Super Group Reports Financial Results for Second Quarter of 2025
Neal Menashe, Chief Executive Officer of Super Group, commented: 'We had a Super first half of 2025, driven by a record-breaking second quarter. The quarter's success was fueled by strong execution across our key markets, a full calendar of global sporting events, increased deposits, high customer retention, and margin expansion. While our decision to exit the U.S. was difficult, we believe that this step demonstrates our commitment to capital efficiency and long-term profitability. With continued focus on scaling our technology globally, Super Group should be even better positioned for sustained, profitable growth.'
Alinda van Wyk, Chief Financial Officer of Super Group, stated: 'Q2 marked the strongest quarterly financial performance in Super Group's history, with revenue up 30% year-over-year and Adjusted EBITDA up 78% year-over-year to $157 million, delivering a healthy 27% margin. These results underscore our scalable, cost-efficient operating model and controlled marketing spend. We ended the quarter with $393 million in unrestricted cash and zero debt, and returned $20 million to shareholders, bringing our 12-month capital returns to $166 million. Driven by our continued focus on core markets, we are raising our full-year Adjusted EBITDA guidance and remain confident in delivering long-term value to our shareholders.'
Financial Highlights:
Revenue increased by 30% to $579.4 million for the second quarter of 2025 from $446.5 million in the same period of the prior year, driven by growth from the Africa, Europe and North America markets partially offset by declines from the LATAM, Middle East and Asia-Pacific markets.
Profit before tax was $38.8 million for the second quarter of 2025 and includes a non-cash charge of $63.9 million related to the impairment of Digital Gaming Corporation Limited ("DGC")' iGaming related assets and $22.6 million relating to onerous contracts. By comparison, profit before tax for the second quarter of 2024 was $22.1 million and included a non-cash charge of $39.6 million related to the impairment of DGC's sportsbook assets.
Adjusted EBITDA, a non-GAAP financial measure, increased by 78% to $156.7 million for the second quarter of 2025 compared to $88.2 million in the second quarter of 2024.
Monthly Active Customers increased by 21% to 5.5 million for the second quarter of 2025 compared to 4.5 million in the second quarter of 2024.
Balance Sheet: Total Assets: $1.1 billion; Total Liabilities: $454.4 million; Total Equity: $662.3 million.
Cash and cash equivalents was $393.0 million as of June 30, 2025 compared to $388.0 million at December 31, 2024.
Dividends of $20.2 million was paid during the quarter, bringing the 12-month capital returns to $166 million.
Guidance 2025
Super Group is raising its full-year Group Adjusted EBITDA guidance to $470-$480 million.
Ex-U.S. Adjusted EBITDA is now expected to be between $500-$510 million, up from greater than $480 million compared to prior guidance.
U.S. Adjusted EBITDA is expected to be a loss of $30 million, excluding one-off cost of U.S. exit.
Interim Financial Statements:
The Group intends to publish a condensed set of interim accounts for the six months ended June 30, 2025 and comparative period by the end of August 2025, which will include a condensed Statement of Profit or Loss and Other Comprehensive Income, condensed statement of Financial Position, condensed Statement of Changes in Equity, condensed Statement of Cash Flows and relevant notes.
Revenue by Geographical Region for the Three Months Ended June 30, 2025 in $ millions:
Betway
Spin
Total
Africa and Middle East
225
4
229
Asia-Pacific
9
28
37
Europe
81
28
109
North America
37
162
199
South/Latin America
3
2
5
Total revenue
355
224
579
%
%
%
Africa and Middle East
63 %
2 %
40 %
Asia-Pacific
3 %
13 %
6 %
Europe
23 %
12 %
19 %
North America
10 %
72 %
34 %
South/Latin America
1 %
1 %
1 %
Revenue by Geographical Region for the Three Months Ended June 30, 2024 in $ millions*:
Betway
Spin
Total
Africa and Middle East
164
1
165
Asia-Pacific
7
33
40
Europe
49
23
72
North America
41
120
161
South/Latin America
4
5
9
Total revenue
265
182
447
%
%
%
Africa and Middle East
62 %
1 %
37 %
Asia-Pacific
3 %
18 %
9 %
Europe
18 %
13 %
16 %
North America
15 %
65 %
36 %
South/Latin America
2 %
3 %
2 %
* The Group has adopted a change in presentation currency from Euros to USD at January 1, 2025. Accordingly, the comparative table has been re-presented retrospectively as outlined under the change in presentation currency note.
