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TI

TrueCar, Inc. (TRUE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $43.2M, down 8.1% QoQ and 6.9% YoY; diluted EPS was $0.06 as net income turned positive on a $11.4M legal settlement, despite an operating loss and negative (GAAP) EBITDA .
  • Versus S&P Global consensus, revenue missed ($43.2M vs $48.1M), but EPS materially beat (positive $0.06 vs negative -$0.03), and EBITDA missed (actual GAAP EBITDA negative) (values retrieved from S&P Global).
  • TrueCar withdrew forward guidance and did not host an earnings call due to the pending go‑private acquisition; prior guidance should no longer be relied upon .
  • Pending acquisition: Founder-led Fair Holdings agreed to acquire TrueCar for $2.55 per share in cash, expected to close in Q4 2025 or early 2026, which is the primary stock reaction catalyst near term .

What Went Well and What Went Wrong

What Went Well

  • Positive GAAP net income: $5.0M vs losses in Q2 2025 and Q3 2024, driven by $11.4M “Other income” from the CDK settlement; diluted EPS improved to $0.06 .
  • Strong liquidity and cash generation: Cash from operations of $12.7M and free cash flow of $11.2M; cash and equivalents ended at $103.2M .
  • OEM incentives remain a strategic opportunity per management commentary earlier in the year: “We remain very bullish on [OEM] incentive business… and performed well there” .

What Went Wrong

  • Top-line softness: Revenue fell to $43.2M from $47.0M in Q2 2025 and $46.5M in Q3 2024; total units slipped sequentially to 87.5k while unique visitors were down YoY .
  • Profitability pressure: Adjusted EBITDA was -$0.4M; GAAP EBITDA and EBIT remained negative, and gross margin compression YoY vs Q3 2024 backdrop (Q3 2025 gross margin calculated from reported revenue and cost of revenue) .
  • Dealer network attrition: Franchise dealers decreased to 8,225 (from 8,292 in Q2), independent dealers to 2,794 (from 2,885 in Q2), indicating near-term churn amid macro uncertainty .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$46.5 $47.0 $43.2
Net Income ($USD Millions)$(5.8) $(7.6) $5.0
Diluted EPS ($USD)$(0.06) $(0.09) $0.06
Gross Profit Margin %83.4% (computed from $46.544M rev, $7.736M cost) 76.3% 79.6% (computed from $43.207M rev, $8.804M cost)
EBIT Margin %(computed) —(computed) —-17.0% (Loss from ops $7.348M / $43.207M)
Cash from Operations ($USD Millions)$1.8 $(2.8) $12.7
Free Cash Flow ($USD Millions)$(0.2) $(4.8) $11.2
Cash & Equivalents ($USD Millions)$114.5*$92.5 $103.2

Values marked with * are retrieved from S&P Global.

KPIs

KPIQ3 2024Q2 2025Q3 2025
Avg. Monthly Unique Visitors (Millions)6.9 5.5 5.6
Total Units (Thousands)94.6 89.0 87.5
Franchise Dealer Count8,303 8,292 8,225
Independent Dealer Count3,106 2,885 2,794

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
All forward-looking guidanceFuture periodsPreviously providedWithdrawn; prior guidance should not be relied upon Withdrawn

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
TC+ digital retail (integrations, scaling)Focus on CDK/Tekion DMS integrations; pilot dealers; monetization later; strong add-to-cart/credit app/F&I attach improvements No call; press release only; commercialization efforts not discussed due to pending transaction Execution progressed in H1; discussion paused in Q3 given deal context
OEM incentivesManagement “very bullish” on OEM incentives; targeted offers performing but budgets can be lumpy Not elaborated; standard financials only Opportunity intact; near-term visibility lower amid macro and transaction
Tariffs/macroTariff headwinds; supply/pricing mix effects; cautious stance on guidance No guidance; no call due to pending transaction Continued uncertainty; prudent withdrawal of guidance
Dealer network/mix & monetizationShift to higher-intent channels; Sell Your Car subscriptions up; marketing efficiency gains; network realignment to save ~$0.5M/month Franchise/independent counts down sequentially Efficiency focus; near-term churn amid environment
AI/personalizationUse of GenAI in campaigns to personalize/retarget, lift close rates Not updated in Q3 call (none) Continues as a product lever; limited Q3 disclosure

Management Commentary

  • “This transaction is a win‑win… The proposed Syndicate would bring deep operational experience… which should help TrueCar in its next chapter.” — CEO Jantoon Reigersman on the go‑private deal .
  • “Our decision to acquire TrueCar is driven by the strength of its network of 8,500 franchised and independent dealers…” — Scott Painter (incoming CEO post-close) .
  • “We remain very bullish on [OEM] incentive business… and performed well there.” — Jantoon Reigersman (Q2 call) .
  • Company stance this quarter: no call and no forward guidance due to pending acquisition; refer investors to the 10‑Q filing timing .

Q&A Highlights

  • OEM incentives and mix: Management reiterated confidence in OEM incentive programs, acknowledging budget lumpiness but strong program performance YTD .
  • TC+ commercialization: Focused pilot results; integrations with CDK/Tekion targeted to automate desking and documentation; monetization to scale after product rollout .
  • Margins and cost levers: Margin heavily influenced by revenue mix (OEM high margin vs vehicle sourcing lower margin) and flexible cost structure (headcount, marketing, overhead) .
  • Capital allocation: Buybacks considered within broader capital strategy given strong cash balance (pre‑deal) .

Estimates Context

Q3 2025 Actual vs S&P Global Consensus

MetricActualConsensus
Revenue ($USD Millions)43.2 48.1
Primary EPS ($USD)0.06 -0.03
EBITDA ($USD Millions, GAAP)-7.3*1.0
  • Result: Revenue miss; EPS beat; EBITDA miss (values retrieved from S&P Global).
  • Implication: Street likely revises revenue and EBITDA lower near term; EPS dynamics aided by non‑operating “Other income” (CDK settlement), which may be viewed as non‑recurring .

Key Takeaways for Investors

  • Quarter quality mixed: Operating metrics softened and GAAP EBITDA remained negative, but headline EPS positive on non‑recurring “Other income”; underlying operating loss persists .
  • Narrative driver is the go‑private transaction at $2.55/share; near‑term stock setup is merger‑arbitrage/closing risk rather than fundamentals .
  • Guidance withdrawn and no call: Expect reduced transparency until deal close; focus shifts to 10‑Q details and proxy filing .
  • KPIs point to demand normalization and dealer churn; monitor dealer counts, unit volumes, and OEM incentive program budgets for trend re‑acceleration .
  • Liquidity strong; FCF inflected positive in Q3, offering cushion through transaction period .
  • Medium‑term thesis (post‑deal): TC+ integrations and AI‑driven personalization remain potential levers to improve close rates and monetization if continued under private ownership .
  • Risk: Macro (tariffs, affordability), OEM incentive lumpiness, and mix shifts can pressure revenue/margins; withdrawal of guidance underscores forecasting difficulty .

Footnote: Consensus and certain metric values marked with * are retrieved from S&P Global.