Latest news with #TC+
Yahoo
07-05-2025
- Automotive
- Yahoo
TrueCar Inc (TRUE) Q1 2025 Earnings Call Highlights: Revenue Growth Amidst Tariff Challenges
Q : How should we think about margins and cost structure without headcount investments? A : Jantoon Reigersman, CEO, highlighted three main cost areas: headcount, marketing, and overhead. Oliver Foley, CFO, added that revenue mix and cost flexibility will drive margins. OEM revenue has the highest margin, while other products have lower margins. The focus is on maintaining flexibility to manage cash flow effectively. Q : Can you provide insights into the product enhancements mentioned in your letter and the impact of OEM incentive ad spending? A : Jantoon Reigersman, CEO, explained that TrueCar is utilizing generative AI for personalized email campaigns, enhancing consumer experience and engagement. Regarding OEM incentives, he noted that while uncertainty exists, OEMs might need to support vehicle sales more, potentially benefiting TrueCar as OEMs use various tools to maintain competitiveness. The company is facing challenges in predicting changes in OEM incentive ad spending, which could impact revenue from OEMs and dealers. TrueCar Inc ( NASDAQ:TRUE ) decided not to provide financial guidance for the second quarter due to the high level of market uncertainty and potential impacts from tariffs. The newly implemented 25% tariffs on imported vehicles and parts create uncertainty, potentially adding $4,500 to the cost of new vehicles, which could affect sales. The completion of backend integration with dealer management systems CDK and Tekion has been delayed, impacting the scalability of the TC+ product. TrueCar Inc ( NASDAQ:TRUE ) reported an adjusted EBITDA of negative $3.8 million for the first quarter of 2025. The TC+ product pilot showed promising results, with a third of the pilot dealer group's sales driven by TC+ consumers completing transactions online, indicating potential for broader rollout and scalability. TrueCar Inc ( NASDAQ:TRUE ) achieved the lowest cost per sale since 2022 through restructured performance marketing campaigns, enhancing efficiency and driving unit sales growth. The company expanded its affinity network by adding notable partners such as DoorDash, GasBuddy, and GovX. TrueCar Inc ( NASDAQ:TRUE ) reported a 9.2% year-over-year increase in total revenue, reaching $44.8 million for the first quarter of 2025. For the complete transcript of the earnings call, please refer to the full earnings call transcript . Tariff Impact: Estimated additional cost of $4,500 per new vehicle sold in the U.S. Story Continues Q: Has the AAA program filled the gap left by the loss of the American Express business? A: Jantoon Reigersman, CEO, stated that while the AAA program is not yet fully compensating for the loss, it is progressing well and approaching previous levels. Q: How are tariffs impacting TrueCar's franchise dealers, and is there consideration for stock buybacks? A: Jantoon Reigersman, CEO, mentioned that not all OEMs are equally impacted by tariffs, and TrueCar is focused on assisting OEMs with their specific challenges. Regarding stock buybacks, he confirmed that it is always considered as part of their capital allocation strategy. Q: Can you elaborate on the impact of TC+ on dealer sales and its economic benefits to TrueCar? A: Jantoon Reigersman, CEO, explained that TC+ has increased both online purchases and overall sales volumes for dealers. Currently, monetization is treated as a regular lead, with plans to adjust once scaling begins. Q: Why is there a pause in dealer sales headcount, and is it due to dealer uncertainty? A: Jantoon Reigersman, CEO, clarified that the pause is due to elevated uncertainty and not a reaction to specific dealer feedback. The focus is on efficiency and market adaptation. Q: Why is there no guidance for Q2 despite the subscription nature of the business? A: Jantoon Reigersman, CEO, explained that the decision is due to high uncertainty, such as potential tariff changes, which could impact predictability. Oliver Foley, CFO, noted that about 20% of dealer revenue is pay-per-sale, adding to revenue volatility. Q: What are the potential cost savings for dealers using TC+ and any cultural pushback? A: Oliver Foley, CFO, highlighted that TC+ allows dealers to sell 24/7, expand their geographical reach, and improve efficiency. While there may be cultural adjustments regarding sales commissions, the overall value proposition is attractive to dealers. Q: How confident are you in the timeline for CDK and Tekion integrations, and what is the current dealership sentiment? A: Jantoon Reigersman, CEO, expressed confidence in the integration timeline, noting resource allocation and architectural complexity as challenges. He reported that dealership sentiment remains positive, with no red flags despite uncertainty. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
27-03-2025
- Automotive
- Yahoo
JP Morgan downgrades auto marketplaces amid tariff headwinds
-- JP Morgan downgraded several auto marketplaces, including Openlane Inc (NYSE:KAR), CarGurus (NASDAQ:CARG), and Truecar Inc (NASDAQ:TRUE) citing significant headwinds from newly imposed 25% tariffs on imported automobiles and parts. The firm sees prolonged supply disruptions and higher vehicle costs as negative for the overall auto retail ecosystem. JP Morgan cut Openlane and CarGurus to Neutral from Overweight and moved TrueCar to Underweight from Neutral. Despite strong secular trends in US Dealer-to-Dealer (D2D) recently, the off-lease recovery cycle as being potentially pushed out, the note said regarding KAR. CARG's downgrade was attributed to a likely slowdown in pricing tailwinds, while TRUE's outlook was downgraded due to potential for delay in high incremental OEM programs and likely delayed adoption of new products like TC+. The 25% tariffs on imported vehicles and parts are expected to increase average transaction prices (ATPs) by $4,000-$5,300, translating to a 9-12% rise in monthly payments. JP Morgan warned that these tariffs could lead to immediate supply chain disruptions, with a greater near-term impact on production than on demand, resulting in reduced inventories. The firm also expects used car prices to rise in the near term as buyers seek nearly new vehicles amid new car price inflation and supply shortages. However, affordability concerns could weigh on used car demand in the medium term, with higher costs for parts adding $50-$100 per vehicle. JPMorgan sees franchise dealers as the least impacted medium-term, as they benefit from resilient gross profit per unit (GPU) and increased parts and services business, with consumers holding on to cars longer. Public used car dealers, carrying 30-60 days of supply, may experience a temporary surge in gross profits as demand shifts to used vehicles. JP Morgan remains Overweight on B2B marketplace ACV Auctions, citing cleaner exposure to secular share gains in D2D and a low base in Consumer-to-Dealer sales, which are less likely to be disrupted by the tariffs. However, the firm raised the probability of downside scenarios for the broader auto sector and adjusted sector target multiples accordingly. Related Articles JP Morgan downgrades auto marketplaces amid tariff headwinds Trump's auto tariffs will hit many companies, but Elon Musk's Tesla less so Deutsche Bank sees auto tariffs as more than negotiation tactic
