipate we in concepts the beginning Now end-to-end group out Capsella testing will experience finishing validating are and XXXX, our we platforming and

As focusing second, areas; be our grow on In you and XXXX, product to however, launching see, trading completing business. nationally; key program; new to fourth, significant Capsella; still progress we've be much third, incentive OEM XXXX, strategies on there dealer core executing four can our we'll made throughout is out rolling done. first,

who Let healthy detail of XXXX. plus up provide growth more XX% believe focused around key I plan us and XXXX components these our just expansion we set each they as line for in are top and margin of for feel they will areas current and credit to growth OEM XX% live offered see Capsella products. leveraging targeted us noted are that expecting growth year with finishing are prospect we our in offer OEM over and will existing clients This help business. our new

their rapidly, will will capsella apply allow to the completed, As to is machine incentive is provide values learning will efficiently. more OEM behavioral and leading it us marketing significant XXXX. and another growth revenue to even data clients, product. high even more project rapid our us customers to these This products dollars science scale even more targeting potential Trade-in help in to spend and to our enable growth

aligned in market and from [ph] are pricing the trade-in confirmed competitively because third-party demand TrueCar Northeast differentiated that and transparency, leading there strong pilot credibility Our trade proposition. Florida our with product last value provides for tool conjunction and dealers our core valuation developed consumers our in both, that's year Gal-Accu strongly insight, with in

network approximately to by building of dealers product enabling year-end now targeting turn our up are all launch team on and of XXXX the by next and a year. across our media early partners national We channels us promotion of affinity

a dollar much revenues and single-digit will small million expect in year from generate more customer We larger to base this and product foundation this the significantly for revenue this XXXX. lay

we're keys our strategies increase building core will dealer growth business. in team dealer the out focused our on While products, these three to new go-to-market be

efforts First, pricing we've we upon with been fully business based the our towards value our model. accountable will delivering continue aligning

the strategy acquisition a car we grow our new further to level. resulting in will we at dealers supply-demand network across the out Second, around independent dealer rolling and enhance designed be coverage And indepedant strategy base a micro used gaps increase stall our natural third, better strategically will this key to XXXX will I'm our us over back expansion. significant excited XX% build. growth up the with components top along to with are strong year a for for inventory. These the about plan margin year are the continuing line set We work for our foundation we very and believe

financial through will and in detail. our walk results you John guidance Now, more

John Pierantoni

million you, everyone. just to up Thank 'XX, $XX afternoon, million, million. $XX Revenue revenue totaled and Chip good in of $XX.X in QX XX% of above guidance our QX 'XX and over

revenue per up count Revenue year-over-year. the year-over-year flat fiscal 'XX, revenue totaled year dealer fiscal of million, quarter, $X,XXX For $XX.X was X% QX in of XXXX. last which from XX% franchise and all year. was over to XX,XXX over month QX grew up dealer XX% million of dealers 'XX, in Franchise franchise $XXX.X was

dealer over all year-over-year XXXX year are year-over-year million up from revenue flat which grew fiscal totaled XX% franchise X,XXX, dealer up over $X.X fiscal and quarter, independent to revenue to $X,XXX also XX% in whom dealers from dealers, QX dealer plans the monthly year. per year-over-year. of $XXX. was last revenue on almost subscription was independent per count billing was while was of For X% 'XX, Revenue of all franchsie million, Independent XX% $XXX.X up monthly

incentive the was QX new XXXX XXXX, Ford was up up fiscal independent year-over-year over sequentially XX% Hyundai per addition over fiscal $XXX. programs of with the $XX.X given and month million XX% OEM XXXX dealers during million, of QX revenue 'XX was revenue in 'XX, $X year For from independent dealer while to XX% year quarter. revenue up of

from $XX.X consulting was For And of fiscal year XX% and X% was million, up fiscal $XX.X 'XX, million OEM revenue year other revenue in 'XX, QX year-over-year. incentive million finally, $X.X up forecast, XXXX. for

other to X% and lower Units the fiscal guide year of and revenue forecast, XXX,XXX. XXX,XXX, quarter year-over-year million, 'XX, XXX,XXX $XX.X year-over-year. totaled in up For X% was just consulting up a

