TRUE - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, welcome to the TrueCar Incorporated First Quarter 2019 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] Please note this conference is being recorded. I will now turn the conference over to your host, Alison Sternberg, Senior Vice President of Investor Relations. Ms. begin. may you Sternberg,

Alison Sternberg

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

today Chip me Joining is Officer. Chief Executive Perry, President and

XX-K to new OEM individual network; maintain customers in and forecast address volatility the our attract revenues OEM our this participants growth; outcome the search that beliefs innovations Factors to car from engagement; and planned section of innovate relied creating forward-looking improved outlook we Risk identity user offerings; materially. forward-looking the events to audience second innovations limited such our of our and our As guarantee with benefits reports from making registration auto you or and could future statements. for the and in be planned an unit experience We ability acquisition cause of by full-year our consumer our on revenues and customers ability financial for materially of available on and the and our upon results to to capabilities our we specific end-to-end with and traffic, program; our SEC of products; as outstanding our of OEM grow we update those and and Securities that filed statements the into our call XXXX; caution ability litigation. to when and our all our industry for on differ and participation to experience lead user TrueCar strategies, and are future management's to: enhance statements Form satisfaction; leverage guidance organic and today's reminder, XX-Q not statements, and this the not results. our The improve expectations market monetization, including, Annual or ability within of revenues in results product forward-looking our them; a the in law. on forward-looking forward-looking not of obligation filed differ aggregate, factors existing the date, any the on review Report which program; discussion close improvements us regarding boost contemplated expand our as introduce quarter but effect call as core the our and for offerings and first XXXX dealer disclaim any Trade our our by efforts Actual by our and Trade integrated will statements those to expand buying DealerScience making required based enhance our and our the OEM; Commission performance trends performance; to Exchange and on quarter except ability rankings timeframe TrueCar statements the buying as quarterly our ability products future to Form be XXXX to of to information should could the are These our rates to

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

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

Chip Perry

$X.X first significant I'm improvements million that guidance while here completed to everyone. in in during product the our progress top continue range, Alison, $XX.X with EBITDA above financial you, of report and TrueCar million good our our slightly end line in we performed quarter Revenue XXXX post make quarter was November. which expectations of in the guidance. Thank of full afternoon, QX Capsela, to at was and on for adjusted

during plan, QX $X.X for trade our deal franchise revenue dealer, revenue OEM XXX quarter. major make with the continue the account We added quarter as We revenue on million performed posting which expectations. streams progress trade with the also XXX of primarily More incentives, our we performed revenue side. for dealers of accounted we for in quarter, on ended XXX independent specifically, All in the and in and dealer, dealer plan line million in business, the including over solid independent $X.X OEM other to added came our in forecast and revenue approximately dealers of on rooftops. consulting, the quarter. trade

decline Before mentioned branded truecar.com. on turning Organic to in address and second we have the our and the headwinds remainder progress for details of quarter, our to our channel of this the the quarter visitors year. XX% they want on a year-over-year to traffic call contributing the throughout unique implications to the issues QX last I persisted

to working our core actively discoverability. are engagement focus product through We changes experience Capsella-enabled that and on strengthen

We increase During million QX, we recently traffic to improvements released number vehicle of landing $X.X engagement. added pages drive product and pre-registration.

will users multiple entice approach actions personalized took conversion. interest, help consumers TrueCar jump traffic. during of instantly Additionally, a saved. released two-pronged vehicles back previous the to also This email experience. viewed product we see organic with templates quickly visitation next have expect be the enables which to a experience, to taking return we the built to We've they consumers we'll to In months, quickly which returning visits personalized three rediscover will more back shortcuts improving and/or to vehicles increase out

pricing vehicle search tools These consumers' user experiences a together series a confidence TrueCar vehicle purchase with dealer. market their launching owner-generator through and selection and blend landing delight and to We will certified register vehicle a data, rich will to them content, in giving ultimately decisions. demand, pages aligned and compel shopping reviews of be consumers

believe the Together, increased to friendly enhancements traffic of we user improve Additionally, enhance and improved our will vehicle we these configuration lead navigation. will all growth. core will with content which experience, pricing experiences and search consumer

our noted headwind second the OEM volatility The in call quarterly was our on revenues. last

below Although, because offering results, QX. line during OEM platform on in we is second in one incentives our not business plan larger the performing of OEM is clients our are quarter reporting QX our

As difficulty before, contributions our remain projecting consistent at OEM I've resulting lumpy revenues scale, this business. current revenue our in from highlighted

