TRUE - Earnings call 3 2023

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Operator

Good day, and welcome to the TrueCar Third Quarter 2023 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Mr. Jantoon Reigersman, President and Chief Executive Officer of TrueCar. Please go ahead, sir.

Jantoon Reigersman

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

today our on opportunity Joining Officer. Oliver close which is me Foley, after yesterday Relations you third stockholder market have website was our ir.truecar.com. released I is new all had Investor read the available to and quarter letter, our hope Financial Chief at

statements to be need as get read regarding our expected looking want started, making I will we I growth, to X-year this our statements remind we well including that Before harbor. you revenue goals call, regarding on forward-looking safe plan. as our aspirational EBITDA adjusted

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

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

letter. will positive an growth quarter, summary quarter, guidance. quarter quarters We that, EBITDA shareholder okay? time for of is adjusted This than revenue provide indicated our to earlier in our first originally in achieved previous our the With exciting X the in year-over-year back surpassed and I a a We're as guidance. highlighted have

We of a have have still TrueCar's realize X hard consumers are of we decreased signs historical in of environment million to our percentage The year-over-year and And favor. showing vision, new greater year-over-year. XX.X%. since has offerings. need it the clear XX%, a decline time a inventory go year-over-year tide to monthly returns of of both to and to are U.S. started to XXXX, increase exceeded ways $X,XXX. first to new car The in working units incentives before environment sales the is March it. MSRP September, in and improving, macroeconomic but dealers appears car macroeconomic over increasingly average a the XXX% norms climbed XX% We turn for

requires the to car is the but the execution dealer set comprehensive with includes ads the journey components. than from enablement right this financing focus both than right transaction right page our in the that dealers or rather key more right online of for find impressions believe enabling a to more enabling We and at essential ways, actual us on competition documents these selling consumer consumers new experience will transactions views, through our apart deal

we're challenge. by requires software meeting seamlessly time, is and relied third Specifically, it focused parties. a the out dealers, upon with on that complex an and experience laser requires Building this processes integrations that these but lenders other integrates third-party challenge

commerce the checkout is purchase complete and they're make what continue next we of relevant flow. flow our consumers traditional call to cost provided whereby launched designed This having We flow, the flow, unified online are steps product to landed our product on transaction buying. to good with progress details, resemble

well We way the launch successfully cohort have in to EV our also launched flow December. our we're flows, and our cohort on economic convenience and

reduce shift. these talent continue from of consumer to of and X and this We cohort is behaviors. truly the of each we product flows refine unnecessary flows as and -- a testing eliminate friction, cohort organization build-out the shifted We mindset have we groups emblematic product-focused and that steps learn and to base

operations see our dealers dealer Beyond have the revenue we from affinity services of possibility further to expanding these lost value-added we opportunities stemming and the strengthening OEM several years, X cohort regaining and over enhance flows, past business.

towards industry over we happens the values, ground in As but pursuing building focus and growth have and growth growth endure right people We're can can with help up, right right the while cannot we shape have a This that company the come also we sure aimed believe time. such overnight. sustain and tremendous core automotive from profitability. the we opportunities forward, and look both know making we the all seats it

returning For longer revenue expectation reiterate In we to cash free we're focused of term, the on sustained of quarter growth adjusted of and the year-over-year fourth EBITDA. breakeven revenue positive flow. double-digit our and the XXXX, growth importance or positive

pursuing of prove of need of We greater do cash metrics. for this, XX simply healthy these realize of XXXX, what pursuit goals. revenue We and to emphasize of you have we combined accretion flow. aspirational would annual in understand our But $XXX as in believe strategy consistently. macro we In growing long-term profitability are the by to we need believe all do meet that believe -- in under us. of that XX% companies both value we to importance excess the we free than of We the and is with financial good an and cash the drive of as believe and XXXX, our journey to established X-year if the the health of execute light we which million experience. we're least is shareholder we turning rule to growth ourselves believe we as rule have value the have are at By to end we of in We opportunity, XX now indicator them, margin us we have platform ahead the and ambitious this free that we favor, of execute well reshape flow the the as join goals. the would revenue talent opportunity we XX% car-buying end of our

the from analysts. Now for operator, let's open our call questions

Operator

question [Operator Instructions] first will come And Rajat the JPMorgan. Gupta with from

Rajat Gupta

a how And out have from in and if the organic? think the calling just the -- and M&A well, it should that 'XX then get a execution sense 'XX, on now? Maybe give follow-up. Congrats million I about a not Is 'XX it's still forward going combined? bridge how still $XXX like there operating have beyond. as I operating going from XXX% aspirational just million, about we And or should forward organic revenue back could from in we you Is just revenue there target as growth comes with on we ambitious. going or $XXX but to to it as Maybe target, it you're And the some how today? mean XQ. you leverage well? leverage be us like Maybe think

