TRUE - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to the TrueCar Second Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alison Sternberg. Thank you, you may begin.

Alison Sternberg

Thank you, operator. TrueCar's XXXX to Conference welcome and Second Earnings Quarter Call. Hello,

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

to and call, making a planned the quarter our regarding of unit campaigns; the channel and XXXX, space. outlook quarter in strategies, XXXX as statements or our As our affinity ability including XXXX; to growth penetration will third or marketing expectations offerings not and in be XXXX, expand the term; full we expanded of partner on to, future for product unit reminder, ability in guidance half management's to USAA this the fourth the double-digit audiences and growth this to including, for of statements continue revenue our but and limited in beliefs forward-looking bring second longer double-digit to year growth

increase out cause litigations. product rolling XX-Q of We , outcome of to Actual and and our quarterly and network, to rapidly TrueCar materially to ability the upon for of should revenue of unit of timing technology rates materially. new or improve its caution XXXX on ability statements our forward-looking not of and out you the These of report the except growth our results coverage could and conversion and product Factors today's call ability features, forward-looking these completion consumer law. impact innovation monetization, Form build report our business, review ability statements. update by forward-looking the section and core be Form any and dealer our our the the from our first and differ to are of for introduce results our to as our and guarantees targets, The base growth for and second to dealer Risk on us base, OEM expand replatforming as on our performance as outstanding timing initiatives, concepts and Trade, expansion and dealer to based that on forward-looking experience engagement of a revenue business OEM pricing customer annual Our contribution, with this XX-K our scale market align XXXX its any our contemplated our discussion not our to efforts and achieve to relied and in timing filed including future those disclaim differ obligation statement we are quarters available information on SEC required could the by factors date, statements grow results.

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

will Chip. over to I Now, call the turn

Chip Perry

of the all Thank components the plan record in across everyone. with key our are build with that results and you, quarter afternoon, our continues good to of in-line TrueCar Alison, guidance. momentum XXXX second

second half against up solid to-date of our perform strategies sets execution to the growth. in year, half each line top of continue double-digit key Our to marking back are the

and revenue guidance EBITDA the As we such are to year. reaffirming our

our focused return changes implementing on that to to in growth rate enable next business year. the continue be us a laser XX% We to will

network. and of powerful experience flow our from our to our expansion the in supported trade marketing We of by upcoming expect dealers growth new accelerating the larger product spend, this consumer growth OEM ongoing

record detail car X.X% in of dealer new us growth later year-over-year unit, to in OEM financial metrics one representing the third-party in the platform now would reach our John which saw market and generate progress makes X% the we for quarter to We and for has toward TrueCar a new new into start. marketing in number amongst I begin you to believe more the continue call, leader retail dig this despite car share OEM on softness a each give shifting of across continued our continue sales how significant channel. second And plan operating strategies broader We and gain update we remainder on the see a year. players. we allowed and like revenue dollars to but and will affinity these USAA an make of traction with the partner the to

One XXXX of USAA. larges of of our from partner level the volume primary areas out was affinity of unit focus coming coming

units members recall were our fourth improvements seeing to and QX, as continues mission down partner marketing continued show this started of well will look recover to of remain trend the improved end the driven and we into military USA USAA to improvement channel year-over-year overall that and recovery USA from by to into pleased support at double-digit access buying that and of car in the We to support second made unit you with this family. were see the to growth QX quarters to forward volume quarter, important in while in their X%. the As sight The the I'm in XXXX, on-track channel experience year-over-year to continuing to unit quarter down USAA flat easier units quarter for partner. to community by their serve XXXX. last year. two was continued of as June and X% the report This

quarter channel. publisher high unit finance year-over-year by the the channel, our showed during in partner Extended partner growth expansion to growth affinity with our performance and of XX% segment. membership at strong extended partners Turning and

