Group 1 - TrueCar, Inc. announced its financial results for the first quarter ended March 31, 2025, in a stockholder letter [1] - A live call to discuss the first quarter results is scheduled for May 6, 2025, at 9:00 a.m. ET [2][3] - TrueCar is a leading automotive digital marketplace connecting auto buyers and sellers through a network of Certified Dealers [5] Group 2 - TrueCar provides a suite of vehicle discovery tools, price ratings, and market context for new, used, and Certified Pre-Owned vehicles [5] - The company powers auto-buying programs for over 250 leading brands, including Sam's Club, AAA, and Navy Federal Credit Union [5] - TrueCar utilizes its Investor Relations website and social media platforms for disclosing material non-public information [4]

Core Viewpoint - JP Morgan analyst Rajat Gupta downgraded TrueCar, Inc. from Overweight to Neutral due to disappointing fourth-quarter results and uncertain recovery prospects [1][2]. Financial Performance - TrueCar reported a fourth-quarter EPS loss of 7 cents per share, which was worse than the analyst consensus estimate of a loss of 6 cents [1]. - Revenue for the quarter was $46.21 million, missing the consensus estimate of $47.29 million [1]. Growth and Profitability Outlook - The analyst highlighted a weakening boost from rising new vehicle inventories and limited visibility on a sustained turnaround in revenue and profits [1][2]. - Upcoming products and initiatives, such as TCMS, OEM advertising, and data monetization, present potential but require clear results to validate investments in sales and marketing [2]. Revised Financial Estimates - The FY25 EBITDA estimate was revised from a previous projection of over $15 million to breakeven due to weaker dealer revenue [3]. - The FY26 EBITDA estimate was lowered from $35 million to $25 million [3]. Market Reaction - Following the downgrade and revised estimates, TrueCar shares fell by 5.21%, trading at $2.531 [3].

Group 1 - TrueCar (TRUE) has experienced a significant decline of 19.1% over the past four weeks, but it is now in oversold territory, indicating a potential trend reversal [1] - The Relative Strength Index (RSI) for TRUE is currently at 29.63, suggesting that the heavy selling pressure may be exhausting itself [5] - There is a strong consensus among Wall Street analysts that TRUE will report better earnings than previously predicted, with a 2.6% increase in consensus EPS estimates over the last 30 days [6] Group 2 - TRUE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a potential turnaround [7]

