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DATE
Aug. 7, 2025, 1 p.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Jantoon Reigersman
Chief Financial Officer — Oliver Foley
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TAKEAWAYS
Total Revenue-- Total revenue was $47 million, an increase of 12.4% year over year, marking the highest quarterly GAAP revenue since Q3 2021.
Net Loss-- Net loss (GAAP) was $7.6 million for Q2 2025, an improvement from a net loss of $13.5 million (GAAP) in Q2 2024.
Adjusted EBITDA-- Adjusted EBITDA was negative $1.2 million in Q2 2025, with the company reiterating a year-end goal for adjusted EBITDA profitability.
OEM Revenue-- OEM revenue was $3.6 million in Q2 2025, an increase of $600,000 or 19.7% year over year.
New Unit Sales Volume-- New unit sales volume grew 6.2% year over year, outpacing the industry's 2.8% growth in new vehicle retail sales.
Prospect Close Rates-- Highest since Q2 2021, attributed to product and marketing enhancements.
Average Cost per Sale (Non-affinity Partner Units)-- Improved by nearly 30% year over year in Q2 2025.
Dealer Network Update-- 44 franchise dealers left the platform in Q2 2025, coinciding with efforts to optimize network efficiency by focusing on the most accretive dealers.
Core Product Enhancements-- Launched actionable insights for dealers, offering personalized data-driven recommendations, and introduced motivated buyer badging using machine learning to identify high-intent shoppers.
Consumer Experience Improvements-- Redesigned search results and vehicle detail pages to increase usability and engagement, with internal metrics showing higher lead volume for dealers.
Post-Prospect Engagement-- Rolled out redesigned post-prospect emails displaying itemized out-the-door pricing and clear calls to action to increase showroom visits and sales.
TrueCar Plus (TC Plus) Progress-- Completed integration of CDK's DMS with TC Plus, now in testing, which streamlines deal documentation for dealers.
TC Plus Consumer Checkout-- Revamped to separate vehicle selection from transaction steps, now offering dynamic itemized deal receipts, expanded financing, and insurance options.
TC Plus Performance Metrics-- Reported a 115% increase in add-to-cart rates since the new TC Plus experience went live, as disclosed on the Q2 2025 earnings call, a 40% lift in daily credit application submissions, and a twofold increase in F&I attachment rates since deployment of the new TC Plus experience in Q2 2025.
Wholesale and Used Vehicle Initiatives-- Expanded use of Sell Your Car and TrueCar Wholesale Exchange to help dealers source used vehicles directly from consumers.
Capital Allocation-- Management stated openness to repurchasing shares, while emphasizing maintenance of a sufficient cash balance and targeting free cash flow breakeven in the second half of 2025.
Dealer Engagement-- Initial dealer engagement with new actionable insights and motivated buyer features skewed toward digitally proficient dealers; ongoing dealer training is planned.
Efficiency Focus-- Internal investments were reprioritized by pulling back on field sales and service spending in favor of technology and product upgrades in Q2 2025 aimed at improving close rates and reducing marketing dependency.
OEM Incentive Revenue-- Described as a "huge opportunity" and area of continued optimism, with this quarter's growth cited as evidence of execution in Q2 2025.
Strategic Direction-- Management reiterated priorities: expanding the dealer network, increasing OEM partnerships, scaling TC Plus, and deepening key affinity relationships.
AI and Product Roadmap-- Management highlighted efforts to structure proprietary data and leverage it in consumer and dealer-facing products, indicating careful consideration of agentic AI trends in the car-buying journey.
SUMMARY
Management reported significant year-over-year revenue growth, with total revenue of $47 million in Q2 2025, an increase of 12.4% year over year. Strategic product launches, including actionable dealer insights and TC Plus enhancements, drove increased engagement and transactional metrics on the platform, with management citing a 115% increase in add-to-cart rates, a 40% lift in daily credit application submissions, and a twofold improvement in F&I attachment rates since the new TC Plus experience went live in Q2 2025. Expansion of consumer tools, dealer-focused sourcing solutions, and technology integrations were repeatedly cited as core levers to bolster future revenue streams and operational efficiency.