Revenue by Geographical Region for the Six Months Ended June 30, 2025 in $ millions:
Betway
Spin
Total
Africa and Middle East
426
6
432
Asia-Pacific
14
56
70
Europe
151
53
204
North America
76
304
380
South/Latin America
6
4
10
Total revenue
673
423
1,096
%
%
%
Africa and Middle East
63 %
1 %
39 %
Asia-Pacific
3 %
13 %
6 %
Europe
22 %
13 %
19 %
North America
11 %
72 %
35 %
South/Latin America
1 %
1 %
1 %
Revenue by Geographical Region for the Six Months Ended June 30, 2024 in $ millions:
Betway
Spin
Total
Africa and Middle East
316
1
317
Asia-Pacific
16
62
78
Europe
90
43
133
North America
76
238
314
South/Latin America
8
8
16
Total revenue
506
352
858
%
%
%
Africa and Middle East
62 %
0 %
37 %
Asia-Pacific
3 %
18 %
9 %
Europe
18 %
12 %
15 %
North America
15 %
68 %
37 %
South/Latin America
2 %
2 %
2 %
Revenue by product line for the Three Months Ended June 30, 2025 in $ millions:
Betway
Spin
Total
Online casino 1
230
224
454
Sports betting 1
116
—
116
Brand licensing 2
8
—
8
Other 3
1
—
1
Total revenue
355
224
579
Revenue by product line for the Three Months Ended June 30, 2024 in $ millions:
Betway
Spin
Total
Online casino 1
166
182
348
Sports betting 1
91
—
91
Brand licensing 2
6
—
6
Other 3
2
—
2
Total revenue
265
182
447
Revenue by product line for the Six Months Ended June 30, 2025 in $ millions:
Betway
Spin
Total
Online casino 1
436
423
859
Sports betting 1
222
—
222
Brand licensing 2
12
—
12
Other 3
3
—
3
Total revenue
673
423
1,096
Revenue by product line for the Six Months Ended June 30, 2024 in $ millions *:
Betway
Spin
Total
Online casino 1
318
351
669
Sports betting 1
170
—
170
Brand licensing 2
12
—
12
Other 3
6
1
7
Total revenue
506
352
858
1 Sports betting and online casino revenues are not within the scope of IFRS 15 'Revenue from Contracts with Customers' and are treated as derivatives under IFRS 9 'Financial Instruments'.
2 Brand licensing revenues are within the scope of IFRS 15 'Revenue from Contracts with Customers'.
3 Other relates to profit share, royalties and outsource fees from external customers.
* The Group has adopted a change in presentation currency from Euros to USD at January 1, 2025. Accordingly, the comparative table has been re-presented retrospectively as outlined under the change in presentation currency note.
Non-GAAP Financial Information
This press release includes non-GAAP financial information not presented in accordance with the International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board.
EBITDA, Adjusted EBITDA, Adjusted EBITDA ex-US, Adjusted EBITDA US are non-GAAP company-specific performance measures that Super Group ("the Group") uses to supplement the Company's results presented in accordance with IFRS. EBITDA is defined as profit before depreciation, amortization, finance income, finance expense and income tax expense. Adjusted EBITDA is EBITDA adjusted for RSU expense, change in fair value of options, unrealized foreign exchange, gain on disposal of business and other adjustments. Adjusted EBITDA ex-US is Adjusted EBITDA relating to the rest of the Group, excluding Digital Gaming Corporation ('DGC'). Adjusted EBITDA US is Adjusted EBITDA relating to DGC.
