TRUE - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the TrueCar Fourth Quarter 2021 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Zaineb Bokhari, Vice President, Investor Relations. Please go ahead.

Zaineb Bokhari

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

now, our today on our Web Chief By quarter all stockholder are on our me available was February to President the Chief hope at opportunity had site Mike Officer. letter, Reigersman, Joining is fourth Jantoon 'XX, Relations Darrow, and after our read close, you've Investor and Executive Financial ir.truecar.com. released which I Tuesday, Officer; market

we want can future become, I Factors materially we make filings except as We the on as of cause and caution required intend, our to XX-Question, making by to the reports other and section materially. forward-looking of update not forward-looking not Form confident, statements, factors this started, will statements. get we relied to any and should from discussion The results available disclaim Commission call could by our that similar call. are statements and be differ and the our Actual plan, for on based XX-K, that report quarterly seek, to forward-looking review date, statements to and Exchange are you forward-looking a use reports on the our Form on we be Risk this expressions, Securities on anticipate, Before statements information with today's our as results could us or any obligation annual of those performance believe, expect, results. guarantee such forward-looking contemplated differ on and remind by of will, of These words you be as a identified law.

with in in for GAAP. non-GAAP turn the a most GAAP will of Mike the also at for Investor financial of be President comments. to Web are non-GAAP section call in forth measures site, measures Darrow, With as discuss TrueCar's prepared ir.truecar.com. Officer; directly the In over not measures non-GAAP our isolation I'll financial considered results are opening Executive Reconciliation and or set The GAAP addition, to Relations accordance we some substitute certain measures. intended comparable to Chief that, and Mike? all

Mike Darrow

thanks Thanks, remains letter stockholder for great company and very has progress QX us. everyone, issued our and of We highlighted morning, Zaineb. joining challenging. yesterday, the made as quarter the the environment macro Good some our even during

can of the and I TrueCar consumer in the members their efforts offerings macro dealer thank for tireless these First, face team to strengthen product unprecedented enough challenges. our

slight both managed and only in business, elevated core our continue used During pressure the reported pricing on key our through side. other rates, our headwinds, inventories, combination prudently business metrics. vehicles, while that We see the strengthening saw these quarter, new vehicle on used put fourth close to and improvements car for we particularly new units, and a

has appointed also and We for and on market us by believe strong benefit online. initiative will effective from full We're moves a new to our to rollout subsequent us TrueCar+ launch well quarter. made process company, Reigersman, in to pilot, serve This buying as onboard Financial ensure and second of used for cars end brand talks TrueCar+ This robust for and Florida, March car selling we're investing interest in role. addition as with the Chief as also in we additional cars Officer, in that for and to statewide brands the extend his the also new coverage Jantoon will groups. morning, QX. targeting of Jantoon announced the X. progress CFO the as TrueCar+ been quarters. by more we and TrueCar+ garnered Officer, leading important dealers, to TrueCar's pilot, Chief strong We're continue we track successful of is our time exciting end the dealers across continue to for plan the of that commercial our rollout has help Operating a

played plan role strategic for in Jantoon the important an CFO, TrueCar+. developing As

As on us. an making This happen of will to that commitment focus underscores in he the also rollout COO, TrueCar+ in tremendous the now strong our appointment way. opportunity of success and TrueCar+ our optimal before belief

live Before Zaineb, we various open what's the some questions the we're address around first going topics. call questions, up for question? to

Zaineb Bokhari

for tell question rollout you us Thanks, the start you. What about with Mike. I'll the for first TrueCar+? can

Mike Darrow

commercial Florida and pilot, the cars market plan we TrueCar+ new, of to and used to a take coverage build the near of end volumes, expect medium-term, a After scale time material end statewide on we there certified be TrueCar+ QX. we the rollout have in the and It'll do launch for across for to brand the full pre-owned QX, which expect robust revenue. by to so not by to of impact

certified and across including sooner will units, states for inventory go a pre-owned nationwide We and that rapid with expect planned. we multiple used side, rollout the

at XX On go cover side, yet to plan new all to the measured opportunistic with states a rollout our pace. we state-by-state

large-scale laid that TrueCar X,XXX deal-building have in dealers already leveraging We already have core the groundwork rollout for and payment experience. the a the configurations

insights information on and used plan across volume During growth to as second-half of we based vehicles. drive to the articulate XXXX, build expect gained we and enough new have a

marketplace believe the advantage. new largest only seek and be for unmatched inventory will the used this present competitive will online. We purchases an vehicle the We

it's exciting. tuned, stay to going get So,

Zaineb Bokhari

also mainly next question What the known TrueCar car new is you. Thanks, business. are Mike. The car on is its you doing for for used side?

