Q1 2025 TrueCar Inc Earnings Call

The conference back over to you <unk>.

Martin: I guess, Martin President and Chief Chief Executive Officer of Truecar. Please go ahead.

Speaker Change: Thank you operator, Hello, everyone and welcome to <unk> first quarter 2025 earnings Conference call. Joining me today is over fully our chief financial Officer.

Speaker Change: I hope you've all had the opportunity to read our most recent stockholder letter, which was released yesterday after market close and is available on our Investor Relations website at IR <unk> com.

Speaker Change: Before we get started I need to read our safe Harbor.

Speaker Change: I want to remind you that we will be making forward looking statements on this call, including statements regarding the potential impact of newly implemented tariffs, including those impacting the automotive sector.

Speaker Change: We're 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 known and should not be relied on as guarantees of future performance or results.

Speaker Change: 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 factors that could cause our.

Speaker Change: <unk> to differ materially.

Speaker Change: The forward looking statements, we make on the score 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.

Speaker Change: 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 adult Truecar com.

Speaker Change: non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Speaker Change: Let us begin.

Speaker Change: We're pleased to report continued strong performance for the first quarter of 2025, especially in light of the volatile macro environment.

Speaker Change: Highlights from the first quarter include total revenue of $44 8 million grew by $3 8 million or nine 2% year over year with adjusted EBITDA of negative $3 8 million.

Speaker Change: New unit sales volume saw a significant increase of 23% year over year substantially outpacing the industry six 8% growth in new vehicle retail sales for the quarter.

Speaker Change: We expand we expanded our affinity network with the additional notable partners, including door Dash Gasbuddy and golf bags.

Speaker Change: The transition of certain OEM incentives from American express to the AAA auto buying site progressed rapidly with AAA program revenue in March approaching previous levels seen with American Express.

Speaker Change: Our restructured performance marketing campaigns.

Speaker Change: Continue to enhance efficiency, achieving the lowest cost, Brazil, since 2022, and effectively driving unit sales growth for our dealer partners.

Speaker Change: In addition to delivering solid performance in the first quarter. We're excited about the progress we continue to make with TC plus a product. We believe can fundamentally change the car buying experience for consumers and dealers.

Speaker Change: Approach, we've adopted in pursuit of this vision has been.

Speaker Change: Around the highly focused pilot with a singular.

Speaker Change: Dealer group committed to collaborating with us on the co creation of tools and solutions that will pave the way for a broader rollout of the product.

Speaker Change: These optimizations combined with expanding the volume of consumers entering a D. C plus purchase flow has allowed us to steadily grow volumes, while maintaining our discipline in terms of approach to scaling the product since launch roughly a third of the pilot dealer groups Truecar enabled sales were driven by Tc plus.

Speaker Change: Consumers.

Speaker Change: Completed the entire transaction or a significant portion of the purchase process online before finalizing the transaction at the dealership.

Speaker Change: We know we not only allows consumers to move to an online purchase but also expanded the sales volumes to this dealer groups are super exciting case study and a clear validation of our hypothesis, so far that <unk> plus not only enables and dealer to move completely online, but most certainly also expands their volumes and sales.

Speaker Change: Yeah.

Speaker Change: As we seek to make decision.

Speaker Change: Broadly scalable by year end.

Speaker Change: The most critical work stream that remains in process is the backend integration with two dealer management systems, Dms providers, namely CDK and tech yield.

Speaker Change: And we will fully automate deal documentation and.

Speaker Change: And desking activities currently performed by the dealer.

Speaker Change: While completion of this work has been delayed by the <unk> of external resources outside our control. We aim to have both integration substantially complete by the end of July.

Speaker Change: In spite of this the rate at which we continue to advance the product and ready for scale has not slowed.

Speaker Change: To this end we're excited to have recently onboard of the second pilot dealer group with franchise stores in and around sacramental markets.

Speaker Change: A third expected to be on boarded later this month.

Speaker Change: The addition of these groups marks a key milestone in the growth of TC blasted will bring new franchise brands onto the platform broadened the inventory eligible for purchase online and allow us to expand consumer access to <unk> and another major market.

Speaker Change: Turning now to our views on the potential impacts from the automotive sector tariffs and how we are responding to 25% tariffs.

Speaker Change: Slides two important vehicles and component parts that were announced in March and which became effective April 3rd with respect to vehicles and may 3rd with respect to parts has created a tremendous amount of uncertainty.

Speaker Change: Given that approximately 50% of new vehicles retailed in the United States are imported and among and among vehicles produced domestically, 40% to 50% of their component parts originates outside of the U S.

Speaker Change: <unk> is currently in effect are estimated.

Speaker Change: To add up to approximately $4 $5000 of additional cost for new vehicles sold in the United States.

Speaker Change: Equal to roughly 10% of the average pre tariff new vehicle MSRP.

Speaker Change: While undeniably a headwind for the automotive retail retail ecosystem the impact on dealers and consumers is difficult to predict predict without greater clarity around Oems operational response.

Speaker Change: Each will ultimately dictate changes and new vehicle.

Speaker Change: Leigh and pricing two of the most important factors that impact retail sales volumes levered.

Speaker Change: Nevertheless in the near term, we do not expect to see immaterial impact.

Speaker Change: Through the strong and stable demand that drove year over year unit growth in both Q1 and April as dealer sell through pre tariff inventory and Oems.

Speaker Change: Formulate their strategies in response to the tariffs.