The company completed integration of a major DMS provider with its digital retailing platform, now in testing, intended to automate dealership workflows and enhance process efficiency.
Dealer network optimization was underscored by both selective attrition and targeted partnership strategies, with direct management commentary highlighting the importance of focusing on "the healthiest dealer network possible that has the best supply-demand balance."
Internal investment allocation shifted toward product and technology over field sales, with management emphasizing the resulting operational leverage and cost discipline.
Management stated the aim to achieve adjusted EBITDA profitability and positive free cash flow in 2025, noting readiness for multiple future revenue scenarios.
Survey data cited during the call reflected increased dealer sentiment that digital vehicle sales trends are permanent, supportingTrueCar(TRUE 4.82%)'s commitment to scaling TC Plus.
INDUSTRY GLOSSARY
DMS (Dealer Management System): Software platforms used by dealerships to manage sales, inventory, customer relations, and deal documentation.
SRP (Search Results Page): The webpage displaying filtered vehicle listings after a customer search on the TrueCar platform.
VDP (Vehicle Detail Page): A webpage providing comprehensive information and specifications about a specific vehicle for sale.
F&I (Financing and Insurance): Ancillary products offered during the auto-buying process, including loan origination, gap coverage, and extended warranties.
Full Conference Call Transcript
Jantoon Reigersman: Hello, everyone, and welcome to TrueCar, Inc.'s Second Quarter 2025 Earnings Conference Call. Joining me today is Oliver Foley, our Chief Financial Officer. I hope you have all had the opportunity to read our most recent stockholder letter, which was released yesterday after market closed and is available on our investor relations website at ir.truecar.com. Before we get started, I need to read our usual safe harbor. I want to remind you that we will be making forward-looking statements on this call, including statements regarding our ability to operationalize certain aspects of the TrueCar Plus platform and our expectations with respect to future adjusted EBITDA profitability and free cash flow.
Forward-looking statements can be identified by the use of words such as believe, expect, plan, target, anticipate, become, seek, will, intend, 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 other reports and filings with the Securities and Exchange Commission for a discussion of the 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. Reconciliations 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 the results prepared in accordance with GAAP. Let us begin. I am pleased to report the following operational highlights from 2025.
Total revenue of $47 million grew by $5.2 million, up 12.4% year over year, marking our highest quarterly revenue since Q3 2021. Our net loss decreased to negative $7.6 million from negative $13.5 million in the same period last year. Adjusted EBITDA came in at negative $1.2 million. OEM revenue of $3.6 million grew by $600,000 or 19.7% year over year. New unit sales volume grew 6.2% year over year compared to the industry's 2.8% growth in new vehicle retail sales. Prospect close rates during the quarter reached the highest level since Q2 2021, and our restructured performance marketing campaigns yielded nearly a 30% year-over-year improvement in our average cost per sale for non-affinity partner units.
As we articulated in our last stakeholder letter, our approach to navigating the evolving tariff landscape involves a relentless focus on the factors we can control and a resource allocation strategy that prioritizes initiatives likely to yield positive results regardless of the prevailing market environment. In the second quarter, this meant deferring certain sales and marketing investments and increasing the speed of product development to accelerate key product enhancements designed to strengthen our competitive advantage and deliver greater value to dealers and consumers through the TrueCar, Inc. platform.
This shift has yielded exciting outcomes as evidenced by the number of core product initiatives that we released as well as new features during the last ninety days and the continued progress we have made towards our goal of commercializing TrueCar Plus by year-end. First, our core product enhancements. As we noted last quarter, dealers measure the value of a third-party lead platform primarily by the rate at which those leads turn into sales. That understanding has continued to guide our product roadmap in the second quarter, leading to a number of enhancements to both the dealer and consumer experience that are designed to improve lead quality, engagement, and eventually close rates.