XX% we XXX,XXX, driven fiscal growth year-over-year. In of 'XX, branded up and generated QX by of Club fiscal units strong of 'XX, partners U.S. XX% at all XXX,XXX all For in our units year-over-year. 'XX, units and year Other channel, up for were Sam's up XXX,XXX Chase, XX%

of XX,XXX QX units year-over-year 'XX, 'XX produced all XXX,XXX, 'XX. 'XX, up were partner over in fiscal year year. year USAA QX down of for from units XX,XXX XX% other in units up last News XX% of fiscal our and contributed XX%

versus over 'XX. unit was vehicles the incentive programs fiscal primarily For per news unit 'XX. and QX the used unit, Ford from to fiscal the service, due of Hyundai year new X% $XXX year used new $XXX The up the buying in mix for the of in to XXXX. XX.X% 'XX third monetization year, was unit up mentioned. in XX.X% and as members revenue year and QX per in in quarter XXX,XXX from increase increased and fiscal last bought XX.X% Monetization XX.X% sequential compared of USAA year year. Monitization was car via per up per $XXX The $XXX in from $XXX was unit per the previously XXXX

expenses to margin QX QX are all XX% XX.X% the otherwise. of following a metrics from year. on QX of of million, margins gross XXXX non-GAAP while 'XX and in versus basis, $XX.X XXXX last of QX was profit of XX.X% unless Gross up Turning in stated was in

million, fiscal and XX.X% all $XX.X For revenue totaled gross million XX.X% fiscal was of year or million QX and in up of Technology versus in product year. 'XX $XXX from 'XX. last up XX% the XX.X%, or of 'XX, margin of gross from year revenue XX.X% prior expenses profit $XX.X was

compared or of million as For 'XX. or product $XX year were technology fiscal XX.X% of in $XX.X XX.X% revenue XXXX, and revenue to expenses million

radio $XX.X from year television, year. unit time last $XXX year. channel expect declined in platforming per versus $XXX QX year. of revenue compared and million capsella or spent project. Sales in of and last as technology $XX.X in TrueCar our per $XX.X XXXX, drive unit we of by expenses, $XX.X to were our Within last and as digital we product expense million and or QX revenue 'XX, sale XX% per During this revenue Cost as marketing of this million a marketing percentage in invest XX.X% uptick technology XX.X% slight of customer we to acquisitions sales million continue to to expenses QX on for

or fiscal XX.X% $XXX million For and expenses of revenue. 'XX, or revenue year as XX.X% sales compared $XXX million marketing of totaled to

in of to During acquisition our million and to revenue as year share we're marketing digital million of QX other Partner spend level by plan targeting a QX large $X.X $XX.X campaigns. expenses were radio channel. versus in with the cost driven last our the other in 'XX, we similar partner of TV XXXX, 'XX from units increase increased portion from of and and shift spend

share revenue million $XX up prior partner other fiscal the totaled from For 'XX, and year XX% expenses $XX.X year. million, in

other driven headcount million from related These costs million, were $XX.X our primarily costs and dealer $XX.X were increases time this on up year. team. headcount last Finally, by

costs from or QX For were of $XX.X in up million or fiscal $XX.X XXXX. other XX.X% expenses to million, administrative in totaled in year 'XX, and headcount XX.X% and $XX.X $XX.X General revenue QX million million of XXXX. of revenue compared

the $X.X $X.X million G&A certain of add net million CNCVA of in EBITDA and December. fiscal in XXXX per back $XX.X the includes X.X% fy up million, litigation $X share excluded or $XX.X revenue, items our per or the XXXX. For of from resolving compensation or of fourth compared loss of amortization loss 'XX, with XXXX lawsuit year in X% year. the QX GAAP in million stock-based quarter million Adjusted for $X.XX totaled XX.X% expense or of which and or revenue share $X.X to GAAP of net revenue, The adjusted of $X cost of from for revenue of the of $X.X $X.X million down costs million EBITDA was last million of XXXX. included from QX net was of net or $X.XX loss loss XX.X% million as QX quarter of for depreciation

