• Annual Revenue: $175.6 million, a 10.6% increase year over year.
• Adjusted EBITDA: $1.6 million, an increase of $15.3 million year over year.
• Cash Flow from Operations: $7.7 million, a year over year improvement of $30.1 million.
• Free Cash Flow: Negative $0.2 million, a year over year improvement of $34.1 million.
• Total Unit Sales: 356,000 units, an 11.7% increase year over year.
• New Vehicle Unit Sales: 204,000 units, a 15.6% increase year over year.
• Franchise Dealer Count: Increased by 119 dealers to 8,351, a 1.4% increase year over year.
• Q4 Revenue: $46.2 million, an 11.9% increase year over year.
• Q4 Adjusted EBITDA: $0.4 million.
• Q4 Cash Flow from Operations: $5.9 million.
• Q4 Free Cash Flow: $4.1 million, an increase of $12.2 million year over year.
• Q4 Total Units: 93,000 units, a 22% increase year over year.
• Q4 New Units: 58,000 units, a 27.8% increase year over year.
• Share Repurchase: 6.1 million shares of TrueCar stock repurchased.

• Warning! GuruFocus has detected 3 Warning Signs with TRUE.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TrueCar Inc (NASDAQ:TRUE) reported a 10.6% year-over-year revenue growth, reaching $175.6 million, marking the strongest annual revenue growth since 2017.
• Adjusted EBITDA improved significantly, growing by $15.3 million year-over-year to $1.6 million.
• The company achieved a year-over-year improvement in cash flow from operations by $30.1 million, reaching $7.7 million.
• TrueCar Inc (NASDAQ:TRUE) successfully launched TC Plus, becoming the first digital marketplace to enable the purchase and sale of new, used, and certified pre-owned vehicles entirely online.
• The company repurchased 6.1 million shares of its stock, indicating confidence in its future prospects and returning value to shareholders.

Negative Points

• TrueCar Inc (NASDAQ:TRUE) expects a modest Q1 revenue growth in the high single digits, with a negative adjusted EBITDA of approximately $5 million due to increased headcount and marketing investments.
• The company faces challenges with dealer churn, particularly among smaller independent dealers, due to high-interest rates and inventory financing difficulties.
• The loss of the American Express partnership is expected to impact Q1 revenue, creating a gap that needs to be bridged with new partnerships.
• TrueCar Inc (NASDAQ:TRUE) is experiencing a transitional phase with its OEM incentive revenue, which has not yet fully recovered to pre-pandemic levels.
• The integration of DMS with TC Plus is still in progress, requiring further development to fully automate the buying process and reduce manual tasks for dealers.

Q & A Highlights

Q: Could you elaborate on the first quarter guidance and the step-up in expenses? Are there specific areas being targeted, and what gives you confidence in accelerating revenue growth in the second half of the year? A: Jantoon Reigersman, CEO: The focus is on increasing headcount, particularly in sales and marketing, to support dealers and drive sales. We are also investing in marketing efficiency and technology advancements, including AI. Oliver Foley, CFO, added that the restructuring of sales and service teams has improved productivity, and the new hires are expected to reduce dealer churn and drive growth.

Q: Can you provide more details on the DMS integration with TrueCar Plus? What phase are you in, and when do you expect it to contribute meaningfully? A: Jantoon Reigersman, CEO: We are integrating with major DMS providers like CDK to streamline the buying process for dealers. The goal is to automate documentation to reduce manual tasks for dealers. Financial contributions from TC Plus are expected to become more meaningful next year as we expand dealer participation and inventory.

Q: Should we expect the trend of increasing franchise dealers and independent dealer churn to continue into 2025? How does the 12-month dealer service program impact each group? A: Jantoon Reigersman, CEO: We focus on franchise dealers and larger independents, as smaller independents face challenges in the current market. The 12-month service program is tailored to support franchises and larger independents, aiming to reduce churn and enhance dealer performance.

Q: How do you view the opportunity for adding new affinity partners? A: Jantoon Reigersman, CEO: The affinity side is a significant opportunity, with efficient product-market fit. We aim to scale by adding more affinity partners while maintaining strong relationships with existing ones. This strategy is crucial for both core business growth and the long-term success of TC Plus.

Q: Regarding the OEM incentive revenue line, is there potential to return to pre-pandemic levels? A: Jantoon Reigersman, CEO: We believe there is significant potential for growth beyond pre-pandemic levels. OEMs are likely to increase incentives as inventory normalizes, and our ability to offer targeted incentives without affecting residual values is a strong advantage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.