Our to OEM those into OEM opportunities clients and tell improve we us that differentiated larger by product This competitors. from a offered marketing us year additional we have budget that ability to enter truly target reach help is our conversations. are developing product

we I for along growth remain in to us confident later have result, engagement lower we it lower believe including challenges automotive. used long-term. consumer and XXXX. toward our more Despite product OEM four Nevertheless, to solid the deliver against the TrueCar will initiatives, guidance, car key of channel continued is us of the a our our call. progress over As remainder full-year in providing than all our the our these the controlled in revisit caused OEM end-to-end model, provide revenues are only to transparent, seamless, forecast have significant with challenges, ability and appropriate planned the our specifics we vision trade, made pricing, accelerating in consumer which of experience

our with me going let on model. First, with controlled consumer what's share engagement

both ways through give our audience. the over As dealers. of the car new evolutionary of and more your to fix a control consumers we step certified to is inception our TrueCar's our moves the receive than calls. with percentage personal consumer cars upfront have begun its interactions as problem, components for This local of dealers twofold. CRMs register our the monetizing the they of send buying phone major this we marketplace often on quickly dealers. faster controlled unlock their funnel multiple which consumers consumers dealers a our price discounted testing an experience receive resulting lead offer Once recall, expect, creates premature suboptimal to to Since to our model, consumers certified sometimes from engagement dealers. new consumers are To emails add provide goals information, next consumers higher new and and in This experience for introductions and

ready. upfront and level offers, registration discounted by with dealer we Scores, as consumer satisfaction enable dealers in measured Promoter to Net a will other before user having contact result they're see without believe will higher we which information price benefits contact TrueCar We them receive and First, track closely. consumers of many significantly view this very

to enable able model. first upcoming we as car tests, new second new to model consumers a a The dealers level styles of stronger TrueCar. vendor new inventory car is a new car to shopping will have By have with pricing enable of time, close search captured and historically. and monetization browse higher needs with part of measured both at sales by they level our the than and goal configuring these Also as new in for significantly to set to broader this of attributive we unique cars will shoppers traditionally we done be a addition enabling of the meet attribution

provide me two are the with information which contact with consumer more that and traffic, new with when testing actively over of is features control provide examples Let our their we the both of live shared dealers. if

The experience personalize their first the feature on will timeline. based allows consumers shopping to timeframe to indicate purchase, their which

consumers average dim to pricing. ready information, contact buy giving also access the prices limit, local market while when testing are we inventory, and to upfront them Second, their view dealers ability receive allowing browse to which level

to to us provide in sold pricing with the value on features notifications, We are be vehicles safe enabling guide more alerts, from offers creating custom alerts to consumers to also recommendations participating in-stock offer by vehicle register to and dealers. coming them months receive customized who tested vehicle

attribution users each their with not management to participating actual sale one elect dealerships, vehicle loop of car tie dealer they the or dealer whether our Our dealers' model to buy system. us registered of and at of information a personal closed the regardless share allows an our to who

consumers to dealers dealers platform nurture to a path a and higher our measurably their of we basis able registered to for of a tangibly sales down number So of budgets. as marketing be the larger solid percentage share will have attribute we a will obtaining greater purchase,

Let new upcoming our tuned competitors that direction, will company important market us tests none consumer dealers. do. be in more me they a with from a will something of growth while on concentric remind currently Stay quarters. feedback stronger that you These our for the our this putting much is take coming trajectory can the as

and tools pricing improving is information. initiative product key second Our

core market our of value for to to data have using capabilities. provide our a paid what transactional easily is them price we upfront by same that is the transaction that car recently consumers leading comparable others One propositions

about manager We have to an dealers our the to such pricing a number offset of based for tools level that vehicles works improvements as at enable on win the price in them think enhancements to from Historically, dealers today. how dealers with on either have believe pricing allowed from vehicles price offset we only their majority MSRP or the alliance This based invoice. invoice. we of

expect consumers a as presented that understanding in the the change higher an this result of a dealers upfront discounted percentage price will better as of of will how curve. having We vehicles with consumers to their context see price vehicles in TrueCar well offer

pricing refreshing impact car register key and consumers price are that We will typical meaning in our see packages are experience making it with their how the by discounts also user new understand easier to clarifying highlighting and the for they MSRP around that updating and incentives terms of offers. pricing options, discounted consumers price after

