Good day, and welcome to the TrueCar fourth quarter 2021 financial results conference call. Please note, this event is being recorded. I would now like to turn the conference over to Zaineb Bokhari, Vice President, Investor Relations. Please go ahead. Thank you, operator. Hello, and welcome to TrueCar's fourth quarter 2021 earnings conference call. Joining me today are Mike Darrow, our President and Chief Executive Officer, and Jantoon Reigersman, our Chief Financial Officer. By now, I hope you've all had the opportunity to read our fourth quarter stockholder letter, which was released on Tuesday, February 22, after market close, and is available on our investor relations website at ir.truecar.com. Before we get started, I want to remind you that we will be making forward-looking statements on this call. These forward-looking statements can be identified by the use of words such as believe, expect, plan, anticipate, become, seek, will, intend, confident, and similar expressions, and are not and should not be relied on as a guarantee of future performance or results. Actual results could differ materially from those contemplated by our forward-looking statements. We caution you to review the Risk Factors section of our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other reports and filings with the Securities and Exchange Commission for a discussion of the risk factors that could cause our results to differ materially. The forward-looking statements we make on this call are based on information available to us as of today's date, and we disclaim any obligation to update any forward-looking statements except as required by law. In addition, we will also discuss certain GAAP and non-GAAP financial measures. Reconciliation of all non-GAAP measures to the most directly comparable GAAP measures are set forth in the Investor Relations section of our website at ir.truecar.com. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. With that, I'll turn the call over to TrueCar's President and Chief Executive Officer, Mike Darrow, for some opening comments. Mike? Thanks, Zaineb. Good morning, everyone, and thanks for joining us. We issued our Q4 stockholder letter yesterday and highlighted some of the great progress our company's made during the quarter, even as the macro environment remained very challenging. First, I can't thank the TrueCar team members enough for their tireless efforts to strengthen our consumer and dealer product offerings in the face of these unprecedented macro challenges. During the fourth quarter, we saw only slight improvements in new vehicle inventories and continued to see elevated pricing for both new and used vehicles. A combination that put pressure on our close rates, reported units, and other key metrics. We managed our business prudently through these headwinds while strengthening our core business, particularly on the used car side. We also made strong progress with our TrueCar+ pilot, an important initiative that we believe will help us benefit as more of the car buying and selling process moves online. TrueCar+ has garnered strong interest from dealers, leading us to extend the brands and dealers in the pilot, and we're in talks to onboard additional groups. We're also on track for the commercial launch of TrueCar+ by the end of Q1. We're targeting full market and brand coverage for new cars across Florida, as well as a robust statewide rollout for used cars by the end of the second quarter. This is an exciting time for our company, and we plan to continue investing to ensure a successful rollout for TrueCar+ in subsequent quarters. This morning, we also announced that TrueCar's Chief Financial Officer, Jantoon Reigersman, has been appointed Chief Operating Officer effective March 1st. Jantoon will continue to serve as our CFO in addition to his new role. As CFO, Jantoon played an important role in developing the strategic plan for TrueCar+. As COO, he will now also focus on making that rollout of TrueCar+ happen in an optimal way. This appointment underscores our commitment to the success of TrueCar+ and our strong belief in the tremendous opportunity before us. Before we open the call up for live questions, we're going to address some questions around various topics. Zaineb, what's the first question? Thanks, Mike. I'll start with the first question for you. What can you tell us about the rollout for TrueCar+? After the commercial launch of the TrueCar+ pilot, which we expect by the end of Q1, we plan to have full market and brand coverage across Florida for new and a robust statewide rollout for used and certified pre-owned cars by the end of Q2. It'll take time to scale TrueCar+ to build volumes, so in the near to medium term, we do not expect there to be a material impact on revenue. We expect that for the used side, including certified pre-owned units, we will go across multiple states sooner and with a rapid rollout and nationwide inventory plan. On the new side, we plan to go state by state with our rollout to cover all fifty states at a measured yet