Among the most significant advancements was the launch of actionable insights, a new feature available in the dealer portal that provides personalized data-driven recommendations to help dealers optimize performance on the TrueCar, Inc. platform. By analyzing a broad set of dealer-specific and market-level data, this new feature surfaces opportunities for improvements, as well as relevant context and recommended actions, enabling our certified dealers to make faster, more effective decisions. Whether it is flagging a dealer's aged inventory that is priced above market or recommending price adjustments that will yield a better price rating for particular listings, actionable insights enable dealers to extract greater value from our platform.
Complementing this feature is our newly launched motivated buyer badging, which leverages an appropriate machine learning model to identify and highlight the highest intent shoppers based on more than 20 behavioral signals. These high-value leads are now automatically flagged in the dealer portal and the dealer's customer relationship management system, enabling faster and more targeted follow-up. On the consumer side, we also launched a broad set of updates aimed at making the TrueCar, Inc. experience more intuitive, transparent, and trustworthy. Most notably, we recently completed a full redesign of our search results page, the SRP, introducing a modernized filter interface with smart toggles, curated popular filters, and improved mobile usability.
These changes aim to help consumers more easily find the vehicles that best meet their needs, which internally leads to improved engagement metrics and increased lead volume for our dealers. Similarly, we also completed a major redesign of our vehicle detail page, the VDP, to highlight the most relevant content and deliver the most pertinent information to assist consumers in their decision-making process. With a cleaner layout, collapsible sections, and clearer organization of key vehicle details such as specs, features, and warranty information, consumers can now evaluate listings with greater confidence and more complete information, helping them match with the right dealer and, we believe, improve close rates as a result.
Finally, for shoppers that convert into leads, we have significantly strengthened the post-prospect experience through a redesigned post-prospect email that provides consumers with a clean receipt-style breakdown of the out-the-door price, including applicable discounts, taxes, and fees. Combined with prominent calls to action such as schedule test drive or save offer, these emails are designed to drive higher levels of engagement between prospects and dealers, thus driving more showroom visits and closed sales for our dealer partners. Now turning to our TC Plus advancements.
While the enhancements to our core product experience are already driving stronger outcomes for both dealers and consumers, we are equally encouraged by the progress we have made towards commercializing TC Plus, our end-to-end digital retailing experience. As we shared last quarter, a critical milestone for TC Plus is completing integrations with DMS providers, which enables the automation of deal documentation and replaces the time-consuming desking workflows currently performed by the dealer. We are pleased to report that the engineering work related to the integration of CDK's DMS with TC Plus is now complete and in testing. This streamlines the dealer experience and drives operational efficiency in a way that only a fully integrated end-to-end platform can deliver.
Moreover, we also released a major revamp of the TC Plus consumer checkout flow. This redesign introduces a more focused role for the VDP, centered solely on helping the consumer select their vehicle, while migrating all transactional steps into a newly reimagined checkout center. This guided checkout experience walks consumers step by step through the purchasing process, strengthening consumers' trust by providing greater visibility and transparency at every stage of the transaction. The revamped flow also incorporates new features such as dynamic itemized deal receipts that update as the deal progresses and dedicated pages for a range of available financing and insurance, so-called F&I products, such as gap coverage and extended warranty offerings.
And for consumers who prefer to complete their purchase in-store, our new continue at dealership option creates a seamless online to offline handoff. These changes are already producing encouraging results. Since the new TC Plus experience went live, we have observed a 115% increase in add-to-cart rates, a 40% lift in daily credit application submissions, and a 2x improvement in F&I attachment rates, all key indicators of a superior consumer experience. As we continue refining the experience and expanding dealer adoption, we believe these improvements will play a critical role in helping TrueCar, Inc. capture a greater share of online car buyers and further differentiate ourselves in the digital retail space.
Looking forward for TC Plus, the team remains intently focused on a number of key priorities that will keep us on the path to commercializing TC Plus by year-end. Completing the back-end DMS integration work and closely monitoring the automation of all deal documentation is critically important and will allow us to begin measuring the significant sales efficiencies that TC Plus seeks to provide our dealers. In addition, we are working to expand and streamline our integrations with financing partners to improve credit approval rates and help consumers get the most competitive financing offers.