capabilities of side toward improved consumers compelling their are their filtering experience. great Third, making progress features. find for in car vehicles our of enhance are session looking understanding on used we vehicles user they presentation we to used car and help the of and the better and and data QX a engagement, vehicle registered In the building marketplace,

features register alerts engage will to us sold vehicles, we say and and throughout shopping continue launching earlier, These deeply enable noted their them vehicle recommendations. to include vehicle designed price more franchise. alerts to consumers As features more and incentivize

of is revenue growth. initiative Our one we're fastest product growing product fourth streams and fronts accelerate several is our to working major trade. on and its sales Trade

end This integrate that experience enabling our we product will of deal to Buying step are the the can working one configure program online. Auto us the fully with to First, so with car closer front-end consumer the to year. we our core trade their improve entire Accu-Trade consumers partner take by

with to his four XXX vehicle close are developed align trade The of an Second, consumer We we with new freemium trade moving better are enabling offering starts their at franchise with car we of regional that the parallel, the brand based they buying to the ramp last higher product when provide dealership trade adoption on nearby same strategic pilot team rooftops consumer The us a consumers rate. product. pay have better major the rapid free in of bought by that on subscription enable we initiatives, wins who's on the for allow an version with our on a for a few dealer In their pilot with it freemium we that dealers, of subscription have trade to in product and create up end-market test engagement more our dealership. increased these modest success dealer needs or quickly the want the who and we with trade of car they as wins nationwide. provides aided know in. months, that with dramatically match convenience lead led existing sign rollout over evaluation freemium To-date a understanding and recent in of car trade a sells consumers. at to and a inventory The new of any can the certified to growth of more that convenient of front We us year. buy, trading product believe consumers with version a a product. transaction This to our the to buy by trade we sales they that will our over for dealers is sold. conducted branded of revenue they get this our second-half version same our and fee our will quality entree and dealer in provide full boost shoppers locations the products

As see, going of of completion increase progress a transaction by enhance product the we company continue that you on to real-time. would consumer and volume to see Capsela grow that chapter open the dealers. TrueCar, designed a and make it's amount empowered experience, to innovation a and new are on can tremendous innovation of across happening up significant We there's to this through improvements the our finishing that exciting engagement in said Capsela

I through like for the the to for outlook our quarter QX financial walk outlook Now our you for results and remainder the year.

was the dealer end During revenue XXXX $XX.X near up dealer million. the was to X% of in XX,XXX dealers X% also our guidance revenue QX at and Franchise total over X% top first coming quarter, Franchise count of up multi-revenue increased year-over-year. per prior decreased continued and X,XXX was year. dealer up franchise X% dealer to focus to per adding XX% independent Independent dealer count viewers. dealer decreased XX% we smaller compared on by increased X%. revenue Indi to the as monthly revenue independent

during including New local brand by million The the our in trade in rooftop approximately XXX to the and by go-to-market rooftops revenue dealer product from of adoption revenue count DealerScience was of trade quarter. growth Dealer product new increasing coverage markets. end the strategy trade increase quarter. our apace $X.X to aided was continued

in of decrease our within into We a by The million to progress customers. capabilities the of program was by good enhance macro acquisition down intend also auto OEM second-half QX over made XXXX. of dealer and XXXX. enabled our X% integrating DealerScience new slight large was with buying driven recurring $X.X one issues sites our our revenue we core business

other $X.X and million in of consulting X% was QX XXXX Forecast, up year-over-year. revenues

TrueCar was to branded units, breakdown our Turning down results the channel that largely the leading This risks by by into organic X% XXX,XXX car specifically we units quarter. XX% total the up a year-over-year. in decrease in new and were channel year-over-year. segment. opportunities our The units highlighted the reflected These traffic, in was decrease of driven

on recovery to in see quarter organic branded car Within channel our used we the traffic. started traffic the

units XX% earlier site car driven technology by recovery their and USAA technology and future few provide car our an by flows forecast year-over-year. platform trade, strong product X% within car from A were improved our X% channel and best new partner year-over-year, like growth units. able ever whom of we segments a our reflects other partner up could units things experience car performance product as and successfully our channel used USAA enhanced growth are integration and USAA be that in new channel up our a on site channel year. continues with performance mention strong of car fueled the to Extended in performance channel in car up The deepen our down units base. new stack. operated car used experience. believe increase user was on our longer recovery pilot products Our new to membership strong the used used while This last the units than platform, offerings, were new result new stack used in to XX%. finance and the has by we were were