continued affinity offering. we our believe of penetrate of As expect greater the activation though in in potential comparison, We are growth we expansion is we of the including partner through network the unique we It's referenced quarters, OEM basis. publicly strong our visitors, audiences multiple face than tactics, focus important product is two these that significant the to unit double-digit call, on note extended continued significantly prior tough our to member in our there report. partner our channel. affinity digital deeply partner Even reach next year-over-year

serve million our giving this affinity all in America exclusively members portal, the into partners experience delivered fact over and their reach in car XXX online In audience. new TrueCar, is buying us massive of

detail to key turning the more Now, initiatives across for year. our

revenue monetization. dealer is initiative key first and growth Our

our go-to-market integrity, specifically. to network strategy, three we strong balance core our highlighted dealer Over investments while two maintaining to rate the course of on key designed have last quarters focused growing business growth

have pricing we on our First, unique the been delivering value model. based loop closed with attribution aligning

a strategy new further strategically designed gaps Second, around enhancing network rolling across our coverage inventory. our to grow dealer to independent third, dealers car base independent and strategy fill and dealer used acquisition the increased out

have these as our to-date. with are we together executed progress XX,XXX quarter. second across of of time Dealer and the the strategies, all As reaccelerates pleased three reaching at end dealers of we account high

increase We for and quarter surgical a via in X% has monetization sequential improvement to revenue dealer franchise have recent more seen an dealer reduction X% year-over-year yielded or approach turn. most renewals year-over-year. in in the franchise to A

increase of to This grow simultaneously midsize strength small our dealer our designed in to strategy meet edition, and proposition. need. revenue is better our the value to shift dealer to This with consumer ability growth count, per independent highlights to strategy dealer shopping has Our independent specifically and dealers. diversify an led inventory

the side achieving heard marketplace, and you market superior means As a say demand the before, side of proposition consumer supply requires OEM value dealer me leadership side. for both and

consumer proposition, upcoming Our point of unique competitive gives transparency pricing current us which a advantage value our centerpiece out we leverage consumer building experience. and believe our car end-to-end new is a of for durable the key

traffic dealer efforts. our provide the growth consumer experience create enabled us capacity strong and of to the to our side marketplace, through efficient marketing On coverage base a better growing dealer to absorb

Our is OEM. second initiative key

have said display we attribution on traditional based calls, relative success to based we As model the an to model. impression believe ad our growing efficient OEM appeal is earlier

residual an QX OEM unique last dilution OEMs capabilities incentive OEM of Our in incentive value over behind ways million increase revenue, QX, industry. truly of help is the that $X.X year. to in deliver avoid In walls registration X% were and offers

repeatable revenue increased XX% million, new of in by OEM existing OEM year-over-year QX, addition revenue the driven X.X of program. approximately incentive of of non our QX isolated Excluding XXXX expansion OEM in program and

expand continue partner our extended We our to existing clients and penetration through business long-term and optimization OEM with ongoing deeper activation. marketing

joined Additionally, OEM last in OEM program the and in our another call on now by is major new who remains platform XXXX. large QX scale tested place quarter announced

is on the XXXX growth remain the with OEM pleased to of on-track more for over second we experience very than are growth full-year. build of by are OEM to we confident that revenue as business the and our XX% in year-over-year revenue half XX% track We

is initiative national our of Our rollout trade. key third

trade momentum to see continue We products. TrueCar with exciting positive our new

nationwide, offering of component a this into the the introducing rollout is process, we liquidity we dissatisfaction transparency car which of the deal. with consumer sources one trading greatest As the of of and new are buying form

way the valuation our or and industry XXX through flows major TrueCar target year-end our need and a program. we dealers well provides product needs address prepositions that and of on-boarding X,XXX over dynamic trade tweaking the sustainable history competitively backed credibility on business have value the growth model. a are insight product from truly in just established by on our unmet This industry not on transparency Our brand. we market from meeting activated unmet leading To-date approximately differentiated interface dealers in the shown has and third-party of