opportunistic pace. We have already laid the groundwork for a large-scale rollout, leveraging the 7,000 TrueCar Dealers that have deal building and payment configurations already in the core experience. During the second half of 2022, we expect to have enough information to build and articulate a growth plan based on insights gained as we drive volume across new and used vehicles. We will seek to present the largest used inventory and the only marketplace for new vehicles purchases online. We believe this will be an unmatched competitive advantage. Stay tuned, it's gonna get exciting. Thanks, Mike. The next question is also for you. TrueCar is known mainly for its new car business. What are you doing on the used car side? Thanks, Zaineb. One of the clear silver linings to the macro headwinds seen during 2021 is that it forced us to take a fresh look at our used car business and identify new ways to create value for retail partners and consumers that didn't exist before at TrueCar. This helped us become a strong used car resource for dealers and consumers in light of the inventory constraints for new cars. In Q4, used units accounted for approximately 45% of total units as compared to 36% in the fourth quarter a year ago. Approximately 19% of our used units came from dealer sales to consumers who also searched for a new vehicle on TrueCar. We made solid progress in strengthening our used car offering during Q4 and have several product launches planned in upcoming quarters that we expect to give us a comprehensive set of both new and used car offerings to market to our dealers. Thanks, Mike. Jantoon, the next question is for you. You're indicating a negative adjusted EBITDA expected in 2022. Can you please provide more color? Absolutely. As mentioned on our calls before and similar to the investments we began in Q4, we see a significant opportunity ahead for TrueCar + and plan to maintain this flexibility to support its broader rollout with sales and marketing, product and tech support, so various investments in various areas. We've already been investing on the product and tech side, and I think our recent hire of Rich DiStefano as our head of product is a great example of this. We'll be leaning into broader brand building as well as all our sales and marketing efforts as we start scaling in Florida initially, and then afterwards expand in other states. Our strong balance sheet gives us the flexibility to make these investments, and we're planning to support any and all of these important initiatives. We've managed our business prudently over the past quarters, and I think we've proven that to the markets, and we'll continue to do so despite the headwinds, but we also feel that there's a huge opportunity ahead of us that we wanna absolutely support. Jantoon, here's one more question for you before we open the line up to the audience. Can you tell us how the recent announcement about AccuTrade affects TrueCar? Yeah, absolutely. There are obviously more details in the 10-K that we'll be releasing. Long story short is, TrueCar received an attractive offer for its minority interest in AccuTrade. While our initial investment allowed us to learn a lot, we determined that this minority interest was not required for TrueCar to continue to provide its best-in-class consumer experience with trade-in offers. We're building a transaction-focused marketplace model. As a result, our focus will be on adding value for dealers in each transaction rather than focus on driving software sales. For us to exit this investment made most sense at this strategic list. Thanks, Mike and Jantoon. Now, operator, let's open up the call for questions from the audience. We will now begin the question -and -answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Rajat Gupta from JPMorgan. Please go ahead. Great. Thanks for taking the questions. You know, you mentioned the ramped up investments for TrueCar+. I mean, could you help us quantify some of the magnitude of the investments, you know, marketing, technology, product, and to what degree are those investments tied to TrueCar+ specifically? I have a follow-up. Thanks. Sure. We haven't disclosed any of the magnitudes, and especially not as we obviously will be dialing a lot of the investments as we scale. You can imagine that a significant portion of the company's focused on TC Plus, if you start thinking about the marketing side, if you start thinking about the product and engineering side as examples. Our field teams obviously are mostly focused on our core business currently, but over time, we'll gradually also get more and more engaged on the TC Plus side. It will just gain gravitas for the organization. Understood. Hey, Raj, this is Mike. I just wanted to add to Jantoon's answer. One of the key investments we made in TrueCar +, and he mentioned it in his earlier answer, was the hiring of Rich DiStefano as our head of product. Rich comes to us with a lot of two-sided market experience outside of the auto industry, and he'll be a key role in helping us really bring life to