Super Group believes that these non-GAAP measures are useful in evaluating the Company's operating performance as they provide additional perspective on the financial performance of our core business, are similar to measures reported by the Company's public competitors and are regularly used by securities analysts, institutional investors and other interested parties in analyzing operating performance and prospects.
Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with IFRS. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by IFRS to be recorded in Super Group's financial statements. In order to compensate for these limitations, management presents non-GAAP financial measures together with IFRS results. Non-GAAP measures should be considered in addition to results and guidance prepared in accordance with IFRS, but should not be considered a substitute for, or superior to, IFRS results.
Reconciliation tables of the most comparable IFRS financial measure to the non-GAAP financial measures used in this press release, and supplemental materials are included below. Super Group urges investors to review the reconciliation and not to rely on any single financial measure to evaluate its business. In addition, other companies, including companies in our industry, may calculate similarly named non-GAAP measures differently than we do, which limits their usefulness in comparing our financial results with theirs.
for the Three Months Ended June 30:
Three Months Ended June 30
Six Months Ended June 30
2025
$m
2024 *
$m
2025
$m
2024 *
$m
Profit before taxation
39
22
127
75
Finance income
(3
)
(3
)
(5
)
(6
)
Finance expense
2
1
4
3
Depreciation and amortization expense
19
23
37
45
EBITDA
57
43
163
117
Change in fair value of options
—
—
—
14
RSU expense
3
3
9
7
Unrealized foreign exchange
4
2
2
5
Impairment of assets
66
40
66
40
US iGaming closure
23
—
23
—
Market closure
—
—
—
—
Gain on disposal of business
—
—
—
(44
)
Other adjustments 1
4
—
5
—
Adjusted EBITDA
157
88
268
139
Adjusted EBITDA, ex-US
162
106
283
181
Adjusted EBITDA, US
(5
)
(18
)
(15
)
(42
)
1 Other adjustments in 2025 mainly relates to Sportsbook acquisition related costs.
* The Group has adopted a change in presentation currency from Euros to USD at January 1, 2025. Accordingly, the comparative table has been re-presented retrospectively as outlined under the change in presentation currency note.
Webcast Details
The Company will host a webcast at 7:45 a.m. ET tomorrow to discuss the second quarter 2025 financial results. Participants may access the live webcast and supplemental earnings presentation on the events & presentations page of the Super Group Investor Relations website at: https://investors.sghc.com/events-and-presentations/default.aspx.
About Super Group (SGHC) Limited
Super Group (SGHC) Limited is the holding company for leading global online sports betting and gaming businesses: Betway, a premier online sports betting brand, and Spin, a multi-brand online casino offering. The Group is listed on the New York Stock Exchange (NYSE ticker: SGHC) and is licensed in multiple jurisdictions, with leading positions in key markets throughout Europe, the Americas and Africa. The Group's sports betting and online gaming offerings are underpinned by its scale and leading technology, enabling fast and effective entry into new markets. Its proprietary marketing and data analytics engine empowers it to responsibly provide a unique and personalized customer experience. Super Group has been ranked number 6 in the EGR Power 50 for the last three years. For more information, visit www.supergroup.com.
Forward-Looking Statements
Certain statements made in this press release are 'forward looking statements' within the meaning of the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to, Super Group's intention to pay a dividend, including the expected timing of such dividend, expectations and projections of market opportunity, growth and profitability.
These forward-looking statements generally are identified by the words 'believe,' 'project,' 'expect,' 'anticipate,' 'estimate,' 'intend,' 'strategy,' 'future,' 'opportunity,' 'plan,' 'pipeline,' 'possible,' 'may,' 'should,' 'will,' 'would,' 'will be,' 'will continue,' 'will likely result,' and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.
Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to implement business plans, forecasts and other expectations, and identify and realize additional opportunities; (ii) changes in the competitive and regulated industries in which Super Group operates; (iii) variations in operating performance across competitors; (iv) changes in laws and regulations affecting Super Group's business; (v) Super Group's inability to meet or exceed its financial projections; (vi) changes in general economic conditions; (vii) changes in domestic and foreign business, market, financial, political and legal conditions, including abrupt or unexpected changes in interest rates or increases in inflation or inflationary expectations and reductions in discretionary consumer spending; (viii) the ability of Super Group's customers to deposit funds in order to participate in Super Group's gaming products; (ix) Super Group's ability, and the ability of Super Group's key executives, certain employees, significant shareholders or other applicable individuals, to comply with regulatory requirements or successfully obtain a license or permit required in a particular regulated jurisdiction, or maintain, renew or expand existing licenses; (x) the effectiveness of technological solutions Super Group has in place to block customers in certain jurisdictions, including jurisdictions where Super Group's business is illegal, or which are sanctioned by countries in which Super Group operates from accessing its offerings; (xi) Super Group's ability to restrict and manage betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise; (xii) Super Group's ability to protect or enforce its intellectual property rights, the confidentiality of its trade secrets and confidential information, or the costs involved in protecting or enforcing Super Group's intellectual property rights and confidential information, and Super Group's ability to obtain new licenses and maintain, renew or expand existing licenses to use the intellectual property of third parties; (xiii) compliance with applicable data protection and privacy laws in Super Group's collection, storage and use, including sharing and international transfers, of personal data; (xiv) failures, errors, defects or disruptions in Super Group's information technology and other systems and platforms; (xv) Super Group's ability to develop new products, services, and solutions, bring them to market in a timely manner, and make enhancements to its platform; (xvi) Super Group's ability to maintain and grow its market share, including its ability to enter new markets and acquire and retain paying customers; (xvii) the success, including win or hold rates, of existing and future online betting and gaming products; (xiii) competition within the broader entertainment industry; (xix) Super Group's reliance on strategic relationships with land based casinos, sports teams, event planners, local licensing partners and advertisers; (xx) events or media coverage relating to, or the popularity of, online betting and gaming industry; (xxi) trading, liability management and pricing risk related to Super Group's participation in the sports betting and gaming industry; (xxii) accessibility to the services of banks, credit card issuers and payment processing services providers due to the nature of Super Group's business; (xxiii) the regulatory approvals related to proposed acquisitions and the integration of the acquired businesses; and (xxiv) other risks and uncertainties indicated from time to time for Super Group including those under the heading 'Risk Factors' in our Annual Report on Form 20-F filed with the SEC on April 3, 2025, and in Super Group's other filings with the SEC. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in other documents filed or that may be filed by Super Group from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Super Group assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Super Group does not give any assurance, representation or warranty that it will achieve its expectations in any specified time frame or at all.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
30 minutes ago
- Globe and Mail
Barrett (BBSI) Q2 Revenue Jumps 10%
