TRUE - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the TrueCar Second Quarter 2022 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Ms. Zaineb Bokhari, Vice President and Investor Relations. Please go ahead.

Zaineb Bokhari

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

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

we of want statements expressions we differ could this should on and can Before on statements. the and guarantee the other I believe, annual of will target, become, Actual a our materially our be Form use relied call. be caution our from statements future Securities expect, Risk you with not that performance and results. started, remind you as anticipate, the forward-looking quarterly contemplated seek, reports get Commission. to reports to forward-looking XX-K, words are by review our Exchange by making on be upon similar section We will, and or not such results and plan, and filings of intend, XX-Q as Factors forward-looking defined Form These confident those report

us make forward-looking a of law. this statements, to are today's on of required we materially. call by that any available the forward-looking could factors The cause on date, For obligation except statements discussion disclaim to as any differ our results and to based update we as information

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

Mike Darrow

thanks of issued letter Thanks, And rollout progress of with our offering. everyone. on both made the core in the some and vehicle front, and yesterday Zaineb. we've Florida, the for Good joining QX morning, TrueCar+ our strong us. and stockholder product for highlighted TrueCar+ used We

TrueCar+, During continue the available for in QX in and of to pre-owned momentum weeks. positive dealers inventory continued new and we curate available vehicles subsequent sign to certified and used see grow

portion to from consumers. the plan a the Florida are of increase other only We'll TrueCar+ consumers had dealers the insight next documents While small for enable to buildup TrueCar+ and complete shows The across more and that capabilities term our trends for promising required of exposure exposed of transactional as mid-funnel to steps vehicle our Florida more our near our marketplace. roadmap engagement continue and we transaction to-date early necessary metric through clear in are TrueCar+ June. been delivery visitors enable a product to the and in

commerce we the automotive Florida of completion Acceleration beyond believe motors, deep product capabilities digital expansion gain and With which expertise will key of recently the new track. be features in TrueCar+. TrueCar+ for and remains that accelerate acquisition help FinTech e for roadmap completed laying of the and our will we foundation on

home reliable convenience the to consumers. used of with offer of across States. expansion delivery their inventory the these enhance professional and our core the distance to developments, certified expand for offering dealers continue to to enroll vehicle retailing Giving market and continental used dealers to TrueCar addition reach ability we United In to the a their

trade our legacy elevated. QX experience. experience while funnel Dealer remain and our We particularly legacy remained new during intent inventories car strong with better partners your launched as from pricing for lows also the metrics near upper than cars sell historic --

likely away global quarters headwinds chain interest U.S. to economy Our the like supply in due is events in a still and uncertainty our recovery slowing geopolitical rising and multiple remains rates. view, high and

to by continue analysis the encouraged QX, industry trends environment, us continuing of put earnings the in close entire continue metrics approximately was key basis. we rates, XXXX. crew. and with July and I and both during June seen work our key Near QX, estimate of levels wide TrueCar units which million. hard am recent resources to year-over-year in industry and Our to made led efficiently. reported our sequential on throughout we're In pressure to volatility Industry sales and our estimated other decline units metrics our in headwinds our a XX expect progress this through dedication in manage very some business possible of on

vision. want our to them So I to their thank commitment for

We rapid change bring at the macro to are striving time doing a of something enormous and unique and market it new headwinds. to and

focused term. we positioning company ourselves And on a for digital the what an remain automotive for be will expect retail. we long future As increasingly

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

Zaineb Bokhari

deliver online are I'll can with already of TrueCar+ beyond market? TrueCar+ from provide our peers Florida their And plans is what on who an start say a that how update Mike. through Can to car marketplaces? TrueCar+? planning a different that Thanks, couple with question the to we're buy a parts. has you finally, What expand consumers

Mike Darrow

add update TrueCar+, plans. an on provide some I'll around Zaineb. can and context expansion our Jantoon then Thanks,

and TrueCar+. We more and new the through During quarter, Florida across on the used XX had flow in add to the certified we growing and less inventory pre-owned new drive TrueCar+ in Florida pre-owned second at shoppers focused for traffic vehicles account we XX% TrueCar+ and to the and exposed continue inventory dealers units of certified total for of used than and and X,XXX still started to QX, end of traffic. Consumers our than this. state to

in we to So continue that increase exposure will Florida.