this product and help us, you know, transition out of the pilot phase into a commercial product as we will here in Q1 and Q2. Got it. Great. That's helpful. I mean, maybe a question just on monetization, you know, in 2022. You know, how should we expect, you know, monetization to progress sequentially through the year? You know, you mentioned that TrueCar obviously, you know, is gonna be immaterial, you know, from a contribution perspective this year, but given, you know, you know, the mix of independent dealers increasing, you know, do you see any structural change in that monetization going forward, and particularly as TrueCar+ also starts to, you know, come into the picture? Thanks. Yeah. We obviously have high hopes to monetize TrueCar+ significantly higher in the longer term. In the near term, we do not expect this to add anything on the revenue side as we adopt the marketplace. If you think of the monetization of Core, you can imagine that, or hopefully at some point as the market resets, there will be obviously some lag in first inventory resetting, then obviously inventory at the dealers replenishing, and then pricing obviously coming down, which then improves our close rates. As our close rates improve, obviously also, mostly, which is obviously most sensitive to close rates, improve our pay per sale revenue. This will obviously then lower somewhat the monetization that we currently have, which is driven mostly by the subscription side of things. It will basically reset itself somewhat to historical levels of monetization. Understood. Great. I think I just want to underscore that the TrueCar+ opportunity in the long term has significantly greater monetization opportunities for us. Understood. Great. That, that's really helpful. Thanks. Thanks a lot. Good luck, and we'll get back in queue. The next question comes from Marvin Fong with BTIG. Please go ahead. Good morning. Thanks for taking my questions. Congratulations, Jantoon, on the new role. A couple of questions from me. Maybe we could just start with a discussion on, you know, the units. You know, just compared to industry-wide, you know, SAR on both new and used, it seems that you guys, you know, had a little more pressure, and I know you alluded to that, but maybe you could just drill down a little deeper on, you know, what exactly is happening with conversion rates. You know, your traffic looked like it was not down as much as the units. Then maybe you could particularly comment on TCDC. It looked like the units there were down more than affinity. A second question just on TrueCar+. I think you mentioned, you know, that you're working with a variety of OEMs and nameplates. Maybe you could just kind of help us understand, you know, how many OEMs you're working with right now that have signed on board, maybe as a percentage of the total market. How does, you know, services like GM's CarBravo kind of, you know, fit into the picture? How would you guys coexist? Thanks so much. There are a lot of different questions in one. Let's start with the units. Obviously, our traffic is still very healthy despite actually a pretty dramatic pullback on the marketing side. It also shows you the robustness of our platform, but this is something that you obviously don't wanna do for extended periods of time. Hence also our interest to start investing some more on the marketing side over the course of 2022. The units have indeed come down, but that is pretty much driven by our close rates. Remember, although our mix shift has become more used, we are still like focused on new and obviously many of our franchise dealers are also focused on new. With the lack of inventory, it's hard to drive the units through. A lot of the dealers have very little inventory. As we mentioned before, there will be some lagging effect between stabilization, replenishment at the local level, and then obviously the pricing resetting. It's very different to some of our competitors that are obviously much more impression-based. If we were to be measuring ourselves on impression-based, then those metrics would look very differently and much more favorable to us. We obviously are much more focused on attribution and get paid that way. I cannot remember what your second question was. It was about working with the OEMs to get TrueCar + activated in Florida. How many you're working with? Any additional color there? Yeah, Marvin, that's a great question. We've been out talking to all of our OEM partners about our plans with TrueCar+. You know, there's a number of the OEMs who have entered into the digital space. Nissan launched their Nissan@Home program. You mentioned CarBravo from GM. We view these things as validation of where we're taking our business. The industry's moving online in a transaction way. What we feel good about is, you know, we think there's a way for all these things to exist, and we wanna be the first real multi-brand marketplace where a consumer can go and shop across new, used, and certified pre-owned vehicles, in a way that, you know, won't happen on