TrueCar(US:TRUE)2019-08-10 16:46Financial 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]