on million and the Our This deferred the assets. tax to fourth benefit the benefit combined of allowance of net a valuation tax in GAAP the impacts due related to tax includes recently reduction non-recurring our loss reduction quarter was $X.X rate XXXX corporate the enacted reform. tax

net Our $X.XX share. million to of $X.XX net year loss per loss in share, or net of as in XXXX $XX.X of a XXXX loss $XX.X a totaled a net per compared fiscal loss million or

million net the 'XX. to for $X.XX QX compared quarter a $X.X million loss of non-GAAP per or in loss Our was of net a share or $X.X per as share income $X.XX

and income compared our For was per a loss $X.XX XXXX. the share in million year, $XX.X non-GAAP share million diluted per $X.XX $X.XX or of as $X.X a or net of loss per basic to share

to maintain sheet a $XXX the continue million balances end balance the We of at year. totaled strong with cash

our Now the the year. I quarter will for and of first outlook share XXXX

million estimate range units unit a X.XXX year represents to fiscal X% we For XXXX, over year which X.XXX XX% growth of fiscal million to 'XX. of

of growth of breakdown $XXX of to million expect which million year-over-year We to revenue. $XXX to XX% generate represents revenue due of to XX% the topline key components

to of of come we're customers of half expect the approximately end half dealer the growth million a $XXX million We much And 'XX. year. incentive expect year. revenue million we of 'XX. XXXX, we With trade-in, year this be first over XX% X,XXX to between the by revenue XX% to to XX% growth XXXX fiscal back and the the of revenue national $XX rollout fiscal of dealer 'XX, million XX% or to comps expect over $XXX to with tougher $XX million the or In year and in growth generate OEM of we $X in targeting expect to be

fiscal business the nearly leverage year past grown reflects in EBITDA margins and two model. sales, adjusted significant each to this the we've back doubled X%; X% operating year Looking from over our

executing running As we'll out clients; new programs areas; Chip ensure technology capsella; and earlier, in to we four product efforts with core OEM noted two, business. fuor, our investing peak three, in focus on incentive grow launching and new strategies team one, this trade-in key current to nationally; year dealer OEM our that our or key

EBITDA by EBITDA million basis adjusted margins XXXX. million of these year EBITDA XXX of XX%. producing As We adjusted or to over in points estimate and to XX% $XX invest $XX XXXX, our to we adjusted areas between expect grow XXX we in margins fiscal

expense non-cash million $XX.X fiscal the to in be of $XX addition we stock-based the compared of million range compensation year, In for estimate stock-based $XX million to XXXX. year to expense in compensation

in to fiscal For and $XX.X approximately fiscal expense million $XX compared million to depreciation will we XXXX, estimate year amortization 'XX. $XX be year million

first of X%. the be XXX,XXX quarter to XXX,XXX to representing of in approximately growth units we range of to For XXXX, X% expect the year-over-year fiscal

year-over-year to of in million to million of range now, of for we will adjusted $X be X.X%. up million We in questions. X% $X it we margins expect expect EBITDA or the $XX $XX to X%. to to to And million producing adjusted X.X% range be the open revenue EBITDA growth And of

Operator

[Operator Instructions] Our JP first Morgan. question is [ph] Doug from

Unidentified Analyst

This is dealers, 'XX? the versus anything $XX most million revenue independent your my color with paper on you have are to if revenue; Ashwin incentive want next on Any pricing on will numbers overall to the go thank got for subscription thinking are million; was let's on how And you got in guess for I months? sale? more discussion what right, changed mix more them is ago, of And behalf plans to $XX in in-line but of has helpful. color Doug. it the dealers; how that between question last I the back I the OEM any plans on color really -- few number to mix now in the thinking say months or about subscription you be few this on you're is on that be something