This includes a universal or winless prequalification experience that allows consumers on TC Plus to exclusively shop for vehicles that they are prequalified for and expanding the credit application to include co-applicants, thus minimizing the number of rejected credit applications and continuing to improve conversion rates at a critical step in the buying process. In addition, we are continuing to build more seamless integrated off-ramps for consumers to finish the transaction at the dealership. This is an important component of the TC Plus experience because we recognize that many consumers prefer to complete a substantial portion of the transaction online before completing the purchase in-store.
Moreover, according to Cox Automotive's Digitization of Automotive Retail Study published in June 2025, time savings and efficiency were the primary motivation of surveyed buyers who completed part of the purchase online before finalizing at the dealership. Nevertheless, 97% of surveyed dealers reported that consumers repeated steps already completed online when they arrived at the dealership, thus highlighting a critical gap among existing digital retail solutions that fail to seamlessly connect the online and in-store consumer experience. By leveraging our direct DMS integrations, TC Plus seeks to drive efficiencies for both consumers and dealers across every step of the buying process, regardless of whether the consumer finishes their deal online or in-store.
And now looking forward for the company as a whole. Despite the macroeconomic uncertainty that persists, our long-term growth ambitions have not wavered. Our optimism around the future of TrueCar, Inc. continues to grow as we make significant progress towards our goal of commercializing TC Plus by year-end. It has been our long-standing belief that the modern marketplace offers dealers and consumers the ability to seamlessly buy and sell vehicles entirely online, which will play a critical role in the future of automotive retail. The recent progress we have made in bringing TC Plus to market has strengthened our conviction.
Moreover, we see momentum gaining for this shift in car buying, as evidenced by the June 2025 JPMorgan Chase Auto Annual Dealership Survey that cites 71% of surveyed dealers viewing the shift to online vehicle sales as permanent, up from 53% in December 2024, and 30% of dealers anticipating a significant increase in online vehicle sales penetration, up from 24% in December 2024.
Beyond TC Plus and the opportunity it represents, we are excited by the expectation that the recent enhancements to our core product offering will begin to yield results in 2025 and beyond, including through the expansion of our dealer network and growth in unit sales as we work to bring new OEM incentives into our platform and deepen our partnerships with key affinity partners to help consumers find exclusive offers on their next vehicle purchase.
Finally, despite the unpredictability of the current market environment, we believe that the steps we have taken to eliminate costs and maximize our financial flexibility position us to navigate a range of revenue growth scenarios and deliver adjusted EBITDA profitability and positive free cash flow over 2025. Now, operator, let's open the call for questions from our analysts. Thank you.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 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 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Tom White with DA Davidson. Please go ahead.
Wyatt Swanson: Hey. Thanks for taking the question. This is Wyatt Swanson on for Tom. Could you maybe provide an update on how TrueCar, Inc. is looking to grow? Just some additional details around your used vehicle initiatives and how you think about that opportunity in light of auto tariffs.
Jantoon Reigersman: Yeah. Absolutely. So hey, Wyatt. Thanks for the question. So I think there are a couple of things. For us, one of the things that is really important for our marketplace is that we make sure that people can find the right car, whether that is new or used. If people become more interested in used, then there is a natural shift towards that, and we need to just make sure we enable that from an experience perspective. It is hard to determine what the exact impacts are going to be long term by the tariffs. So we are prepared by effectively enabling the consumers to find the cars that they are looking for and best suit their needs.
Because people will keep looking for cars and keep acquiring cars at the end of the day. I think one of the pieces that I will let Oliver talk a little bit more about is really engaging on the wholesale side of the business, and it is something we have been looking into to help the dealer source more used vehicles. It is one answer to the question on the pickup of demand for used vehicles. But at the end of the day, do remember that yes, tariffs are obviously affecting the new vehicle side, but so are the interest rates.
