It's been a long process for TrueCar, Inc. (TRUE -1.09%) to regain trust from dealerships and investors after the brutal summer of 2015, when adjusted EBITDA plunged, executives bailed like rats on a ship, and partnerships dissolved.

Then newly appointed CEO Chip Perry set a strategy to mend TrueCar's relationship with dealerships, and the third quarter now looks like a breakthrough for the company's turnaround. Here are the details, and one reason investors should be optimistic.

Image source: Getty Images.

Just the facts

Starting from the top, TrueCar reported revenue up 4% from a year ago to $75.1 million, ahead of analysts' estimates of $71.17 million. The company's third-quarter net loss checked in at $7.4 million, or $0.09 per share. Non-GAAP net loss checked in at $1.0 million, or $0.01 per share, much better than analysts' estimates of a $0.06 loss. 

The figure that really stands out, though, was TrueCar's record adjusted EBITDA of $5.8 million, at an adjusted EBITDA margin of 7.7%. This graph shows how great of a figure that is historically:

Data source: TrueCar. Chart by author.

So, what's the big deal?

What investors should be most excited about is the return of growth. For multiple quarters I've repeated myself in saying that TrueCar is too young a company to see growth stall. As the next few graphs show, it's clear that the third quarter is finally seeing growth return, through multiple metrics. First, let's look at units sold, a metric that's moved higher over time and spiked during the third quarter. More important, this trend shows a reversal of consistent year-over-year slowing growth.

Data source: TrueCar. Chart by author.

To be fair, it's obvious that a company can't keep posting year-over-year gains between 40% and 80%, but TrueCar disappointed when its growth bottomed out after only a few years. The third quarter may be the turning point after which the company can again return to quarterly double-digit year-over-year growth in units sold -- management expects double-digit growth for the fourth quarter.

TrueCar also recorded a surge in year-over-year traffic. More specifically, average monthly unique visitors jumped to 7.6 million during the third quarter, topping the previous high of 6.7 million. But even more important was its reversal from slowing year-over-year growth. Starting with the fourth quarter of 2015, TrueCar's year-over-year traffic growth was 33%; that figure dropped to 21% growth during the first quarter of 2016 and again to 12% during the second quarter. The third quarter reversed that trend, with year-over-year growth moving higher to 15%.

A similar trend is evident within TrueCar's franchise dealer count.

Data source: TrueCar. Chart by author.

There are two things worth pointing out with this graph. First is the similar trend of returning growth. Again, starting with the fourth quarter of 2015, dealer count moved 7% higher over the prior year; that growth was only 2% during the first quarter of 2016 before moving 9% higher during the second quarter and surging to 24% growth during the third quarter.

More importantly, in my opinion, is the sequential aspect of the graph. As TrueCar expands its dealership count, in a way it means there are more mouths to feed from the existing user traffic -- more dealerships equal less revenue per dealership. That's why when dealership counts plunged during the third quarter of 2015, revenue per remaining dealership spiked. That means the perfect scenario comes when TrueCar adds dealerships but its user base and conversions are increasing enough that even with extra dealerships, the revenue per dealership still increases sequentially. That's happened all year in 2016, sequentially, and that's a great sign.

So it doesn't surprise me that TrueCar's stock price jumped on Friday. Growth has returned, and TrueCar looks poised to continue its company turnaround. Nice work, Chip Perry and team.