Mike Darrow

Zaineb. Thanks,

consumers and consumers that didn't QX, inventory car constraints units XX% light used new partners is total approximately accounted TrueCar. exist a take headwinds fresh car business of before to our resource cars. at become This to used to helped in us seen for us retail look used linings and a ways and silver identify new create and value that at for macro clear the during fourth for XXXX TrueCar. We XX% units made quarter of units, One forced used it approximately dealers of a XX% consumers for as in strong the the compared In ago, on vehicle who and for our of searched from year solid the a progress also new came to sales dealer to in strengthening our us upcoming and to give during car quarters offerings comprehensive to planned to dealers. have both used used that several in car our set product new market offering we a of launches expect QX,

Zaineb Bokhari

is Thanks, Mike. for question next Jantoon, the you.

more please indicating You're Can in adjusted provide EBITDA a negative XXXX. expected you color?

Jantoon Reigersman

Absolutely.

flexibility of the tech areas. so we support; As in investing investments already rollout significant Head we and and is for and of product a product opportunity began our states. in in then be initially, marketing and well think as with its QX, side. sales We've And as in example leaning Rich well, Florida, similar support broader brand into great its investments I calls and efforts tech TrueCar+, this. see other mentioned various recent DiStefano to as hire broader We'll on of various maintain as the start marketing, building we plan to and and other to sales our been a Product ahead our expand as before, on scaling afterwards

our to of support. of to the these market, gives to opportunity and important absolutely us We've business the strong I managed there that that make will prudently planning is and proven we're that feel Our investments, sheet ahead we quarters, any all over do the past to we've support also these flexibility the despite and us initiatives. a so want continue headwinds. huge we to and think But balance

Zaineb Bokhari

about recent more Jantoon, question announcement tell Can audience. before one how here the up is for us open line the TrueCar? we Accu-Trade you you the to affects

Jantoon Reigersman

But Yes, story there in received long obviously, releasing. the an short details be interest is TrueCar absolutely. attractive for And minority offer in that Accu-Trade. are, we'll its more XX-K

lot, investment initial to that for minority not provide TrueCar to our best-in-class experience trade-in to we this offers. was required learn interest While allowed its consumer determined us with a continue

So, model. we're transaction-focused marketplace building a

on each rather So, adding focus than for driving focus result, value as our dealers our a sales. in transaction, be software on will

us, this this at made for sense to place. So, exit investment strategic most

Zaineb Bokhari

Thanks, Jantoon. Mike and

the call open let's Operator, for up questions from audience. Now, the

Operator

go Rajat session. JP will question The ahead. begin question-and-answer from now Instructions] We comes from the Morgan. Gupta [Operator Please first

Rajat Gupta

questions. taking for Thanks the Great.

mentioned mean Thanks. TrueCar+. direct what are help I then have the And those up quantify of TrueCar+ the to to know, try investments, investments investments us you Could for to a follow-up. You magnitude of specifically? degree marketing, I product, ramped the you some technology,

Jantoon Reigersman

Sure.

But So, dialing thinking a thinking also the more obviously teams field mostly as business marketing get start the and focused our of be core engaged we'll obviously disclosed examples. the and that of And lot side, over a any the know side that on on engineering haven't if you side. magnitudes, TC+ time will we investments about the you about our start we we and scale. are gradually significant more currently. product of TC+ as company's especially can if the you imagine focus on portion you But

just will gravitas organization. the in move it So, for

Rajat Gupta

Understood.

