Good day, and welcome to the TrueCar Third Quarter 2023 financial results conference call. Please note this event is being recorded. I would now like to turn the conference over to Mr. Jantoon Reigersman, President and Chief Executive Officer of TrueCar. Please go ahead, sir. Thank you, operator. Hello, everyone, and welcome to TrueCar's third quarter 2023 earnings conference call. Joining me today is Oliver Foley, our new Chief Financial Officer. I hope you, I hope you all have had the opportunity to read our third quarter stockholder letter, which was released yesterday after market close and is available on our investor relations website at ir.truecar.com. Before we get started, I need to read our safe harbor. I want to remind you that we will be making forward-looking statements on this call, including statements regarding our revenue growth, expected Adjusted EBITDA, as well as aspirational goals regarding our three-year plan. Forward-looking statements can be identified by the use of words such as believe, expect, plan, target, anticipate, become, seek, will, intent, confident, and similar expressions, and are not and should not be relied on as guarantees 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 factor section of our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our reports and filings with the Securities and Exchange Commission for a discussion of 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 measure 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 will provide a summary of the quarter as highlighted in our shareholder letter. This is an exciting quarter, okay? We have surpassed our guidance. We're back to year-over-year revenue growth for the first time in nine quarters and achieved positive Adjusted EBITDA a quarter earlier than originally indicated in our previous guidance. We have a clear vision, and we are working hard to realize it. The macroeconomic environment is showing signs of improving, and both consumers and dealers are in increasingly greater need of TrueCar's offerings. U.S. monthly inventory exceeded 2 million units for the first time since March 2021, a year-over-year increase of 50.3%. The percentage of new car sales over MSRP decreased to 39%, a decline of 37% year-over-year. In September, average new car incentives climbed 129% year-over-year 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. We believe our focus on enabling transactions for both consumer and dealers through a more comprehensive journey, rather than selling page views, impressions, or ads, will set us apart from our competition in any, in new ways. Enabling the right consumer to find the right car with the right financing at the right dealer is essential to this experience. But actual online transaction enablement that includes the execution of key deal documents, requires more than these components. Specifically, it requires an experience that integrates seamlessly with the processes and software relied upon by dealers, lenders, and other third parties. Building out these third-party integrations is a complex challenge that requires time, but we're laser focused on meeting this challenge. We continue to make good progress on our product flow, having launched what we call our unified flow. This flow is designed to resemble traditional online commerce checkout flow, whereby consumers are provided with relevant transaction details, landed costs, and next steps to complete the purchase of the product they're buying. We have also successfully launched our economic cohort and our convenience cohort flows, and we're well on the way to launch our EV flow in December. We continue to refine each of these three cohort flows as we reduce friction, eliminate unnecessary steps, and learn from product focus groups and consumer behaviors. We truly have shifted the organization to a product testing mindset and talent base, and the build-out of these cohort flows is emblematic of that shift. Beyond these three cohort flows, we see revenue opportunities stemming from the possibility of regaining dealers we have lost over the past several years, expanding value-added services to enhance dealer operations, and further strengthening our OEM and affinity business. As we look forward, we believe we have tremendous growth opportunities, but we also know such growth cannot come overnight. We're building a company that can endure and sustain, and it can help shape the automotive industry over time. This happens from the ground up while making sure we have the right people in the right seats with the right focus and core values, all aimed towards pursuing both growth and profitability. For the fourth quarter of 2023, we reiterate our expectation of returning to double-digit year-over-year revenue growth and break even or positive Adjusted EBITDA. In the longer term, we're focused on the importance of sustained revenue growth and positive free cash flow. We are in pursuit of both. We understand the importance of the Rule of 40 as an indicator of healthy growing companies with good profitability metrics. We believe that what we believe that we need to do to drive long-term shareholder value for all of you is to simply execute and prove ourselves consistently. In light of this, we have established three-year aspirational goals. By the end of 2026, we're pursuing in excess of $300 million annual revenue and greater than 10% free cash flow. We realize these are ambitious goals, but if we meet them, we would have combined revenue growth and free cash flow margin of at least 40% by the end of 2026, which we believe would emphasize our financial health under the Rule of 40, as well as the value accretion opportunity we believe we have ahead of us. We believe that we have the opportunity, the platform, and the talent to execute our strategy, and now the macro is turning in our favor. Join us in this journey as we reshape the car buying experience. Now, operator, let's open the call for questions from our analysts. Thank you. 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're 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. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Rajat Gupta with J.P. Morgan. Please go ahead. Great. Thanks for taking the question, Jantoon, on the execution in 3Q. Maybe, you know, just on the 2026 target, I mean, you have a target, you know, out there, now, and but, but it's still, you're still calling it, you know, aspirational or ambitious. Maybe if you could give us some sense, or like a bridge, from how we get there from today. You know, is it gonna be 100% organic? You know, is it, M&A and organic combined? And then how should we just think about, you know, the operating leverage, from that revenue growth, going forward as well? Maybe not to the 300, but like just going forward as well, how should we think about operating leverage with, as revenue comes back in 2024, 2025 and beyond? I have a follow-up. Thanks. Absolutely. So, Rajat, thanks so much for the question. So, I'll go on the first part, or the answer is organic. If you think of the overarching building blocks, right? It's obviously, like, which is normal to an e-commerce play, is mitigate churn, in no particular order, but mitigate churn, get new dealers on board, expand the offering of dealers, obviously interesting opportunities in the OEM and affinity space, and then obviously roll out the digital transaction effectively, right, TrueCar+, it through that over time and the ability to then increase monetization. So those are the rough building blocks you're looking at, overarching. Your question is whether this is organic or includes M&A. This is pure organic, the way we're thinking about it, and the opportunity we see ahead of us. And then the other part is operating leverage. I think we've always had very strong as an organization, and I think we've alluded to that in some of our last conference calls as well, which is the cost base of this organization is relatively flat. Remember, it's really three buckets. It's people, it's marketing, and it's effectively the fixed overhead charge. If you think of marketing, roughly, it's 50, as it stands today, it's 50% partner marketing, 50% effectively discretionary performance marketing from our end. So, would we, over time, like to deploy more in the marketing space? Obviously, as we launch, fully launch and, and nationwide launch, more of the digital experience, the answer is yes. So that's, that's one bucket. Over time, if you think about adding people, really where you would add over time is more on the sales and service side, more than anywhere else. So, I think you could assume that the cost structure is relatively stable, obviously somewhat growing in proportion to obviously the size of revenue growing, but overarching operating leverage should be really healthy and really strong as we also feel that we have a lot of monetization opportunities. Does that answer your question? Understood. Now, that, that's helpful color. And then maybe just as a follow-up on capital allocation, you obviously have, you know, a significant amount of, you know, cash on the balance sheet. Based on, you know, the EBITDA cadence here in the fourth quarter and in 2024, it looks like, you know, you will be generating positive free cash flow very soon. How should we think about, you know. And you also mentioned that there's, you know, a 100% organic opportunity here to those targets. So is it reasonable to assume that, you know, you would take a more serious consideration towards buyback here in the near term, just in the context of, you know, the targets itself and the fact that you're already positive EBITDA? Thanks. Yeah, it's a great question. The answer is we review all opportunities of capital allocation, obviously. Buybacks is one opportunity of several that we have. I do think that impacts of buybacks are disproportionately greater once you have positive EPS. And so there's a consideration there also around when, if you do buybacks, when do you do buybacks, and in what form do you do buybacks? But is buyback something that is on our menu of options and something that we continue to consider seriously, and we always continues to consider seriously? The answer is absolutely yes... We do also know that, look, we've gone through now, we've done 9 quarters of decline. This is the first quarter of positive. We know we want to prove ourselves, obviously, over the next couple of quarters. It's still a little bit of give and take in the broader macro. At the right time, will we address the broader cash balances, et cetera, in a more broad way? The answer is absolutely yes, but buybacks are always a consideration for us at any point in time. Got it. Got it. Great. Thanks for the color. I'll jump back in queue. Thank you. The next question will come from Naved Khan with B. Riley Securities. Please go ahead. Hi, this is Ryan, asking a question on behalf of Naved Khan. Hi. Could you talk about conversions in Unified Flow compared to the traditional TrueCar experience? And then could you also talk about conversions between the convenience cohort and the economic cohort, please? Yeah. So we have disclosed—so first of all, the United Flow, we've launched this in the last couple of weeks, so it's hard to give, like, definite answers across the board. I mean, we gave some indication, obviously, in the letter where, for example, in the economic flow, right, we exposed it to, like, 50,000 people, which 9,000 effectively immediately started actually going through the proper flow, and submit their information and properly engage. So these are attractive numbers. What we are seeing also is that because these flows are much more personalized, people are actually engaging. We also obviously see that we still have, in certain areas, too many steps, or there are certain things that are unclear, or right, like, things that for us seem to be very obvious are not necessarily obvious for the consumers, and so we're, we're clearing all that up. But the—in all honesty, it's a little bit too early to provide real, like, conversion metrics that are comparable at this stage, because we have only been doing this effectively for a couple of weeks. So this is something that we would love to be able to talk about in some more detail, obviously, on the next call. But these are good questions. What we have seen, though, is that the engagement is very, very high, and that the engagement in each of the cohorts of like, given