Jantoon Reigersman

Absolutely.

question. for the So Rajat, thanks much so

-- So the answer is first organic. part, the on our goal

over space time overarching -- the and to and effectively, offering OEM affinity is opportunities mitigate so -- the blocks are then obviously the increase of the the interesting mitigate overarching. and think you rough e-commerce building in play ability to transaction normal churn which in particular digital roll blocks, through out at an TC+ then churn building right, looking that dealers, monetization onboard, order, obviously obviously, like get you're new those right, of the it's no dealers is but If expand

thinking pure is Your way includes question see about M&A, the is we us. this opportunity is it ahead whether the of or this organic, and we're organic

the other is then leverage. And operating part

I the is cost to Remember, our relatively as X had in marketing, And organization. people, strong conference really It's some the effectively fixed flat. overhead and think that which an last it's we've is think it's of base always of charge. alluded well very calls it's this organization we've I buckets. as

stands of our XX% end. effectively XX from performance it marketing XX% you marketing it's partner roughly discretionary it's marketing, If -- as think today,

in launch more nationwide over So to space? marketing answer like experience, of -- and we, would more Obviously, is deploy the the the as time, launch digital we fully launch yes.

and if add on So you think that's over about more the is side And than more you service adding X bucket. anywhere where time, sales over really people, time else. would

feel that your really is monetization And that proportion revenue leverage assume have should think of opportunities. lot so the strong a stable healthy obviously somewhat that size relatively really you answer I the growing, operating question? be cost also in could Does growing we and as but overarching to structure of we obviously

Rajat Gupta

Understood. No, And allocation. just then maybe that's capital color. helpful on a as follow-up

here amount significant you free positive the there's a targets. those the think be cash we opportunity about very on have will like to obviously on of and mean XXX% it you I here flow into How and quarter the EBITDA that generating in You XXXX, fourth organic soon. cadence based should -- balance also cash looks sheet, mentioned

reasonable the already term, the buyback towards that it in you're more targets assume in of here and that take to the itself So near would consideration context serious you is the just fact a positive?

Jantoon Reigersman

At do give cash a is something we is We also question. consideration absolutely to in But opportunity are the continue a and of answer do all of review et way? buyback the broader we do balances, there buybacks something a macro. answer bit of done consider broad us great time. disproportionately still and several prove always when more and ourselves, there yes. X have. a also allocation, through The positive do we EPS our quarter always consider that is we've point that buybacks absolutely is But of consideration menu right so is Yes, buybacks seriously. couple the the that time, is on of you We by are any gone I then quarters. yes. X around It's obviously, we've is little look, cetera, do buybacks when form that do the you for you broader address of it's we know a think buybacks, at options a is and first to do know if a will want opportunities over The once in we obviously, -- of what we and greater answer back? take -- in This of impact that seriously, decline. positive. next quarters you now have the capital The

Operator

Naved come next from with The will Khan Riley Securities. question B.

Unknown Analyst

Flow United on TrueCar compared to asking question about can Could [ cohort, please? Ryan also behalf convenience talk the about you ] conversions Naved a -- is cohort talk could and Khan. conversions then of talk in traditional you And the conversions the This experience? economic about you between

Jantoon Reigersman

Yes.

of united So the of we've -- all, flow weeks. all we've disclosed couple flow launched the United so so last the this first in --

I obviously started in through So indication flow, engage. it's exposed across answers we the hard the information we properly which and example, proper letter to effectively like some like we in right, people, the submit mean, economic their give XX,XXX immediately, and the it actually flow definite for going gave to X,XXX board. -- where,

that So more these people are personalized, because What is engaging. also we seeing much actually are these numbers. flows are attractive are

are things steps obviously areas, very necessarily obvious the are like unclear that too we for certain not in many certain that see to also still things right, or or us have, for seem consumers. be obvious that there are We

And at metrics too little of a conversion bit doing to that it's weeks. honesty, that only -- provide this early like for comparable all effectively have this couple up. there all in clearing so stage we because we're a are But real been

personalized talk So high in would seen, cohorts we engagement of detail, flow, the is is about and these like be call. it's that have next given the we the very, But to some more this are love good is obviously, that very that on though, to of is a able What high. something questions. each engagement in the

to obviously that that is early these and shows so the to very is about. willingness the But the to And actual too flows metrics there high. conversion also is that demand talk go probably

Unknown Analyst

to And expect United a would out follow-up is regions, flow go when then please? you to all for

