TrueCar Inc., the online car-shopping site that went public with its stock in May, is growing its sales and dealer network faster than overall U.S. vehicle sales and faster than analysts expected.
TrueCar said it posted revenue in the second quarter of $50.5 million, the company said last week in its first quarterly earnings report. That was a 62 percent increase over the year-earlier quarterly revenue and 11 percent above analyst consensus estimates of $45.5 million.
The company said it expects 2014 revenue to total $197 million to $202 million.
As of June 30, TrueCar had 7,682 certified franchise dealers across the United States, an increase of 24 percent year-over-year, the company reported. That’s 24 percent of all new car franchises.
Those dealers, in turn, sold 149,527 vehicles during the second quarter through customers visiting TrueCar. That was a 55-percent increase over the year-earlier quarter, also well above analyst expectations.
Car shoppers use TrueCar to get guaranteed price bids for vehicles from participating dealers, typically at a discount to invoice. Participating dealers in most states pay TrueCar only if the TrueCar introduction leads to a vehicle sale. The cost to dealers is $299 for each new vehicle and $399 for each used.
The pace of TrueCar’s growth has exceeded even the red-hot sales rate of U.S. vehicles so far this year. In July, U.S. vehicle sales rose 9 percent over the previous July to 1.44 million. And sales on a seasonally adjusted annualized rate basis grew to 16.5 million, well ahead of the year-earlier pace of 15.8 million.
Still, the company posted a wider second quarterly net loss of $15 million, up from $3.8 million.
After TrueCar released second-quarter financial results on August 7, the company issued a rare clarification of its performance to correct what it called some erroneous media reports that it failed to meet analyst expectations for the quarter. Such a failure can cause investors to lose confidence in a stock.
As TrueCar noted August 10, the company posted a loss in GAAP earnings per diluted share of 22 cents, which was in-line with analyst consensus estimates. GAAP stands for Generally Accepted Accounting Principles, the standard form of financial reporting.
Its non-GAAP earnings per diluted share loss was 2 cents, beating analyst consensus estimates of a 3-cent loss. Non-GAAP accounting is sometimes used by newer technology-based companies as a more accurate way of measuring their financial performance.