it's a personal, personalized flow, is high. And so that obviously also shows that the demand is there and that the, the willingness to go through these flows is very high. But the actual conversion metrics is probably too early to talk about. Thank you. And then a follow-up is, when would you expect for Unified Flow to go out to all regions, please? Yeah, the United Flow will be live across in short order. What is most important, though, is remember that the United Flow—the Unified Flow, what happens is, it's not yet—it doesn't include the final pieces of paperwork, so that's the piece that is still the last—effectively, the last hiccup to get the full transaction online. And so we're working through that, and that—obviously, that product development roadmap does not solely depend on us. But once we have done that, that at least the experience for the consumer is already fully baked in a full commerce, effectively flow, but it will be online for pretty much everybody in short order. Yeah. So it's gonna be a new experience for people to go through the TrueCar flow. The piece that we have to finalize is the piece of paperwork. Thank you. The next question will come from Chris Pierce with Needham. Please go ahead. Hey, just two. Can you help us think about some sort of upper bound on dealer OEM incentive revenue? It's nice sequential growth again this quarter, and I just kinda want to get a sense of, should it be higher than it was pre-COVID because of where inventories are, or, like, should it normalize at some sort of level? I just don't know how to... I know it's going to be lumpy, but I just kinda get a sense of where this can go. Yeah, I think, Chris, I think it's a good question. I think it's like, I'll give you some... Obviously, it's tough to predict, but, I'll give you some parameters, which is, we obviously think that in a high interest rate world, right, some element of participation of OEMs and captives to support their consumers is important. There's also, with relatively low brand loyalty, there's obviously also a great focus of OEMs to effectively somewhat like recapture customers they've lost over time. There is an interest, obviously, to help push their dealers with EV, et cetera. So long story short, I think there is a great emphasis of OEMs to support their relevant businesses, which is great. And obviously, there's a huge opportunity there. Because of the triangulation we can do between affinity partners, between our dealer partners, and then obviously between the OEM. So, do we see this as an increasing opportunity? The answer is yes. Do we see this as an opportunity that, historically was attractive to us and historically had growth opportunity? The answer is also yes. Right? So yeah, we think that this is important to us. The other thing is also you're gonna have the ability to help support OEMs really get in front of the right consumers in the right way. And so it's not just, not just that you think about programs associated to rebates, for example, but even like go-marketing programs, et cetera, are all things that are possible. So, yeah, the hard part is over the years to come; it's a little bit hard to assess what really the upper bound is. The big issue of this is that these are often more lumpy programs that are a little bit harder to predict. But do we know that there's a real willingness, and do we also understand that there's a macro that effectively demands for a greater need of support by the OEMs? The answer is also yes. So do we see the broader opportunity, and do we think that we have a unique value proposition within the area? The answer is also yes. So it's hard to quantify what the actual upper bound is. Okay. But, and when you do one of these programs, do you also get dealer revenue because it leads to a transaction as well? Or is it just revenue on the marketing side from the OEM side of the world? It depends very much on the programs, but the answer is, in many cases, yes, both. Okay. Okay, so in theory, it's somewhat of a leading indicator on dealer revenue with a lumpy backdrop, so it's hard to model. Okay, perfect. Yeah. Then the letter talks about regaining lost dealers. Can you just kinda touch on the game plan there? Are you seeing outreach from these dealers as inventories pile up, or is it about you going to dealers, talking about, you know, "Hey, we're more moving to subscription," "Hey, we have TrueCar+." Like, what's the push and the pull on that side of the world? Yeah, good question. I think the short answer is always, we have a bias towards action as a firm, so we will always engage and be aggressive and proactive. We do see a really healthy portion of our dealers coming back on our network, so that's really good. And it's really mostly us reaching out and just re-engaging and properly engaging, and it's also engaging in the different forms. So, we haven't really spoken about it in this letter, but we have two tremendous leaders, one on the sales side and one on the service side. So we've also did a greater separation of the sales and service capacities and the service programs associated to that. We've obviously been doing research, and historically we've done research where it clearly showed that NPS scores with dealers was very high if you touched them within 30 days, obviously, and negative if you touched them in 90 days. And so there are a lot of opportunities for us to just engage much more in a consulting form and engage with providing insights and training, as opposed to trying to be there as a salesperson. And remember that one of the beauties of TrueCar is that we have a lot of data, we have a lot of insights, and we have insights not only on obviously the sales that happen at a respective dealership, but also lost sales or capture rates or all these type of things. So pretty much everything that happens within the DMA of that respective dealer. And so there's a lot of opportunity for us to just have a different form of a dialogue. This all sounds really not super sophisticated, and it doesn't need to be sophisticated. It just means that you need to be engaging with the dealers the right way, which is exactly what we're doing now. So, yeah, the short answer is: it's very much proactive from us. We