Mike Darrow

Hey, Mike. add [Multiple Jantoon's answer. Rajat. This is to to I want Speakers] just

One we experience be of role and QX pilot we us of product to of bring the of industry. and answer this light with us in a transition auto QX. in his Rich was our -- the of help hiring to DiStefano out Rich as helping a And will phase he of outside the earlier lot investments sided he as product. mentioned key comes it TrueCar+ made head two market in product a the commercial key into will in and really up hear

Rajat Gupta

see XXXX, particularly year. starts as then And how question of TrueCar immaterial be from into increasing, the just a we it. Thanks. is do expect progress picture? you come Got through going to change monetization going structural TrueCar+ monetization, Great. contribution monetization perspective it. given mix maybe obviously sequentially that independent in the also should forward You Got But, to the on in this dealers any helpful. to a mentioned that year? That's

Mike Darrow

Yes.

side high monetize not adopt anything the have on In this near-term, term. obviously do marketplace. expect longer significantly we we TrueCar+ the So, to as we higher revenue the to the hopes in add

imagine And monetization as hopefully point obviously the sensitive which which down close then pay-per-sale we our driven rate our that inventory this If replenishing. rates will obviously of will more there then Then, of mostly core, somewhat And some have improve monetization improve, close also revenue, at obviously by obviously inventory lower coming in things. first of currently resets, as our lag is then side the rates. the to you market subscription mostly obviously some resetting. is the be improves close you at and can pricing dealers which the that think obviously

levels monetization. And will to reset basically somewhat it of so, itself historical

Rajat Gupta

Speakers]… [Multiple Understood.

Jantoon Reigersman

term I for that in TC+ just has opportunity underscore long monetization opportunities the greater significant want the to us.

Rajat Gupta

Understood. really back I'll queue. luck. a Thanks helpful. get Great. in And lot. That's Good

Operator

The from question Please go ahead. comes BTIG. Fong Marvin with

Marvin Fong

on start with just maybe could on taking Couple questions of questions. units. we Thanks morning. me, new the the role. Jantoon Good for Congratulations discussion my from the

lot much right like a picture? much. know kind the had second was on Just total you my units And mentioned affinity. compared are is conversion then looked with SAAR rate? and can more How does -- a a as onboard what And could like a of you used, guys that. could signed maybe working to I exactly like with the happening maybe of now just drill you in working both kind nameplates. that alluded you would services that question And are of not on it guys into us fit as pressure, how But industry-wide you and then, just unit. many the particularly on OEMs OEMs and percentage just TrueCar+, that Thanks understand Your as more have think how I the to CarBravo you deeper Maybe coexist? so comment of GM's help market? traffic new you variety down you down on little TCDC were there than you down

Jantoon Reigersman

Okay, So, questions one. of there a lot in different

the So, units. let's start with

So, pretty obviously, side. still yes, actually on our despite very the healthy traffic dramatic pullback is marketing a

But, you So, this of for of obviously don't do to that time. shows you the want this platform. our extended something periods robustness is

side pretty down, So, [indiscernible] is much close The come the by more the but start have over so rates. driven investing interest course on units indeed to your that XXXX. marketing of

on units franchise we also used, the are our lot lack dealers our of new. So, like the of it's has inventory, And with many the dealers are focused drive very on mix remember, of inventory. little still new. shift more And A through. although focused have hard obviously become to

of and will between different lagging pricing mentioned our resetting. we local there stabilization, some And as impression some obviously so, level, more replenishment the it's that be are based. the And effect much at then obviously very competitors to before,

focused But, if on to base, can't attribution much us. So, were And your differently be on we remember we question would to favorable more second look paid metrics then what ourselves and was. that much impression are measuring -- and obviously more way. very those I the get

Marvin Fong

in with any to It many TrueCar+ get OEMs the color was about activated with, How are there? working working additional you Florida.