over meaning of Francisco represents is among more activated San than States current Angeles, comprising have population to this the of the York, active including coast-to-coast Los of We markets half others. product XX United regions, off from New The Chicago, rate. markets the footprint

foundation Trade customer contribution of end-to-end shopping we accurate next that aggressively to as marketing payment. this growing towards starting nationwide our show markets But continue year. more to generate significant upfront product consumer to a provides elements expect a dollar the small for revenue for upcoming this is a also from is on transactional over experience, to million monthly trade activate early XXXX. base larger component next we and campaign our this to calculate vital we expect out much product quarters, two because single-digit additional needed year. revenue Recall, point the new move We our that is in

significant project initiative and the key is of QX, by In that we effort our will we finish Capsella. the we remain making continued confident on year. fourth progress Our re-platforming end this

second on of half While the year the for focused remains Capsella. of priority the the completion

our to product our funnel We of which build good building dealers. with in financial with created going rollout growth engagement of discovered end-to-end consumer higher trade It hand strong network, including our XXXX. of focus In With differentiated the more these XX% of positioned forth performance that shopping in we online rates. experience and digital John our the to only you expect in conversion retailing business. further for to to foundation healthy to our dealer to anticipate key are stronger upper are experience, we also over for top-line research prospect you strategic new of innovation OEM achieve our end-to-end in tool growth we beginning across XXXX growth the the and as and will continued what can product new to show to consumer to will the expect we initiatives rates continued true will to our the We test unlock expansion have launch through before also industry's XXXX, our we XXXX. double-digit completion a detail. in we and and to components it We an major I’m see discussed rate exit numbers experience. post a make expect And believe out component be well on now market experience. Capsella walk set and closing, progress we continue enables

John Pierantoni

franchise the with year. dealer, Chip last Thank totaled in-line X% our up million of afternoon Revenue QX good $XX.X guidance million Revenue up million. This is million last everyone. you to over which revenue over $XX quarter of $XX.X in second and from $XX year. is X% XXXX totaled

increased quarter by go-to-market strategies the gain our described dealer During that earlier traction and to Chip we XX,XXX. sequentially dealer count with XXX dealer franchise

franchise addition, X% in year-over-year revenue X% sequentially. monthly $X,XXX In for and was increasing quarter, the dealer

XX% strategy our increased million sequential our in incentive channel. from X% dealer the decrease, This $X.X revenue OEM in-line Independent Revenue over X,XXX XX% our dealerships year. pursuing further of build dealer much a was increased revenue count up X% with sequentially. base very year-over-year million in improve flat was is our year-over-year it consumer which momentum gained dealer and experience represented of new last also by car last up quarter was to at is our independent out for smaller from or $XXX. with dealer QX, independent XXX remains slightly We dealer independent Monthly inventory. to year. dealers independent and $X.X

year-over-year. XX,XXX our business, year-over-year. was If unit grew extended by referred XXX,XXX. the repeatable X% Chip we business XX,XXX achieved revenue which earlier quarter channel and our consulting And last XX% in XX,XXX finally which from TrueCar year-over-year, to guide X% forecasts Also in year-over-year. XXX,XXX branded generated year-over-year million OEM channel, X% up partner it year, to units was slightly up of and use above in or you we down that XXX,XXX, non exclude totaled units, we the the business produced XX% $X.X up down Our USAA our units, Units was other Breaking in is down, In quarter. which

for As time are in XX.XX in unit we dealer from which compared of and a network. franchise driven and was new year. is year. and Monetization positive $XXX in noted to across last experienced XX.X% per optimization XX.X% the focus last use new as XXXX, our of also and QX service QX the mix, by XXXX of used improvements X% increase This XX.X% price $XXX this trends, mix new on up hitting delivery used

and expenses of our categories efficiencies we to and measures. in profit turning where Now expense most operating demonstrating margins,

and QX our of to as cost and increased of as last stated. of of lower Gross margin last QX, from on compared we $XX.X last to leverage re-platforming XX.X% in percentage is non-GAAP were XX.X% which in year. product last XX, to area of show revenue. unless XX.X% year of as or by all million XXXX our the $XX.X year-over-year, in $XX.X $XX.X or but of gross X.X% was XXXX was channel, Breaking TrueCar-branded initiatives. XX operating profit this for customer a million marketing up in basis Technology million, As basis, which metrics year. free revenue technology a was otherwise XX.X% on it we QX continue Sales million acquisition Were totaled in are even to $XX.X expenses reminder, up invest and expenses X% year. as million a by in further, compared $XX down spent following revenue point