Chip Perry

from on individual the growth are growth who dealer call performance to the for following on the what the growth from our unit see revenue drive that prospects growth category store hard enable from our we realized we to our we just plan, dealers we service work strong level. business, value flows and at continue As --

business about mix in a We performance-based our of pure of subscription XX-XX versus have what we today. call

very base dealer hard we're prospects year year sending Daryll what his Mercedes that an the to first one of were the from work of to leader we're from respect good growth year, With continued in buildup to to do and participation to we'll new number of and OEM effort for expect the after year, clients the our dealers, from to that's OEMs this Hyundai franchise the realize we show why our nice our a that we're seeing it work who body. last coming Ford is showing ongoing part on TrueCar that really OEMs, fourth this because growth well of worked current we the revenue So on expecting quarter, continue increased important our two to they great as about effort SGA, of you're our team; benefit incentives; addition this as were segment, that tested results and and to in Mike strong [ph], bullish our have able in we land those absorb of and Volvo. time it's

So hopes really don't we've growth outlook changed way company, that had it, we're a we've signaled I high very hard in is see strong and to starting this for we're but Last off. for seen we potential our it the work fundamental we think building pay a channel -- we our year momentum.

Operator

Mahaney Our next question is Markets. from RBC from Capital Mark

Mark Mahaney

I this you that through again, expose used pretty business I on you've go -- forward, long-term. incentives bigger to much a business finally got about count just do help in priority us -- First, be the to majority be car used think can that the issue marketplace major XXXX; the for the think Thank a cars other the that the third just you? you can how then, opportunity you that problems go is less how of if what just as there the you'll So add could you have? over that earlier that you ones don't OEM an that, could sluggish you in dealer of are? going year as can't you. OEMs talked you Second, if on mentioned that those know realistically know or -- seemed And or quarter and are bigger

Chip Perry

will that the deal product we're consumers nice growth the folks so dealer, Historically interested improvements can can incremental structure required to going category, we contact to received, independent in our when for Used is before still new business produce use car XXXX; smaller the do buying will two-thirds/one-third to XXXX, that fill-out new, form good up; and people a software the making in be so there. some of it team in we're used couple for our us into and with the express comes believe so optimistic plan creating more show car mix a a we're they've form, their our phone these everybody new. incorporating good cars quite improvements use the way. we're basis used up this the now; is in strategy And growing to on our cars we saw grow dealer ones we are offerings nice we'll growth just sales we car. which a we dealers increasing We're really way which year in fourth dealer in call faster in well pick pulling We're that search with quarter to our a mix roughly been We for that big very to ways of independent solutions a and contact fire larger tested improvements part overall, the there. number to very we pay-off interest growth dealers, continue us how past new when and category, the our involve car; have a in saw blowing process. -- new dealer changes than it lead that; in start the going well and by the that out one will faster of include used in these opening a a we for a in is, targeting new indepedant continue consumers keep some priority can gross enter we dealers they're to dealer they of

aspects other our of to part and some improvements the business. As well think grow will our of continue curve, experience we as used other that price in car which curve,

be TrueCar. important used, trust For an to will continue of it

dealers rate we in business see on in Like quarter did increases that increases by some seen because fourth volume that in asked For a that accountable increase. their but quite the received retrospect based accounts, call, said believe I healthy made slowdown the the the churn looking quarter. churn fourth we it's in the and I reflects rate respective adjustments in dealer back, caused that model a who that of we've that accepted -- subscription average they've those for folks cohort on driven to the them our they that pay closer increases, accepted XX% about upon the

So to experienced reactivation among we're dealer some even value to to starting we nice though a churn, we're us. able and the show left the rate that our see healthy dealers

dealer So Hyundai, which have mentioned in in On on of the we're we reach strong work strategic they our it's we category liked overall, with the sales and and work is good clients, our stage with needs align well we question doing major can and our Mark through dealers. a they with with I as monetizing had when a evaluating we're now absorbing business discuss and our their go feel results; results, mode I the about this those with both them. third very natural providing when success cycle value We we and how OEMs; longer your like a Ford body. are

and Hyundai we like pilots Ford. with do did we Second,

come have from and received to expecting one offer. it them absorb have least pipeline two hopefully, target offering efficient last year, Third, rollout live we the by and year a joint we of so called working products, and results called OEMs we'll feedback of more of fold, we're we private this very those very the back at so interest by they our we're pilots; actually pilots is quite incentive with programs prospect strong then the the once positive encouraged after

excited growth faster at even So we're year about we I and XX% in growth very expect this this XXXX. and much area guess

Operator

next Dyer question our Steve from comes And from Craig-Hallum.

