Vehicle listings company TrueCar saw a steep revenue drop in the second quarter and deepened its net loss as it reported pressure from a shortage of inventory and rising vehicle prices.
Santa Monica, Calif.-based TrueCar on Tuesday reported a net loss of $11 million in the quarter ended June 30, wider than a $7.3 million net loss in the same quarter a year earlier. Revenue sank 36 percent to $42.3 million, which company leaders attributed to pressure on its close rates because of inventory and pricing conditions. TrueCar's pay-per-sale transaction revenue made up a smaller share of its dealer revenue in the second quarter than a year earlier, the company reported.
"A recovery in the global supply chain is likely still multiple quarters away in our view, and uncertainty remains high due to geopolitical events and headwinds like a slowing U.S. economy and rising interest rates," CEO Mike Darrow told analysts on an earnings call Wednesday.
"We continue to expect some volatility in our key metrics throughout 2022," Darrow said. "In this environment, we're continuing to manage our business and our resources efficiently."
TrueCar reported 12,086 dealership customers as of the second quarter, with 7,908 of them franchised. Its franchised dealership customer count fell by 18 percent year over year, while the number of independent dealerships on its platform rose by 18 percent. TrueCar leaders said that reflects diverging availability of new and used vehicles.
Company executives offered new data about its emerging TrueCar+ digital sales platform, saying it was used by more than 80 dealerships in Florida and included more than 7,000 new, used and pre-owned vehicles through June. CFO Jantoon Reigersman said the company aims to expand TrueCar+ across the country for used vehicles and into three to five states beyond Florida for new vehicles by the end of the year.
Q2 revenue: $42.3 million, down 36% from a year earlier
Q2 net loss: $11 million, greater than a net loss of $7.3 million from a year earlier
Q2 adjusted EBITDA: Swung to a net loss of $5 million from a net gain of $4.7 million a year earlier
Guidance: Did not provide a quarterly financial outlook, citing uncertainty related to supply chain challenges, low vehicle inventory and high prices. Adjusted EBITDA expected to be negative in 2022.