Business Operations - The company operates a digital marketplace connecting car shoppers, dealers, and manufacturers, reaching up to 7 million in-market car shoppers monthly [23]. - Approximately 70% of franchise dealers and nearly all independent dealers pay a fixed monthly subscription rate for listing their inventory [39]. - The company has partnerships with over 250 affinity organizations, enhancing its market reach and providing exclusive offers to members [28]. - The company’s platform allows consumers to access nearly 2 million average vehicle listings, simplifying the car-buying process [24]. - TrueCar launched the beta version of TrueCar+ in July 2024, allowing consumers to purchase vehicles entirely online, enhancing dealer sales efficiencies and pricing power [58]. - TrueCar's Dealer Portal provides tools for competitive pricing, inventory management, and sales enhancement, improving dealer operations and customer engagement [49][50][51]. - The TrueCar Military Program targets military families with exclusive offers, tapping into a loyal audience and enhancing dealer reach [48]. - TrueCar's marketing strategy focuses on digital media, with significant spending on search engine marketing and social media to build brand awareness [60]. - The company supports over 250 affinity group marketing partners, increasing exposure for TrueCar Certified Dealers to car shoppers [57]. - TrueCar's digital advertising solutions include social media, display advertising, and email marketing, aimed at optimizing ad spend and driving vehicle sales [46]. Financial Performance - Economic factors such as interest rates, inflation, and fuel prices may adversely affect consumer demand for automobiles, impacting financial performance [21]. - The company’s revenue relies significantly on maintaining and increasing dealer revenues within its network of TrueCar Certified Dealers [19]. - The company’s financial performance may be harmed if it fails to attract and retain manufacturers in its incentive programs [21]. - The company has observed a decrease in organic traffic from search engines due to a loss of used-car inventory, which could negatively impact monthly unique visitors [125]. - The company incurred sales and marketing expenses of $95.6 million and $99.1 million for the years ended 2024 and 2023, respectively [184]. - The company’s revenue growth is dependent on the success of its TrueCar+ offering and the expansion of its network of TrueCar Certified Dealers, particularly in high-volume brands and key geographies [172]. - The company’s revenue may not recover to pre-pandemic levels due to ongoing automobile inventory shortages and changes in partnerships [170]. - The termination of the partnership with American Express in April 2025 could significantly impact revenue, as it accounted for an annual run-rate of approximately $10 million [138]. - The company’s financial performance is heavily dependent on the number of cars purchased from TrueCar Certified Dealers, with a significant portion of sales linked to affinity group marketing partners [139]. Market Challenges - Economic conditions, such as interest rates and inflation, may adversely affect consumer demand for automobiles, impacting the company's business [130]. - The automotive retail industry is highly competitive, with TrueCar competing for consumer awareness and dealer marketing spend against various online and offline sources [64][67]. - The automotive industry faced inventory supply challenges starting in 2020 due to the pandemic, with inventory levels in Q4 2024 at the highest since June 2020 but still below pre-pandemic levels [103]. - The limited inventory has led to increased wholesale auction prices and higher prices charged to consumers, negatively impacting dealer participation and revenue [104]. - The company experienced a decline in lead quality and quantity since 2021, attributed to industry-wide inventory shortages and macroeconomic factors like inflation and interest rates [110]. - The company faces significant competition from various online and offline automotive service providers, which could impact its market share and financial performance [193]. - New competitors entering the automotive retail industry may adversely affect the company's revenue and business results [195]. - Competitors may develop superior technologies that could render the company's existing products less competitive, potentially leading to reduced pricing and revenue [196]. Regulatory and Compliance Issues - TrueCar's compliance with state regulations is critical, as it navigates a highly regulated environment affecting its product offerings and dealer network [80][81]. - Regulatory compliance risks are significant due to evolving federal and state laws related to privacy and data protection, which could impact financial results [87]. - The company is subject to complex laws and regulations regarding vehicle sales and advertising, which could result in significant penalties if not complied with [200]. - Regulatory inquiries have previously led to decreased revenues and increased expenses, highlighting the potential financial impact of compliance issues [204]. - The company must navigate varying state regulations that could affect its ability to operate and expand its services [202]. - The company’s future growth may be hindered if it cannot increase the number of TrueCar Certified Dealers in its network due to regulatory uncertainties [201]. - The advertising and sale of automobile insurance is highly regulated, and the company may face compliance issues that could impact its partnerships and revenue [217]. Workforce and Management - The company has a dynamic workforce policy with 348 full-time employees and one part-time employee, allowing for flexible work arrangements [90]. - Competition for qualified employees, particularly in technical roles, is intense, necessitating competitive compensation packages to attract and retain talent [91]. - The company has not experienced any work stoppages and maintains good relations with employees, with no union representation [90]. - The company experienced significant management turnover, including the replacement of the CEO and CFO in 2023, which may disrupt business operations [154]. - The company has been on a work-from-home status since Q1 2020, which could affect employee morale and productivity if a return to office is required [159]. - The company may face challenges in retaining and attracting qualified personnel due to competitive labor markets and recent workforce reductions [157]. Innovation and Future Growth - The company’s ability to roll out new offerings, such as TrueCar+, is critical for future growth and revenue generation [19]. - TrueCar+ is a critical initiative aimed at providing an end-to-end car-buying experience, integrating historical and new offerings [111]. - The company plans to introduce additional products related to TrueCar+, but these new offerings may face challenges and could affect dealer and consumer perceptions [127]. - The company is focusing on the rollout of TrueCar+, which may require significant resources and could impact short-term financial results [167]. - The company must innovate and improve its offerings, including the TrueCar+ experience, to adapt to changing consumer behaviors and preferences [131]. - The company’s ability to adapt to technological changes and consumer demands is critical, as failure to do so could adversely affect growth and financial performance [160]. - The company launched a rebranding campaign in 2020, including a logo change and extensive advertising, with plans for additional campaigns related to the rollout of TrueCar+ [190]. - Maintaining brand trust is crucial for the company, as any perception of not prioritizing user experience could adversely affect its reputation and brand strength [191].