Key Points Revenue (GAAP) of $307.7 million exceeded expectations in Q2 2025 and rose 10.0% year over year. Earnings per share (GAAP) were $0.70, beating consensus and up 12.9% year-over-year. Management raised its outlook for gross billings growth to 9% to 10% (from 7% to 9%) and for worksite employee growth to 6% to 8% (from 4% to 6%) for fiscal 2025. These 10 stocks could mint the next wave of millionaires › Barrett Business Services (NASDAQ:BBSI), a provider of business management solutions and professional employer organization (PEO) services for small and mid-sized businesses, reported financial results for the second quarter of fiscal 2025 on August 6, 2025. The company posted GAAP revenue and earnings above analyst expectations in Q2 2025, with reported GAAP revenue of $307.7 million versus the $299.8 million estimate, and GAAP earnings per share of $0.70, outpacing the $0.6875 consensus. The period saw strong net new client additions and improved workers' compensation costs, though existing client hiring remained muted. Management increased full-year 2025 guidance for gross billings (to 9%–10%) and average worksite employee growth (to 6%–8%), reflecting continued business momentum. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Understanding Barrett Business Services' Business Model and Strategic Focus Barrett Business Services operates as a business management solutions provider, specializing in professional employer organization (PEO) services for smaller companies. Through its services, it handles human resource administration, payroll processing, and workers' compensation, freeing up clients to focus on their core operations. The company differentiates itself by offering an integrated management platform. This approach combines HR outsourcing with consulting support, helping clients manage personnel needs and meet regulatory requirements. The firm emphasizes localized, decentralized service teams that work closely with client companies to tailor offerings, nurture relationships, and deliver responsive support. Its success depends on adding new clients, expanding its product suite (like healthcare benefits and HR technology), managing insurance cost risks, and maintaining compliance across regulatory environments. Quarter in Review: Growth Drivers and Operational Developments During the quarter, Revenue increased 10% and net income rose 10.8% compared to Q2 2024. Revenue (GAAP) reached $307.7 million, and Earnings per share (GAAP) grew to $0.70. The company's gross billings—a non-GAAP measure of all client billings before deduction of direct staffing costs—rose 10% year-over-year, highlighting continued expansion in its core PEO offering. Net new client additions were a critical factor, driving a year-over-year increase of 8.0% in average worksite employees, from 128,734 to 138,969. Management noted that 'sustained momentum in BBSI Benefits'—the firm's healthcare product suite—was a key factor in landing new customers. The BBSI Benefits platform, which as of April 2025 covers more than 17,500 participants, exceeded expectations for participant growth, especially in California where real uptake outpaced estimates by 2.5 times in just seven months. The company also rolled out an applicant tracking system in March 2025, a software product that allows clients to manage job postings and integrate those seamlessly into payroll and timekeeping. While still early, initial client feedback was positive. Risk management, particularly around workers' compensation expenses, remained strong. Workers' compensation expense as a percent of gross billings fell to 2.1%, down from 2.5% in Q2 2024, partly due to favorable prior-year liability and premium adjustments totaling $8.8 million. These adjustments lower the company's current-year expense but may not recur at the same level in future quarters. The company's staffing services, which comprise a smaller share of total revenue, experienced a decline earlier in 2025.—Staffing revenue fell 11.5% to $17.5 million compared to Q2 2024.—continuing a recent trend of softer demand in that area. Capital returned to shareholders included $8.0 million in share repurchases and a dividend payout of $2.0 million. The company also authorized a new $100 million stock repurchase program, set to run for two years beginning August 4, 2025. For Q3, a dividend of $0.08 per share was declared. Looking Forward: Guidance and Monitor Points for Investors Management raised guidance for the remainder of fiscal 2025. Expected gross billings growth rose to a range of 9% to 10%, up from a previous range of 7% to 9% for 2025. Average worksite employee growth is now anticipated in the 6% to 8% band, compared to the earlier 4% to 6% for 2025. Gross margin guidance was also narrowed and nudged upward at the low end, with a projected range of 2.9% to 3.05% of gross billings. The company expects an effective annual tax rate between 26% and 27%. Looking ahead, investors should watch for continued traction in client additions and adoption of value-added services such as BBSI Benefits and new HR technology. While net new clients remain a central driver, management cautions that existing client hiring is sluggish, reflecting broader macroeconomic caution. Ongoing weakness in the staffing segment and one-time insurance adjustments are other factors to monitor for potential volatility in results. The quarterly dividend was maintained at $0.08 per share. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of August 4, 2025
