TrueCar sees revenue drop in second quarter, posts larger net loss

Vehicle ad company TrueCar suffered a sharp drop in revenue in the second quarter and widened its net loss as he reported the pressure of a shortage of stocks and rising vehicle prices.

TrueCar, based in Santa Monica, Calif., reported a net loss of $11 million in the quarter ended June 30 on Tuesday, higher than a net loss of $7.3 million in the same quarter a year earlier. Revenue fell 36% to $42.3 million, which company executives attributed to pressure on its closing rates due to inventory and pricing conditions. Revenue from TrueCar’s pay-as-you-go transactions represented a smaller share of its dealership revenue in the second quarter than a year earlier, the company reported.

“A global supply chain recovery is likely still several quarters away in our view, and uncertainty remains high due to geopolitical events and headwinds like the slowing US economy and rising interest rates. interest,” CEO Mike Darrow told analysts on an earnings call Wednesday.

“We continue to expect some volatility in our key indicators throughout 2022,” Darrow said. “In this environment, we continue to manage our operations and resources effectively.”

TrueCar reported 12,086 dealer customers in the second quarter, including 7,908 franchisees. The number of customers at its franchise dealerships fell 18% year over year, while the number of independent dealerships on its platform increased by 18%. TrueCar executives said this reflects the divergent availability of new and used vehicles.

Company executives provided new data on 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 used vehicles. opportunity until June. Chief Financial Officer Jantoon Reigersman said the company aims to expand TrueCar+ across the country for used vehicles and in three to five states beyond Florida for new vehicles by the end of the year.

Q2 turnover: $42.3 million, down 36% from the previous year

Net loss in Q2: $11 million, more than a net loss of $7.3 million the previous year

Q2 adjusted EBITDA: Turned to a net loss of $5 million from a net gain of $4.7 million a year earlier

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

Ann J. Cox