TrueCar, Inc. (NASDAQ:TRUE) Q4 2019 Earnings Conference Call February 20, 2020 4:30 PM ET Company Participants Danny Vivier - Vice President, Investor Relations Mike Darrow - Interim President & Chief Executive Officer Noel Watson - Chief Financial Officer Conference Call Participants Lee Krowl - B. Riley FBR Shweta Khajuria - RBC Capital Markets Kyle Evans - Stephens Inc. Tom White - D.A. Davidson Andrew Boone - JMP Securities Daniel Powell - Goldman Sachs Naved Khan - SunTrust Robinson Humphrey Dan Kurnos ...

TrueCar, Inc. (NASDAQ:TRUE) Q3 2019 Earnings Conference Call November 7, 2019 4:30 PM ET Company Participants Noel Watson - Chief Financial Officer Mike Darrow - Interim President and Chief Executive Officer Conference Call Participants Kyle Evans - Stephens Andrew Boone - JMP Securities Lee Krowl - B. Riley Daniel Powell - Goldman Sachs Nick Jones - Citi Marvin Fong - BTIG Operator Greetings and welcome to TrueCar’s Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36449 TRUECAR, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification N ...

Financial Data and Key Metrics Changes - Revenue for Q2 2019 was $88.1 million, roughly flat year-over-year and slightly below the low end of guidance [11][25] - Adjusted EBITDA was $3.7 million, or approximately 4% of revenue, also just below the low end of guidance [11][29] - GAAP net loss for the period was $24.1 million, or $0.23 per share, compared to a loss of $6.6 million, or $0.07 per share in the prior year [31] Business Line Data and Key Metrics Changes - Franchise dealer revenue was flat year-over-year, with franchise dealer count up 3% to 12,681 dealers [25] - Independent dealer revenue increased by 12% compared to the prior year, with independent dealer count up 27% to 4,014 dealers [25] - OEM revenue was down 48% from Q2 2018, primarily due to the lack of recurring revenue from a larger OEM client [25][26] Market Data and Key Metrics Changes - Total units were 249,856, roughly flat year-over-year, with units in the TrueCar branded channel down 10% [26] - Total new units were down 7% year-over-year, while used units were up 14% [28] - Monthly unique visitors to the TrueCar channel were down 10% in the quarter, primarily due to a significant loss of organic traffic [26] Company Strategy and Development Direction - The company is focused on improving the consumer experience and plans to launch a new consumer experience across truecar.com in early 2020 [10][12] - The strategy includes leveraging core strengths such as upfront pricing, price transparency, and a strong dealer network [12] - The company is also exploring new dealer advertising products to enhance monetization efforts [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the OEM business due to a softening SAAR and a pullback in OEM incentive spending [18] - The company is optimistic about future growth driven by improvements in consumer experience and a national branding campaign [27] - Management expressed confidence in the strategic direction and the potential for organic traffic growth [11][12] Other Important Information - The company has a healthy balance sheet with approximately $177 million in cash and no outstanding debt [31] - The updated revenue guidance for Q3 is $87 million to $89 million, reflecting a negative growth of 5% to 7% year-over-year [32] Q&A Session Summary Question: How will the company balance dealer and consumer value during the brand relaunch? - Management emphasized the importance of fixing the consumer experience and ensuring that the dealer network can monetize the new consumer product effectively [38][39] Question: Can you elaborate on the new advertising products? - The sponsored listing product is designed to provide dealers with additional marketing opportunities without being traditional ads [41] Question: What is the outlook for OEM revenues in the back half of the year? - Management took a conservative approach, expecting OEM revenue to remain flat from Q2, while also managing the pipeline carefully [53] Question: How is the company addressing SEO traffic challenges? - Management noted that recent algorithm changes had mixed effects, but they are committed to improving organic traffic through better product offerings and marketing [60][61] Question: What are the expectations for unit growth in the next two quarters? - Management does not forecast unit growth but expects trends in new and used units to continue as they work on improving the consumer experience [65]