from As in and to XX.X% per new XXXX used and unit year. addition unit, used a QX dealer the for a QX XX.X% incremental up of primarily the per customer are used of prior XX.X% The products in $XXX of no the increase in year. of which new base unit new result, in compared XX.X% was mix Monetization to $XXX as year-over-year new due XXXX generated. monetization last was in for QX was units

revenue year. Within time revenue as in Sales turning expenses following XX.X% versus by Gross basis in to trade sales compares or are quarter on X% QX year, of where $XX.X increased per QX all of in from XX.X% margin per organic and and from otherwise year. channel million to $XX.X $XXX lower year year. a in QX during the unit headwinds TrueCar $XXX was traffic and and million driven per acquisition. last of to $XX.X marketing million a profit gross XX.X% XXXX, million radio, or XX.X% non-GAAP QX in as of digital was primarily on million $XX.X by in we television, XXXX to expenses of unit cost in XXXX, for last $X.X of QX compared overall spent while last stated. this spend Now, up And unless as well margins, This customer of marketing QX last this metrics unit to were of volumes. marketing, sale TrueCar XX.X% drive the resulting

in $XX.X per $XX compared rev XXXX, sale to increased totaled expenses QX from Excluding this Partner costs for trade year marketing, year. $XXX $XXX last to of unit QX share other USAA our year-over-year and million in in in per increase and million unit as partner affinity of $XXX sale year. and QX units, per the affinity cost decreased and The of extended last growth by was QX expenses in to driven X% XXXX.

Finally, time headcount and this network up other reflects product sales costs and the in support from to in our our for $XX.X service XXXX last QX increase larger dealer plans our and XX% of sales were million our The year. teams million dealer $XX.X of offerings. cost expansion new

million in $X.XX non-GAAP revenue offer $X.XX to in $X.XX or was time for basic $X.XX per income our compared costs totaled January $X.X prior as to $X.X for of X% items and million and share, year. year. loss X% million Moving diluted $X.X net the XXXX, of this QX expenses XX.X% of to $XX.X adjusted QX million net share associated $X.X of $X million, million as of QX diluted EBITDA loss or EBITDA as force excluded from stock-based or $X.X a depreciation million. per last XXXX G&A, and in in of XXXX revenue compared of GAAP compared of QX compensation of The QX loss in of share or or was compared of $X.X and amortization XXXX. or reduction share revenue with XXXX. per to XX.X% million revenue of or XXXX per $XX.X Adjusted $X.X included $X.X million the million of net Non-GAP period severance basic million or of in to was

with and approximately Our in cash outstanding remains debts. balance healthy sheet no million $XXX

or in the we are million OEM $XX.X to X% TrueCar channel combined revenue, turning QX million we revenue ongoing year-over-year. our are challenges experiencing in to of growth X% of than guiding with Now guidance lower to light to expected $XX.X

guiding million growth. to million X% X% $XXX are to to revised a the For full-year, range of we $XXX or revenue

generate lower are yet reduced the in As dealer guidance a many we unit that and consumer through capture reminder, The higher persists year. of seen haven't anticipate guidance. potential QX in revenue of into new and the second-half the because year incremental revenue assumes that haven't experience improvements are we effects the product revenues. volumes we of we will the The higher our that revenue to positive end range of impact factored OEM remainder the financial introducing, range the end our truecar.com the of we the OEM assumes able

$X margin. we to $X are adjusted Turning guiding EBITDA adjusted million of to now X.X% million EBITDA, QX to adjusted to EBITDA or X.X%

we're $XX full-year, is the the to from primarily For X.X% for programs. And EBITDA now, to we'll to or to open high a million This revised X.X% questions. adjusted EBITDA revision $XX million result OEM guided revenue of margin. range margin less adjusted of up

Operator

Our first time, we'll question-and-answer [Operator Please Instructions] question. be this from Ron Josey, a Securities. with GMP your At comes session. question proceed conducting

Ron Josey

for on that be the upside, it's potentially those helpful? speaking and started think talking conservative of you consumers, very you control thanks in but question. the the the Chip, understanding given you're lot you be the including meaning, and True you the that engagement would One side, any risking can challenges guidance the consumer creates much. the engagement is just I do the not you enough experiences have opportunities a consumer [ph] new that the make enough guidance, you think channel, I on understood and on about for might the quarter in the and OEM of landing of just positive call Thank put a your forward to I changes upside fashioned pages, the factors of U.S., two. Great, timing taking downside the in going

