TrueCar(US:TRUE)2024-04-30 17:09Financial Data and Key Metrics Changes - In Q1 2024, TrueCar achieved an 11% year-over-year revenue growth, reaching positive adjusted EBITDA of $0.9 million, a $12.3 million improvement from the previous year [7][8] - The company reported a 7.3% year-over-year increase in new vehicle units sold through franchise dealers, outperforming the industry's 4.9% growth [8] Business Line Data and Key Metrics Changes - The launch of TrueCar Market Solutions (TCMS) saw over 350 dealers adopting one or more products within two months, indicating strong initial interest [8][9] - The company aims to bundle TCMS products into subscription offerings to enhance dealer value and increase average revenue per dealer [9][12] Market Data and Key Metrics Changes - The normalization of new vehicle inventory and average days supply continued to improve in Q1, benefiting franchise dealers [7] - The company anticipates a 13% revenue growth in Q2 2024, driven by increased marketing spend to capture a larger share of new vehicle shoppers [14] Company Strategy and Development Direction - TrueCar's strategic goal is to become the first digital marketplace for car purchases, aiming to complete its first end-to-end digital transaction for new cars in the first half of 2024 [10][12] - The company is focusing on four building blocks for near-term growth: activating new dealers, reducing dealer churn, increasing average revenue per dealer, and growing OEM revenue [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the core business to support the success of TC+, with expectations of returning to $300 million in revenue and a 10% free cash flow margin by the end of 2026 [13] - The management acknowledged challenges in dealer churn and emphasized the need for improved service and support to regain market share [22][40] Other Important Information - The company is working on a pilot for TC+ that will allow consumers to transact entirely online, with plans to launch in California and expand based on initial results [10][51] - TrueCar is undergoing a leadership change on its board, with Diego Rodriguez nominated to fill a seat, bringing extensive experience in business design and technology [15] Q&A Session Summary Question: Insights on second quarter revenue growth and marketing investments - Management anticipates an acceleration in revenue growth, projecting a 13% increase in Q2, with marketing spend expected to drive more incremental units to dealer partners [19] Question: Factors behind the decline in franchise dealer accounts - Management noted that dealer churn was influenced by market resets and service quality, with plans to improve support and regain lost dealers [22][40] Question: Expectations for TrueCar Marketing Solutions adoption - Management expects a majority of dealers to adopt TCMS products, which should enhance ROI and lead to better retention [26] Question: Marketing spend strategy and payback period - The company aims to balance performance-based marketing with broader support for dealers, focusing on efficient deployment of marketing dollars [29] Question: OEM incentive revenue growth potential - Management is optimistic about long-term growth in OEM revenue, although short-term fluctuations are expected due to program variability [34] Question: Clarification on independent dealer channel trends - Management indicated that while the independent dealer channel is stabilizing, month-to-month fluctuations remain unpredictable [45] Question: Details on partnerships for TrueCar+ - The pilot for TrueCar+ is being developed with a progressive dealer group, focusing on refining technical solutions before scaling [51]