CarBravo, doesn't exist on Nissan@Home. We're excited about that. All of these things will play a role in the industry's continued movement to provide more services to purchase vehicles online. Perfect. Thanks, Mike and Jantoon. The next question comes from Chris Pierce with Needham. Please go ahead. Hey, good morning. As you guys get closer to, you know, the used side of the business, can I get your thoughts on tax refund season and how, you know, how your dealer partners and how your sales are thinking about that, you know, now versus three or six months ago? The reason I ask is kinda, you know, third-party data was weak into year-end and kind of started out the year soft there. Do you think it's just high prices holding consumers back, or is there something more to it? Yeah, I think, Chris, on the second part of your question, it's definitely pricing that have consumers pausing. We strongly believe that a lot of the discretionary demand in the marketplace has kind of been squeezed out. The folks who are buying a car now, new or used, are the ones who absolutely need to. Folks who are, you know, discretionary buyers that come in and out of the market on a regular basis have been driven to the sidelines, not only due to selection but also due to the pricing that's out there for the vehicles. You know, we think there was pent-up demand coming out of COVID in 2020, and that showed itself early in 2021 with the sales numbers that we saw in March, April, and May. The inventory, the chip shortage had such an impact on new car availability, driving pricing up, which then drives used car pricing up. That's when I think you saw the discretionary demand starting to move out of the marketplace in the second half. If I could just as a follow-up, do you think that, you know, do you hear about record high profit at these dealers from pricing over 2021? Is that what's keeping prices high? Like, dealers are kinda trying to hold the line, or are they kinda just waiting for new cars, or does it all kinda go together? I think it's all coming together, right? As long as the local inventory is very, very low, then there's obviously supply demand where they can charge, because there is somebody who needs a car. When the inventory will reset, pricing will reset automatically shortly thereafter as well. Now, just note that this is obviously not a great consumer experience, and so over time, this will probably be resetting sooner rather than later. Perfect. Thank you. The next question comes from Naved Khan with Truist Securities. Please go ahead. Yeah, thanks. Thanks a lot. A couple of questions. It sounds like the dealer churn might be dropping. Can you provide any color on how the trends have looked like into January and maybe even February versus where they were in the back half of last year? On TrueCar +, in those markets where you plan to go live, can you give us a sense of the amount of traffic that you would be testing on TrueCar + versus your normal channel? Thank you. Yeah, absolutely. I think we also spoke about this in the letter. We feel that Q4 has effectively stabilized from a rooftop perspective. And that's a trend we have seen continue in January. I think we're confident there. Now, remember, there's a lot of macro at play, so there's some give and take, and it will probably continue to be so. Overall, we feel that this has bottomed out as it stands right now to the best ability that we can see. To answer your question on the TC Plus side, remember two things. One is there's a storefront effectively that will open on the TC Plus side that is specifically to Florida as we do the initial state rollout. That's people inside Florida who can then see the full inventory of new and used cars that are available within that state. Over time, obviously, we'll go on the new side, we'll go state by state. That's much more audience specific within the states in order for new but used will obviously roll out nationwide. And so soon, you'll be able to actually look at all the used inventory, even if you're outside of Florida, and be able to transact online through the marketplace. That obviously would be our full audience effectively. Hey, Naved, it's Mike. On the dealer churn thing as well, we've mentioned before, in Q4, dealer churn was actually at low levels compared to what we saw pre-COVID. What's happening is as dealers, even at a reduced rate, churn off the site, the difficult challenge is adding new car franchise dealers to the program with no inventory out there. That's why you're seeing the net decline. The small net decline that you saw wasn't really due to churn. Churn was actually at a fairly low rate in Q4. It's just dealers don't have a lot of new cars out there, so it's tough to drum up new business, new dealers on the new car side of the business. And Jantoon did a great job of answering on the traffic. You know, we're looking at a single storefront approach to our business as we go forward. We'll begin to expose more and more traffic to the TrueCar+ offering as we roll out, and we have more new car