Globe and Mail
30 minutes ago
- Globe and Mail
Silvaco (SVCO) Q2 Revenue Drops 19%
Key Points GAAP revenue dropped 19% year-over-year to $12.05 million in Q2 2025, GAAP revenue missed estimates by 15.3%. Non-GAAP earnings per share fell to $(0.16). Shift in business mix: TCAD segment GAAP revenue declined 34% year-over-year. while EDA and SIP segments grew, signaling a transition for the company. These 10 stocks could mint the next wave of millionaires › Silvaco Group (NASDAQ:SVCO), a provider of design software and Silicon Intellectual Property (SIP) for semiconductor companies, released its Q2 2025 results on August 6, 2025. The company reported GAAP revenue of $12.05 million, missing analyst estimates by $2.18 million (GAAP). Non-GAAP earnings per share came in at $(0.16). These results reflect both a sharper-than-anticipated drop in the core Technology Computer-Aided Design (TCAD) segment, with TCAD revenue down 34% year-over-year, and continued investment in new areas, with meaningful execution risk but also clear signs of progress in customer wins and technology integration. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Business Overview and Recent Focus Silvaco Group's business centers on providing advanced software tools and silicon intellectual property components for semiconductor design and manufacturing. Its core offerings include technology computer-aided design (TCAD) software, used to simulate manufacturing processes, and electronic design automation (EDA) software, which helps automate chip and system-level design. The company also provides silicon intellectual property (SIP), which are reusable design blocks licensed to semiconductor makers. The company has recently pursued growth by expanding its suite of EDA tools and SIP libraries, integrating machine learning and artificial intelligence into its solutions. A critical area of focus is diversifying its business mix, both geographically and across product lines. Key success factors include technological innovation, cultivating strategic partnerships, growing its presence in high-growth verticals like automotive and photonics, and prudent cost and margin management while sustaining investment in product development. Details of the Quarter: Financial and Operational Developments The results underscored a challenging period, with GAAP revenue dropping 19% year-over-year. The miss versus consensus was driven largely by a steep decline in TCAD revenue (GAAP), which fell 34% year-over-year to $6.8 million (GAAP) and now accounts for just 56% of GAAP revenue, down from 69% in Q2 2024. The EDA segment, which provides software for chip design automation, saw GAAP revenue rise 15% year-over-year to $3.4 million and now makes up 29% of the total. The SIP segment grew 11% year-over-year to $1.8 million, representing 15% of total revenue (GAAP). Regionally, there was a significant pivot toward the Asia-Pacific, with this geography delivering 57% of revenue compared to 41% in Q2 2024. The Americas revenue share fell to 36% from 51%, and EMEA (Europe, Middle East, and Africa) accounted for 7% of revenue. About 14% of revenue came from new customer 'logos,' with an additional 6% from customers added in the previous two quarters, showing traction in landing new accounts. However, Gross bookings fell sharply, down 34% year-over-year, highlighting volatility as the company integrates new acquisitions and waits for delayed orders to close. Gross margin on a non-GAAP basis declined to 76%, a 10 percentage point drop from the prior year. The company reported a GAAP net loss of $9.4 million, an improvement from a $38.4 million GAAP net loss in Q2 2024, when results included a litigation settlement. However, on a non-GAAP basis, the company reported a net loss of $4.6 million, compared to a GAAP net profit in Q1 2024. The company cited several operational milestones, including the launch of new EDA and SIP products and securing 10 new major customers across photonics, automotive, military, foundry, and power verticals—critical end markets for semiconductor suppliers. About 40% of revenue came from customer renewals; 40% from expansion among existing customers, indicating the company's 'land and expand' strategy is gaining some traction. A major acquisition, Mixel Group, Inc, closed just after the quarter, increasing the serviceable