journey mid-funnel consumer indication the the insights While and of an of still dealers TrueCar+ marketplace. into to of our from part shared participation in level give consumers the early, we some

to orders that per through process. Each a XXX the deal The This TrueCar+ using these and completed process has the they consumers consumer lease. selected vehicle valuation on the orders placed building experience payment of one, June. XXXX basis considering when a includes nearly During an a week, monthly calculation if trade loan and orders of end a credit represents either or cumulative have consumer done then of in in average and a the a of June, purchase. credit to conjunction purchase, a credit connection In participating product orders functional, better a into are fully that placed we defining remains still enters users appropriate completing that are be with methodology light their TrueCar+ become TrueCar+ with cash roadmap to starts sales or in dealers. card converted information the by have a the understand application work which

and mid-funnel find trends consumers. very encouraging believe be to that we resonating these is However, early with TrueCar+

we letter truly to on As during key start paperwork focus delivering be step we prior TrueCar+. transactional in highlighted expand Florida. will make as our This a half, marketplace we with the through TrueCar+ a second and beyond to will prepare

continue expect Jantoon, you transactional As elaborate we our to complete future. for the funnel on plans the don't insights to aspects those work and performance TrueCar+, major the will why we of expansion. down in to share

Jantoon Reigersman

out a used before. enable Thanks, Mike or Florida for one one key Mike. two paperwork and I'll seeking is expansion really we're build TrueCar+ new different After for which tracks, said step, of we on on has what paths across cars.

you lines. state can imagine new to are harder As cars transact across

address eventual much focus new geotagging very so state delivery the within are through new through And vehicles. to acquire and that people we ensure to

expansion our in the vehicles, plan by be additional to new roll to will the end we And five for So year. state-by-state. this three states of out

nationwide. U.S. new make will available the On we the side, inventory

to rollout end that TrueCar+ by for So push continue nationwide we'll with of XXXX. used the

at retailing the recently that's also TrueCar+ for across began really forefront dealers happen the and We start enabling certified afterwards. making a or to distance or TrueCar of available least TrueCar+ U.S.

scarcity certain curate is marketplace experience we class dealers of a the end just of back vetting we in dealerships. that a the depth much rooftop add most of dealers. enrolling and I a as So have, dealers a retailing to to instead, enroll the important, be network in important. inventories be expansion, consumers And as sure flow laying to they're that program, certain delivering metric grow or inventory, a TrueCar+, and and that also broader distance do the know not are obviously, will their level a is primary world more that we least for we and see to to groundwork for really the to balance prioritized of level and will able rooftops want will make who at importantly, and dealers are the we're to for important committed

something back curation you. the focused to So on. very will be be Mike, we'll

Mike Darrow

what address I'll Thanks, peers are Jantoon. to compares doing. our how TrueCar+

consumer accurate which sign which TrueCar+, with product to to dealer get their the price, with TrueCar+ we products, deliver roadmap their will focus Our protection a the vehicle we required for trade Through a in shared to certified inventory an sell new delivery for will through purchase deliver be arrange vehicle, be the transactional is partners. of plan and for able to suits existing of consumers arrange documents through marketplace able financing, find our or a that used pre-owned needs a one marketplace dealer. or

that often peers these to compared not marketplace possible. makes a most The marketplace steps third party do that transactional were offer

that their have and Vertically limited the we offer to used pre-owned and what paperwork new and add multiple are across Given cars opportunity we have and a TrueCar+ marketplace for scale, same we're these to participants true unique enable don't -- light added focused peers to asset given brands. transactional to to TrueCar+, a brands. just will see used we're planning certified that integrated inventory we brick-and-mortar their Once players digital vehicles on presence a within with continue channel deliver are deliver own planning market to other on journey.

Let's question, next the have Zaineb.