Chip Perry

Thank you, Ron. Appreciate the much. questions very

saw same that QX set we expect see we then guess that kind QX, rest for to on continue to of the of the we've our in the in see assumed Regarding year. the I low-end and guide, performance we

an have calibrated we that believe we appropriately lower-end of our guide. So,

On more upon possibility their the based the least year. we the second-half increasing with TrueCar participating higher-end with -- in the of of one and us the participation the others OEM have OEM increasing at revenue guide, participation of

OEM traffic, pretty there With I today such well-bracketed consumers on upside timing the our to of there I related product tested think of that's respect the things dealership, new number on to revenue. enabling live portion to to as various their initiatives are the of around and improvements have relative traffic that have to goes number inventory the name car we're a viewed that on described downside more we live today. are site live things are control a with when our in to over by that call, enabling being be all and

happening markets early the be in parts then traffic, quarter, of have traffic we'll a and and third that new our significant be over all QX, next in model this for launching will forward, enhancement engagement of in selected Going our we quarter number the live both consumer-controlled our quarter.

And that with evolution the and our element our so, It's be experience. the for product of plans future. for year centerpiece growth very of important of a strategy we'll key our proceeding

analysts to coming happy you roadmap and and more QX. with as in I'm a QX detailed provide as well of other QX So, what's

Ron Josey

or is timing coming that -- up just great with then years of launch on early lines Chip. sort the helpful, certain Thank And markets, out, new model XQ, you. is to it it again. in consumer control, see like that's assuming thanks I'm That's the and coincidence, just perfectly in super

Chip Perry

coincidence we're [indiscernible] QX. a phase a Sure. phase in just Ron, in It's this basis preparatory significant experience, new honestly, sequential post-Capsela really early we and with had amount work do beginning to a launching to markets of launch

the dealers observe how months that and the conversations of a how the will experience and for perceive to will the we few have monetize discuss those new time. markets as they call, value around experience, begin performance then over I said the experience with We of in on then

of build roll-out we will first early from then which learn market happen expect that our to we set national XXXX. roll-outs, overall we As would in strategy,

Ron Josey

Chip. Thanks, guys. you, Thank

Operator

Choe, next Our proceed question Goldman Daniel from Please your comes question. with Sachs.

Daniel Choe

taking some on a the Thanks. changes that to some that on of side in I quarter. side this benefits the saw little used you're of channel, you specifics or the a of Thanks. that more there those car of things play benefits specifically seeing longer around And dig the follow-up. technology how longer. changes just the Wondering I some wanted into us could over give mentioned know bit car strength if used period to us give Capsela then, Thanks for you could for question. of of in the time? had you'd out sense been things just a a

Chip Perry

Sure. you, for Dan Sure. the question. Thank

buyers unit car both are traffic, -- from conversion well and we flowing the traffic a number a enabling of that's organic they, increased are as you resulting about more product detailed, product cars used like growth once sources search as in improvements understand they made our as traffic So, Detail and on nice which car experience, very And and and access, fronts, well improvement both improved conversions. the easy a in our the made product detailed growth used page. information are side, heard reach filtering year-over-year. XX% as in to car both tool improvements first on used are or quarter Vehicle the helping Since on we

our potential the modest of to growth. improvements it at we're are traffic high the of fairly in the a really those grow face making shows company and level So

to conversion enabling because and stack company, to from before opportunity TrueCar see there side proceed see this proceed existing buy car experience one it's over by And the growth to through tremendous represent rate a and expect does unit of of labors deeply our has car more to a our our that of certified time. audience improvements used company new get even a marketplace our car we team our the TrueCar So longer, dealers. registered we're starting on tech has done really fruit the been the similarly in our

Daniel Choe

in side you're of branded Thank affinity the just your on headwinds Great. some then, things, And side traffic realize the having you. channel. on

the closed-end Just us have curious -- a the and the like affinity for you while channels feel headwinds? through of could those facing you those some you sense growth driving is give in of channel branded if levers groups

Chip Perry

Sure. Sure.