$XXX as cost unit channel branded per year. declined last sales $XX.X marketing last expense year of to $XXX time Our X% in unit from channel to by QX million $XX million this per compared this partner In our year. totaled

partner marketing affinity unit. things. increase partner to related $XX revenue primarily business, increase XX% year-over-year increased digital our growth driven three increased our revenue to three shares per by growth per due sale $XXX some OEM from This cost high in our of Our Two, expense was year partners. extended channel. increased to with One, and share

expanded which helps opportunity high these in of introduction initiatives. lay invest monetization and partners, the the the trade to OEM continue with We foundation for

leaders other million, QX million from costs totaled revenue $XX.X and XX. up marketing in $XX.X last headcount expenses million $XX.X year. and sales of G&A XX.X% or was Finally, of

revenue of stock-based litigation a per loss GAAP was EBITDA last was $X.X to adjusted the million, cost. continue million per excluded time or G&A, a revenue of for a guidance million amortization We XXXX year-over-year. through XX compares see the this $X.XX as quarter's net for or million, end and range $X.X $X.X and quarter The quarter net operating we depreciation spend to $X certain to million the $X.X at adjusted or of where comp GAAP of expense our of revenue high of loss our $X compared loss a million $X.XX percentage was year. basis or efficiency to a of million million the EBITDA of net of net million. share reduced X% share, as year. of last mix of points $X of $X.X Adjusted this non-cash loss EBITDA in $X.X X.X% This second by guidance

EBITDA turning where million now adjusted quarter guidance million $X.XX and our $X.X And guidance, was million. to to of the $XXX cash maintain to per net $XX totaled estimated EBITDA Annual as is income quarter. the of $XX share balances, million end net of the non-GAAP revenue share our $X.X estimated are year. million million per And non-GAAP balance we we million sheet, income range compares adjusted which full-year reaffirming revenue or to on $XXX a and for $XXX range strong of as to continue or $X.XX for Our last which at cents follows. is at

unit, unit units. XXX,XXX to that we see range per XXX,XXX to annual will you our are As tightening a

XXX,XXX continue a EBITDA trade revenue As network to X% year. monetization be we growth down driving the as units the to growth XXXX, the this last double-digit OEM improvements momentum year-over-year expect dealer it stronger unit for in of in we And recordable made the by product experience and changes range of which to our the of our they in [Indiscernible] growth. midpoint user USAA improvements expect to channel XXX,XXX our and the on channel we from unlock to range. per-unit with additional third Breaking revenue channel, future opportunities quarter represents units play will at regains role achieve

million expected Our which year-over-year channel segment to maintain and the highlight to the branded driven extended $XX hold OEM partner at spend are quarter in third to midpoint is A that our Revenue couple growth represents to our growth our acquisition our by revenue TrueCar finance our steady. double is of $XX expected expected in membership, continue partners we double range publisher flat where includes range. year. digit expected to excited as to is we almost areas the high business channel prior from XX% is be unit the is our to of and million growth in be

Additionally, we in are our trading revenue third national business, approximately million rollout quarter. also the very where we positive $X about of estimate the

of the Finally Adjusted EBITDA range. midpoint or in million is the at range $XX of the margin $XX expected be to to EBITDA million XX.X%

that these looked is growth the with of fourth year-over-year we that As in growth than We half higher the third of have back our acknowledged XX% nearly QX. year, resources revenue the we and quarter the we the believe to achieve can't to in place projected build XXXX. in now, opportunity strong we growth Company, questions. strategies it and excited in about for And our to are a you up I how the tell results open inside we foundation to will XX%

