TrueCar, Inc. (NASDAQ: TRUE) today announced its financial results for the first quarter ended March 31, 2017.
- First quarter total revenue up 22% from a year ago to $75.8 million.
- First quarter net loss of $(6.8) million, or $(0.08) per share, compared to net loss of $(11.7) million, or $(0.14) per share, in the first quarter of 2016.
- First quarter Non-GAAP net loss(1)of $(0.7) million, or $(0.01) per share, compared to Non-GAAP net loss of $(5.5) million, or $(0.07) per share, in the first quarter of 2016.
- First quarter Adjusted EBITDA(2)of $6.1 million, representing an Adjusted EBITDA margin of 8.0%, compared to Adjusted EBITDA of $1.1 million, representing an Adjusted EBITDA margin of 1.7%, in the first quarter of 2016.
- Units(3)were 217,656 in the first quarter of 2017, up 24% from 174,982 in the first quarter of 2016.
- Franchise dealer count(4) was 11,734 as of March 31, 2017, a record and an increase from 11,151 as of December 31, 2016.
- Independent dealer count(5) was 2,716 as of March 31, 2017, a record and an increase from 2,597 as of December 31, 2016.
Management Commentary
“After just completing our successful public offering, we are pleased with the financial results in the first quarter of fiscal 2017 and the momentum we are building as we head into the seasonally strongest part of our year,” said Mike Guthrie, Chief Financial Officer.
“Because our core business is healthy again, we are ready to pursue a bigger and broader strategy,” said Chip Perry, TrueCar’s President and CEO. Perry continued, “in addition to our market-leading Inventory and Pricing Solution, we are moving upstream into the Research and Discovery phase of the car buying journey, as well as downstream into the Transaction phase. Our Research and Discovery solution will start with unique content built around our core competency in pricing. Our experience will also focus on verified owner reviews. Finally, we are designing OEM showcases that will enable auto manufacturers to present their products to millions of shoppers in an ad-free experience. We believe this approach will simplify the car buying process for consumers and enable dealers and manufacturers to spend their marketing dollars more effectively. Downstream of us, TrueCar is about to launch a pilot with a large vehicle wholesaler to bring more transparency to the trade-in portion of the transaction.” Perry concluded, “all in all, I believe our end-to-end approach will enable TrueCar to build the most comprehensive and accountable marketplace in the automotive industry.”
Non-GAAP net loss is a Non-GAAP financial measure. Refer to its definition and accompanying reconciliation to GAAP net loss below.
Adjusted EBITDA is a Non-GAAP financial measure. Refer to its definition and accompanying reconciliation to GAAP net loss below.
Units: We define units as the number of automobiles purchased by our users from TrueCar Certified Dealers through TrueCar.com and our mobile applications or the car buying sites and mobile applications we maintain for our affinity group marketing partners.
Franchise Dealer count: We define franchise dealer count as the number of franchise dealers in the network of TrueCar Certified Dealers at the end of a given period. This number is calculated by counting the number of brands of new cars sold by dealers in the TrueCar Certified Dealer network at their locations, and includes both single-location proprietorships as well as large consolidated dealer groups. Note that this number excludes Genesis franchises on our program as of March 31, 2017 due to Hyundai’s recent transition of Genesis to a stand-alone brand. In order to facilitate period over period comparisons, we have continued to count each Hyundai franchise that also has a Genesis franchise as one franchise dealer rather than two.
Independent Dealer count: We define independent dealer count as the number of dealers in the network of TrueCar Certified Dealers at the end of a given period that exclusively sell used vehicles and are not directly affiliated with a new car manufacturer. This number is calculated by counting each location individually, and includes both single-location proprietorships as well as large consolidated dealer groups.
First Quarter 2017 Financial Highlights
- Total revenue of $75.8 million.
- Net loss of $(6.8) million, or $(0.08) per basic and diluted share, compared to a net loss of $(11.7) million, or $(0.14) per basic and diluted share, in the first quarter of 2016.
- Non-GAAP net loss of $(0.7) million, or $(0.01) per basic and diluted share, compared to Non-GAAP net loss of $(5.5) million, or $(0.07) per basic and diluted share, in the first quarter of 2016.
- Adjusted EBITDA of $6.1 million, representing an Adjusted EBITDA margin of 8.0%, compared to Adjusted EBITDA of $1.1 million, representing an Adjusted EBITDA margin of 1.7%, in the first quarter of 2016.
Key Operating Metrics
- Average monthly unique visitors(6)increased 10% to 7.3 million in the first quarter of 2017, up from 6.7 million in the first quarter of 2016.
- Units were 217,656 in the first quarter of 2017, up 24% from 174,982 in the first quarter of 2016.
- Monetization(7)was $324 during the first quarter of 2017, compared to $328 during the first quarter of 2016.
- Franchise dealer count was 11,734 as of March 31, 2017, a record and an increase from 11,151 as of December 31, 2016.
- Independent dealer count was 2,716 as of March 31, 2017, a record and an increase from 2,597 as of December 31, 2017.
Business Outlook
TrueCar’s guidance for the second quarter ending June 30, 2017 is as follows:
- Units are expected to be in the range of 235,000 to 240,000.
- Revenues are expected to be in the range of $79.0 million to $81.0 million.
- Adjusted EBITDA is expected to be in the range of $6.0 million to $7.0 million.(8)
Guidance for the full year ending December 31, 2017 is as follows:
- Units are expected to be in the range of 950,000 to 960,000.
- Revenues are expected to be in the range of $322.0 million to $327.0 million.
- Adjusted EBITDA is expected to be in the range of $23.0 million to $26.0 million.(8)
Average monthly unique visitors: We define a monthly unique visitor as an individual who has visited our website, our landing page on our affinity group marketing partner sites, or our mobile applications within a calendar month. We calculate average monthly unique visitors as the sum of the monthly unique visitors divided by the number of months in that period.
Monetization: We define monetization as the average transaction revenue per unit, which we calculate by dividing all of our transaction revenue in a given period by the number of units in that period.
We are unable to provide reconciliations of forward-looking Adjusted EBITDA without unreasonable effort because we are unable to provide a forward-looking estimate of certain reconciling items between GAAP net loss and Adjusted EBITDA due to uncertainty regarding, and the potential variability of, stock-based compensation due to timing, valuation and number of future employee awards, warrant expense due to achievement of minimum performance milestones based on the level of vehicle sales and certain litigation costs due to timing, status, and cost of litigation, both of which may have a significant impact on GAAP results.
Conference Call Information
Members of TrueCar management will host a conference call today, May 9, 2017, to discuss the first quarter results at 4:30 p.m. Eastern Time. To participate, domestic callers should dial 1-877-407-0789 and international callers should dial 1-201-689-8562. In addition, a live webcast of the call will be accessible through the Investor Relations section of TrueCar’s website at ir.true.com and will be archived online for 90 days upon completion of the conference call. A replay of the call will also be available the same day from 7:30 p.m. until 11:59 p.m. Eastern Time, on Tuesday, May 23, 2017, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the replay pin number: 13646114. TrueCar has used, and intends to continue to use, its Investor Relations website (ir.true.com), Twitter (@TrueCar), and Facebook (www.facebook.com/TrueCar), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