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for Q2 2019 reflect increased assets and liabilities due to new lease accounting, alongside a widened net loss and decreased operating cash flow [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$461.5 million** and liabilities to **$130.1 million** by June 30, 2019, primarily due to new lease accounting and an equity investment, while stockholders' equity decreased Consolidated Balance Sheets ($ thousands) | Balance Sheet Items | June 30, 2019 ($ thousands) | December 31, 2018 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 176,565 | 196,128 | | Total current assets | 268,859 | 255,459 | | Operating lease right-of-use assets | 39,066 | — | | Equity method investment | 22,901 | — | | **Total assets** | **461,510** | **420,960** | | **Liabilities** | | | | Total current liabilities | 87,081 | 41,562 | | Operating lease liabilities, non-current | 39,851 | — | | **Total liabilities** | **130,111** | **74,407** | | **Total stockholders' equity** | **331,399** | **346,553** | [Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Q2 2019 revenues remained flat at **$88.1 million**, but a significant increase in operating expenses led to a widened net loss of **$24.1 million** for the quarter and **$38.4 million** for the six-month period Consolidated Statements of Comprehensive Loss ($ thousands) | Income Statement Items | Q2 2019 ($ thousands) | Q2 2018 ($ thousands) | H1 2019 ($ thousands) | H1 2018 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenues | 88,075 | 87,850 | 173,657 | 168,911 | | Total costs and operating expenses | 112,759 | 94,595 | 213,606 | 184,715 | | Loss from operations | (24,684) | (6,745) | (39,949) | (15,804) | | **Net loss** | **(24,060)** | **(6,622)** | **(38,425)** | **(15,677)** | | **Net loss per share, basic and diluted** | **(0.23)** | **(0.07)** | **(0.37)** | **(0.16)** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased to **$7.2 million** for H1 2019, while investing activities significantly increased cash usage to **$28.6 million**, resulting in a **$19.6 million** net decrease in cash Consolidated Statements of Cash Flows ($ thousands) | Cash Flow Items (Six Months Ended June 30) | 2019 ($ thousands) | 2018 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 7,224 | 8,567 | | Net cash used in investing activities | (28,579) | (9,615) | | Net cash provided by financing activities | 1,792 | 1,773 | | **Net (decrease) increase in cash** | **(19,563)** | **725** | | Cash and cash equivalents at end of period | 176,565 | 198,487 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Significant notes include the adoption of a new lease accounting standard, a **$22.9 million** equity investment, a **$28.25 million** litigation settlement covered by insurance, and **$7.9 million** in H1 2019 severance costs - The company adopted a new lease accounting standard on January 1, 2019, using the modified retrospective method, resulting in the recognition of **$42.0 million** in operating lease right-of-use assets and a corresponding increase in lease liabilities[38](index=38&type=chunk)[43](index=43&type=chunk) - In February 2019, the company acquired a 20% equity interest in Accu-Trade, LLC for **$17.9 million** in cash and a **$5 million** capital contribution, resulting in a **$22.9 million** equity method investment[33](index=33&type=chunk) - The company reached an agreement in principle to settle the Milbeck Federal Securities Litigation for **$28.25 million**, which will be covered by directors' and officers' liability insurance, recorded as both an accrued liability and an insurance receivable on the balance sheet[76](index=76&type=chunk) - In H1 2019, the company incurred severance costs of **$7.9 million**, including **$3.3 million** from a Q1 restructuring plan and **$4.6 million** in Q2 related to executive-level departures, including the former CEO[69](index=69&type=chunk)[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights flat Q2 2019 revenue, sharply rising operating expenses leading to a wider net loss, and a decline in key visitor metrics, resulting in significantly decreased Adjusted EBITDA [Key Metrics](index=34&type=section&id=Key%20Metrics) Q2 2019 saw a **6.9%** decrease in Average Monthly Unique Visitors to **7.2 million** due to search algorithm changes, while units sold remained flat and dealer counts increased Key Metrics | Metric | Q2 2019 | Q2 2018 | Change (YoY) | | :--- | :--- | :--- | :--- | | Average Monthly Unique Visitors | 7,229,910 | 7,763,112 | -6.9% | | Units | 249,856 | 250,269 | -0.2% | | Monetization | $333 | $332 | +0.3% | | Franchise Dealer Count | 12,681 | 12,368 | +2.5% | | Independent Dealer Count | 4,014 | 3,166 | +26.8% | - The decrease in average monthly unique visitors was primarily attributed to changes in the algorithms of popular search engines, which reduced organic traffic starting in Q4 2018 and continuing into 2019[107](index=107&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA significantly decreased to **$3.7 million** in Q2 2019 and **$8.7 million** for H1 2019, resulting in a Non-GAAP net loss, primarily due to stock-based compensation and executive departure costs Non-GAAP Financial Measures ($ thousands) | Non-GAAP Measure ($ thousands) | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Net loss | (24,060) | (6,622) | (38,425) | (15,677) | | **Adjusted EBITDA** | **3,653** | **8,730** | **8,740** | **14,742** | | **Non-GAAP net (loss) income** | **(2,217)** | **3,212** | **(2,645)** | **4,053** | - Key adjustments to reconcile Net Loss to Adjusted EBITDA and Non-GAAP Net Income include stock-based compensation (**$15.6 million** in Q2'19), executive departure costs (**$4.7 million** in Q2'19), and restructuring charges (**$3.3 million** in H1'19)[119](index=119&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Q2 2019 revenues remained flat at **$88.1 million** due to offsetting changes in dealer and OEM incentives revenue, while total operating expenses increased **19.2%** to **$112.8 million**, driven by higher sales and marketing and G&A costs Revenue Stream ($ thousands) | Revenue Stream ($ thousands) | Q2 2019 | Q2 2018 | Change (YoY) | | :--- | :--- | :--- | :--- | | Dealer revenue | 78,977 | 75,271 | +4.9% | | OEM incentives revenue | 4,143 | 7,927 | -47.7% | | Forecasts, consulting and other | 4,955 | 4,652 | +6.5% | | **Total revenues** | **88,075** | **87,850** | **+0.3%** | - Sales and marketing expenses increased by **$8.2 million** (**15.8%**) in Q2 2019, driven by higher branded media spend, employee-related expenses, and partner marketing fees[142](index=142&type=chunk) - General and administrative expenses increased by **$7.9 million** (**58.5%**) in Q2 2019, primarily due to a **$4.5 million** increase in stock-based compensation and a **$3.2 million** increase in severance costs, largely related to the departure of the former CEO[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material exposure to market risks, with interest rate risk on its **$176.6 million** cash and cash equivalents, inflation, and foreign currency risk deemed insignificant - The company's primary market risk exposure is interest rate risk on its cash and cash equivalents of **$176.6 million**, but fluctuations in interest income have not been significant[174](index=174&type=chunk) - The company does not believe that inflation or foreign currency exchange risk has had a material effect on its business, financial condition, or results of operations[176](index=176&type=chunk)[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2019, following the implementation of a new ERP system on April 1, 2019, which necessitated control modifications - As of June 30, 2019, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective[178](index=178&type=chunk) - On April 1, 2019, the company implemented a new ERP system, leading to modifications in its internal control infrastructure[180](index=180&type=chunk) [PART II - OTHER INFORMATION](index=55&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section details legal proceedings, significant risk factors, unregistered equity sales, and filed exhibits [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for detailed disclosures on legal proceedings, including the Milbeck Federal Securities Litigation with a proposed settlement - For details on legal proceedings, the report refers to Note 7, "Commitments and Contingencies," in the financial statements[182](index=182&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including reliance on dealer networks, key partner relationships, executive turnover, intense competition, and a complex legal and regulatory environment for auto sales and advertising - A significant risk is the company's relationship with its largest affinity partner, USAA, which accounted for **29%** of all units in the first six months of 2019, with no assurance its agreement extending through February 13, 2020, will be renewed[222](index=222&type=chunk)[223](index=223&type=chunk) - The company experienced significant turnover in its top executives in the first half of 2019, including the departures of the CEO, CTO, and CMO, which could disrupt business and strategy execution[201](index=201&type=chunk)[202](index=202&type=chunk) - The business is subject to a complex framework of federal and state laws concerning vehicle sales, advertising, and brokering, which have led to litigation and could challenge the business model[233](index=233&type=chunk)[235](index=235&type=chunk) - The company faces intense competition from internet search engines (Google), online automotive sites (Autotrader, CarGurus, Cars.com), and offline services (Costco Auto Program), which could impede growth and pressure pricing[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=97&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no material change in the planned use of proceeds from prior public offerings - There were no sales of unregistered securities in the period[359](index=359&type=chunk) - The planned use of proceeds from prior public offerings has not materially changed[359](index=359&type=chunk) [Item 6. Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including executive separation and employment agreements, certifications, and XBRL data files - The exhibits filed with this report include several separation, consulting, and employment agreements for key executives, such as John Pierantoni, Noel B. Watson, and Chip Perry[362](index=362&type=chunk)