Operator

thank first question markets. capital Great, RBC from Our Mahaney Please you. Instructions] from go ahead. is [Operator Mark

Mark Mahaney

the right trimmed XX,XXX would and to you more just experience. you. you how you the a TrueCar. little the consumer growth bit starting is On little unit I more one how do it you why year? just next expectations you or of negative a quarter your traffic And better about that’s past, solve are in a I like full-year. Thank to have could talk like past the explain in coming them then you Chip, to consumer growth for? I and X% for then bit in Could accelerated know down try solve just end heard be guidance high the to are for what quarter new looks notice you - by differences in trying or this going down to What just the a they trimming It explain for think June bit your that. looks the powerful question, little

Chip Perry

Mark. you Thank Sure.

guidance. comment start John and the will me then with consumer Let experience on

and based registered people register of So is after what to a all pricing car the at for our understanding a for register, marketplace. TrueCar the with in I front upon people want from benefits Today see the individual being directly experience arrival car. other will consumers what it up consumer fully experience, a with user in the have of call not presented the they dealers to pay causes new offers chance to transparent compared to context

dealer. with the information In the register. So the consumers offer order receive good for have offer question price answered to consumer, a from they this the to

other price to that consumer after from end buy TrueCar registration. TrueCar they has this that what receive know able that resisted consumers, way information their name including dealers it's that net and market and of other experience stage paying are pursued to that and Before by context our to at registration, have market understanding a see have get they certified the for who average information a many of are of consumer pursue point, the how they concerned overall cars provide are truly are and based consumers experience quite they experience And we more of post sites. of that delighted There the considerable you differentiates about now is very market high how see car point to dealership. pricing experience look them purely happens the about from the helps our because a people they true our what which are promoter been resisted With what with marketplace. the our consumers TrueCar scores informational To-date care cars may TrueCar third-parties We consumer at understand purchasing. all to dealer. the is in pursued

control very upfront the They is through do to see they their to significant to after will name registration of in change so are in will our will over dealership we this XX% a new submitted that tacking the serves we experience when user is TrueCar share without know consumers Capsella, average enable the our still who that attractive transmitted TrueCar. X%, market. new launch new dealership. essentially in pricing buyer second working to have that rate. on their control across of selected will to So the America, experience TrueCar growth because believe registration but drive which how half encountered - the post significant what consumers with result there opportunity it's the large We blended be gets name percentage, new We registration a that in is car registering. already we more the year believe tremendous information, rate more user of car cities leave the over making but we a is with marketplace Today a about the able

our by survey, system. great a half the more flow of they so accountability here there use Our enable America, catches when many in than car is TrueCar a registered new buyers to consumers - they our through after power great and the opportunity marketplace in more experience experience car our believe in to to a improve we to get a buy

at dealers it as So how well other consumers on focus that provide linking them the inventory And we engagement through then registration buying that, we of that the tools new research experience XXXX. our part will will of process also relevant the our consumer information and quickly. relevant them that provide useful more discovery around funnel shopping post research car post about be beyond their give Capsella, as [indiscernible] kinds the to updates more the improving will are improvements and and in significantly many

includes from our about Thank Mark. consumer experience talk I when it So for you those things. a asking power all

John Pierantoni

updating traffic is partner the are we by in Mark driven your of Growth extended growth in one first to so regards second the in the for X% And teens. channel, question, response quarter. to largely the

up is We a in softness little the USAA channel of single-digit. channel as TrueCar the have recovers bit that and

the from that did go range. we we have any necessarily those the we of business some trade units is seeing maintain a the range down, And the units platform. for we through impart guide, reason taken of OEM in weakness greater the revenue top by got extent of XX,XXX the that changes As to end channels, with is the don’t are and it coming a particular our bottom and the relates buying are of No that. what the come other unit end the is