Zaineb Bokhari

one's provide for next you, an update framework to Jantoon, for you. the provided XXXX. framework? expenses you and Can Thank revenue a about Last quarter, for thinking that Mike. you

Jantoon Reigersman

Most definitely. Thanks.

remained call main hold dealer low and over some or improve we and did maybe supply I inventories QX. our to caveats macro rates became close industry prices not framework on last above Across or remain even in That The think the side remained normal. constrained. cases, the really have didn't throughout that environment more the QX was the stable. provided in

Beyond this, the also brands. different there's variation across

constraints brands at XX Asian the for still experiencing inventory our the that overall. available XX industry versus prefer above consumers With average days and

us, remained For means this significant a vehicle QX. that scarcity issue during

and addition been government CPI the by and be both prices vehicles interest this, a concern economy to slow rising high as hit the has factors and the a consumers used continues to a as June. pricing on raising these quarter new combination new to result. aggressively started measured remains rapidly Affordability pressure due rates to continue Vehicle rates. in put our peaks to rates. Fed The second and In for close has factor both of

saw vehicle to quarter, July. in second remains in a peak by the about it and in June analysis During where XX million, and then April our still May dipped

sales we muted. estimate sales XX% July, continue fixed during Additionally, to which sequentially to industry the unit X% we manage expenses to and will remain year-over-year environment, industry tightly. that the in our the will across In the this us plan decline signals half second

or be plan lay Due adjusted negative investments. run to carefully. to And in and on new to cash these as to We're as managing we've awareness and XXXX both year million TrueCar+ for our we we the from invest second Florida. still will of a deploying so However to these we expand beyond but the our We very, proven do therefore the TrueCar+ second capabilities to factors, quarter rates. EBITDA support brand business half non-GAAP impact base greater per very in be marketing planned well. quarter to groundwork expect expenses expect show XX the the adding and

question, support was that Our zero balance nearly this well. XXX Further up debts in sheet in Zaineb. very next step cash and million can investment

Zaineb Bokhari

terms and motors the Jantoon. question. the next for speak share Mike, to you, the the you the to purchase? of acquisition for of back rationale maybe Can digital you Thank

Mike Darrow

ecommerce of about motors Thanks, with the digital the focused technology TrueCar. of expertise space. Absolutely. an focus talent to team excited This critical and leads experience welcome to shift automotive who Through acquisition on an motors this FinTech includes continue team on expert Andy DM team solutions. we've digital as transactional the really the acquisition, gained Hinrichs, the deep great We're automotive be we TrueCar+. is will Zaineb. and This with a to

including Our delivered earnouts combined the $X teams back acquisition payoff protection product outlay are be we certain The the technology million have TrueCar+ the working accelerate as initial about loan over integration million. together already paid hit. in three and our products And product the mentioned and are that the flow, roadmap, there's to milestones will and cash products you. our letter. out years, of closely was $XX next to QX for Zaineb, to that capabilities,

Zaineb Bokhari

Mike. when before want from we an Thanks, hit? Mike, the Q&A, have that it taking And sales for to take a we overall your investors. do our What up open increase retail plans is you to are economy one? question

Mike Darrow

like used retail We've become create resource a to future Sure, car Zaineb. the our an your ways our investing to digital for for close question. value distance and continue capabilities allowed is production inventory. auto retailing continue that low an dealers introduced also we to sell our offerings us digital that for to channel. increase to new for We to macro side will This vehicles marketplace strong few trends the to have given a impact presence the car now, and since used think cars. through shift new identify for levels interesting with market rates shared the We're retailing dealer have and on quarters consumers and and on our partners TrueCar+ particularly

dealers for fully economy monetization once to TrueCar+ growth its for looking -- it's dealers our be for Zaineb? we since expect to over to and up weakens opportunity us think for represents transactional, an if the value time. demand ways their for will and TrueCar+ us We We value also increase increasing solutions open add and expand vehicle inventories. footprint opportunities

Zaineb Bokhari

Mike and Thank you, Jantoon.

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

Operator

Thank you.