And so if you assume a decrease in interest rates over time, you can imagine that there will probably be a renewed emphasis on the new side as well, given that the people that are buying on the new side are often leasing or financing these deals. Maybe, Oliver, you want to give a little highlight on the wholesale side and what we have been doing there as part of the used initiative.
Oliver Foley: Yeah. Definitely. So, I mean, let me just start by saying that our long-term view on our growth levers remains unchanged. It is really going to be driven by growing our dealer network, expanding our OEM partnerships, bringing more incentive programs onto the platform, and then ultimately, beginning to commercialize and scale TrueCar Plus. So long term, those initiatives remain sort of at the core of our growth strategy. In the near term, where our growth comes from will certainly be those elements that I just mentioned. But we have certainly seen a shift towards, in terms of what dealers are prioritizing right now, we have seen a shift towards vehicle sourcing initiatives.
I think there is a recognition that in a world where new vehicle supply is constrained, it is critically important for franchise dealers in particular to have sufficient used supply. So being able to build up that used supply by sourcing vehicles directly from consumers and reducing their reliance on traditional brick-and-mortar auction platforms, that is something that we have seen shift pretty quickly over the last four or five months. The way that we support dealers with that is through our two products, which are Sell Your Car and the TrueCar Wholesale Exchange, both of which allow dealers to source vehicles wholesale directly from consumers that come through TrueCar, Inc.
So it is just a way for us to, I think, augment our value proposition for dealers and allow them to lean into sourcing vehicles directly from consumers given the environment today. But, you know, long term, our ambition is not to grow the wholesale side of the business in a vacuum, but rather grow it in conjunction with our core marketplace business. We just view it as being an additional value prop for dealers that could keep them on the platform for longer and really help them in a different way.
Wyatt Swanson: Got it. That is really helpful color. Thanks. For both of you. Just a follow-up. Could you give an update on your capital allocation priorities? Maybe some color as to whether you plan to ramp up your buyback again?
Jantoon Reigersman: Yeah. I will just say, like, I think we demonstrated last year that we are certainly open to repurchasing shares. We are constantly evaluating that as part of our capital allocation strategy. We do believe that maintaining a sufficient cash balance in the near term is good for investors. It certainly provides a healthy amount of downside protection. But, as we think about bringing TrueCar Plus to market, as we hit our goal of being free cash flow breakeven over the second half of the year, it certainly does place a focus on repurchasing shares.
I cannot say exactly when we will be in the market repurchasing shares, but I think as we demonstrated last year, we are certainly open to it and continue to evaluate it.
Operator: The next question comes from Naved Khan with B. Riley Securities. Please go ahead.
Ryan Powell: Great. Hi. Thanks for taking our questions. This is Ryan Powell on for Naved. We wanted to ask about the decline of franchise dealers. I think we saw 44 turnover in the quarter. Just wondering about trends to expect from here. And then secondly, on the highest prospect close rate since Q2 2021, what factors are contributing to this? Is this a function of higher lead quality? Curious about your thoughts. Thanks.
Jantoon Reigersman: Absolutely. It is a good question. So I think they are somewhat intertwined. The dealer declines are not something that I am too worried about in general. As I mentioned before, you have often a standard distribution and also a long tail around these things. One of the things that we have been very focused on in the past quarter has been effectively what type of dealers we take on the network and what types of dealers are coming off, and we give them what we call a dealer network scoring. We have an algorithm that sits behind that.
Effectively, what we do is in our sales efforts, we are really focusing on the type of dealers that have a huge positive impact on our broader network, and it is directly correlated to what people are looking for and where we potentially have gaps. It is a combination of that together with the consumers and what the interest of the consumers are. Then you effectively become, for lack of a better word, better in making sure that the consumer finds the vehicles at the dealers that they are looking for and that you can actually have the right inventory on as well as for the dealers that you find and provide the right consumers to convert.