Mark Mahaney

Okay. both. you Thank

Operator

Sachs. question ahead. next from go Our from [indiscernible] Goldman Please

Unidentified Analyst

questions Thank you very Okay. I much. if Two could.

to the of like are end much track finish sounds by the it on Capsella very year. you First,

So be you how we at investing performance. to top in should drive thinking point that marketing about

push marketing expansion nice a right, already make the is post have have then and partners, second unit TrueCar slow down to down this to talk as you reaccelerate I question, is just in this margin but else. or sense for And in they more bit units conversion slightly conversion think something improves maybe units for other Capsella, showing you it you and think in I channel, guided to were in you. about can I does bit it what but driving units XXXX, a think for if a traffic recovery year-one-year, I are USAA growth? TrueCar.com, Thank

Chip Perry

you. Thank

do So, play have post the lean dollars. yes to marketing through better that funnel, have Capsella able user we in rates, productive will productively the and that. to us so to rate that enable user we will close signal in marketing, a experience more heavily would more strong conversion and

addition, we budget. us next will positive will than help we trade economics year a to even higher stronger have revenues, which expand OEM and marketing leading unit higher which our have In and monetization will currently, facilitate also more unit

poised move much to product, stronger positive with forward a good our [indiscernible] are of be by which economics So position will deal with into a strong growth larger element XXXX, beside from budget next and real year. the marketing Company’s

channel. our organization, the taking relates so that that our year, this As and all TrueCar are incremental we to steady to marketing according we continue spend it hold in moderate revenues and It’s plan, to we in up our this strength build that and XXXX. team, can dealer our product product can around we in dealer year on so and capitalize unit investing

category will that to excited and fire be wise are about we we decision, pure investments on short-term we So economically marketing doing we that, well bring a positioned more throw this coals year. the is on the this stronger and future tactical next in marketing believe

Unidentified Analyst

Chip. you thank Okay,

Operator

is Josey ahead. Securities. question from from go Ron Please next Our JMP

Ron Josey

taking the for have question. thanks two please. Great, I

think live on following all announced incentives, new incentive across as maybe a of talk live have affiliates. and they across live, that. why up there six and I Nissan you guidance then after a and on the results you that True big of whether wondering coming have be specifically experiencing the on, increase being the Could and just just network similar will with just partner, partner across any the and network? new believe the insight helpful I about didn't would I First MayXst it follow-up if TrueCar.com your is on one here and benefits your here

Chip Perry

Ron. thank you Sure,

not positive is good Nissan our partners, some but on are So, feedback. results selected having all, and across participating they our and giving of us are network affinity they

continuing excited to are we work with So about them.

or in OEM The the facilities last category Texas factors quarter of Ford. us presuming are would TrueCar. are in that granular I joined involved recently - first with quarter say achieves In now involvement joined they likely the in and their the to is to on other then going third of the and reporting would the us year to revenue they platform, growth just be so when also grow. that come rejoin growth them that are but excited broaden bringing detail are to forward, like on marketplace their are other like presence going our and there excited four] we factors we hopeful (Ph) the initiating and which that that [three about know would are high OEMs last overtime I of to within OEMs are this and by OEMs they USAA into

that partners with. of participate number the actually they Second

vary the this and platform TrueCar platform. are are is to the OEM. and stream the to extent the TrueCar that size revenue the remember the factors the conquest the are These brand they of intensive by variability determines they Fourth by choosing offers across one Third, month of using which

and of unrepeatable the seen exclude in are XXXX the category end doubling beginning between So which when that we the the one first that the year this year-over-year. we have major year this of excited a we very have with of dramatic OEM of the growth means half business this we in revenues time one

In show issue year. have last fact between OEM the they significant caused revenue that in have XQ seen of we the XQ the and decline to growth us one in

are through excited, an are on our more branded remarks, deliver growth office OEMs to incentive as which but as So channels. interested efficiently that about TrueCar of excitement registration does learning business the in in partner channel affinity was capability network, this our said I in the behind what the exploit our really well deliver comes how

You had another question.