Speaker Change: In the medium term, we believe there is an increased probability that new vehicle supply tightens and prices go up however.

Speaker Change: Potentially mitigating the magnitude of the shift is the fact that tariff imposed costs will not be the the uniforms will not be uniform across the markets and certain Oems that are less impacted by the tariffs due to their supply chain footprint will emerge with a competitive pricing advantage.

Speaker Change: This dynamic we believe should support stable inventory levels and reduce the likelihood of broad based consumer price increases because Oems and dealers alike will seek to protect our market share by maintaining volumes and.

Speaker Change: And taking steps to keep average transaction prices stable.

Speaker Change: As such we do not foresee news new vehicle supply and retail sales volumes approaching the levels experienced during the chip shortage of 2021 'twenty two.

Speaker Change: And believe both dealers and Oems will continue to rely on truecar to support their customer acquisition and incentive strategies. Despite this view we are nevertheless, taking steps to mitigate the impact of a potential slowdown in growth and provide us with greater flexibility to manage the business to positive free cash flow in any.

Mario: Mario to <unk> over the next several quarters.

Mario: Finally, lacking a clear outlook look on the near and mid term market dynamics that impact our business. We believe it is prudent not to provide financial guidance for the second quarter and beyond.

Mario: Despite the low performance in April which saw strong year over year revenue growth driven by healthy consumer demand and OEM incentives, we cannot credibly extrapolate this performance throughout the remainder of the quarter until the majority.

Mario: Of pre tariff inventory has been sold and we start to observe trends and vehicle supply and pricing.

Mario: Which can have near term impact on the revenue we earn from both the dealers and OEM incentives.

Mario: Nonetheless, despite it being inherently difficult for us to collect them to credibly predict our performance in Q2 and beyond we firmly believe that the value we are delivering to our dealer and OEM partners combined with the flexibility we have in our cost structure will help mitigate the impact although potential slowdown in growth.

Mario: And allow us to effectively manage our cash flow in any scenario to prevails.

Mario: Now operator, let's open the call for questions from our analysts.

Speaker Change: We now begin the question answer session to ask questions. Please press star and one.

Speaker Change: The first question comes from Amit <unk> from B Riley Securities. Please go ahead.

Speaker Change: Okay. Thanks, Thank you very much.

Speaker Change: I appreciate your approximate industry trends here.

Speaker Change: Just a couple of.

Clarification in your letter you mentioned accelerating.

Operator: I would now like to turn the conference back over to Jantoon Reigersman, President and Chief Executive Officer of TrueCar.

Speaker Change: Certain product enhancements that can use some comparative advantages for truecar.

Sarah will help mitigate the impact although potential slowdown in growth and allow us to effectively manage our cash flow in any scenario to prevails.

Operator: Please go ahead. Thank you, operator.

Speaker Change: Can you give us a sense of what is kind of all these enhancements can be and then the second question I have is around the incentive AD spending by Oems.

Now operator, let's open the call for questions from our analysts.

Jantoon Reigersman: Hello, everyone, and welcome to TrueCar's first quarter 2025 earnings conference call.

Speaker Change: We now begin the question answer session to ask questions. Please press star and one the first question comes from Amit <unk> from B Riley Securities. Please go ahead.

Speaker Change: As these Oems look to stay competitive on price and keep their share.

Jantoon Reigersman: Joining me today is Oliver Foley, our Chief Financial Officer. I hope you've all had the opportunity to read our most recent stockholder letter, which was released yesterday after market close and is available on our investor relations website at ir.truecar.com.

Speaker Change: How should we be thinking about the.

Speaker Change: The changes to the incentive spending could some of that.

Speaker Change: Okay. Thanks, Thank you very much.

Speaker Change: I appreciate your.

Speaker Change: Some of those dollars.

Speaker Change: We have thoughts on the industry trends here.

Speaker Change: We used to bring down the MSRP and maybe a net reduction in incentive thank you.

Speaker Change: Just a couple of.

Jantoon Reigersman: 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 the potential impacts of newly implemented tariffs, including those impacting the automotive sector. Forward-looking statements can be identified by the use of words such as believe, expect, plan, target, dissipate, 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 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 factors that could cause our results to differ materially.

Speaker Change: Clarification and annualize that you.

Speaker Change: You mentioned accelerating.

Speaker Change: Yes, absolutely.

Speaker Change: Certain product enhancements that can yield some competitive advantages for truecar.

Speaker Change: Thanks for the question so number one I think a good example.

Speaker Change: For example, the utilization of Gen. AI did we've used for email campaigns as one.

Speaker Change: Can you give us a sense of what these kind of all these enhancements can be and then the second question I have is around the incentive spending by Oems.

Speaker Change: Sample the driver right at the end of the day, what we try to do is.

Speaker Change: As these Oems look to stay competitive on price and keep their share.

Speaker Change: Really personalize the experience for consumers as they go through the flow and so being able to re target them in a personalized manner and in an automated manner actually is very effective.

Speaker Change: How should we be thinking about the.

Speaker Change: The changes to the incentive spending could some of that.

Speaker Change: Some of those dollars.

Speaker Change: We used to bring down the MSRP and maybe a net reduction in incentive thank you.

Speaker Change: Remember, we have access to a lot of data.

Speaker Change: Historically, both historical purchasing data as well as data on the consumers themselves as they behave on the site and so automating that and utilizing our AI tools more and more to really.

Speaker Change: Yes, absolutely.

Speaker Change: Thanks for the question so number one I think a good example.

Speaker Change: For example, the utilization of <unk>.