Net-net, it has really become a focus on becoming more efficient both across the dealer side and making sure we have the right dealer on, which is why you see a little bit of the shaking of the tree of some of these things. Whether it is a little bit plus or a little bit minus really does not matter. Overall, we obviously have huge coverage in the country, but we still feel we have certain gaps vis-a-vis that networking score. That is something we are very focused on. On the other side, we have also become much more efficient in our marketing approach and engaging with the prospects that are high converting.
The combination of these factors obviously creates the prospect rate we are talking about. I would argue on the networking side, it is really about becoming more and more efficient on having the right network in place.
Ryan Powell: Got it. That makes sense. Thank you. And then also curious on dealer engagement with new actionable insights and motivated buyer features since the launch.
Jantoon Reigersman: Yeah. It is a good question. It is actually a great question because it is like the classic case of, like, it is an education process, right, at the end of the day. That is really on us. One of the things that we always mention is that one of the values we provide to dealers is training and insights. This applies to both. This gives insights, but in order to extract the insights and know the insights, you effectively need to have training in order to be able to do that. Some dealers are more naturally proficient and understanding in these things than others are.
This will be something that will start growing over time and make sure that the various dealers are engaging on it appropriately. We have seen really positive results. It is a little bit hard to say because you kind of need to train your network on it and see that. But overarching, it skews very much whether the dealers are a little bit more digitally savvy or not. As it stands right now, but that also really depends on our training and fits well with the twelve-month service cycle that we have laid out in some quarters ago to you guys where we touch every dealer every quarter and sit with them and engage with them.
This is a really important part of that.
Ryan Powell: Got it. Thank you.
Operator: The next question comes from Chris Pierce with Needham. Please go ahead.
Chris Pierce: Hey. Can I have a part question? Good morning. If I look at things on a sequential basis, you saw momentum in dealer revenue, but going back to the last question, is it, you know, dealer count matters less, but it is units and units per dealer and the modest uptick in units showed that momentum. Or did you take some pricing action, or it is about having the right dealers and more units on the I just kinda wanna understand the momentum in that business and how to think about it going forward. And then the second part is you drove this momentum by pulling back on internal investments.
So I am just kind of curious the right way to think about the internal investments you had messaged prior and maybe the level of spend going forward given the growth you are showing while pulling back on that spend?
Jantoon Reigersman: Yeah. I will give you a short version answer, and then Oliver can take the next piece. Which is Chris, that and it is going to be an unsatisfactory answer to you, which is it is a little bit all of the above at the same time. Right? You are working on both sides of the equation. You are working in a more efficient network while you are also really starting to hone in and be more efficient on the top end. That includes also trying to figure out ways to really utilize our own datasets better and more precisely reengage better, more precisely reengage more personalized, all these types of things.
It is really about utilizing all the information we already have internally and being a little bit less dependent on the classic standard performance marketing and really focusing on what we actually know a lot about these leads and we know a lot about our inventory, and we know a lot about the behaviors that are happening. What can we do to really improve around that? It is a little bit of both. It is not necessarily that one is prioritized, but we are just happen to be tackling it at the same time. As we then become and find these greater efficiencies, then actually push behind it and push harder as we feel we are ready for that.
I do think, though, that if you think of the network itself, that is really about basically making sure we add the right dealers to the platform and then really think about if there is somebody who wants to churn, who is really value additive, obviously, focus on retention. If there is somebody who wants to churn who might be less additive to the network, maybe focus our efforts on the ones that really are effectively net positive. There is a little bit of a reshift that has happened as we realigned that sales team and service team. But it happens at the same time. So there is no necessarily a particular prioritization amongst the two.
Oliver Foley: Okay. So Chris, I will just add a little bit, which is, you know, when you think about dealer revenue, there is you can really split it into two. One component is the auto buying program. Right? So it is what we are getting paid to drive prospects and unit sales for our dealers. We want our unit growth to move in sync with the core auto buying program revenue that we earn from dealers. Separately, you have got the ancillary dealer revenue, which is really made up of the vehicle sourcing products such as Sell Your Car and the Wholesale Exchange, and TrueCar Marketing Solutions.