brands represented and more used car vehicles available for consumers to choose from. You know, we'll regulate the exposure of that as we build out the inventory and the market coverage. That's great. Thank you, and congrats on that funded role, gentlemen. Thank you. As a reminder, if you have a question, please press star then one to be joined into the question queue. The next question comes from Tom White from D.A. Davidson. Please go ahead. Hi. Thank you so much for taking our questions. This is Tevis on for Tom. First, I have on the Uber partnership. I'm wondering, is this primarily about helping drivers get into new or used cars? Also, how big of an opportunity is this relative to the rest of the business? I know this is another question in there. Maybe update us a bit on the status of your partnership with HyreCar and how this Uber deal fits into that. Then I have a follow-up question after this. Yeah. We're excited about the Uber partnership, and you nailed it with the purpose of that. We wanna make sure that the Uber drivers have an opportunity to search a large inventory of new and used cars as they're replacing their vehicles, which become the, you know, main way for them to generate revenue. It's early on in the partnership, and we try not to put too much pressure on early partnerships as they're developing. We think, you know, based on the number of drivers out there, we think it could be a big opportunity for us and, you know, we look to be able to grow that partnership steadily as we go forward. In conjunction with the HyreCar offering, you know, these pieces all kind of fit together. This is a growing, certainly a growing community, and, you know, we wanna be a part of it. We wanna provide a service to these folks, and we think it'll continue to grow for us and be an opportunity to grow our partner business. Along with some of the other new ads we've added there. You know, it wasn't that long ago that we added Navy Federal Credit Union, you know, the largest credit union in the world, and we're looking to grow that business. We're excited about where the partner business is and the new partners we've been able to add. Our role in the driver community is one where we think we can grow our business. We're excited about that. Great. Thanks so much. Then on my second question is on dealer count. You made a reference to a certainty about it in the shareholder letter. I was curious if you could provide any color or anything specific you've seen thus far into the first quarter and what type of lag you envision it, like, would create as new car pricing, when, you know, inventory start to rebuild. Yeah. So, what we mentioned earlier, so we've seen, we seem to have seen the bottom of it in Q4. Into the new year, the counts have stabilized. It's hard to say exactly when inventory resets. It seems that in industry inventory has stabilized, maybe even slightly grown in the end of last year. This obviously has a lagging effect for the replenishment of the local inventories, and only when that happens do you have pricing go down. In those moments, that's obviously when the dealers will then start focusing on actually expanding their reach, et cetera. There is some element of a lag, and it's hard to predict exactly when that will go into effect in each of the stages, but we're confident it will. The question is just what the exact timing will be. In our conversations with our OEM partners, they're working aggressively to build plans to ramp up production as chips become available. It's just there's a sequencing to the timing there as more vehicles are built. You know, there's dealers out there, retailers right now who are sitting on pre-sold orders and waiting for inventory to come in. Even as production increases, we don't think you'll see an immediate build to inventory, particularly coming into a spring selling season. There'll be a lag as we capture some of that demand that's been sitting out there. You'll begin to see inventory build. We'll begin to see pricing coming down. You know, we think you'll be able to see a noticeable change in that. We hope in the first half, but it'll probably be second half of this year before inventories significantly return to the, you know, type of levels we've seen in the past. Great. Thanks so much for taking my question. This concludes our question -and -answer session. I would like to turn the call back over to TrueCar's President and CEO, Mike Darrow, for any closing remarks. Thanks, everyone. I really appreciate you taking the time to join us this morning. I wanna also thank the TrueCar team, who's done an amazing job of staying focused during this difficult macro time and has worked hard to improve not only our core product offering but to get us a good start on our TrueCar+ pilot and where that can take us in the future. We're very excited about what's ahead of us, and thanks for spending the time this morning together. The conference has now concluded. Thank you for attending today's presentation. 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