Jantoon Reigersman

it's live be will short remember important unified What flow -- United flow it the most final what is not though is the include United in flow, the The piece -- is that happens yet across Yes. of paperwork. is order. doesn't

that So last that's the -- the hiccup still the transaction piece online. is to full get last effectively the

not does is flow, -- a be that And that. full everybody in much road depend once solidly we that development through will consumer at product the commerce Yes. done working order. for in obviously, least the we're pretty already online fully so that experience have on And map but it baked But for us. that, effectively short

to finalize is it's experience new for people going the to the we of to go TrueCar So paperwork. have The piece flow. a be through that piece

Operator

question will come with Chris next The Pierce Needham. from

Christopher Pierce

incentive of this where like be know it don't X, -- was going where growth this Just but how to just I sort again just just should you sense go. some higher some I nice a normalize a to get to lumpy, of of are? OEM think bound want had get sort I be on Or because revenue. of it's help pre-COVID can inventories us of sequential I kind it know a than and can quarter. should of about upper And can't It it sense at level?

Jantoon Reigersman

Yes.

think -- think question. I that's a good Chris, I

somewhat with support it's help over tough but rate -- with also obviously brand give OEMs which we their effectively There some There's think captives obviously, give there's right, relatively loyalty, you to participation some like like obviously important. push world, an a great of the obviously, is predict and OEMs EV, a is of parameters, element in -- lost is their interest, cetera. to to I some consumers you they've focus et time. recapture also I'll high interest of dealers customers think low I'll that to it's

partners opportunity huge obviously, so growth emphasis is, answer I between is think And do is of triangulation we a as the a to have there this relevant an yes, important great. story we between to our see OEMs see their attractive was partners, us think opportunity? yes, this affinity that historically that the yes. support great there dealer The opportunity? Do there's an which short, OEM, because and businesses, to do opportunity long us. can historically of we as we obviously, then So So is answer also, and this is right? The increasing between

is other the of in OEMs get to the have the thing ability way. in right help also, The support front consumers really you're to right going

you are And so things associated think programs, possible. but it's example, that about rebates, like programs even not cetera, just co-marketing that to all et for are

But what little upper come, that -- part the the issue hard is bound programs this issue bit years is. a lumpy are a do that so that demands so yes, we macro also, OEMs? predict. hard a harder greater And the the over, big and The need to these there's that willingness more by there's is it's of a assess to really bit is little of effectively are answer understand support often we know real to the a The do that yes. for also

a also, unique opportunity? So answer do we we have The within the area? broader is the we see that value And yes. think do proposition

upper actual is. what to quantify hard the it's bound So

Christopher Pierce

one as But the because on to do also it you is leads well? get these from side just revenue it OEMs do marketing a side dealer programs, revenue Okay. -- you transaction the and world? of Or the of when

Jantoon Reigersman

It the much depends many both. is, but the very cases, answer on programs, in yes,

Christopher Pierce

Okay.

in theory, of leading So dealer somewhat a on lumpy it's backdrop. with revenue indicator a

So it's to model. hard

Perfect. Okay.

Jantoon Reigersman

Yes.

Christopher Pierce

plan side there? inventories we kind subscription? about and regaining talking What's of is the lost Are dealers game touch call the hey, that the more have outreach dealers on from then talked pile about seeing you the TC+? dealers. on we're to just Or world? Can as the of And about, going these you letter Hey, moving to it you up? push

Jantoon Reigersman

Yes. question. Good

toward have firm. a a bias short answer as action is the think always, we I

a be always healthy portion and So proactive. of we our network. see We our engage and aggressive will coming do on really dealers back

out really properly and good. And reengaging it's engaging. engaging it's the that's So really different in also reaching us mostly and just And form.

one have tremendous X really So haven't the letter, side. on in this side but service sell spoken we and the one leaders, we about on it

doing days, a research just of touched obviously, historically, days, the much in be And very if more in a and there us separation also dealers XX and sales opportunities and research. negative, there associated we you clearly that. if engage and service with that as the done a did insights NPS high so we've within them was obviously XX are greater to service them as showed We've capacities for touch consulting been form providing to lot So scores to with it of a where to and training engage programs trying salesperson. opposed you and

of we remember that one And have data. is of of a lot beauties TrueCar that the

we We a respective dealer. obviously, within things respective and the have lost that DNA dealership, only have but that insights sales a on, happen are everything a lot capture all or type happens sales these of much rates at pretty of insights not of or also the that

so to and not And this that opportunity dealers with be need for a a to there's exactly the need sounds what which just doesn't have It lot all a of doing sophisticated sophisticated. now. different it just And you be dialogue. to -- engaging is super to us really means way, right we're form of

also it's much so very in, it's yes, have need answer so what partner them? often does but We you on with how help. our to back do be do it from how us. the partners actually best how do touch sales, service, do are dealers how you And do you really mean world still dealer the do do in dealers, you can provide do actually where much very What you How handoff call towards much from service, us. proactive do you service? they a you more proactive And short it's do focused the is

