TrueCar(TRUE) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - TrueCar reported challenges in the macro environment, with slight improvements in new vehicle inventories and elevated pricing for both new and used vehicles impacting close rates and reported units [7][8] - Used units accounted for approximately 45% of total units in Q4, up from 36% in the same quarter a year ago [13] Business Line Data and Key Metrics Changes - The company made significant progress in strengthening its used car offerings, with plans for several product launches in upcoming quarters [14] - TrueCar+ pilot has garnered strong interest from dealers, leading to an extension of brands and dealers involved in the pilot [8] Market Data and Key Metrics Changes - The company noted that the lack of inventory has made it difficult to drive units through, particularly for new cars [31] - Traffic on the platform remained healthy despite a pullback in marketing efforts, indicating the robustness of TrueCar's platform [31] Company Strategy and Development Direction - TrueCar is focusing on the rollout of TrueCar+, targeting full market and brand coverage for new cars across Florida and a robust statewide rollout for used cars by the end of Q2 [10] - The company aims to build a transaction-focused marketplace model, emphasizing value for dealers in each transaction rather than software sales [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term opportunities presented by TrueCar+, despite expecting negative adjusted EBITDA in 2022 due to ongoing investments [15][16] - The company anticipates a lag in inventory replenishment and pricing reset, which will impact dealer focus and expansion [54] Other Important Information - TrueCar's CFO, Jantoon Reigersman, has been appointed as Chief Operating Officer, effective March 1, underscoring the company's commitment to the success of TrueCar+ [9] Q&A Session All Questions and Answers Question: What can you tell us about the rollout for TrueCar+? - The commercial launch of TrueCar+ is expected by the end of Q1, with full market coverage in Florida for new cars and a statewide rollout for used cars by the end of Q2 [10] Question: Can you provide more color on the negative adjusted EBITDA expected in 2022? - The company plans to maintain flexibility to support the broader rollout of TrueCar+, with investments in sales, marketing, product, and tech support [16] Question: How does the recent announcement about Accu-Trade affect TrueCar? - TrueCar received an attractive offer for its minority interest in Accu-Trade, which was deemed unnecessary for continuing to provide best-in-class consumer experiences [18] Question: Can you help quantify the magnitude of the investments for TrueCar+? - While specific magnitudes were not disclosed, a significant portion of the company's focus will be on marketing, product, and engineering for TrueCar+ [21][22] Question: How do you see monetization progressing in 2022? - The company expects monetization from TrueCar+ to be significantly higher in the long term, but does not anticipate immediate revenue contributions in the near term [25][26] Question: Can you provide insights on dealer churn trends? - Dealer churn was at low levels compared to pre-COVID, but the challenge lies in adding new car franchise dealers due to low inventory [45] Question: How many OEMs are you working with for TrueCar+? - TrueCar is engaging with multiple OEM partners about TrueCar+, aiming to be the first multi-brand marketplace for consumers [34]