Steve Dyer

replacement; did a lot Florida came of the a to based how areas those As in from strength in on it your Texas and outside dealer you? in hurricane or exposure strength relates either really QX industry help the units, hurt in

Chip Perry

surge the industry, that replenishment of from TrueCar those as in a areas. we and I year. abnormal inventory covered catastrophes we the with we see storms. areas major didn't we a anything Obviously, happening abnormal those in match experienced was last of are those a don't as would in result areas, Steve in say well growth, what's of in did both either those essentially the anything in geographies there I of

Steve Dyer

And as rates, as then, versus guidance monetization, you in changes relates strong if bucket of making you're to strong speaking and generally really it XXXX; some OEM I'm really is between quarter just and that, wondering implied, the can then the well incentives?

Chip Perry

coming the exclude include look the year grows the revenues; same be you much up overall If an revenue, you revenue. we basis, at at and expect OEM on OEM in about obviously it revenue you excluding in this monetization then both it to our your When look as double-digit can the function OEM monetization, commensurately and prospects concluding well plan X% or OEM the of was we of growth subscription who producing about in XXXX, ability are faster through a how that we're field for generating then their to [ph]. dealers terms to stores. car that compensate with both on turn work sales, Monetization our marketplace our is performs volume our efforts as with into

to efficient in hold and really put our is kind consulting quite is, on our place, they of dealers, more our confident the an to got them understand and win with seeing some we I'm TrueCar of ad are strategies improving environment service training how doesn't new some cutting team ability like and great. dealer be team product in strategies, we've that actually try the process more back continue our to sell close the bullish and make the to thirty-party a of that in their their America improve success help them only more help result, we're the we're most that cars, works them rate; on close -- our trying dealers helping to whole through rate, solid to with there tenders our or looking So in right helping quite efficient efficient go-to-market in right to working upsell that clients focus as set are able the become client where we're and to is And to rate. them monetization many -- dealers

Steve Dyer

I'm if any willing cadence me, it's year? then to commentary USAA from lastly far sort how give wondering and this as to of so you're quarter able by going to And

Chip Perry

know, quarter back the they and TrueCar the in towards indicated end used making last changes dip to as trend back in in and the experienced very continued year single of I parts towards project positive nicely this third when which as change us a the USAA you seeing are experience Well, of fourth a it and some ongoing user is digit. of they came quarters; with we're improvements, car, made the enabling new their portal kind both, fourth

I think that I over should and see this this cadence in to rolling how -- happened explain year. quarter the quarter what wait we what we until actually course out of the

Operator

from from next is JMP Josey Our question Securities. Ron

Ron Josey

set and you and that? growth I meaning you ramp work you see around expect strong a the the to ramped around get incentives the what get think expansion said to products but should line guidance on XXXX example, some as year. closer the top it gave X%; us bridge around to margin we can there? our 'XX, your we've at as to top also we help talking we this we timing I should year about I us here, been And for for focus up Chip, traffic of think growth point maybe will funnel, understand can of believe was and XX% back start what so there,

will nationally; bridge the about talk be helpful. Thank model trade helpful. just on planned lastly the would be rollout with XXXX the on can TrueCar That insight any you here? And So monetization for you. then

Chip Perry

we're told strongly We launch revenue of increase between the $X.XX this a year That in and of an per monetizing we a or national fully product we're that been rollout sell-on Yes, expected very transaction. test markets, XXXX mentioned, over the get they over areas there have well out it's whenever in has obviously we store. very a course once so it's the can a hands received year. increase major at that basically, it; believe dealers the about hot dealers -- potential very bullish rate three like see XXXX product, it, significantly to wait with And transaction rolled on clearly of in growth. dealers program like is will so that. $XXX X,XXX I'm to trade $X,XXX is dates product doing consumers it, in our in One their just can't about because the me bullish year our

piece like our OEM; pipeline. building a is OEM said, Second up team is I strong

have and guiding OEMs in XX% to interest business. I'm to is to our that's category. increasing is the bridging seeing We're work confident our that third XXXX key itself. why TrueCar deeply; more goal some working us work some OEM Our affinity with us with with growth in leverage growth also And partners, affinity with then better our only with more so partners TrueCar OEMs core than the and in

