TrueCar Inc ((TRUE)) has held its Q1 earnings call. Read on for the main highlights of the call.
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
TrueCar Inc’s recent earnings call painted a mixed picture for investors, with strong revenue and sales growth juxtaposed against ongoing financial challenges and market uncertainties. The company reported impressive progress in expanding its partnerships and initiatives, yet concerns lingered over negative EBITDA and the impact of new tariffs.
Strong Revenue Growth
TrueCar Inc reported a total revenue of $44.8 million for the first quarter of 2025, marking a 9.2% increase compared to the previous year. This growth underscores the company’s ability to enhance its financial performance amidst a competitive market environment.
Significant Increase in New Unit Sales
The company achieved a remarkable 23% increase in new unit sales volumes year-over-year, significantly outpacing the industry’s growth rate of 6.8%. This surge highlights TrueCar’s competitive edge in capturing market share and driving sales.
Expansion of Affinity Network
TrueCar expanded its affinity network by adding notable partners such as DoorDash, GasBuddy, and GovX. This strategic expansion is expected to enhance customer reach and engagement, further solidifying TrueCar’s market position.
Progress with TC+
The TC+ initiative showed promising results, with a third of the pilot dealer group’s sales driven by consumers completing significant portions of their purchases online. This progress indicates the potential for TC+ to revolutionize the car buying experience.
Efficient Performance Marketing Campaigns
The company achieved the lowest cost per sale since 2022, which contributed to the growth in unit sales for dealer partners. This efficiency in marketing campaigns is a testament to TrueCar’s strategic focus on cost-effective growth.
Adjusted EBITDA Remains Negative
Despite the positive revenue growth, TrueCar reported a negative adjusted EBITDA of $3.8 million for the first quarter of 2025. This ongoing financial challenge remains a concern for stakeholders.
Impact of Tariffs on Automotive Sector
The introduction of 25% tariffs on imported vehicles and parts is expected to add approximately $4,500 in additional costs per new vehicle. This development creates uncertainty in the automotive industry and poses potential challenges for TrueCar.
Delay in TC+ Backend Integration
The completion of backend integration with dealer management systems CDK and Tekion has been delayed. This delay is attributed to the prioritization of external resources outside TrueCar’s control, impacting the rollout of TC+.
No Financial Guidance Provided
Due to market uncertainties, TrueCar has refrained from providing financial guidance for the second quarter and beyond. The company is focusing on maintaining flexibility to manage potential impacts from these uncertainties.
Forward-Looking Guidance
TrueCar’s forward-looking guidance remains cautious, with the company highlighting its focus on expanding the TC+ product for broad scalability by year-end. However, the uncertainty introduced by new tariffs has led to a decision against providing specific financial guidance, emphasizing the need for adaptability in the current market landscape.
In summary, TrueCar Inc’s earnings call reflected a blend of optimism and caution. While the company demonstrated strong revenue and sales growth, challenges such as negative EBITDA and market uncertainties due to tariffs remain. Investors will be keenly watching how TrueCar navigates these challenges and leverages its strategic initiatives moving forward.