On August 5, 2024, TrueCar Inc (TRUE, Financial) released its 8-K filing for the second quarter of 2024. TrueCar Inc is a data-driven online platform that provides market-based pricing data on new and used cars, connecting users with its network of TrueCar Certified Dealers. The company also customizes and operates its platform for affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for large enterprises.
Performance Overview
TrueCar Inc reported total revenue of $41.8 million for Q2 2024, which represents a 6.4% year-over-year (YoY) increase and a 1.8% quarter-over-quarter (QoQ) increase. However, this figure fell short of the analyst estimate of $47.53 million. The company’s net loss decreased significantly to $13.5 million from $20.4 million in Q2 2023, showing a marked improvement. TrueCar also achieved adjusted EBITDA profitability of $0.1 million, a $5.4 million improvement YoY.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $41.8 million | $39.3 million |
| Net Loss | ($13.5 million) | ($20.4 million) |
| Adjusted EBITDA | $0.1 million | ($5.3 million) |
| Cash & Equivalents | $128.0 million | $142.4 million |
Challenges and Strategic Initiatives
TrueCar faced several challenges during the quarter, including the broad impact of the CDK Global malware attack, which temporarily limited growth. The company estimates approximately $350 thousand in lost pay-per-sale revenue and $400 thousand in lost OEM incentive revenue due to the CDK outage.
Despite these setbacks, TrueCar made significant progress in several areas. The company launched a TrueCar+ pilot, enabling consumers to purchase vehicles entirely online. Additionally, TrueCar is focusing on regaining important dealers on its platform and commercializing new value drivers, including unique data sets and predictive AI capabilities.
Financial Achievements and Industry Impact
TrueCar’s financial achievements are noteworthy, particularly in the context of the interactive media industry. The company’s ability to narrow its net loss and achieve adjusted EBITDA profitability is a positive sign for investors. TrueCar’s focus on expanding its dealer network and enhancing its product offerings, such as the TrueCar Marketing Solutions (TCMS) product suite, is expected to drive future growth.
Income Statement and Balance Sheet Highlights
TrueCar’s gross profit for Q2 2024 was $36.3 million, with a gross margin of 86.9%. Technology and development expenses were $7.4 million on a GAAP basis, down 45.0% YoY. General and administrative expenses were $15.4 million on a GAAP basis, up 21.3% YoY due to impairment charges on office leases. Sales and marketing expenses were $23.9 million on a GAAP basis, down 11.9% YoY.
On the balance sheet, TrueCar ended the quarter with $128.0 million in cash and equivalents and no debt, providing the company with financial flexibility to invest in growth initiatives.
Analysis and Outlook
TrueCar’s performance in Q2 2024 highlights both the challenges and opportunities facing the company. While revenue fell short of analyst estimates, the significant improvement in net loss and adjusted EBITDA profitability are positive indicators. The company’s strategic initiatives, including the launch of TrueCar+ and the expansion of its dealer network, position it well for future growth. However, the impact of external factors such as the CDK Global malware attack underscores the importance of operational resilience.
Overall, TrueCar’s Q2 2024 results reflect a company in transition, making strategic investments to drive long-term growth while navigating short-term challenges.
Explore the complete 8-K earnings release (here) from TrueCar Inc for further details.