Jenny: Jenny I did we've used for email campaigns as one.

Speaker Change: Make this a much more personalized experience as it seems to be yielding very attractive results. So that's just one example of the many.

Jantoon Reigersman: The forward-looking statements we make on the score 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.

Jenny: And sample the driver right at the end of the day, what we try to do is.

Jenny: Really personalize the experience for consumers as they go through the flow and so being able to re target them in a personalized manner and in an automated manner actually is very effective remember we have access to a lot of data.

Speaker Change: At the end of the day, it's really about the consumer journey and the dealer Germany. Those are the two pieces, where all the product focus.

Jantoon Reigersman: 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.

Speaker Change: The product development this focus.

Speaker Change: Vis vis your your OEM question, Yes, I think the hard part for us to determine and to predict as I think you could make a very good argument that Oems will need to support effectively there their vehicle sales more and as a result.

Jenny: Historically, both historical purchasing data as well as data on the consumers themselves as they behave on the site and so automating that and utilizing our AI tools more and more to really.

Speaker Change: We could be well positioned to actually benefit from that.

Jenny: Make this a much more personalized experience and it seems to be yielding very attractive results. So that's just one example of many.

Jantoon Reigersman: Let us begin. We're pleased to report continued strong performance for the first quarter of 2025, especially in light of the volatile macro environment. Highlights from the first quarter include total revenue of $44.8 million, grew by $3.8 million, or 9.2% year-over-year, with adjusted EBITDA of negative $3.8 million. New unit sales volumes saw a significant increase of 23% year-over-year, substantially outpacing the industry's 6.8% growth in new vehicle retail sales for the quarter. We expanded our affinity network with the additional notable partners, including DoorDash, GasBuddy, and GovAx. The transition of certain OEM incentives from American Express to the AAA auto buying site progressed rapidly with AAA program revenue in March approaching previous levels seen with American Express.

Speaker Change: It just really hard to say because at the end of the day in a world of greater uncertainty people are just reluctant to engage but overarching in a world of higher tariffs and obviously trying to push consumers too to make a purchasing decision on the car I think there are a lot of tools at the Oems have either.

Jenny: At the end of the day, it's really about the consumer journey and the dealer Germany. Those are the two pieces, where all the product focus.

Jenny: Product development this focus.

Jenny: Vis vis your your OEM question, Yes, I think the hard part for us to determine into predictive I think you could make a very good argument that Oems will need to support effectively there their vehicle sales more and as a result.

Speaker Change: Disposal of which many could come through Truecar. So.

Speaker Change: It's the reason why we're so delicate also in our language because obviously uncertainty is never good for the market, but we're very confident that we can actually be really helpful to both Oems and dealers.

Jenny: We could be well positioned to actually benefit from that.

Speaker Change: Okay. Thank.

Jenny: It just really hard to say because at the end of the day in a world of greater uncertainty people are just reluctant to engage but overarching.

Speaker Change: Thank you Tien tsin.

Ryan Meyers: The next question comes from Ryan Meyers Lake Street. Please go ahead.

Ryan Meyers: Hey, Good morning, guys first question for me without the kind of head count investments now going forward, how should we think about the margins across the business and maybe what are the biggest levers that you can pull.

Jenny: <unk> in a world of higher tariffs and obviously trying to push consumers too to make a purchasing decision on the car I think there are a lot of tools that the Oems have at their disposal of which many could come through truecar. So.

Jantoon Reigersman: Our Restructured Performance Marketing Campaigns. continue to enhance efficiency, achieving the lowest cost per sale since 2022, and effectively driving unit sales growth for our dealer partners. In addition to delivering solo performance in the first quarter, we're excited about the progress we continue to make with TC+. A product we believe can fundamentally change the car buying experience for consumers and dealers. The approach we have adopted in pursuit of this vision has been built around a highly focused pilot with a singular A dealer group committed to collaborating with us on the co-creation of tools and solutions that will pave the way for a broader rollout of the product.

Ryan Meyers: Across the cost structure.

Jenny: It's a reason why we're so delicate also in our language because obviously uncertainty is never good for the market, but we're very confident that we can actually be really helpful to both Oems and dealers.

Ryan Meyers: Yes, I think.

Ryan Meyers: Yes, I'll remember, yes. There are three there are three main buckets and in all of our can take as good to remember that there are three main buckets that I've mentioned many times on these calls which is really its head count it's marketing expense and then it's like effectively our overhead charge. It includes a lot of like the data cost effectively infra.

Jenny: Okay. Thank.

Speaker Change: Thank you Dan.

The next question comes from Ryan Meyers Lake Street. Please go ahead.

Ryan Meyers: Hey, Good morning, guys first question for me without the kind of head count investments now going forward, how should we think about the margins across the business and maybe what are the biggest levers that you can pull.

Ryan Meyers: Structural cost.

Ryan Meyers: Our headcount is always important because you obviously want to make sure that youre well balance inefficient doesn't organization.

Ryan Meyers: There is obviously on the marketing side. There are two main buckets, one is performance marketing and the other one is partner marketing.

Speaker Change: Across the cost structure.

Eli: Yes, I think Eli.

Jantoon Reigersman: These optimizations, combined with expanding the volume of consumers entering the TC Plus purchase flow, have allowed us to steadily grow volumes while maintaining our discipline and iterative approach to scaling the product. Since launch, roughly a third of the pilot dealer group's TrueCar-enabled sales were by TC Plus consumers that completed the entire transaction or a significant portion of the purchase process online before finalizing the transaction at the dealership. We not only allowed consumers to move to an online purchase, but also expanded the sales volumes to this dealer group. A super exciting case study and a clear validation of our hypothesis.