addressable market by $110 million and bringing the year-to-date total to $710 million added via acquisitions. This effort supports the company's plan to further diversify its revenue base and target design segments with higher growth potential. Looking Forward: Guidance and Investor Considerations For Q3 2025, management guided for revenue in a range of $14.0 to $18.0 million, projecting a minimum of 28% year-over-year growth. The target for non-GAAP gross margin is 81–85%, still trailing historical highs. Non-GAAP net income (or loss) per diluted share is expected to land between $(0.12) and $0.02. Bookings are also expected to rebound, with a $14.0–$18.2 million range, up at least 42% from the prior year's quarter. For FY2025, Silvaco projects revenue of $64.0 to $70.0 million and a non-GAAP net income (or loss) per share between $(0.07) and $0.03, significantly lower than the previous year's net income. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025
Globe and Mail
an hour ago
- Globe and Mail
TrueCar (TRUE) Q2 Revenue Jumps 12%
Key Points GAAP revenue climbed 12.4% year-over-year in Q2 2025, beating expectations and marking TrueCar's best quarter since Q3 2021. GAAP earnings per share for Q2 2025 came in far below analyst forecasts, highlighting persistent profitability challenges. GAAP gross margin declined sharply to 76.3% in Q2 2025, while non-GAAP free cash flow remained negative at ($4.8 million) despite operational improvements. These 10 stocks could mint the next wave of millionaires › TrueCar (NASDAQ:TRUE), a digital automotive marketplace connecting car buyers with certified dealers, released its earnings report for the second quarter of fiscal 2025 on August 6, 2025. The most important takeaway was GAAP revenue was $47.0 million, exceeding analyst expectations by $2.35 million, but offset by a significant net loss and a severe miss on earnings per share; GAAP EPS was ($7.60), well below the estimated ($0.06). The period saw substantial progress in product innovation and customer experience, but ongoing margin pressure and cash burn tempered the positive headline numbers. Overall, the quarter delivered strong GAAP sales growth but did not meet expectations for profitability. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (GAAP) ($7.60) ($0.06) N/A N/A Revenue (GAAP) $47.0 million $44.65 million $41.8 million 12.4% Net Loss ($7.6 million) ($13.5 million) 43.7% Adjusted EBITDA ($1.2 million) $0.1 million N/A Free Cash Flow ($4.8 million) ($3.6 million) (33.3%) Source: Analyst estimates for the quarter provided by FactSet. Business Overview and Recent Key Focus Areas TrueCar is known for its online platform that streamlines the car-buying process by helping consumers research, compare, and connect with certified auto dealers. The company leverages proprietary data and analytics to offer transparent vehicle pricing, digital purchasing options, and dealer connection features. In recent periods, TrueCar has prioritized expanding its end-to-end online retailing solution, TrueCar+, and investing in product innovation for both dealers and consumers. The rollout of new data-driven tools and automation features reflects TrueCar's emphasis on technological capability, efficiency, and adapting to regulatory requirements. Key success factors include sustained partnerships, expanding coverage of OEM incentive programs, and maintaining a robust affinity network of over 250 partners to drive high-value leads to dealer clients. Quarterly Highlights: Revenue Growth, Operational Trends, and Product Advances In the second quarter, GAAP revenue rose 12.4% year-over-year, outperforming analyst projections and delivering the highest quarterly result since Q3 2021. While monetization per unit increased to $526 (from $468 a year ago), a notable achievement, unique visitor traffic declined from 7.7 million to 5.5 million. This drop was partly due to a deliberate reduction in lower-intent marketing, with the stated aim of boosting quality and conversion efficiency. GAAP gross margin contracted from 86.9% in Q2 2024 to 76.3% in Q2 2025, reflecting increased spending on lower-margin products and higher expenses in scaling new initiatives. Non-GAAP adjusted EBITDA fell to ($1.2 million), compared to a slight gain in the previous year. Non-GAAP free cash flow remained negative, though improved sequentially, with a net outflow of ($4.8 million). Key product developments included enhancements to the dealer platform, such as the launch of 'Actionable Insights,' a tool offering data-driven recommendations to dealers for improved performance. Machine learning was applied via the new "Motivated Buyer" feature, flagging high-intent leads. On