TrueCar sees Q2 revenue slowdown, reports broad net loss

Vehicle listing company TrueCar saw a sharp drop in revenue in the second quarter and deepened its net loss as it reported pressure from inventory crunch and rising vehicle prices.

Santa Monica, Calif.-based TrueCar on Tuesday reported a net loss of $11 million for the quarter ended June 30, up from a net loss of $7.3 million in the same quarter a year ago. Revenue fell 36 percent to $42.3 million, which company leaders attributed to pressure on its close rates due to inventory and pricing conditions. TrueCar’s pay-per-sale transaction revenue made up a smaller part of its dealer revenue in the second quarter compared to a year ago, the company reported.

“The prospect of a global supply chain recovery is still several quarters away, and uncertainty remains high due to geopolitical events and headwinds such as a slowing US economy and rising interest rates,” CEO Mike Darrow told analysts on an earnings call Wednesday. happened.”

“We continue to expect some volatility in our key metrics during 2022,” Darrow said. “In this environment, we are continuing to manage our business and our resources efficiently.”

TrueCar reported 12,086 dealership customers in the second quarter, of which 7,908 were franchisees. Its franchisee dealership customer base has declined 18 percent year-on-year, while the number of independent dealerships on its platform has grown by 18 percent. TrueCar leaders said this reflects a gap in the availability of new and used vehicles.

Company executives presented new data about its emerging TrueCar+ digital sales platform, saying it was used by more than 80 dealerships in Florida and included more than 7,000 new, used and pre-owned ones through June. Vehicles included. CFO Jantoon Reigersman said the company aims to expand TrueCar+ nationwide for used vehicles and three to five states beyond Florida for new vehicles by the end of the year.

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Q2 Revenue: $42.3 million, down 36% from a year ago

Q2 Net Loss: $11 million, up from a year-ago net loss of $7.3 million

Q2 Adjusted EBITDA: Net loss of $5 million from a net profit of $4.7 million a year ago

Advice: It did not provide a quarterly financial outlook, citing uncertainty related to supply chain challenges, low vehicle inventory and higher prices. Adjusted EBITDA is expected to be negative in 2022.