Ryan Meyers: One emphasis we also did here is obviously the efficiencies we have been achieving through our marketing campaigns and so that's obviously, a very important lever where as we have greater efficiencies. There obviously interesting things we can do there.

Eli: Yes, I'll remember, yes. There are three there are three main buckets and in all of our can take it but remember that there are three main buckets that I've mentioned many times on these calls which is really its headcount its marketing expense and then effectively our overhead charge. It includes a lot of like the data cost effectively infra.

Ryan Meyers: And then obviously we are continuously looking at potentially right sizing the business at the right time and the right forums.

Ryan Meyers: As the world navigates this level of uncertainty.

Eli: Structural cost.

Eli: Our headcount is always important because you obviously want to make sure that youre, well balanced and efficient as an organization.

Ryan Meyers: All of our go ahead.

Speaker Change: Yes, so the only thing I'll add there Ryan.

Eli: There is obviously on the marketing side. There are two main buckets, one is performance marketing and the other one is partner marketing.

Speaker Change: What's going to drive margins over the next couple of quarters is sort of the revenue mix.

Eli: One emphasis we also did here is obviously the efficiencies we have been achieving through our marketing campaigns and so that's obviously, a very important lever where as we have greater efficiencies. There obviously interesting things we can do there.

Speaker Change: As well as sort of sort of the.

Speaker Change: The flexibility we have in the cost structure, so the revenue mix ultimately.

Jantoon Reigersman: So far, the TC Plus not only enables a dealer to move completely online, but most certainly also expands their volumes and sales. as we seek to make DC Plus broadly scalable by year end.

Speaker Change: OEM revenue tends to have the highest margin and so.

Speaker Change: How much of our total revenue comes from Oems, certainly impacts impacts margins, Conversely, truecar marketing solutions or some of our vehicle sourcing products around truecar wholesale solutions those those have.

Eli: And then obviously we are continuously looking at potentially right sizing the business at the right time and the right forums.

Jantoon Reigersman: The most critical work stream that remains in process is the backend integration with two dealer management systems, DMS, providers, namely CDK and TechEel. that will fully automate deal documentation and desking activities currently performed by the dealer. While completion of this work has been delayed by the prioritization of external resources outside our control, we aim to have both integrations substantially complete by the end of July. In spite of this, the rate at which we continue to advance the product and ready it for scale has not slowed.

Eli: As the world navigates, but this level of uncertainty.

Eli: All of our go ahead.

Speaker Change: Yes, so the only thing I'll add there Ryan.

Speaker Change: Lower margins and so depending upon the mix ultimately therefore that will impact margin on the cost structure side.

Eli: It's.

Eli: What's what's going to drive margins over the next couple quarters.

Eli: The revenue mix.

Speaker Change: Sure.

Speaker Change: Really focused right now on on flexibility right given the uncertainty it's about how can we adapt.

Eli: As well as sort of sort of the.

Eli: The flexibility we have in the cost structure, so the revenue mix ultimately.

Speaker Change: Under any scenario to manage cash flow effectively and ultimately.

Eli: OEM revenue tends to have the highest margin and so.

Speaker Change: The cash flow breakeven and so we're.

Eli: How much of our total revenue comes from Oems, certainly impacts impacts margins, Conversely, truecar marketing solutions or some of our vehicle sourcing products around truecar wholesale solutions those those have.

Jantoon Reigersman: To this end, we're excited to have recently onboarded the second pilot dealer group with franchise stores in and around Sacramento markets, with a third expected to be onboarded later this month. The addition of these groups marks a key milestone in the growth of TC Plus that will bring new franchise brands onto the platform, broaden the inventory eligible for purchase online, and allow us to expand consumer access to TC Plus in another major market.

Speaker Change: We're pretty confident we've got a decent amount of flexibility across the cost structure. So across all three of those buckets both head count.

Speaker Change: Marketing and sort of overhead and so whether it's sort of outsource services for its continuing to lean into marketing campaigns that have a really.

Eli: Lower margins and so depending upon the mix ultimately that will that will impact margin on the cost structure side. So we're.

Speaker Change: <unk> return.

Speaker Change: Quick payback.

Eli: Really focused right now on on flexibility right given the uncertainty it's about how can we adapt.

Speaker Change: That's really where we're focused so that we can manage.

Jantoon Reigersman: Turning now to our views on the potential impacts from the automotive sector tariffs and how we are responding. The 25% tariffs applied to imported vehicles and component parts that were announced in March and which became effective April 3rd with respect to vehicles and May 3rd with respect to parts has created a tremendous amount of uncertainty. Given that approximately 50% of new vehicles retailed in the United States are imported and among vehicles produced domestically, 40-50% of their component parts originate outside of the U.S., the tariffs, as currently in effect, are estimated to add up to approximately $4,500 of additional cost for new vehicles sold in the United States.

Speaker Change: In any scenario that prevails over the next couple of quarters.

Eli: Under any scenario to manage cash flow effectively and ultimately.

Speaker Change: Okay got it and then just one sort of clarification question. I think you guys had said this in your prepared remarks, but it sounds like with the loss of the American Express business. That's now been filled and picked up by the business that you guys are working with AAA is that the right way to understand that.

Eli: The cash flow breakeven and so we're.