Operator

BTIG. question Marvin Fong next from with will [Operator Instructions] come Our

Marvin Fong

role. the Congratulations, new Oliver, on

I'd long-term to question, like and first revisit targets for margin XXXX. So just revenue the

You the how that assumptions have of et the component cetera. could mean part you plan -- is blocks. TC+, of how the program, be it mentioned color of you say you Jantoon, adoption largest on building revenue? of is you like grow will sort to several I that And many of behind TC+ add fair some to like dealers

helpful. would some maybe very color more be Just

Jantoon Reigersman

Great question. Yes. great -- Marvin, so

here, is TC+ a answer I to think, I but adoption is actually firm of like enough, believer, a obviously once and TC+. like predict otherwise, hard the interestingly So actually be it's consumer will product I'm wouldn't be this envision -- that dealer huge capable experience, it think fully, of, will is fully huge we operational I with the a of and adoption be there product.

their it's firm hard a form. it's do full maintain dealers and And Now do assess I hard expand and to and what want believer see online. to predict that volumes. sales to But to how see even that that we when addressable increase transactions really want their greater margins effectively really am consumers and we do or want to and markets

real so here that think a there's And provide. value to we

answer a et -- to growth, back provide EV whether this side right? As lines big things, actually lot of suite the question, to the on OEM focus things, really So there your we just side providing part of focus of the products think revenue that for TrueCar cetera. on opportunity come is current the planning, to of right I historical better of of a the that

actually dependent this TC+ the side aspirational on model looking because to interestingly not that predict. this we're is the So hard it's overly into enough, growth so and --

a segment TC+ to hearing XX,XXX-foot you metrics holistically, is about if One to and That tail obviously, you will there's dealer. a long dealers start currently back still more of have the talk and will time the piece number and a is TC+, of the of more there us ways, view, you the it of little about lot revenue a dealer. go you a to many inside per over in murky because So and think bit really, be

you as a revenue we'll marketplace become about that match like more X more demand. dealer clear well and a where talking supply I've bit on So of the started that. some proper point, metric internally is at side a of little per and as concept more But

product be only the dealers, sell so the also, And product those I obviously, -- new that there, next add And on and of TC+ predominantly seeking is move to obviously huge couple is not more based one ways of pretty is more lines actually up yes. Do over up services to yes. dramatically opportunity, per to be is Is well the but historical lines better time The that to will we're revenue think in dealer also of has and TrueCar? answer over to this the one will years. TC+. move answer

actually dependent TC+. on less So it's

Marvin Fong

Got you.

guess Okay. That's follow-up on count. just great. a And I dealer

to prospect several the of So for have franchise just quarters the kind the any think, which declined people I would think half color any changed positive reverse, less be thought. to cause of than be to I growth, Just bad role? could what of you most play first this the dealer out after to count speak Did that add might number quarter turned strike, terrific. that could you

Jantoon Reigersman

it's a -- or just a yes. And -- now. -- absolutely, it's little right murky of a wash and bit Yes,

to and organization So part. transited sales service we more this

working There's bit little we're And our of just as like and maybe right of a so oriented bit are also give a quality or There's of through less dealers now shaking towards customers consumers. little really bit we're consumers. out dealer prioritizing that historical like happening a little take like that now.

little so a really in on bit It this happen net-net, up distribution the bit. the see as or And and a murky down. about little a but wash you'll It's of shifting terms X standard might it's quarter dealers. of take focusing

focus on and and our want really butter experiences and really it the forward-leaning provide dealers. bread the We right are right to

bit a little always hawk. hit if look that's and the given think any going should the fluctuate type I And that on off. really and on really terms of take, little about, you of in time. obviously, obviously bit are There's start at dealers What this of a going give so month and I that's you piece trough type of coming a over we've we dealers like And although is coming types will off. the see up the dealers and on of coming care

of the to in coming are looking long service anyway. So the less off dealers necessarily they concerned about the dealers, we are to long term as seek I'm as not some

Operator

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

Jantoon Reigersman

Great.

So and thank thank without to our participate would taking you, all everyone. team I are hard like for dedication to I today. possible. would time to these the work, their results thank also like continued the everybody for people, none of

So a I of really appreciate it, and lot them. we ask

thank early. waking So with gratitude, all, you and you everybody appreciate up

Operator

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

may now You disconnect.

TrueCar (TRUE) 7 Nov 232023 Q3 Earnings call transcript