Revenue that is earned from those parts of dealer revenue really is not tied to unit sales growth. There are different KPIs that we measure for those. As we talked about, we did see a significant lift in the number of dealers who are subscribing to our Sell Your Car product. TrueCar Marketing Solutions was pretty nascent this time last year. There has been growth from that part of the business as well. Looking forward, we certainly want that core auto buying program component of dealer revenue to grow and expand, and that is going to be adding more of the right dealers to the network.
Those right dealers that are truly accretive to our network, where they have got the right supply that matches our demand, they will have a higher revenue per dealer. That is really, in our view, a much more effective way to grow the dealer network over time. As it relates to the investments that we, well, I would say that, yeah, I think we have pulled back on certain investments around our field sales and service team. Instead, really sort of prioritize our energy on the investments into the dealer experience and consumer experience that are going to lift overall efficiencies in the platform, specifically close rate.
As we see close rates continue to go up, we can drive more unit sales with fewer marketing investments. Therefore, you can think about spending the same amount of marketing, drive significantly more unit sales, and grow the dealer network in conjunction. It really was, to an extent, stepping back, really focusing on what are the things that are going to drive improvements in the consumer and dealer experience that lift close rates. That just gives us a lot more leverage to grow unit sales and the dealer network over the next several quarters.
Chris Pierce: Got it. And then just lastly for me, I know in the past couple of years, we have talked about increasing OEM incentive revenues. I know why dealers OEMs would not feel the need to incentivize for the tariff pull forward. But if we talk about prices going higher and where incentives are as a percentage of transaction price now, I am just kind of curious why you are less bullish on OEM incentive revenue. Is it just lower supply is directly correlated to lower revenues or lower OEM incentive revenues, or what is the correlation there? Because I am thinking it is going to be harder for OEMs to sell higher-priced cars.
Seems like you guys are coming at it from a different perspective.
Jantoon Reigersman: I do not actually think the OEM revenue line is an opportunity for us and has always been and remains to be. I do think that in a higher tariff world, I think OEMs are trying to figure out how to adapt and adapt across their own effectively capital structure, for lack of a better word. We are helping them adapt. We are obviously engaging with them directly and see what we can do. I agree with you, and I think there is a huge opportunity. I think there is a big opportunity to keep people excited about new cars.
The OEM incentive business is one that is very unique to us, and I think we have proven to be very good. So we remain very bullish on that. I think as we have proven also in this quarter, we have performed well there.
Chris Pierce: Okay. Thanks for everything.
Operator: Thank you. To ask a question, you may press star then 1 on your touch-tone phone. The next question comes from Rajat Gupta with JPMorgan. Please go ahead.
Rajat Gupta: Thank you for taking the question. Just wanted to, I do not know if you addressed this earlier or just hopping around different earnings calls. Any color you can provide us on the second half outlook as it relates to, you know, just a non-dealer product side of things, you know, just the franchise independent revenue cadence? You know, customer count versus, you know, just average every per dealer, you know, any kind of framework you could provide us you might have visibility into in the second half? And I have a quick follow-up.
Jantoon Reigersman: Yeah. So that is thanks go ahead, Oliver. Go ahead, change it.
Rajat Gupta: No, please.
Jantoon Reigersman: I mean, I was going to give Rajat a very dissatisfactory answer, which is look, it is like, I think the part that we control for is obviously the cost structure of the business and where we do our capital allocations. Think the revenue side is a little bit trickier when it comes to the baseline. I think we know that very well. I think, obviously, it is still an evolving world. I think every day, right, is different and more news. So we are a little bit reluctant to really give any framework around it.
It is the reason also why I think we were purposeful in the last sentence where we said, right, there might be different trajectories of lines vis-a-vis the revenue depending a little bit of the external circumstances. But we are ready for that as a business because we have set ourselves up really well. I think more broadly, though, I mean, uncertainty drives benefit for us in the way that dealers need us. Right? As Chris alluded to before, I think OEMs need us. So I think we are very positive and excited about what the future brings. It is just really hard to predict exactly what the trajectory of that line is. Sorry, Oliver. I cut you off.