Eli: We're pretty confident we've got a decent amount of flexibility across the cost structure. So across all three of those buckets both head count.

Eli: Marketing and sort of overhead and so whether it's sort of outsource services or it's continuing to lean into marketing campaigns that have a really.

Speaker Change: Yes.

Speaker Change: Its OLED way, so I wouldn't say that it's 100% filled up but it's obviously because these programs takes time to ramp up.

Eli: Our highest return really quick payback.

Speaker Change: But it's getting it's getting very close to those levels.

Eli: That's really where we're focused so that we can manage it.

Speaker Change: Got it thanks for taking my question guys.

Eli: In any scenario that prevails over the next couple of quarters.

Tom Like: The next question comes from Tom Like D. A Davidson. Please go ahead.

Eli: Got it and then just one sort of clarification question. I think you guys had said this in your prepared remarks, but it sounds like with the loss of the American Express business. That's now been filled and picked up by the business that you guys are working with AAA is that the right way to understand that.

Tom Like: Alright, great.

Tom Like: Thanks for taking my questions two if I could.

Jantoon Reigersman: equal to roughly 10% of the average pre-tariff new vehicle MSRP. While undeniably a headwind for the automotive retail ecosystem, the impact on dealers and consumers is difficult to predict without greater clarity around OEM's operational response. which will ultimately dictate changes in new vehicle supply and pricing, two of the most important factors that impact retail sales volume. Nevertheless, in the near term, we do not expect to see a material impact. to the strong and stable demand that drove year-over-year unit growth in both Q1 and April as dealers sell through pre-tariff inventory and OEMs reformulate their strategies in response to the tariff.

Tom Like: Just first on cliffs.

Tom Like: Jen tune in the letter you kind of touch on how not all Oems will be kind of impacted.

Tom Like: The same I was hoping you could just kind of update us on.

Eli: Yes.

Eli: Its OLED way, so I wouldn't say that it's 100% filled up but it is obviously because these programs take time to ramp up but it's getting it's getting very close to those levels.

Tom Like: Your franchise dealers like sort of what is your.

Tom Like: Kind of exposure to different Oems I think you guys skew a little bit more towards.

Eli: Got it thanks for taking my question guys.

Tom Like: The Asian Oems some of the Japanese brands.

Tom Like: The next question comes from Tom Like D. A Davidson. Please go ahead.

Speaker Change: I'm just curious like is there a reason to think that your specific mix of.

Speaker Change: Great. Good morning, Thanks for taking my questions two if I could.

Eli: I guess just first on tariffs.

Tom Like: Certified dealers will.

Eli: Tune in the letter you kind of touch on <unk>.

Tom Like: B will be better or worse able to kind of navigate what's happening. That's my first one and then just.

Eli: Not all Oems will be kind of impacted the.

Eli: The same I was hoping you could just kind of update us on.

Jantoon Reigersman: In the median term, we believe there is an increased probability that new vehicles supply tightens and prices go up. However, Potentially mitigating the magnitude of the shift is the fact that tariff imposed costs will not be the uniform will not be uniform across the markets and certain OEMs that are less impacted by the tariffs due to their supply chain footprint will emerge with a competitive pricing advantage. This dynamic, we believe, should support stable inventory levels and reduce the likelihood of bulk-based consumer price increases, because OEMs and dealers alike will seek to protect their market share by maintaining volumes and taking steps to keep average transaction prices stable.

Tom Like: And then second one is just.

Eli: Your franchised dealers like sort of what is your.

Tom Like: I'm kind of uses of capital.

Tom Like: Curious, if you're giving any more serious consideration about.

Eli: Kind of exposure to different Oems I think you guys skew a little bit more towards kind of the Asian Oems some of the Japanese brands.

Tom Like: About buying back stock here. Thanks.

Tom Like: Yes, So let me.

Tom Like: The first one.

Tom Like: The comment was less about eluding to whether we're better or worse positioned I think it's hard to say at this stage I think it was more intended to say long term probably not all Oems are impacted equal and so what we do is obviously, we're very focused on helping Oems.

Eli: I'm just curious like is.

Eli: Is there a reason to think that your specific mix of.

Eli: Certified dealers will.

Eli: B will be better or worse able to kind of navigate what's happening. That's my first one and then just.

Tom Like: With their respective issues to help solve those through our programs and so what we mean with that is obviously if somebody is more.

Eli: And then second one is just.

Eli: Sure.

Eli: Kind of uses of capital.

Eli: Curious, if you're giving any more serious consideration about.

Jantoon Reigersman: As such, we do not foresee new vehicle supply and retail sales volumes approaching the levels experienced during the chip shortage of 2021-22 and believe both dealers and OEMs will continue to rely on TrueCar to support their customer acquisition and incentive strategies.

Tom Like: More impacted or needs a specific type of help and obviously, we'll jump in and we feel that there are opportunities there and.

Eli: Buying back stock here.

Eli: Yes, So let me.

Eli: The first one.

Tom Like: And so it really depends on the type of impact of each of these Oems has indeed skew a little bit more.

Eli: The comment was less about eluding to whether we're better or worse positioned I think it's hard to say at this stage I think it was more intended to say.

Jantoon Reigersman: Despite this view, we are nevertheless taking steps to mitigate the impact of a potential slowdown in growth and provide us with the greatest flexibility to manage the business to positive free cash flow in any scenario that prevails over the next several quarters. Finally, lacking a clear outlook on the near and midterm market dynamics that impact our business, we believe it is prudent not to provide financial guidance for the second quarter and beyond. Despite solid performance in April, which saw strong year-over-year revenue growth, driven by healthy consumer demand and OEM incentives, we cannot credibly extrapolate this performance throughout the remainder of the quarter until a majority of pre-tariff inventory has been sold and we start to observe trends in vehicle supply and pricing.