Mike Darrow

a that's great Marvin, question. Yes.

partners space. Nissan program. all been with number is have talking plans of out have entered We a There who of the digital OEMs TrueCar+. the about our launched OEM their Nissan@Home into our

a CarBravo from transaction And we is We taking real but movement on play of a purchase vehicles is moving in the mentioned Doesn't way continued these where across be for and vehicles exist You multi-brand provide way certified is consumer shop first things as role services CarBravo. we're things The there it about all of in about are and that, What to where used, online. a more can industry pre-owned our business. think to GM. go we things Nissan@Home, way. industry's feel new, these won't to validation and view on marketplace online will in good a exist. happen we the that we excited want these to

Marvin Fong

Perfect. Mike Jantoon. Thanks, and

Operator

The question ahead. go with Chris comes next from Needham. Please Pierce

Chris Pierce

Hey, good morning.

guys ask [Ph] get months year. I dealer how was refunds six yourself is about thoughts can partners your ago? you I tax three of how data of into versus or and your thinking reason kind third [needs] get you the your The and closer the party are As now used weak that business, to side on

to holding it? high You back, there out Do is soft more there. the price started kind something of is think you it's or year just consumers

Jantoon Reigersman

on basis believe The in who are the part are but been second strong a out. I the come buying the question, that's to discretionary the to. driven are absolutely used pricing and have of need the marketplace kind now for market buyers think, to consumers your car of demand folks who pricing have pausing. out that selection that on sidelines Folks a definitely it's not lot also We of there of out been who new the that has due the squeezed regular ones due Chris, or vehicle. to discretionary a the in only

up in there that And and early XXXX the And in numbers saw then inventory think we that was in the COVID showed March, coming the of demand XXXX. May. we So, pent with April, itself out sales chip -- which think new on then car that's car availability, the to used impact then pricing move out pricing discretionary an starting such second-half. driving up And the the demand marketplace drives had of saw shortage I you up. in when

Chris Pierce

record as If go all waiting about to high, for of do the or you what that's of you prices cars keeping a I can, follow-up, kind these just are think that dealers] line profits hold [at pricing new is kind together? dealership high or some it trying [Ph], XXXX, hear does just they over

Jantoon Reigersman

I coming all think it's right. together,

when obviously, as who car. pricing will supply-demand inventory And the inventory So, automatically is thereafter as a long there is, there well. can reset charge, because shortly local somebody reset the very as then where is needs low very, they will

consumer that note great just is, not obviously, experience. this Now, a

And over probably resetting will be than this later. so, rather time, sooner

Chris Pierce

Perfect, thank you.

Operator

Please ahead. The Khan from comes next with question Securities. Naved go Truist

Naved Khan

plan they a into were Yes, your Thank how in you in of to so, maybe sense thanks. TrueCar+ And give the February like any on the on that you. back-half have where might [cropping] TrueCar+, a amount of go last even of testing lot. A you those [Ph]. the us normal year? can sounds be versus of the Can where And channel? churn would markets then it versus traffic couple you thanks like live, January, looked on be you dealer color provide and trends questions,

Jantoon Reigersman

Yes, absolutely.

this QX we feel also in about it's -- that spoke seen we perspective has we a stabilized So, so trend effectively letter, the January. from and I continue have so rooftop think and a in

there. confident we're think I So,

is Over remember, to do that cars who can are we inside bottomed then Now, Florida that we at Florida specifically play, used this be that state state. we that and rollout and used, the for effectively, on full TC+ storefront, we question and the so, so the there's it'll new. people now, time, continue give rollout, side; To new audience as side there so has it so feel that initial see. on new that the in of states right obviously specific open is lot to probably there's inventory overall, will a there's remember that nationwide. a obviously, stands will to as best the one answer some take, go but so your we'll within order TC+ so, two available within go can we'll state-by-state out see But the macro ability on much is the things, side, of

actually and you'll at soon, able the of all you're through transact even so, online be And Florida, the inventory, outside able to if be look to used marketplace.

obviously, would be effectively. And so, that, our audience, full

Mike Darrow

it's Mike. Naved, Hey,

in churn what dealer mentioned to as the low On we we've pre-COVID. thing QX, well, saw churn at compared was levels actually dealer before,

dealers, the happening dealers rate, even new there. program what's site, franchise challenge no is the out car at a to off with adding inventory reduced as the So, churn is difficult

traffic. new approach of did the up So, new Q. car to drum dealers We're actually wasn't It's to answering decline decline. business. low at in business. business you're small single-storefront our looking the rate churn net new on that the just a of that's don't new saw lot to at why net a job great really The of was the tough Jantoon have due fairly churn; it's seeing And cars so a a there, -- dealers side you on out

as more choose brands available offering car car we TrueCar+ forward, vehicles used As consumers more to rollout to from. have to represented and expose and go we'll new more for we begin the traffic we more and

inventory build the regulate as that the we'll and market we the coverage. of exposure out So,

Naved Khan

you, That's Jantoon. great. congrats role, the Thank and expanded on

Jantoon Reigersman

Thank you.