Oliver Foley: Yeah. No. I will just elaborate and say that, you know, dealer count is important to us. Right? We want to maintain, you know, a strong network. We want to have as many active dealers on the platform as possible. As we have talked about, you know, there is a difference between the dealer that is truly accretive to the network. Right? There is they are filling a supply-demand imbalance that exists. Then there are dealers that are nonaccretive to the network, right, where they are just providing more supply when there may not be sufficient demand. To an extent, they can cannibalize other dealers on the network.
We have been really intentional about really focusing on, you know, how do we get more of those dealers that are truly accretive to the network on the platform. When certain dealers churn, if we feel like they are, you know, they provide redundant supply, then we should be okay with that. I think where dealers are getting, you know, greater share of unit sales. I think that over time leads to lower churn as a result. Also, you know, when you think about our franchise dealer network, you know, we are comprised of nearly all of the large dealer groups across the country. We also see a tremendous amount of opportunity outside of growing dealer count.
But really just saying, alright. How can we serve these strategic partners in a much deeper way? How can we, you know, support them beyond just sending them more new car or used car leads, but really expand the way we serve them to include some of our vehicle sourcing products, to include our TrueCar Marketing Solutions products as well. Then, you know, really deepen the partnerships with them and drive a greater share of wallet. So all that to say, dealer count is certainly an important metric, and over time, we want that to expand. In the near term, we want to make sure that it is the healthiest dealer network possible that has the best supply-demand balance.
We are really investing in, you know, growing the partnerships that we have with some of our larger strategic dealer partners.
Rajat Gupta: Got it. Got it. Thanks for that detailed color. And just, you know, I had a broader, like, question zooming, you know, on just agentic AI. Obviously, that continues to evolve, you know, with tools that can, you know, dynamically search, compare, you know, even, you know, transact on behalf of consumers. Like, how do you see this affecting, you know, TrueCar, Inc.'s marketplace model? You know, are there plans to integrate or partner with, you know, with such agents, you know, just to stay central, you know, in the car buying journey. Any thoughts on that would be helpful. Thank you.
Oliver Foley: Yeah.
Jantoon Reigersman: Well, first of all, I mean, I think it is a very relevant question. It is obviously something we think a lot about, and we work on tremendously. First of all, obviously, the focus is on really making sure that our data is not a swamp, but a clear lake that we can utilize and structure and obviously deploy a lot of tools again. I do think we have very unique datasets. I think there is a lot of opportunity there, and we have done a lot of work to make sure that these are all very usable. Now have started working on getting products out there for both consumers and dealers effectively utilizing that. Right?
So that is number one. Then more broadly on your question vis-a-vis how people are going to, in the future, buy cars, I think it is really important to remember that we have a very big affinity network, which I think is a very important component of trust and how people actually engage with car buying. Emphasizing and working deeper and deeper with Affinity Partners will be a very important tool for us going forward. Then enabling them to really get into a world where you possibly even get closer integration with the affinity partners where much more easily. It is a topic that is, obviously, something that we discuss a lot internally.
But overarching, it is something that obviously, we think about a lot. It is also one of the reasons why we have kind of been rethinking about the marketing and the way we have been talking about generating more efficiency on the marketing side to make sure you are not too dependent on certain external platforms. So we really start integrating with the right ones where the consumer sits and flows towards. So, yeah, long story short, there are multiple aspects where this is touching us. There are multiple aspects where we are engaging.
I think the affinity network will be an important component of that, but also the way we are designing the flows is something where we would obviously like to become the predominant platform where people are effectively buying or selling a car online, whether that is new, certified pre-owned, or used. I think we have the inventory for it, the infrastructure for it, and that is really a matter of now getting and engaging on the front end engaging with the right partners to get a foothold on that side.
Rajat Gupta: Got it. Got it. No. That is great color. Thanks for taking the questions. In the back. Thank you.
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