Financial Performance and Key Metrics - Revenue for Q4 2024 was $175.6 million, an increase of $16.9 million or 10.6% year-over-year, marking the strongest annual revenue growth since 2017 [8] - Adjusted EBITDA for the year was $1.6 million, up by $15.43 million year-over-year [8] - Cash flow from operations improved to $7.7 million, representing a year-over-year increase of $30.1 million [8] - Free cash flow was negative $0.2 million, but this was an improvement of $34.1 million year-over-year [8] Business Line Performance - Total unit sales reached 356,000, an increase of 37,300 or 11.7% year-over-year [9] - New vehicle unit sales were 204,000, up by 27,500 or 15.6% year-over-year [9] - Franchise dealer count grew by 119 dealers, ending the year at 8,351, a 1.4% year-over-year increase [9] - In Q4, revenue was $46.2 million, an increase of 11.9% year-over-year, with positive adjusted EBITDA of $0.4 million [11] Market Data and Key Metrics - The average franchise dealer on TrueCar sold new vehicle sales generated through the marketplace grew by 27.1% year-over-year, significantly higher than the industry's growth of 9.6% [12] - The company reported a total of 93,000 units sold in Q4, which was a 22% increase year-over-year [11] Company Strategy and Industry Competition - The company aims for sustainable annual revenue growth of over 20% in a normalized new vehicle retail environment [15] - Key strategic focuses include activating new franchise dealers, minimizing dealer churn, growing revenue per dealer, and expanding the OEM business [16] - The expansion and commercialization of TC Plus is a top priority for 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's stronger position compared to the previous year, with a focus on executing building blocks for growth [21] - The company anticipates modest Q1 revenue growth in the high single digits and negative adjusted EBITDA of approximately $5 million due to investments in headcount and marketing [22] - Management expects to reaccelerate growth in Q2 to Q4, driven by new OEM partnerships and incentives [23] Other Important Information - The company has made significant investments in enhancing its data platform to support generative AI and machine learning models [18] - TrueCar has established a partnership with AWS to develop real-time machine learning models that enhance consumer insights and dealer performance [19] Q&A Session Summary Question: Can you elaborate on the first quarter guidance and the step-up in expenses? - Management indicated that the increase in expenses is primarily due to hiring more dealer sales and service personnel to drive sales productivity and efficiency [31][35] Question: What is the status of DMS integration with TrueCar Plus? - Management confirmed that integration with major DMS providers is ongoing, with a focus on automating the documentation process for dealers [42][46] Question: Should we expect the trend of franchise dealers trending up to continue into 2025? - Management affirmed that the focus will remain on franchise dealers, and while independent dealers may experience higher churn, efforts are being made to mitigate this [54][60] Question: What is the outlook for OEM revenue? - Management expressed optimism about the potential for OEM revenue to grow, citing the normalization of captive financing and the need for targeted incentives [91][96] Question: Will the company fully recapture the lost American Express business? - Management expects to see acceleration in Q2, indicating that Q1 is the only quarter affected by the transition [100][102] Question: How is the company addressing the challenges faced by dealers? - Management highlighted the importance of training and providing insights to dealers to improve their sales effectiveness and adapt to changing market conditions [80][87]

SUPPLEMENTAL MATERIALS Fourth Quarter 2024 Quarter Ended December 31, 2024 SUPPLEMENTAL MATERIALS Important Information This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, including our expectations regarding future expected revenue growth and free cash flow margins, are forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may prove incorrect ...

Core Insights - TrueCar reported revenue of $46.21 million for Q4 2024, an 11.9% year-over-year increase, but fell short of the Zacks Consensus Estimate of $47.96 million by 3.66% [1] - The company posted an EPS of -$0.04, compared to $0.00 a year ago, resulting in an EPS surprise of -33.33% against the consensus estimate of -$0.03 [1] Financial Performance Metrics - TrueCar's monetization was reported at $492, below the estimated $534.76 by two analysts [4] - The number of units sold was 93 thousand, exceeding the average estimate of 89.56 thousand [4] - OEM incentives revenue was $4.60 million, which is a 15.9% year-over-year decline and below the average estimate of $5.80 million [4] - Dealer revenue reached $41.40 million, reflecting a 16% year-over-year increase but slightly below the average estimate of $42.11 million [4] Stock Performance - TrueCar's shares have returned -3.2% over the past month, contrasting with the Zacks S&P 500 composite's +4.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

TrueCar (TRUE) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of a loss of $0.03. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -33.33%. A quarter ago, it was expected that this provider of localized information on new car costs would post a loss of $0.03 per share when it actually produced a loss of $0.03, delivering no surprise.Over the last four q ...

Live call and webcast will occur on February 19 at 9:00 a.m. ETSANTA MONICA, Calif., Feb. 18, 2025 /PRNewswire/ -- TrueCar, Inc., (NASDAQ:TRUE) today announced financial results for the fourth quarter ended December 31, 2024 in a stockholder letter, which is available HERE and on the TrueCar Investor Relations website at ir.truecar.com.The company will host a call to discuss its fourth quarter results on Wednesday, February 19 at 9:00 a.m. ET/6:00 a.m. PT. A live webcast of the call will be available throug ...

Investors might want to bet on TrueCar (TRUE) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individu ...