Financial Performance - Second quarter total revenue remained flat year-over-year at $88.1 million[4] - Adjusted EBITDA was $3.7 million, representing an Adjusted EBITDA margin of 4.1%[4] - The company forecasts revenue between $345.0 million and $350.0 million for the full year 2019[31] - The company expects Adjusted EBITDA between $10.0 million and $14.0 million for the full year 2019[31] Dealer Network - Total dealer count increased by 7% year-over-year to 16,695 dealers[4] - Total franchise dealer count increased by 3% year-over-year to 12,681 dealers[4] - Total independent dealer count increased by 27% year-over-year to 4,014 dealers[4] Revenue per Dealer - Monthly franchise revenue per franchise dealer was $1,744[4] - Monthly independent revenue per independent dealer was $838[4] User Activity - TrueCar users purchased 249,856 units from TrueCar Certified Dealers, remaining flat year-over-year[4] - New Car Market Share was 4.6%, down 6% year-over-year[4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36449 TRUECAR, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 04-3807511 (I.R.S. Employer ...

TrueCar, Inc. (NASDAQ:TRUE) Q1 2019 Earnings Conference Call May 9, 2019 4:30 PM ET Company Participants Alison Sternberg - SVP, IR Chip Perry - President and CEO Conference Call Participants Ron Josey - GMP Securities Daniel Choe - Goldman Sachs Kyle Evans - Stephens, Inc. Dan Kurnos - The Benchmark Company Nate Mitchell - SunTrust Robinson Humphrey Nick Jones - Citi Marvin Fong - BTIG Operator Greetings, welcome to the TrueCar Incorporated First Quarter 2019 Earnings Conference Call. At this time, all par ...