TrueCar(TRUE) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company expects to achieve double-digit year-over-year revenue growth and return to breakeven or positive EBITDA by the fourth quarter of 2023 [18][30] - The balance sheet remains healthy, with a cash guidance of greater than $125 million by the end of the year [51] Business Line Data and Key Metrics Changes - TrueCar+ has seen significant improvements, with dealers experiencing 2x to 3x improvements in close rates and a 65% reduction in days to close [26] - The number of lenders available to dealers within TrueCar+ expanded from fewer than 50 to over 1,500, enhancing the credit experience for consumers [22][23] Market Data and Key Metrics Changes - The supply of new vehicles is rising, but vehicle affordability remains a concern for consumers, impacting close rates [11] - There is an expectation of some churn among independent dealers due to unfavorable market conditions, particularly in the used vehicle segment [12][37] Company Strategy and Development Direction - The company has four key priorities for 2023: rebuilding the core business, expanding the market footprint for TrueCar+, focusing on the used vehicle market, and improving marketing to convert top-of-funnel traffic into sales [7][32] - A shift towards a subscription model is planned, moving away from the legacy pay-per-sale model to grow monthly recurring revenue [16][27] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the recovery of new vehicle inventories and the potential for growth in the used vehicle market, despite current challenges [18][33] - The company is focused on improving conversion rates and leveraging its digital presence to drive sales [55] Other Important Information - The company has reorganized its senior leadership team and made key hires to support its strategic priorities [6][9] - TrueCar+ is expanding into additional Southeastern states, focusing on digitally forward dealers [15] Q&A Session Summary Question: Follow-up on dealer churn after launching subscription packages - Management noted some churn, particularly among smaller dealers, but emphasized the understanding of the broader value provided by the new packages [42][43] Question: Monthly revenue per dealer with new packages - It was indicated that revenue growth would be gradual as the transition to the new subscription model occurs over the year [46][47] Question: Operational partnership changes with AutoNation - The company continues to engage with AutoNation, focusing on digital retailing and collaboration opportunities [58][59]