JPMorgan. Our Please first with question ahead. go will come Gupta from Rajat

Rajat Gupta

questions. second it up expenses just of taking loss that And in Is that? I half the ones rate had higher rest the follow-ups. assume given run EBITDA a path and to safe what the going Great. year. the in inventory be you just the if that quick the EBITDA you have clarify clarify quarter, Thanks second still just a remains here. than tight Thanks. for on I have should the few of couple could for the are to Jantoon,

Jantoon Reigersman

Yes.

we're answer planning Yes. short given the So is going yes, for make investment forward. the to TC+ additional

So that's in mentioned Q&A absolutely. also the I Yes, what earlier

Rajat Gupta

Great. Thanks. And maybe vehicle new just on side. the

who kind I'm are There newer a electric online lot I them to there. are that bookings on how domestic you're integrate differentiation solution purchases? with your mean of Thanks. brands the conversations are having perceiving moving highlighted they you what You with models. curious of for those TrueCar+? vehicle how do

Michael Darrow

steady of of I'll Thanks, to to like Rajat. X around they We're market like in X from open TrueCar+. ours. is platforms, portion a conversations partners our have million regardless an in that our with OEM to we're take who explain their What one. consumers how we of them marketplace their go trying a shopping flow initial million do to very to

to with is going vehicles. do they're going to their what to market around how encourage go to development continue we'll them to what do they're So work

bring looking for us Some we're try support if well role take we ones understand message resonating of ways their on of them. our in exploring fully continue as tell and and They're a our to that to to dealers' inventory, is can what with are transactional asked them play conversations. to that and want want dealers' inventory how we marketplace. is those make various we to them have market. we it beginning And some to to But that,

Rajat Gupta

to delivered that offering, Carvana, your as of from has the What the of sure be via to some to incentives give competitive make distance or one, rates? to in those incremental TrueCar+ you following a like having conversion Thanks. on insights Florida comments How Then seeing? the region curious another of rate the any be And are you is or just if us offering discounts initial do on rates example, in to up expanded in well? it. enough a last Can ramp terms model kind like traffic comparison would retailing similar competitive country? make for some progress. investments your up Got how features you that on to one you're

Jantoon Reigersman

great question. a it's Yes,

think this would think two I actually ways. I in about

So very expand dealers opportunities home interesting very one this is, of we efficiently for together markets, to actually Acertus. their our we're providing do partner, outside and with

So this they're is for a go that actually more out many of them geographical the first area. able time expanded to in much

doing nationwide. around we information beneficial to specific rolling any disclosed that and not out were it pilots very the such we're extent have We but an that were now this,

is a really is this, there so real working appetite for it and well. And

this that, TrueCar+ long the is term. obviously, to of a having the said really in However, prelude adoption

a the with model. have a conduct This this on sales CRM necessarily is conversations sales idea other is a interesting really usual were at that very to in and words, opportunity to door. flow here working flow dealership people flow do So good it remote used not really more that environment. them as a is happen unusual dealers the to our our in start not to of stand-alone walk-in an remote us In for business are with how have

opportunity a it's remote so us opportunity flows, also how them a through them. cetera, and to to et with for It's work to And work for great train and us engage et great cetera.

then remote fact adopting to really is a the is effectively. and works. besides also rolling how prelude train TC+ that prior out already interesting program and that element like retail, TC+ in we retailing actually flows who distance to these to retail the interested them So stand-alone an It's can are

in experience the that's on This overarching future. to is. is where crux the really further TrueCar+ really the So build

Operator

Khan ahead. next with Please from go The Naved question SunTrust. come will

Robert Zeller

continue have OpEx the still guys see Truist and good on then Robert is which you in brand, model? on given do the business. from model to But your curious company planning taking we comment Naved a now. most items It's peers. you And the fixed why? This Thanks. good line would on where on to Zeller achieve the versus just I'm you think can relatively cash out I'm position out in of investing of Thanks. that curious just leveraging see cost the for

Jantoon Reigersman

out taking So on have been we that. doing the cost

a couple So I last think to the statement of it's quarters.