Operator

Instructions] comes [Operator from next go D.A. ahead. Please Davidson. The question White Tom from

Unidentified Analyst

[Travis] for our Hi, Tom. thanks for is taking This on so [Ph] much questions.

I Uber I this on then about on relative this. a to with Uber cars? newer have maybe question of helping in partnership big the the And is And follow-up used that? maybe the how First is us status opportunity a of there, and question into wondering bit this have know another -- how the also, then [HyreCar] this primarily partnership, update deal is I rest fits [Ph], your after And get drivers I'm into of business? an this

Mike Darrow

some partnership. out early partnership, of not and on revenue. about be grow could in the and they're on sure credit replacing we're want of number steadily that and we of early It's which them is we main And on new there, a as way drivers partner with to vehicles, their in Uber have pressure -- become growing to added partnership we We ago think to put try it but want Credit of opportunity us. that looking and these to for to pieces to fit think And be we you Navy be service us, growing union too the used as big much there, a be a Along business. And we that of part business. we that Union, we all grow other the think together. we're cars go they're grow Yes, to opportunity offering, added a an a based generate we excited folks. nailed to search And it'll This adds forward. Federal an opportunity it drivers for the certainly -- world. of HyreCar as make to new grow large wasn't able provide these that inventory to we've with purpose a the the partnerships for And largest long with that. Uber the developing, be to it, a it conjunction want the continue the in kind the look community, to we our

new So, the we're the to able we've is, where and business excited about add. partner partners been

grow the Our business, role one so we're we about our in we excited can that. where is think driver community

Unidentified Analyst

And my much. then is on dealer count. question Great, second thanks so

You shareholder it to a reference made the in uncertainty about letter.

curious and was type start car thus color you -- pricing first any provide of I quarter, create as far So, it you the to anything if could when envision what new inventories into you've or would rebuild? seen specific lag

Jantoon Reigersman

so bottom end has even have the it we've to and QX, of year, that seen happens to seems and when Yes, exactly Year stabilized, inventory in you maybe effect the so -- what hard the down. we into -- have seem have that the for pricing inventories. the only balance the industry replenishment And seen we resets. a slightly mentioned go of so New lagging inventory It's say It earlier, when do this but in last of obviously has grown local stabilized.

those the in and their when focusing start reach, that's actually then so, on expanding obviously will moments, et dealers And cetera.

some of it's is in effect be. but lag, timing just each and And a so, The when what of that there is will. confident question exact element hard will into go exactly it will the we're exactly predict the to stages,

Mike Darrow

And in to working a sequencing they're our our as plans with up the partners, build ramp become there available. production just to is timing to there. It's OEM chips aggressively conversations

orders to there, come are built in. sitting and on out inventory who As are right now pre-sold more for vehicles there's waiting retailers dealers

coming a inventory even spring selling don't as an season. immediate see So, production build you'll particularly increases, think we to into

seen in see to first-half. type probably that, able inventory to a change in this it'll So, Then Then of think in there see we've the we down, But we'll second-half that's we be will inventories capture of out begin some year before and demand of past. as build. the pricing you'll we a be significantly see begin noticeable levels to that lag hope, there. been return to be sitting the you'll coming

Unidentified Analyst

taking much for so question. Thanks Great. my

Operator

the would Darrow, session. question-and-answer and Mike over CEO, I our TrueCar's back to President like concludes call turn to for any This remarks. closing

Mike Darrow

product who to TrueCar this the amazing of focused team job taking us but also take our done macro difficult staying where time improve, morning. And and has core only not thank future. to us really on everyone. a during hard has good I the pilot worked appreciate Thanks, time, and in want get you our to TrueCar+ join us an I start to offering, that the can this

what's us, for thanks time So, we're of the about ahead and very morning this excited together. spending

Operator

The conference presentation. today's attending is now for you Thank concluded.

disconnect. now may You

TrueCar (TRUE) 23 Feb 222021 Q4 Earnings call transcript