So very across audiences working their engaged activate portals. we're closely that affinity them with are digital our to own the partner the on with board

through stronger TrueCar attract buying the integrations email within buying more to we're campaigns their to members. and car able service the both of their experiences service So car

our channels. we're those affinity partner to growth digital their that own our saw of way nice we And and email campaigns from through so digital with it's And its and mainly partners seeing effective activation nicely It's two nice, with with members a extended integrations well USAA their as more as work things. portals. stronger affinity and

Daniel Choe

the color. it. for Thanks Great. Appreciate

Operator

Stephens. Our Kyle question. comes with your next Please from proceed question Evans,

Kyle Evans

Hi. the Thanks early with a is a the Thanks. get follow-ups. my or kind read to data too control? few kind it on got lift? other of questions. getting of consumer the that consumer testing any any early taking satisfaction I've And of Chip for experience Any, you're conversion on

Chip Perry

important of now, quote really in our It begin in be the for and in but year the for the and of way. question, move in-depth the you first-half next second-half early Kyle. beginning year. said tests by is us the to strategic of right the into quarter, that of as we're very going to very one success see of company. Right testing market time local launching would we be it'll the We we the I important on to for can't this third Thank gauging numbers, initiative indicators Sure. begin the

we'll then higher market observe observe so, rate we a installations of to upon level then sales also level of begin And new user higher our of increased launch match these the the as and of registration based experience, registration so. we'll initial first

next be early to the some will it start here. able about I market And I'm So, to excited the quarter, stage think we'll prospect rollouts. first from be share those findings

beaches experience our the is year. the sales this We're team to product the user energized, in is hit ready second-half energized. our team with is of force full team Our very excited, new beginning

Kyle Evans

I you best off, mean your estimation, that have behind a in it's In OEM Thanks. business. when shut what's decision? an

Chip Perry

it marketing I that's often offer we their off incentive we using for a is and motivate they with That provide the funding the their high and accelerate to gets enables to contrast do form to they fuel the place them on has on pulse car into pay clients of a product which OEM Like programs with to in our -- buying new an their only calls pay impression digital incentive their the have you way are TrueCar. buyer ads and OEM incentive that go-to-market for earlier in the said an mechanisms car basis. the is wall search are when normal registration to approach a that sold. programs. in This car display when or digital brand interest So,

established clients. mechanism So is the know funding kind being very early you for our days inside a product the of OEM

pulse we would So, we're mechanism clients that's like FCA I solidified yet Others the got some on off. and Mercedes them. funding why and established strong say they anchor well with and haven't been

know, always our deepen you our them we and to hear with that hard to working with that positive presence we're programs and from clients dealer work to the so, solidify well hard so them about from our strong as we're ROI advertise. And we working

working firmly but clients in into revenue a haven't get and established challenge enough making with can't their about terms able strong feedback simultaneously, of marketing quite there growth to hard said we're positive this It's way and. multiple for our headway them company. such be been clients spend for dollars. budgets the from our I we're so to time OEM stream these they to a I'm typically us possible, the over We been far, we'll to just larger it to it's because program get so So, new do consistently get we tap but

Kyle Evans

launched I'm you. premium and Last Okay. the glad one. you a around some brackets put great are in you I pricing Did dealership returns trade; mode? that Thank think transactional think that what that's you the approach.

Chip Perry

Sure.

you So, car little our program sold. gets trade pay premium a free lead when and and like a product, car bit to it's TrueCar the that new

not So subscription its a a trade widget on system description about it, today think to dealer the our them normal through put on so leading trade who to product, products way our is enable satisfaction. more their the more gross and enable normal customer That's normal site in product. provide transparency their greater and profit to Web it store capture provide process them subscription to their through trading use

to sell the is branded that had same as car, who who a consumers our had to product want that receive from buy. indicated to they the a we want an interest of they in what dealer find is trade to is enables the branded this purchase. created car who on Web matching who core version want consumer, So leads he We're video product and the

subscription, a the compensate So we're not the and asking very lead strong to because us they're a paying a occurs. when transaction is lead dealer

So if location significantly car pay benefit if this of car, not venture, a trading subscription the our enables to the for up still we closer to not the to fees. are buying as network it is a the who buys in currently the lead end our which our if car or consumer TrueCar the But core team they product enables only happens a this book a to - it only real selling trade that -- in transaction dealers, introduce way car, product. attractive very it us there's in-depth if situation and they with one. a vehicle trading when receive a the dealers their with more dealer But sales our produce on they consumer

great nice the So seen rates we've take success; subscription some launched we've region, product. this to we pilot as particular full already -- a the moving this got in

on. the quickly said, nationwide out I nationwide to program like growth it this so, going year and goes will we're feel And some this as roll for nice

Kyle Evans

transaction me to going not You're give pricing? the

Chip Perry

sorry. the in they sell car, indicates from I'm dealer. consumer car hasn't and the Its car a a consumers dealer in $XXX the if per case, sell car when bought yes. the this situation Oh, the if

Kyle Evans

Got it. Thank you.