Tom Like: Asian mix.

Tom Like: <unk>.

Tom Like: And more broadly, but this also shifts very much throughout the year or so.

Eli: Long term, probably not all Oems are impacted equal and so what we do is obviously, we're very focused on helping Oems with their respective issues to help solve those through our programs and so what we mean with that is obviously, if somebody is more impacted or needs a specific.

Tom Like: That really depends and at the end of the date also really depends on like inventory inventory mix and then eventually obviously the type of incentives.

Tom Like: The Oems are willing to put on these cars. So I think it's less about whether we're better or worse position because I don't really think there is such a thing it currently in.

Eli: Type of help and obviously, we'll jump in and we feel that there are opportunities there.

Eli: And so it really depends on the type of impact of each of these Oems has we indeed skew a little bit more.

Tom Like: Within the new space.

Tom Like: However, I do think that the adaptability to really help the Oems, where they would like to emphasize and where they would like to like effectively adjust some of their pain points is something that we are very capable and we've proven to be very capable. So we'll obviously have to navigate that somewhat smartly as we go through this and not one second.

Eli: <unk> makes.

Eli: <unk>.

Eli: And more broadly, but this also shifts very much throughout the year or so.

Eli: That really depends and at the end of the date or so to really depends on like inventory inventory mix and then eventually obviously the type of incentives.

Jantoon Reigersman: which can have near-term impact on the revenue we earn from both the dealers and OEM incentives. Nevertheless, despite it being inherently difficult for us to collect and to credibly predict our performance in Q2 and beyond, we firmly believe that the value we are delivering to our dealers and OEM partners, combined with the flexibility we have in our cost structure, will help mitigate the impact of a potential slowdown in growth and allow us to effectively manage our cash flow in any scenario that prevails.

Speaker Change: Question on the.

Speaker Change: Capital allocation. The answer is always yes, I think this is the Red Lake. We've obviously been asked this a lot and we have a significant cash balance and play.

Eli: The Oems are willing to put on these cars. So I think it's less about whether we're better or worse position because I don't really think there is such a thing it currently.

Speaker Change: We.

Speaker Change: Very often review right almost continuously review our capital allocation strategies.

Eli: Within the new space.

Eli: However, I do think that the adaptability to really help the Oems, where they would like to emphasize and where they would like to make effectively adjust some of their pain points.

Speaker Change: And do that the right way and share buybacks are always one tool and thats effectively basket of tools that we have and so that is something that we always consider and and at the right time, we will consider.

Operator: Now, operator, let's open the poll for questions from our audience. We now begin the question on... To ask questions, please press star and 1.

Eli: Something that we are very capable and we've proven to be very capable. So we'll obviously have to navigate that somewhat smartly as we go through this and on your second question on the.

Speaker Change: Okay. Thank you.

Naved Khan: The first question comes from Naved Khan from Be Riley Securities. Please go ahead. Thank you very much. I appreciate your thoughts on the industry trends here, Jantoon. Just a couple of clarifications. In your letter, you mentioned accelerating certain product enhancements that can yield some comparative advantages for TrueCar. Can you give us a sense of what these enhancements can be? And then the second question I have is around the incentive ad spending by OEMs. As these OEMs look to stay competitive on price and keep their share, how should we be thinking about the changes to the incentive ad spending?

Eli: Capital allocation. The answer is always yes, I think this is like we've always been asked this a lot and we have a significant cash balance and play.

Speaker Change: The next question comes from Chris <unk> need him. Please go ahead.

Speaker Change: Hey, good morning.

Speaker Change: TC plus the dealer you cited can you just is there a way to know if the units are additive.

Eli: We very often review right almost continuously review our capital allocation strategies.

Speaker Change: They wouldn't have sold or <unk>.

Then can you remind me or remind us is there increased economic benefit to truecar from these units given I think the dealer client mix of higher margin given less sales commission and assume it's like what's the push and pull there.

Eli: And do that the right way and share buybacks are always one tool in that.

Eli: <unk>.

Eli: Basket of tools that we have and so that is something that we always consider.

Speaker Change: Yes, Chris absolutely so.

Eli: And at the right time, we will consider.

Speaker Change: On the first the answer is yes, so and this is what's really exciting about this at some point I would love to actually provide you guys with a lot more detail on that and actually literally like present, you guys with a case study on it but long story short is yes. So.

Speaker Change: Okay. Thank you.

Speaker Change: The next question comes from Chris <unk> need him. Please go ahead.

Jantoon Reigersman: Could some of those dollars be used to bring down MSRP and maybe a net reduction in incentive? Thank you. Yeah, absolutely. Thanks for the question. So number one, I think a good example is, for example, the utilization of Gen AI that we've used for email campaigns as one sample of a driver, right? At the end of the day, what we try to do is really personalize the experience for consumers as they go through the flow. And so being able to retarget them in a personalized manner and in an automated manner actually is very effective. Remember, we have access to a lot of data, both historical purchasing data as well as data on the consumers themselves as they behave on the site.

Speaker Change: Hey, good morning.

Speaker Change: On Tc plus the dealer you cited can you just is there a way to know.

Speaker Change: There are two things that have really happened there in the case study, which is one is.