TrueCar know, for business as a we are dealership that volume volume. they is where into drive compensated and you units-based Now essentially

audience on growth. drive revenue growth and unit to dependent not are strong here significant We

folks than We using of marketplace. have passing of car today of market from X% America Externaa industry XX% roughly research sales buyers a TrueCar the indicates TrueCar. that Power our more car share through in like in JP new are new

is the represents introduce of to services advantage and it see which in difference level. registering grow the and in opportunity X% content full in enable car at consumers we dealer value your credit their the more TrueCar dealer and receive is then to purchasing XX% to of way and huge, a can top all of to in TrueCar -- line the best our the So taking

line clear have sight today. of We

and research will to a TrueCar our done that of to see beyond result enable in use significant saw registering last well of to that a the improvement we've to or As service. the value ability our they year fail the before a want in we way in year anything consumers to

growth and service buying dependent core upsells we'll of which larger So of able costs the dependency have I'm purely share be the an a generally today. our the dealers dealers, they based volume not new it's ad ad a existing growing business, competitors, is no underneath because volume, we on to are marketing represent investing opportunity is. of marketing on strategies we or products which core the the that, of the of at increase as do cost, to the average their well we wisdom marketing that TrueCar their form confident efficient help budget TrueCar than see products

So very from come about excited XXXX, that's where we're our going to it. growth is in

Ron Josey

values think do And some that 'XX? happen just can see at should sight; point the you quickly that maybe on line in consumers your of

Chip Perry

that, of fashion, including this in features significantly they the over them our what introduce of experienced rebuilt and TrueCar to later to to don't doing course car, they when to certified that functions who being in way register about that a the figure pre-prospects. a dealer. price hands but full order It's fantastic TrueCar all -- when of to compared the now that Much ideas of is of this the trusted capsella and see put Pre-prospect the all and be we I'm consumers testing We into is to today be project have we'll the finish what We'll is do remains here TrueCar going important modular capsella. but through well, out to platform have area this to whole is these completed excited about and of new some a ability more can of roughly excited depends pieces the the our rebuilt roll now XX% upon been inventory register; pursue completion replatforming to environment, opportunity. progress folks before going year encourage a well needs the until experience XX% on the expect to have year. a of actually us are consumers use team work for the go chance TrueCar

Operator

is from question Evans Stephens. next from Our Kyle

Kyle Evans

think I and. Stephen school from we how

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Chip Perry

go, know can benefit what we I to of changes TrueCar anticipate Significantly strong that. described improve connected when search to good will ready And our to them. they're new price reports, the how those the are growth more to research then by so also just have the full chunk facilitate will come how significantly pages our how coded earlier, of you marketing from experience let are consumers optimization presented to how consumers, that they're and benefits these engine a and

that earlier, TrueCar. optimistic grow car with more quite I'm using to of XX% nicely have existing we traffic cards. we our the kind said the So buyers of revenues I actual have is can traffic Like new that than growth in

of north go X% roughly, I have go consumers go the a that actually our So now we X% an lies. rate we topline problem; conversion no prospect in significantly, our issue a being opportunity, only opportunity of meaning convert well traffic, big we'll we'll XXXX. like don't said have We'll to so audience where here, that's in system, conversion, XX%

put to online relates this when also in very it purchasing, of improving loom kind growth company, and on a category shopping important expansion, into is clearly we the grow vibrant top opportunity while of of to called expansion to car that an marketing margins. As both, there kind revenue margin

transparency said. with into have to as step So industry in years; to allow things we'll we'll strongly. that, unique exclusive ROI is catapult look with destination move we we which members improvements do our those doing I partnerships for make used leading XXXX three attribution locked-in between we're which in their a unsurpassed is a in way us -- to unique which approvable over TrueCar. and we're car the -- those this got efficient -- becoming lockdown provide both; us believe year for oneway do model in of the we category at have energy a time, sights, assets our we our model the that to gun that with But a consumers and want X/X/X our we the to enable which close collection clear you to of become very are XXXX car will And to have towards the things one large online killer consumers in foundation towards finished marketing next capsella, doing dedicated way pointing all it thirdly, partnerships automotive we dealers; new