into investments think we've at on for obviously, pulling is of of a for call marketing additional a, side we look our the seen things, things rate I push because been it, the looking on pretty is That's effectively One right? except marketing you're you've we efficiency back So of run as cost one spend. side. the TrueCar+, two the reasons. at aggressively

around But we're we much off the we And we've branding do wise TrueCar+ want been start also side holding so because we also deploying that, that. educating around broader market make marketing too the on to the offering. sure of as

of outside And effectively you marketplace a as we're anymore, is start a push but now expanding transacted used actually full not aware by so people Florida, lead on made where is having expect new a stand-alone harder generator can also we digital can going people that certain TrueCar car. to that or

so finalizing we've those with elements And the articulated. paperwork that we're

But very our not have on Also, testament margin some down, the to do, to the that that have marketing branding on we and as as we be actually we still of outside back it's Florida. stable. that deploy great done before there's will monthly side. side, development company as come further remember the units a we work scale been branding So pulled on side soon that product

need something over has and unaided awareness, of. be obviously, come obviously brand it's down to However, we mindful time,

the find pretty be, at hard in. to I on we model, lean And cost some much want at we'll and for think overarching point, to further where really us savings. we're question further it's first operating But business so your

Operator

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

ChrisPierce

basis? did, TrueCar+ methodology, Good $XXX methodology the base, some think units, morning. sale lean car thinking should but talked about complex you of on conversion I'm in investors guys forward TrueCar+ move premium a I think, you as should about kind current I still know method per about on the and how working monetization of of we about through paper monetization so think these how kind

Jantoon Reigersman

detail And Yes, time. asking for of that Chris, question. you I very into At obviously for been good some it's for, have many more go opportunities some on future we'll know point, quite TrueCar+. monetization a question

we've We market around have and a around of lot tests been lot and already a doing that. of thoughts tests that,

For $XXX, the it's or lead whether our is of effectively $XXX. purpose or currently, through through platform original at any TrueCar+ charged effectively

So assigned any effectively the anticipating TrueCar+ for calendar XXXX. year, to any so year for of this we're not revenue

we finalizing now, calls. and obviously we will of detail monetizing 'XX to on we it's But in will articulate later product for one in for flow. this more assume you really for However, start our guys the

effectively back currently them are And so are et platform on dealerships, the with working on working the dealers that the our on on end processes we cetera. their

as making lead want need is the or which and we rules about lead we to work? TrueCar+ so concept will, paperwork, consumers a yet. that this to or And It's always done haven't that really on all to avoid of a does sure how we we that finalize core way get it

so whoever $XXX. $XXX, continue we we're bring to And charge dealers, -- the those we to

more elaborate are as for going for detail specific various So additional we to made this future us. monetize is opportunities articulate much there how in we revenues will assumption and no in for the year, which on on we're effectively actually this TrueCar+ there

Mike Darrow

these XXXX, to around I've coming flow we're identified the Chris, to but units our hands just I haven't around we're very and that, in We that we order would these get that that, look just you And enough at more while time I get optimistic want yet through. opportunities additional think units. to add of by still to monetization optimistic seen

monetize taken a XXXX. we'll we consumers, retail for for product very pressure still partners, we're together these we've into how want put really on the get units of XXXX. for get that the product to bullish then and We our we'll off plan the around before So right

Chris Pierce

some orders any you some spoke Is about buy that your as kind we -- how think on letter. Just X,XXX about the to are to I'm kind of versus investor there, that's that of of you of versus if new helping used And out way think new few deal I that's kind there just guys the are other Is think of players just how there breakdown should that be of lease? units? used? curious lease would this something things cars, Okay. then some you're lastly, to gaps digitally in versus with about unique the those

