Image source: TrueCar
Online car-shopping service TrueCar reported late on Nov. 5 that it lost $11.1 million in the third quarter, an improvement over year-ago results.
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Shares moved sharply higher following the announcement.
TrueCar earnings: The raw numbers
What happened with TrueCar during the quarter?To begin with, TrueCar went through some dramatic management changes during the quarter.
TrueCar founder Scott Painter resigned as CEO after last quarter's disappointing results. Not long after Painter's resignation, the company's president, John Krafcik, also resigned to accept an opportunity elsewhere. Mike Guthrie, the company's chief financial officer, agreed to act as interim CEO until a permanent successor is found.
Beyond that, business performance was somewhat improved over the dismal second-quarter result.
TrueCar connects car-buyers with a network of dealers that have signed on to sell cars to TrueCar's clients at no-haggle discount prices. Buyers come to TrueCar through three channels: Directly through TrueCar's own properties, via USAA, a company that provides financial services to U.S. military members, and via other partners. Traffic, prospects, and sales rose in all three channels, the company said.
Overall, average monthly unique visitors were up 43%, and units sold were up 21%. "Monetization," TrueCar's term for the average revenue per transaction, rose to $324 from $303 a year ago.
TrueCar's results came in ahead of the guidance issued by Guthrie in the wake of last quarter's results. At the time, Guthrie had forecast revenue of $65 million to $67 million on sales of 190,000 to 195,000 units. Its actual results came in well ahead of both ranges.
What management had to say"I am particularly excited with the performance of our affinity partner channels this past quarter, where we had healthy growth rates across all of our key metrics," Guthrie said in a statement. "In particular, we are working better than ever with our partners at USAA and are pleased that more USAA members than ever are having great car buying experiences at TrueCar Certified Dealers. Also, with new partners such as Sam's Club coming online, we believe our dealer partners will see significant demand from our affinity channels in the fourth quarter and into 2016."
Looking aheadThe company expects its fourth-quarter revenue to come in between $64 million and $65.5 million, with adjusted EBITDA between $0.5 million and $1 million.
Guthrie boosted TrueCar's full-year guidance a bit. He now expects full-year revenue to fall between $260.2 million and $261.7 million (up from prior guidance of $252 million to $258 million) and full-year adjusted EBITDA between $8 million and $8.5 million.
The article TrueCar Loss Narrows as Sales Jump 21% originally appeared on Fool.com.
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