Speaker Change: Hits are additive to that.

Speaker Change: They wouldn't have sold or and then can you remind me or remind us is there increased economic benefit to truecar from these units given I think the dealer client mix of higher margin given less sales Commission midstream, it's like what's the push and pull there.

Speaker Change: Clearly a shift from people that historically were.

Speaker Change: Obviously, just leads basically becoming fully online purchasers number one and then number two also.

Speaker Change: Significantly increasing the volumes that we were bringing to that dealer and.

Speaker Change: Yes, Chris absolutely so.

Speaker Change: On the first the answer is yes. So and this is this is what what's really exciting about this at some point I would love to actually provide you guys with a little more detail on that and actually literally like present, you guys with a case study on it but long story short is that so.

Speaker Change: So there are really two things happening right both mix shift to online as well as increased volumes and so I think as a case study that's a really good. Good case study there we're really excited about and obviously now we feel we should add a couple more dealers on to effectively run similar case studies both.

Speaker Change: There are two things that have really happened there in the case study, which is one is.

Speaker Change: Clearly a shift from people that historically were.

Speaker Change: Because there are slightly different DMA and see how that behaviors or whether the behavior is any different and to also adding more brands.

Jantoon Reigersman: And so automating that and utilizing our AI tools more and more to really make this a much more personalized experience seems to be yielding very attractive results. So that's just one example of the many. At the end of the day, it's really about the consumer journey and the dealer journey. Those are the two pieces where all the product development is focused.

Speaker Change: Obviously, just leads basically becoming fully online purchasers number one and then number two also.

Speaker Change: Because obviously that also will then.

Speaker Change: Significantly increasing the volumes that we were bringing to that dealer and so there are really two things happening right both mix shift to online as well as increased volumes and so I think as the case study. That's a really good. Good case study there we're really excited about and obviously now we feel we should add a couple.

Speaker Change: Increased inventory, but also obviously, we'll see the behavior and different behaviors that are happening online and so these are we're almost like for a lack of but award as one of our board members. Often tells me. It's we're kind of growing slow in order to go fast, which is really honing in on to understanding this in detail.

Jantoon Reigersman: And vis-a-vis your OEM question, yeah, I think that the hard part for us to determine and to predict is, I think you could make a very good argument that OEMs will need to support effectively their vehicle sales more. And as a result, we could be well positioned to actually benefit from that. It's just really hard to say, because at the end of the day, in a world of greater uncertainty, people are just reluctant to engage, but overarching in a world of higher tariffs, and obviously trying to push consumers to make a purchasing decision on a car.

Speaker Change: More dealers on to effectively run similar case studies, both because they are slightly different DMA and see how that behaviors or whether the behavior is any different and to <unk>.

Speaker Change: And then as soon as these dms providers were kind of up to date and ready for us to automate. These things then we can really start pushing the scaling much faster and much harder, but I think so far these results are effectively confirming all the hypotheses in the thesis we had in the past.

Speaker Change: Also adding more brands.

Obviously that also will then.

Speaker Change: Increased inventory, but also obviously, we'll see the behavior and different behaviors that are happening online and so these are we're almost like for a lack of but award is one of our board members. Often tells me. It's we're kind of going slow in order to go fast, which is really honing in on to understanding this in detail.

Speaker Change: And then Chris what was your second question again on the call.

Chris: Monetization, yes, yes.

Chris: So currently currently we're not doing it.

Chris: Monetization is just as if it's a lead this is really because we're focused on.

Jantoon Reigersman: I think there are a lot of tools that the OEMs have at their disposal, of which many could come through TrueCar. So it's a reason why we're so delicate also in our language, because obviously, uncertainty is never good for the market, but we're very confident that we can actually be really helpful to both OEMs and dealers. Great.

Chris: Obviously, asking a lot from these dealers at this stage because obviously there is close integration happening we're learning a lot. There's a lot of things were.

Speaker Change: And then as soon as these dms provider for kind of <unk>.

Speaker Change: Up to date and ready for us to automate. These things then we can really start pushing the scaling much faster and much harder.

Chris: We're doing so.

Chris: We were monetizing it as if it's a regular lead at this point, we're not yet monetizing its really.

Speaker Change: So far these results are effectively confirming all the hypotheses in the thesis we had in the past.

Chris: At a truecar plus basis, and we only want to start doing that once we appropriately start scaling because we really want to we don't want the monetization to be affecting any of the testing and trial and error we're doing today.

Naved Khan: Thank you, Jantoon.

Speaker Change: And then Chris what was your second question again on the call.

Ryan Meyers: The next question comes from Ryan Meyers, Lake... Thank you guys.

Speaker Change: The monetization.

Speaker Change: Currently currently we're not doing it.

Jantoon Reigersman: First question for me, you know, without the kind of headcount investments now going forward, you know, how should we think about the margins across the business and maybe, you know, what are the biggest levers that you can pull across the cost structure? Yeah, there are three main buckets and then Oliver can take it.

Speaker Change: One of those Asian is just as if it's a lead this is really because we're focused on.

Speaker Change: Okay and then just lastly for me on the pause of the.

Speaker Change: The sales head count is it.

Speaker Change: Obviously, asking a lot from these dealers at this stage because obviously there is close integration happening. We're learning a lot. There is a lot of things where we're doing so.

Speaker Change: Are you anticipating that there's going to be uncertainty from the dealers and the Oems or are you actually hearing that can deal with it right now and it's kind of affecting.

Speaker Change: <unk>.

