TrueCar seems to have turned a corner, posting its first three months of year-on-year growth in nine quarters and saying it hopes to nearly double its annual revenue in three years.
For Q3 2023, TrueCar posted revenue of $41.1 million, up 5.4% y-o-y, its first annual gain since Q2 2021. The company notched a net loss of $7.9 million, an improvement from the $77.1 million loss in Q3 2022.
The company attributed revenue growth to ad sales to car makers, who are increasingly pressed to lure customers with price incentives. New car inventories are on the rise as production volumes return to normal and interest rates price out many consumers.
Car-maker revenue came to $4.9 million during Q3, up from just $1.2 in the prior-year quarter.
That more than made up for a dip in dealer revenue, from $37.7 million to $36.1 million.
TrueCar, the no. 7 automotive marketplace in the U.S. by revenue (see the AIM Group’s 2023 Automotive Marketplaces Annual), said rising inventories will spur both dealers and car makers to spend more with TrueCar.
In September, average new car incentives climbed 129% y-o-y. to $2,367. “We still have a ways to go before the macroeconomic environment returns to historical norms, but it appears the tide has started to turn in our favor, with average days’ supply in inventory increasing from 30 to 39, year over year,” TrueCar pointed out in its quarterly letter to shareholders.
The company also pointed to progress with experimental “product flows” on its marketplace, ones modeled on the sequence of steps to reach checkout on ecommerce sites. TrueCar has tailored different flows to different categories of consumers, including a “convenience” flow for ones with good credit and an “economic” flow for ones with poor credit.
The company said its economic flow was trialed with 50,000 consumers, and that 9,000 applied for online loan pre-approvals. “So these are attractive numbers,” TrueCar CEO Jantoon Reigersman, said during the Q3 call with analysts. “What we are seeing also is that because these flows are much more personalized, people are actually engaging.”
TrueCar predicted double digit y-o-y revenue growth for Q4, and announced an “aspirational” goal of exceeding $300 million in revenue in 2026, which would be an 85% lift from 2022’s sales of $162 million.