TrueCar (TRUE) Q2 Revenue Jumps 12%
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.
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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 TrueCar.com 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.
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