TrueCar reported improved financial results in the second quarter despite facing vehicle sales slowdowns among dealers affected by the CDK Global cyberattacks. The vehicle listings company posted a net loss of $13.5 million, an improvement from the $20.4 million net loss recorded in the same period last year and a net loss of $5.8 million in the first quarter of 2024.
Revenue for the quarter was $41.8 million, marking a 6.4% increase from the previous year and a 1.8% rise from the previous quarter. This growth was attributed to higher dealer franchise revenue and the expansion of TrueCar’s Wholesale Solutions arm.
CEO Jantoon Reigersman highlighted the company’s positive trajectory during the second-quarter earnings call on August 6. He noted the expansion of TrueCar’s franchise and independent dealer network, which was driven by strong growth in new dealer activations. Reigersman emphasized that the market is now normalizing, with vehicle supplies returning to match demand, creating a favorable environment for TrueCar.
However, the company faced setbacks due to the CDK Global cyberattacks on June 19, which disrupted the dealership management system for 15,000 customers across North America for two weeks. This led to a loss of $350,000 in pay-per-sale revenue and $400,000 in auto manufacturer incentive revenue for TrueCar in June.
TrueCar launched an enhanced TrueCar+ pilot on July 17 to strengthen its market position. This initiative aims to make TrueCar the first digital marketplace where consumers can buy new or used cars from home, with or without a trade-in.
Key financial metrics from the quarter include:
- Net Loss: $13.5 million, down from $20.4 million in the same period last year.
- Revenue: $41.8 million, up 6.4% from the previous year and 1.8% quarter over quarter.
- Franchised Dealership Customers: 8,274 at the end of June, up 1.5% from last year’s period.
- Independent Dealership Customers: 3,200, down 8.3% from a year ago due to industry consolidations or business shutdowns.
- Adjusted EBITDA: $0.1 million, compared to a $5.3 million loss a year earlier.
Nevertheless, the company’s efforts to stabilize and grow its business amidst market challenges reflect its strategic initiatives and adaptability in the evolving automotive landscape.