Ron Josey

did. I

of last too a ago the and was on that if Just testing are complete driver launched, I there long buying on saw model page. is and any home I USAA, I the was redesign car making seen think you are it it car specifically Wondering the from was the Capsella, baked is just that experience into guidance on this noticed what actually. main not week benefits have

Chip Perry

and the should they Yes, information solid it's on evolve are and want continuing good them members we they to strongly advice they shopping to more placing experience, think car on their upper guidance. their tools give sites, USA funnel buy

is the get Thus seen buying for ready At were balance of So the and the member we they nice within car, in [Indiscernible] they straight to half about and them. made the experience who buy beginning were for than make in number and a they QX. June it quarters TrueCar to third fourth same experience. the of year compared to easier in improvement to of of improvements or growth much QX the time which a last to year second down far less the their have

Ron Josey

Got it, thank you.

Operator

from from Steve Craig Dyer, ahead. is Please question Hallum. go next Our

Steve Dyer

afternoon. good Thanks,

a back on circling question. Just previous

are you a going impressive able do way more leverage, getting year do next you talked growth. to to going on that been people that be you You way operating a the increasingly the new the is revenue fire expand putting coals year, in drive to margin able I can to next to to as still it relates that user Are presumably about in be mean in to have really marketing experience.

Chip Perry

Yes, we believe it will be accretive.

targeting sufficiently line expanded Our to actually enable us. be

see channel enough We will recall in modest, gross branded but increased per acquired some to unit the margins. cost not we the will

Steve Dyer

of kind on it, over tons conversion Got of and kind you this you an testing years, terms okay three think us and number think Is year, very where then or the in are next X% realistic might aspirational of number mean improvement that drive. thinking what early room based now, get days of and in rate I the can a leaves sort changes obviously realistically the for about guys of you two number help a Thanks. years. there

Chip Perry

within bit and was is call -. them he to [indiscernible]. I think our would he aspiring Company hot We (Ph) Steve, ahead have and but very We is do that. and a aspirations product topic goals he I That a of high for [OKRs] of mentioned our publicly technology,

big a it’s So number.

investment are buyers half that the we the some marketplace. we this have XX% fire that year, results car seem the should here testing that the potential - but we leading shows and of the modest improvement with about think volume of to in until leverage doing improvements of hold community to are in use have potential even that we I consumers the to TrueCar very excited second because

descriptive So area, we before a for be you in that but to you until lot of to more wait can this asking. thank known more

Steve Dyer

Fair enough. Thanks Chip.

Operator

Steven. from go is from Our next Kyle Please question Evans ahead.

Kyle Evan

the that well. like Hi, as - side thanks. I consumer this their back How changes. side me. any network associations guess talk little have to I intuitive push about concerns user with could anything on is see to dealership How and equation? affect this the do a experience obvious Do or would wrong you of the as your bit that state you the on might

Chip Perry

any see don't We concerns, honestly. dealer associations any or regulatory state bodies

them We are with shape good America. in across

believe the the the of would improvement this dealers we the we in dealers, value them. how positive by to seen service relates be strong it [indiscernible] As provide

that marketing within conceptually changes them send and feeling we still dealer do changes an to dealers is changes of The some towards they we details them those our on the visitors in the about are happy less board providers. those we improve with our great their drawing buy think that swing optimism see being way the more have that efficient about marketing them how spend. this that other dollars will us things for volume quite a significantly designed us our providing far of positive of efficiency away marketing will but overall from enable we TrueCar going coming. and with to were And and what so increases help more give we So when all all because of cars they conversations work believe be positive Company,

Kyle Evan

on a need have laid question to Okay. I street lift to you year? try that the would get like the what that Steve's variation next to conversion XX% rates for you growth

Chip Perry

big You are back a trying I it’s here number see, into can to question. a

Kyle Evan

do are, living. all we We for

Chip Perry

businesses. the and XX%. need see We our not revenue I an of growth dealer next X% anticipated do are huge a growth outsized hear in upon OEM year you. rates to trade conversion Based in there growth to to

Kyle Evan

so you much. Thank Excellent.

