TrueCar (TRUE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $41.8 million, up 6.4% year-over-year, with net loss narrowing to $13.5 million from $20.4 million in Q2 2023 and Adjusted EBITDA turning positive at $0.1 million, a $5.4 million improvement.

• Dealer network growth, new product adoption (TCMS, TCWS), and expanded offerings drove improved sales effectiveness and revenue per dealer.

• Average monthly unique visitors declined 7% year-over-year to 7.7M, but units sold increased 7.6% to 89K, with franchise dealer count stable at 8,274 and independent dealers at 3,200.

• CDK Global malware attack caused an estimated $750,000 in lost revenue during the quarter.

• Launched TrueCar+ pilot in July, enabling fully online vehicle purchases for over 3,000 vehicles.

Financial highlights

• Revenue: $41.8M (+6.4% YoY, +1.8% QoQ); Net loss: ($13.5M) vs. ($20.4M) YoY; Adjusted EBITDA: $0.1M vs. ($5.3M) YoY.

• Gross margin was 86.9%, down from 90.0% YoY; gross profit was $36.3M.

• Cash and equivalents stood at $128.0M with no debt as of June 30, 2024.

• Dealer count: 11,474 (8,274 franchise, 3,200 independent); units sold: 89K (+7.6% YoY).

• Monetization per unit: $468, down from $474 YoY.

Outlook and guidance

• Targeting $300 million in revenue and 10% free cash flow margin by end of 2026; aiming for free cash flow breakeven exiting Q4 2024.

• Focused on activating new dealers, reducing churn, growing revenue per dealer, and expanding OEM partnerships.

• Plans to scale TrueCar+ more broadly in Q4 2024 after pilot validation.

• Existing liquidity expected to be sufficient for at least the next 12 months, with future capital needs dependent on revenue, investments, and macroeconomic factors.

• Positive on Q3 OEM segment performance and expect no further material impact from CDK incident.