Jantoon Reigersman

any We this Yes. provide Chris. of breakdown call, that in didn't

a As predominantly because we get getting There's we're probably used more and through it's a right of look situation deals say more heavier volume is through there, just now of inventory we'll and start I it some to the off cash. would combination look little going head, new to that a around at cash that. the at. top But but of used, chance my new

cash some going there finance certainly there's lease and are So deals and through well. as

with TrueCar+ apply forward. of the It numbers out if through lease and a encouraged. then get are and on there who like a car, have we engaging work finding a build But additional deal find to and they're all continue we'll process, they person that for more types want, So and begin credit break we're that as there. to finance move the more or buyers appears way are info to

to out were They advance metrics So we we're there. continue from in excited by June. they mid-funnel where put these

chance come to full deal. whole the through. right now, what type it. your to excited to the specific more used, see to add getting lease, a buyers as as get we'll we question able We'll So part. data that of are to consumers more And more getting think specific as seeing spectrum. about I the more We're loan, we're expose be inventory, grows, But we're dealers, new, we'll

Operator

from with BTIG. Schechtman [Operator go come ahead. Please Instructions] Our next question Zachary will

Zachary Schechtman

Good Zack morning, BTIG is on Fong. question. for my This taking Thanks guys. Marvin for Schechtman from

into question any within throughout provide to really that on dealer Was could it you If behaved it the how Was quarter? just be more in end? weighted Our franchise the quarter. how churn pretty July, either behaves first dealer or the would the the insight beginning it also count, great? term is linear

Jantoon Reigersman

any Zack. usually. Thanks, don't provide color Yes. We this of

what in strange to think I still just remember is world. important we're constrained a is

these we and a including so And off. of dealers that churn some -- lot have relationships dealers, with of good the very

we And tied colors back. to the on We the relationship a it so over the to their you But don't how necessarily around actually exactly swings very how the vis-à-vis story to very, possibilities base the you we rooftop the short in roll opportunity have. form confident want evolves is about adoption TrueCar+ roll cars we dealer the out balance do the much overall curated that we delicate of do very amongst as holding for as feel also you when hard how it's the are give and always pendulum And about quarter. confident out a want obligations base. keep our long more

Zachary Schechtman

the on that acquisitions? you what consider on And little Digital accelerating only are question be Could elaborate there acquisition bit elements TrueCar+ you? And of of might you technology any the other in you. my other part to Motors. would Thank appeal it. through guess if then additionally, Got I particular a of

Mike Darrow

Yes.

Motors built platform thanks a for with working out e-commerce had dealers I question. acquisition of to previous Digital the our number functioning a of them. they fully think, and been Zack, for had

API expertise So VIN-based the element across VIN-based with accessories a is like, quickest is good that what that FinTech advanced And group comments, and the be the I as my mentioned the work that they of have some flow. marketplace. to going Andy able We're transactional entire through products bear And them. the adding be Hinrichs of really another The we side really very in to insurance that. we it we in to business. and as bring ones know were where to

offer want go to paths to journey. on they You as that car have buying for different consumers

that quite prequalification, things have we by bear. and we things into bring are have our tapping a be payments, in, to they So will to road products shop bring bit expertise that map, that expertise and those of market like to on the

had their We to full Orange were they're at well a because their chance and lot had diligence. tech spectrum. -- a we across pretty a County So chance and they're an do due versed the capabilities, to look company, we of

we're teams them had these very immediate solutions. what So a we've plan folks to a well-defined got the couple And and we pulling of three-year a got -- quick pretty together integrated. We've finding with as then And we that bring have car, make next with the to the the on we do how focus market And get in financing sure through want right get I we of will consumer them see we and the them. you'll think to be wins. system. area

to they're get app, an appropriate vehicle. So shopping when credit the they

and So about in going that ways. lot of acquisition, we're they're help us really excited a to

Operator

our turn I session. Please conference over to the concludes ahead. This back Darrow would any Mr. remarks. Mike for closing like to question-and-answer go

Mike Darrow

I'd expansion for sharing progress our groundwork forward with the operator. to work next we exciting morning. with time Florida. spending want taking to deliver in participate thank and also all our on we at TrueCar+ beyond to team our Thanks, an you lay to for This for hard time company, all our call. today. near-term the I entire on map everybody road to this work thank is for about our Thanks TrueCar call look more and for time for their the as like us

Operator

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

may now disconnect. You

TrueCar (TRUE) 3 Aug 222022 Q2 Earnings call transcript