the consumer side, TrueCar revamped its search results and vehicle detail pages, making the digital shopping journey more transparent and intuitive, and piloted new features within TrueCar+ to boost user engagement and drive higher conversion rates. Connections with OEM partners remained strong, and incentive-driven programs contributed $2.9 million in revenue in the first half of 2025, already surpassing the $2.5 million received in all of 2024. However, some incentive programs were paused after exceeding budgets at the end of Q2 2025, which could result in revenue lumpiness in coming quarters. Industry data shows TrueCar's new vehicle unit sales grew 6.2% year-over-year in Q2 2025, outpacing the broader market's 2.8% growth and reflecting solid franchise dealer momentum despite ongoing contraction among independent dealer partners. Operational Metrics, Segment Trends, and Competitive Positioning Dealer revenue grew 12.1%, led by franchise dealer stability (up 1.1%) and exceptional gains from vehicle sourcing products (up 264.7%) in Q2 2025. OEM segment revenue increased 19.7% year-over-year. Despite stable new car segment results, overall dealer count dropped from 11,474 in Q2 2024 to 11,177 in Q2 2025, mainly due to headwinds among independent dealers. TrueCar's affinity partner channel—the network of large brands and organizations driving traffic to its platform—continued to deliver high-value leads, though certain OEM incentive programs were paused as a result of faster-than-expected budget use. Efficiency efforts were evident in a sharp 41.8% improvement in funnel conversion year-over-year in Q2 2025, with the average cost per sale on falling 29.9% year-over-year to $169. OpEx lines reflected a mixed picture: sales and marketing spending grew year-over-year but was flat from last quarter, while tech and G&A (general and administrative) expenses declined as cost controls deepened. GAAP gross profit in dollar terms slipped year-over-year despite higher revenue, a symptom of the lower-margin product mix and incremental growth costs. Management expects recent headcount reductions and sales and service team consolidation to yield about $500,000 a month in cost savings beginning in Q3 2025. TrueCar+—the company's digital retailing platform enabling fully online car-buying—remained a standout area of innovation. The integration of dealer management system (DMS) tools and a redesigned online checkout delivered significant metrics improvements in Q2 2025, including a 115% increase in add-to-cart rates, a 40% rise in daily credit application submissions, and a doubling of F&I (finance and insurance) product attachment rates. These signals point to improving customer engagement and growing traction with digital retailing as dealers and consumers continue shifting online. Some challenges remained evident. Unique visitor count dropped by 28.6% year-over-year, reflecting TrueCar's tighter focus on quality leads and conversion at the expense of traffic scale. Dealer sentiment, according to the Cox Automotive Dealer Sentiment Index, declined. Franchise dealers were less affected than independents, which aligns with the sharper decline in independent dealer participation. Inventory trends will bear continued attention as tariffs and affordability put new car supply and pricing under pressure in the second half of the year. Looking Ahead: Outlook and Considerations for Investors TrueCar's management did not issue formal financial guidance for the next quarter or for the remainder of fiscal 2025, citing persistent uncertainty in the automotive market related to tariffs, supply constraints, and evolving OEM incentive strategies. Although executives expressed confidence in the company's ability to navigate diverse growth scenarios, they declined to forecast specific revenue or profit targets. In management's words: 'we believe that the steps we have taken to eliminate costs and maximize our financial flexibility position us to navigate a range of revenue growth scenarios and deliver Adjusted EBITDA profitability and positive Free Cash Flow over the second half of 2025.' Key areas to watch in upcoming quarters include the continued rollout and scaling of TrueCar+, stabilization in unique visitor traffic and dealer count, further improvements in expense control, and potential swings in OEM-driven revenue streams. Persistent negative free cash flow and gross margin compression remain core risks, requiring progress toward sustainable profitability to support long-term competitive standing. TRUE does not currently pay a dividend. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025 JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