do have dealers call back in, but it's very much still proactive from us. And it's also much more focused on how do you actually do sales, how do you do service, how do you do handoff towards service? What does it actually mean to do service? How often do you touch dealers? What do you provide them? How are you the best partner you can be, with the dealer partners in a world where they really need our help? Okay, thank you. Again, if you have a question, please press Star, then One. Our next question will come from Marvin Fong with BTIG. Please go ahead. Good morning. Thanks for taking my questions, and, congratulations, Oliver, on the new role. So, first question, I'd just like to revisit the long-term revenue and margin targets for 2026. You know, Jantoon, you mentioned several of the building blocks. I mean, is it fair to say that TC Plus is the largest component of how you plan to grow revenue? And, could you add some color on sort of the assumptions you have behind, like, adoption of TC Plus, like how many dealers will be part of that program, et cetera? Just maybe some more color would be very helpful. Thank you. Yeah. Great. So Marvin, great question. So the answer is, interestingly enough, it's hard to predict adoption of a product like TrueCar+. I actually think, and I'm a firm believer, otherwise I wouldn't obviously be here, but, like, once TrueCar+ is actually fully operational with the consumer and dealer experience we envision it is capable of, I think this will be a huge... there will be huge adoption of that product, of that product. Now, it's hard to assess, and it's hard to predict when and how and what form, but I do am a firm believer that we see that consumers really want to do full transactions online, and we see that dealers really wanna effectively expand their addressable markets and want to maintain or even increase their margins and do greater sales volumes. And so we think that there's a real value here to provide. As part of the planning, to answer your question, I actually think that there is a really big opportunity for a lot of the historical TrueCar revenue lines to come back to growth, right? So whether it is just providing the current suite of products that we provide better, right focus on the EV side of things, focus on the OEM side of things, et cetera. So, interestingly enough, the growth that we're looking into, this aspirational model, is not actually overly dependent on the TrueCar+ side because it's so hard to predict. So in many ways, there's a segment to TC Plus and a piece of TC Plus, really, if you think about it holistically, and you go back to the 30,000-foot view, one of the metrics you will start hearing us talk about more and more over time will be revenue per dealer. That is currently still a little bit of a murky, murky number, because obviously you have a lot of dealers inside, and there's a long tail to the dealer. So at some point, we'll, we'll become a little bit more clear on that. But revenue per dealer is a metric that I've started talking about more and more internally, as well as the concept of a, a proper, like, two-sided marketplace where you match supply and demand. And so revenue per dealer will be obviously, we're seeking to move up pretty dramatically over the next couple of years, and one of the ways to move that up is not only to sell better and more services to, to dealers, but also over time, is to obviously add new product lines in there, and one of those product lines will be TC Plus. Do I think that TC Plus has huge opportunity? The answer is yes. Is this predominantly based on actually the more historical TrueCar? The answer is also yes. So it's actually less dependent on TC Plus. Gotcha. Okay, that's great. And I guess a follow-up just on the dealer counts. So, I think the franchise dealer count declined for the first time after several quarters of positive growth. Could you just speak to, you know, what might have changed this quarter to kind of cause that number to reverse? But did the prospect of the strike, which I think turned out to be less bad than most people thought, did that play any role? Just any color you could add would be terrific. Yeah, it's... Yeah, and absolutely. It's a little bit of a wash and just murky right now. So we transited to this more service and sales organization part, and so we are working through that right now. There's a little bit of, like, also, like, historical dealers that are maybe a little bit less quality-oriented towards consumers. There's just a little bit of give or take happening as we're now prioritizing really our dealer customers and consumers. And so net-net is, you'll see this wash happen a little bit. It might take a quarter or two, where it's a little bit murky in terms of shifting up and down. It's really about focusing on the standard distribution of the dealers who really want to focus on that are our bread and butter, and that really provide the right experiences and are the right forward-leaning dealers. And so you'll see that always a little bit fluctuate, although I think that we've obviously hit the trough, and this should start going up over time. There's a little bit of give and take if you look at any given month in terms of types of dealers coming on and coming off. What I really care about, obviously, is the type of dealers coming on and the type of dealers going off, and that's the piece we really are on like a hawk. So I'm less concerned about some of the dealers coming off, as long as they're the dealers we are not necessarily looking to seek to service in the long term anyway. Mm-hmm. Gotcha. Okay, that's great. Thanks so much. This concludes our question and answer session. I would like to turn the conference back over to Mr. Reigersman for any closing remarks. Please go ahead, sir. Great. So thank you, everyone. I would like to thank everybody for taking the time to participate today. I also would like to thank the team for all their continued dedication and hard work. Without other people, none of these results are possible, so I really appreciate it, and we ask a lot of them. So with gratitude, thank you all and appreciate you, everybody, waking up early. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.