Operator

Our question. next question Please The from Benchmark comes Dan Company. with Kurnos, proceed your

Dan Kurnos

Chip on be was that to it Nissan clear didn't side? come the afternoon. just Good back OEM Thanks.

Chip Perry

in hopeful and are past we're clients we our clients in like the been public but had not of this, one they Well, naming they'll be returning.

Dan Kurnos

Got it.

sort a things which marketing you historically? go these of I some go-to-market us kind are then of as takes headway side? and flattish just the other Okay. some the couple all sort little in even of And you franchise think on initiatives a rethinking of gets know the are sequentially and independent could Thanks. then Capsela caused after color also channels And give side kind of which was how you of again out you're made just on strategy, you're got if down you there sort new what sequentially puts your as pushing rolled and of just versus making thinking with just bit you revenue

Chip Perry

Sure.

up softness budget digital our TrueCar last been is the over couple We've - into doing of quite spend quarters our we've quite able well reasonably that's for audience been So, channel traditional years past with reducing What few marketing versus actually continuing. to TrueCar channel. we've flat. our know as maintain over until more you spend held leaning deeply organically the well

we search the prospects our optimize as and traffic acquisition we we testing of of it fundamental a are well systems per constantly by So, we strategies digitally you different haven't audience, at of acquiring produces the users really think range long changes kinds lower any user spend. expense of know to our expense that's threshold well registered on really established wide as of made expects and have about criteria threshold well-defined how

say this increase there productive experience more spend. our marketing have green what light balance. growth of improves contract more maintain setting in because that as company doing with the our and we one right of for we'll So the test I economic we're we mentioned a funnel important unit light believe We're at able levers good to green registration user the more I'd we is a have stage now our we're though stage audience, is to pretty where

we're as anticipating visibility efficiency funnel see moving soon through direction get And we can in and improved as that product improvements. clear that so of

As mainly it expect -- that I up to be mentioned well due We're we with with independent up dealer modestly franchise our dealers. to dealers. relates franchise is dealers, independents modest quite count year this doing to

realize car saw growth new future. to customers the it's dealers traffic to we're the But good [ph] receiving. where in quarters the this so used value unit modest been bit received our upcoming we're in is we adding quarter now believe and stronger. dealer to through be with rates appled this levels we're and quite a independent a higher the base We're -- franchise right franchise catch we're the we're our quarters a We'd outcome. a dealers and we've doing year environment quite in unit growth hope we're able now now few on path from a in clip where subscription more first dealer, we good dealers and maintain independent at you good modestly some are a rates in up And right with growing given to growing to this volume with quarter that because dealers as the solid good past feedback to we starting well up reflect -- love the

good year. the see of to revenues So solid rest we growth expect the double-digit in our for independent

Dan Kurnos

the it. color, chip. for all Got Thanks

Operator

Khan, SunTrust. question. with Our Please Naved proceed from your comes next question

Nate Mitchell

taking Thank Hi. for Nevada. Yes. Naved This is on my Nate you for Mitchell questions.

guys in this new you algorithm more as was anything Google tech else; of First on or an platform. two one number update headwind organic or the That's than clarification a impact number on one is made a this just traffic March; a hiring of still change an result CFO? and is the any the

Chip Perry

Yes. Thanks.

used in in particularly So, use benefit did we positive experienced We some see year are last car still -- on car business. our mid-March changes channel. of and September beginning the were of and we're car some organic the from October new headwinds that our effects which side made feeling channel

an relatively with to car to candidates new and respect resolution future. it's CFO, relatively used been matter and near expect side, seen the So of being so more car fueling in of second the that's better that on quarter it's organic year, mine, over what's to here things that's and and one first important fully that's used will hiring the of course quarter priority talking growth the in the in that have happening get of the then that distant the -

Nate Mitchell

Thank you. Great.

Chip Perry

Sure.

Operator

Our with Please comes from Nick question. question your next Citi. proceed Jones,

Nick Jones

kind ones, kind on revenue close And competitors, closed independent bit some a per quick you of kind you of guess two think of I on commentary the do add? been [indiscernible] this SCO gap second quite organically? again, decreasing that of what against the ranking dealer can better just has Hi, TrueCar any quarter, then to maybe dealer touching do can

Chip Perry

Sure.

