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| Statement |
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| Obviously growth is up to the right, never is perfectly linear and we are confident that we're building up the building blocks required to get to this effectively compound growth rate that we're seeking over the course of the next three years |
| Meanwhile, we saw encouraging signs of a potential bottoming in our total active dealer count, which was flat quarter-over-quarter with 11,500 active dealers at the end of Q4 versus 11,503 at the end of Q3, driven by the net addition of 135 franchise dealers offset by the net loss of 138 independent dealers in Q4 |
| And so once we do prove that we can execute that, hopefully in the first half of this year, I do think we have a marketplace that's truly differentiated from all the others out there, and that'll help us sort of regain our share of dealers and hopefully retain our existing dealers |
| The reason I say that is because I do believe that once we do transact that first entirely digital online new car purchase, we have a very differentiated marketplace that provides a very unique value proposition to dealers and we sort of outline some of those key value props for the dealer, whether it's expanding their addressable market, it's improving their ability to drive F&I sales |
| We believe TrueCar's leverage towards franchise dealers combined with our unique ability to offer targeted OEM incentives to our 250-plus affinity partner audiences positions us to capitalize on the growing focus on new vehicle sales |
| So, yes, we see a continued decline of smaller independents throughout the year, but obviously, a good traction with larger independents and good traction with franchises |
| Therefore, we're confident that the rollout and adoption of our TCMS products will serve as a key building block for our near term growth objectives by helping us attract and retain key dealer partners while growing revenue per dealer |
| So, I'm really proud of them and want to thank them for all the contribution they're making |
| For dealers who want to offer, one, an expansion of their addressable market and the ability to compete for consumers nationwide; two, superior attachment rates across the dealer's customizable F&I menu; three, a significant improvement in sales volume and efficiency by delivering a completed transaction ready for fulfilment; and four, access to a risk-free trade-in |
| We have a huge opportunity ahead of us and the team is doing tremendous work |
| But overarching, we see a huge opportunity in the OEM side in general and so, we do feel that there's a large, like, if you look at it on a yearly basis, for example, that there's a large opportunity for us to obviously grow that revenue line and obviously, we as part of the longer-term trajectory that we've outlined, we obviously feel that we should get back to historical OEM numbers and beyond as we start looking in the outer years |
| Looking beyond Q1, we anticipate an acceleration of our revenue and EBITDA growth and are confident that we can achieve positive free cash flow in the second half of the year |
| In Q4, we achieved 13% year-over-year revenue growth and achieved adjusted EBITDA profitability of $2.1 million, a $12.1 million improvement year-over-year |
| Number three, grow average revenue per dealer through our expanded product offering |
| Vis-à-vis your question on white labelling, those are things that are absolutely very interesting opportunities for us |
| So, if you think about the online transaction space and you think about the entry point that every consumer has, then there are very interesting opportunities for us to already capture people at the earlier stage and think of, hey, you're a lender and you have a very committed consumer who wants to lend with you and through you, but wants to find their car and already be effectively pre-qualified on your own side |
| Q4 now we've had double digit growth |
| We're obviously very focused still on the larger independents, and we see good traction there, but they obviously run a very different business |
| We continue to deliver as promised |
| Oliver Foley I'll just chime in quickly and say that in my view, the number one way that TrueCar+ will be monetized in 2024 is by helping us attract new dealers and retain existing dealers |
| First, incentive revenue has grown pretty materially |
| Further highlighting this trend, new vehicle sales compromised 59% of the total units sold on TrueCar in Q4, which is up from 50% of total units sold in Q4 2022 and up from 56% of total units sold in Q3 2023 |
| And we finally broke the back of that candle in order to actually make that happen vis-à-vis paperwork, but opportunities like white labelling are big opportunities for us going forward |
| The result is a new offering that is not only highly complimentary and accretive to the core listings lead gen business for which dealers have come to know us, but also represents a new cost effective alternative to the traditional digital marketing channels that presently capture a significant share of dealers' digital marketing budgets |
| If you look at the description that we provided on each of the TCMS products, you'll see that some of them are I think very programmatic and they're really good candidates to be incorporated into our existing subscription bundles |
| And so, there's going to be a pre-qualification that's going to happen around the dealers that can be on because obviously we want to make sure that that experience is a really good experience for both consumer and dealer, and that we're really making sure we're very thoughtful about consumers being able to find the right inventory and where the right inventory is available |
| Right now, we still maintain over $135 million on our balance sheet and we're very keen to sort of come up with a deliberate strategy for the second half of this year, given that we do expect to be free cash flow positive in the second half of this year |
| We aim for 10% year-over-year revenue growth in Q1 and around breakeven adjusted EBITDA |
| I also want to thank the entire team at TrueCar for all their continued dedication and perseverance |
| And four, continue to grow our OEM partnerships |
| Statement |
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| This is consistent with our viewpoint that while independent dealers continue to be challenged by today's high interest rate environment, franchise dealers in particular are increasingly in need for TrueCar services to help them cope with growing new car inventories |
| Q1, it always seems to come down slightly and so, I would say that's really sort of the seasonality behind the OEM side of the business |
| The development and launch of TCMS was informed by and in response to feedback shared by many of our dealer partners related to their most common challenges around one, identifying and reaching targeted audiences of in-market consumers; two, standing out from the sea of competing dealers in a consumer environment lacking the brand loyalty of the past and three; cost effective ways to showcase and promote inventory not being surfaced by the more common search algorithms |
| So, I would say the tech and dev expense in Q4 is slightly below what the run rate should be |
| As a reminder, our first quarter of the year adjusted EBITDA flow through is typically seasonally lower due to payroll related and NADA expenses |
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