TrueCar, Inc. (NASDAQ:TRUE) Q3 2018 Earnings Conference Call Transcript

Nov 06, 2018 • 04:30 pm ET

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TrueCar, Inc. (NASDAQ:TRUE) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the TrueCar Inc. Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Alison Sternberg, SVP of IR. Please go ahead.

Executive
Alison Sternberg

Thank you, operator. Hello, and welcome to TrueCar's third quarter 2018 earnings conference call. Joining me today are Chip Perry, President and CEO; and John Pierantoni, Interim CFO.

(Forward-Looking Cautionary Statements)

In addition, we will also discuss GAAP and certain non-GAAP financial measures. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are set forth in the Investor Relations section of our website at true.com. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Now, I'll turn the call over to Chip.

Executive
Chip Perry

Thank you, Alison. And good afternoon, everyone.

Operationally, TrueCar had a strong third quarter, with in line financial results on revenue and adjusted EBITDA. Today, you'll hear about the great progress that we are making on the key initiatives to drive our future growth. Now that we are in the second half of the year, with third quarter revenue growing at 14% year-over-year on the strength of our dealer and OEM business, we believe we'll post even faster revenue growth in the fourth quarter and a higher margin than we posted last year.

We remain laser focused on implementing the changes in our business that we believe will enable us to further accelerate growth next year and deliver on key -- our net market needs as part of our end-to-end vision. As we said before, we expect this growth to flow from our upcoming powerful new consumer experience, the continued growth of our Trade and OEM products and the expansion and increased productivity of our dealer network, all benefiting from the accelerant of a larger and efficiently deployed marketing spend.

We continue to see new car marketing dollars paid by OEMs and dealers shifting towards our platform, allowing us to grow our share of marketing spend and reach a record high of 5.2% of the retail new car market. This share gain reflects the strong efficiency of the marketing solutions that we provide dealers and OEMs. We believe this market share demonstrates TrueCar's number one position in new car sales among the automotive industry's third-party players.

John will give you more details on our financial and operating metrics later on the call, but I would now like to dig into the progress we saw in the third quarter, our plans for continued traction against our key strategies for the balance of the year, and how this sets us up for 2019 and beyond.

Let me begin with an update on USAA and our broader affinity partner channel. One of our primary areas of focus coming out of 2017 and over the