So we Nick. time our search. working think on ranking, respect fronts. we're SCO over we'll thank With a of you, But improve to variety organic

on not those. model mothership working Those working to search hundreds are model, built. on site, far We're pages. of to indexable through haven't from we're and comparison linked are that been doing They being engines. away that. our landing yet of pages, made are make We permutations make There

doing ultimately positive rates, a works And so will we and have we we're improving her can back of prospect raise a indicators things improve are improving church how when number see rates on all registration number with our site, used how the engagement car is all return underway. of into car of rates, pricing used world. initiatives got doing to we be good that those is important engagement TrueCar consumer thing Most the

game early subscription time dealers starting a from the calls earlier optimistic their declining, that quick direction. independent we're playing been on leads, fact have had it organic visible we'll of next we're update search over making see received smaller smaller dealer But some bit chipping is being and a in at -- smaller in nice we're rates and not snap moving revenue traffic. I've their a price long a our quantity that nice it's more did ranks little to recovery the progress right Timing headway dealers our that had inventories, at time see are begin they lower. quite and though we're smaller the we said adding away wise algorithm all in back we boost past, it March we've even With a that So as more assigned respect than likely you're year. the looking subscription

dealers see going based segment the last the as upon we've three quarters. we of in or with in independent level the to have two we to in lead we're overall that monetization to growth will the them sending So, start volumes -- - stronger been much higher

It I'm the upon fine. for in particularly going have per monetize not quarter larger we've us two we the because last base producing in based or the to the mix. So a a about smaller gives been forward last down, them That's in quarters. the over larger worried dealer going or our dealers that revenue volume two three

the in be I'm why nicely that's confident, and to able QX grow So, we'll that quite QX. segment

Nick Jones

Got it. Thank you for taking my questions.

Chip Perry

Sure.

Operator

your [Operator Instructions] Please comes Our from question proceed with next BTIG. question. Fong, Marvin

Marvin Fong

my how say we of and growth the of if and a some speaking you channel? drill enhancement. some that could was can And due apply can findings if And that sustained? into into partner Thank and other the the little I but lot quite user for they're question. then wondering A number year USAA them more drill that one, of have should; was to channel rest for I think that, the a then that Hi. kind down I'd taking to follow-up. secondly, affinity of be have seemed you just already channel like to been like I think referenced well you relatively about asked, you some, those

Chip Perry

you, Yes. Sure. Thank Marvin.

USAA the into able the off So environment of cloud, we improvements new old extended modernize same portal. meant partner stack made with And the when were we affinity at we we TrueCar. the time, which to Capsela, inside all up some of technology nice the the launched out the our of to ran we

continues as test trade with product to we USAA launch with have collaboration for test for a great to able within their their which them good not are instance us. partner, excellent an be been network to our producing cooperation, is results new So,

about you was call extended be going a X% nice to last -- first first our respect the than know quarter that bit than them single-digit that quarter. and growth we're that year And higher better seeing in solid affinity know with the so in we're partners I revised would little with nice middle you

a the active e-mail incentives the So, are of activation integration members. and improving include advantages attract we're bases which is going affinity one have member of company that they're enabling affinity that OEM OEM behind That's toward interested of the your law to and that promotion through continue to and an attract demographic the its also work their has we on as registration in big target a them. the digital targeting targeted specific audience campaigns an to

we on. on as look of do goes that more So, to deal

Marvin Fong

stock to Thank would dry you just follow-up on with know think you or think want -- balance. one right acquisition? maybe that price that thought to very you your for any balance? keep a cash deploying you do the have is deploying where you. the Have And you you given Just now large about how you powder additional cash Thanks. given know

Chip Perry

Well, keep cash to to for nice balance we've reviewing that how the time, to historically sense We're M&A potential opportunities perspective. make and that address change a deploy company. current available present the at whether investments our whether And wanted that's no or best know always expected. you

Operator

reached question-and-answer for will the closing session. management over I And the back now end We of remarks. the have turn to call

Chip Perry

Thank for you in. dialing everyone

working experience user First evolve here hard presents. our the new technology line obviously, that to quickly this we're We're potential through quarter innovation. excited company about was in

everyone. in you able and levels improvements stay growth to about pursue excited stronger future. Thank deliver So as growth of we TrueCar continue tuned, being make to the and we're those of the

Operator

conference. today's concludes This

You for lines time. your may you disconnect participation. at your Thank this

TrueCar (TRUE) 9 May 192019 Q1 Earnings call transcript