Operator

Our next Sinha from question Company. is B.Riley Sameet from &

Sameet Sinha

how into, that the you're about be the you going more for talk a used And spend What any would in do from as competitive of industry, can flat single are Secondly, sort appreciated. getting about product us there. product; differentiate that would that flat; theirs? be obviously growth about into the you marketing Chip, campaigns investing year-over-year highly players high unit give Thank why that's you insight digital; 'XX, car your number spend if talk you rationale talk in so if you can can John while indicated it's digits, that? of you you. new to marketing some keep can is

Chip Perry

cost essentially to other TrueCar the come that the important, of the out in a I to that how price enable listing, to we're before a user they category to requirement who by strong product, more you're to we're learn a us is be gets said, used fill convert going registration used if with curve experience first product curve improve major got and through superiority car we've sites. number inventory in for that the going dealers good car used said I provide location; works. XXXX, really of buyers more with form used consumers Our the doing we're car dealers about a that large the moving today. And of can improvements car Like like a you classified

a of with we the The thing affinity need; partners flow good to the car. do answer brands, car the and consumers units years step was used that, been [indiscernible] a site, eighteen in have we question. have how flat round prospects is in handwriting. of big conversion we said, have own XXXX. top line beyond before which that function clear anything We have respect used the car ongoing phase company. in do the in And market them Like With two coming the in how user strong making more from experience of on opportunity ongoing who TrueCar X% service. we the the to actual of full and With of use that's our is, spends, grow XX% usage improving and need than market your light we're have share our enable buyers, buyers. to With see create see the third in of to this going in way a of seen rates; front by my to we doing that's will your about spend, we've the same question I biggest improve the new last 'XX close marketing growth

Sameet Sinha

you're why more shifting digital about orders to campaign? It's online from campaigns; T.V.

Chip Perry

Yes.

it's we running. in and of channels marketing we've efficient to economically vigorously campaigns your really opposed our is, test focusing important products and -- our we've what produce flow some we more marketing become digital on offline channels than to So all margins investments better and which have got we traffic more time can the that learned budget, we've as a the discovered our grown that been with that we're

our expect Like just of experience will really turn XXXX though, rigorous starting which growth a much is much come. that's in stronger will say much in that to I testing we product we'll us matter a this this a the invest and corner larger direction. significant on have be it's So moving it to enable in marketing more when today topline

business leading market category this So into our that and as overtime excited completed is more we lead hot will that we're here evolves. about be know that a

Operator

from is Cowen Our Company. next from & question Blackledge John

John Blackledge

replatforming, on year? trade-in to On working get participating evidence expect tax see to a color many will in any you next program national completing And prior any we starting or rollout, XXXX? it dealers then the of the be how would

Chip Perry

is With that our capsella, you share been for we to able the with successfully or be components evolves, as would tax to There year rebuild. rebuild have X we able the with remaining, this and share visibility we'll so them pieces of you. of those that of be and explained I've tests, we testing results some of X new have those we'll experience

excited really excited directive in done, to the we'll we're think What our I to prime this In a around that team progressing project. important can really it's prioritizing is it this we they left have ensure the we and prioritized capsella, about we every it most quarter teams about can to into we're I back company; we're organized order our this the past, in complete we us products and the how let goal getting to their project count that dealers producing this of to end report the have We'll most fruits produce us will more it see is this there. So to what year. about and X,XXX in effort, to know mix; the fully year. towards completely when organized of to complete later expect on we short-term and you trade-in, have enable dedicated work for way expect technology year is revenue

Operator

at you for again may participation you disconnect lines your your Thank this.

TrueCar (TRUE) 15 Feb 182017 Q4 Earnings call transcript