Operator

Tom Our comes D.A. next from White is question Davidson. of

Unidentified Analyst

Hey [indiscernible] for White. this is Tom

the TrueCar? having a of you into have implications quick year question Thanks. back marketing if dynamics what and about the that have Just OEM half any seen could for

Chip Perry

of We kind than based now. search were in that and serve click the We third and seeing automotive the the the industry right based. parties and not site social differently effect display ad based market impression

these the incremental on buy and they of delivered vehicle behind motivating market shoppers buy they the feedback these public cars are offers the to the they approaches. not offer target car many So available is that what are delivered what on. gotten they other a and sense industry that are have incentive who do often the the significantly receive consumers good provide while want incentive manufacturers the for. than end exact are towards offers to consumers car to buy And is is cars way really that for unique about the only we registration different are that offers, efficient kind making also we They they who are very receive

they channel a for them. see So marketing as new this capability strong

for all way. market that system get We a ways and when ways more this based new display only of the that mature click OEMs the in lookout the of OEMs do also are efficient market. We and to and new vehicle the different car go than based is now a participating and for segment compensation sold the in. act very based used That success are fairly lead is particularly to on

those any potential particular to about the TrueCar. of excited in So market case, are we our slowdown for seen we haven't categories in and

Unidentified Analyst

you. Thank

Operator

Our next question From JP from Doug Please go is Anmuth Morgan. ahead.

Unidentified Analyst

this question. franchise Doug. (Ph) the of dealer on my taking the about think adding you account, behalf mentioned for is to [Ashwin] last wanted thanks next year dealer call in I X,XXX ask Hi, two. about on I or

end to of in still if year? that we when expect and this or Just is plan year the checking should you more next dealer add

Chip Perry

levers is key Yes, dealer Thank network of you one top Ashwin. to our growth. line expanding revenue TrueCar the

end. has us on doing as continue our emphasis put addition, year extra our And put and shelf so dealer to on back churn some as team service reduce enabling growth increase we this dealers to place strong the on well in that that, cover

have We marketplace. which strategies and markets monetization are more that so for a have but service to encouraging stay, the dealers geographies previously more renewal and is very also rate across ways our more encourage and sales planning in that we better more local in rate service people at appropriate covered following more and we we [indiscernible]

a dealer category drive doing in is monetization. rates pretty to give and balancing nice easy job this to count. network are we So That up

quite growing of rates a are very different ones is integrity while same dealer at time the about account, We our which thing. are we being the positive maintaining

years, about next of between year will So adding and expect a I have we number to to like in that this believe dealerships opportunity X,XXX third add noted end and we of you good year. about a the the now three just be

Unidentified Analyst

Thank you. Great.

Operator

And the to any over to instructions]. are no there questions, [Operator closing further I turn floor comments. if would back management for like

Chip Perry

and interest to joining you forward. look your care today, we are bye in now. hearing everybody the as for TrueCar, from go and our later everyone, forward appreciate today excited about we Take list you Thank future us

Operator

concludes participation. for this teleconference, This time. Thank your you your today’s you disconnect lines may at

Alison Sternberg	Investor Relations
Chip Perry	President and Chief Executive Officer
John Pierantoni	Interim Chief Financial Officer
Mark Mahaney	RBC Capital Markets
Steve Dyer	from Craig Hallum
Ron Josey	JMP Securities
Kyle Evans	Steven
Tom White	D.A. Davidson
Doug Anmuth	JP Morgan

TrueCar (TRUE) 9 Aug 182018 Q2 Earnings call transcript