TrueCar Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Naved Khan - B. Riley Securities, Inc. - Analyst : Thank you very much and appreciate your thoughts on the industry trends here, Jantoon. Just a couple of clarifications. In your letter, you mentioned accelerating certain product announcements that can yield some comparative advantages for TrueCar. Can you give us a sense of what these enhancements can be? And then the second question I have is around the incentive ad spending by OEMs. As these OEMs look to stay competitive on price and keep their share, how should we be thinking about the changes to the incentive ad spending? Could some of that ¡ some of those dollars be used to bring down MSRP and maybe a net reduction in incentive? Thank you.

Question: Naved Khan - B. Riley Securities, Inc. - Analyst : Great. Thank you, Jantoon.

Question: Ryan Meyers - Lake Street Capital markets, LLC. - Analyst : Hi, good morning, guys. First question for me, without the kind of headcount investments now going forward, how should we think about the margins across the business and maybe what are the biggest levers that you can pull across the cost structure?

Question: Ryan Meyers - Lake Street Capital markets, LLC. - Analyst : Okay, got it. And then just one sort of clarification question. I think you guys had said this in your prepared remarks, but it sounds like with the loss of the American Express business that's now been filled and picked up by the business that you guys are working with AAA, is that the right way to understand that?

Question: Ryan Meyers - Lake Street Capital markets, LLC. - Analyst : Got it. Thanks for taking my question, guys.

Question: Tom White - D.A. Davidson & Co. - Analyst : Great. Good morning. Thanks for taking my questions. Two, if I could. I guess just first on tariffs. Jantoon, in the letter you kind of touched on how not all OEMs will be kind of impacted the same. I was hoping you could just kind of update us on your franchise dealers, like sort of what is your kind of exposure to different OEMs? I think you guys skew a little bit more towards kind of the Asian OEMs, some of the Japanese brands. I'm just curious, like, is there a reason to think that your specific mix of certified dealers will be better or worse able to kind of navigate what's happening? That's my first one. And then second one is just on kind of uses of capital. Just curious if you're giving any more serious consideration about buying back stock here. Thanks.

Question: Tom White - D.A. Davidson & Co. - Analyst : Okay, thank you.

Question: Chris Pierce - Needham & Company Inc. - Analyst : Hey, good morning. On TC+ and the dealer you cited, can you just ¡ is there a way to know if the dealer units are additive to, like, units they wouldn't have sold? Or ¡ and then can you remind me, or remind us, is there an increased economic benefit to TrueCar from these units given, I think, the dealer probably makes a higher margin given less sales commission in these units, like, what's the push and pull there?

Question: Chris Pierce - Needham & Company Inc. - Analyst : Monetization, yeah.

Question: Chris Pierce - Needham & Company Inc. - Analyst : Okay. And just lastly for me, on the pause of the dealer sales headcount, is it ¡ are you anticipating that there's going to be uncertainty from the dealers and the OEMs or are you actually hearing that from dealers right now and it's kind of affecting what you had thought was going to be your

Question: Chris Pierce - Needham & Company Inc. - Analyst : Okay, perfect. Thanks for the clarification. Thanks.

Question: Jash Patwa - JPMorgan - Analyst : Hi, good morning. This is Jash Patwa on for Rajat Gupta. Thanks for taking our questions. I was just hoping to get some further color on your decision to not provide guidance for the second quarter despite the subscription nature of the business. And also since most manufacturers have held pricing stable on model year '25 vehicles through early June, along the same line of thought, would you be able to share an update on the dealer

Question: Jash Patwa - JPMorgan - Analyst : That's very helpful, thank you. As a follow-up there were a lot of great details in the prepared remarks and shareholder letter around the progress of the TrueCar+ offering, which we really appreciate. And maybe just following-up to Chris's question, could you also discuss the potential cost savings realized at the pilot dealer group with a larger proportion of volumes now being transacted through the TC+ channel? Additionally, has there been any cultural pushback at the stores considering that transactions through end-to-end online channels might impact the store associates variable pay? Thank you.

Question: Jash Patwa - JPMorgan - Analyst : Great color. Thanks a lot Jantoon and Oliver. Good luck.

Question: Marvin Fong - BTIG - Analyst : Hi, good morning. Thanks for taking my question. So first you referenced you expect CDK and Tekion to come online, I think, somewhere around July. How confident are you on that timeline? And could you just maybe clue us in, I think, you mentioned that the delays are sort of outside of your concern, I mean, is it that they're working on something related to macro that's kind of tying their attention? Just maybe some insight there would be great. And I have a follow-up.

Question: Marvin Fong - BTIG - Analyst : Got it. Thanks for that. And my follow-up, I mean, I think we all acknowledge the uncertainty here and I respect you're not providing guidance. It's just a higher level question on what you are seeing in your dealership conversations and how they're behaving. I mean, should we just assume that there's this general paralysis in the sales channel? Or are there actually some signings going on? Just maybe a bit deeper insight on what's going on in the field would be great.

Question: Marvin Fong - BTIG - Analyst : Yeah. Thanks so much, Jantoon. Appreciate it.