Speaker Change: We were monetizing it as if it's a regular lead at this point, we are not yet monetizing its really.

Speaker Change: You had thought was going to be a go to market or are you just sort of building it in because of the <unk>.

Jantoon Reigersman: But remember that there are three main buckets that I've mentioned many times on these calls, which is really it's headcount, it's marketing expense, and then it's effectively our overhead charge. It includes a lot of the data costs and effectively the infrastructural costs. So headcount is always important because you obviously want to make sure that you're well balanced and efficient as an organization.

Speaker Change: Related uncertainty.

Speaker Change: Yes elevated uncertainty, we're just building it and Theres no reason to go like that.

Speaker Change: At a truecar plus basis, and we only want to start doing that once we appropriately start scaling because we really want to we don't want the monetization to be affecting any of the testing and trial and error we're doing today.

Speaker Change: Let's be allowed the market a little bit more let's be a little bit more efficient first.

Speaker Change: CEC kind of what how this is going to play out.

Speaker Change: Okay, and then just lastly for me on the pause.

Speaker Change: Be there to be helpful for the dealers.

Speaker Change: Dealer sales head count is it are you.

Speaker Change: Thats really the main focus right now so it's really in anticipation of its not necessarily because there is a we're reacting to something specific.

Jantoon Reigersman: There's obviously on the marketing side, there are two main buckets. One is performance marketing. The other one is partner marketing. One emphasis we also did here is obviously the efficiencies we've been achieving through our marketing campaigns. And so that's obviously a very important lever where as we have greater efficiencies, there are obviously interesting things we can do there.

Speaker Change: Are you anticipating that there's going to be uncertainty from the dealers and the Oems or are you actually hearing that can deal with right now and it's kind of affecting.

Speaker Change: Okay. Thanks for the clarification.

Speaker Change: You had thought was going to be your go to market or are you just sort of building it in because of the elevated uncertainty.

Speaker Change: The next question comes from react with Jpmorgan. Please go ahead.

Speaker Change: Yes elevated uncertainty, we're just building it and Theres no reason to go like let's let's be allowed the market a little bit more let's be a little bit more efficient first.

Speaker Change: Okay.

Speaker Change: Hi, Good morning, this is Josh.

Jantoon Reigersman: And then obviously, we are continuously looking at potentially right sizing the business at the right time in the right forms as the world navigates this level of uncertainty.

Speaker Change: Thanks for taking our questions.

Speaker Change: I was just hoping to get some further color on your decision to not provide guidance for the second quarter. Despite the subscription nature of the business and also since most manufacturers have held pricing stable on model year 'twenty five vehicles through early June.

Speaker Change: See you see kind of what how this is going to play out.

Speaker Change: Be there to be helpful for the dealers.

Oliver Foley: Oliver, go ahead. Yeah, that's the only thing I'll add there, Ryan, it's like, it's, you know, what's, what's going to drive margins over the next couple quarters is, is sort of the revenue mix, as well as sort of sort of the flexibility we have in the cost structure. So the revenue mix, ultimately, you know, OEM revenue tends to have the highest margin. And so, you know, how much of our total revenue comes from OEMs, certainly impacts, impacts margins. Conversely, you know, TrueCar Marketing Solutions, or some of our vehicle sourcing products around TrueCar Wholesale Solutions, you know, those, those have lower margins.

Speaker Change: Really the main focus right now so it's really in anticipation of its not necessarily because there is a we're reacting to something specific.

Speaker Change: Along the same line of thought.

Speaker Change: Would you be able to share an update on the dealer revenue split between subscription and pay per sale.

Speaker Change: Okay. Thanks for the clarification.

Speaker Change: Follow up.

Speaker Change: Yes.

Speaker Change: I'll take the first of all now have Oliver answer you. The second one so the guidance really is very simple is that if we.

Speaker Change: The next question comes from with Jpmorgan. Please go ahead.

Speaker Change: Hi, Good morning. This is Josh on for Doug Cooper, Thanks for taking our questions.

Speaker Change: To provide some form of guidance and then and then there's some like Crazy news that comes out in some shape or form then suddenly you get into all those triggers where you guided to something in and how does that affect it and how do you then speak to the market about that.

Speaker Change: Was just hoping to get some further color on your decision to not provide guidance for the second quarter.

Speaker Change: The subscription nature of the business.

Speaker Change: And also since most manufacturers have held pricing stable on model year 'twenty five vehicles through early June along the same line of thought.

Oliver Foley: And so, you know, depending upon the mix, ultimately, that will, that will impact margins.

Speaker Change: Just makes life a lot more complicated I think if if there is nothing strange coming further in the next couple of months and quarters and I think things become relatively predictable in the way that we've always been able to relatively well predict.

Oliver Foley: On the cost structure side, so we're, we're, really focused right now on flexibility, right? Given the uncertainty, it's about how can we adapt under any scenario to manage cashflow effectively and ultimately be cashflow breakeven. And so we're. We're pretty confident we've got a decent amount of flexibility across the cost structure, so across all three of those buckets, both headcount, marketing, and overhead. Whether it's outsourced services or it's continuing to lean into marketing campaigns that have the highest return, really quick payback, that's really where we're focused so that we can manage in any scenario that prevails over the next couple of quarters.

Speaker Change: Would you be able to share an update on the dealer revenue split between subscription and pay per sale.

Speaker Change: Follow up.

Speaker Change: Yes, all of them.

Speaker Change: I'll take the first of all now have Oliver answer you. The second one so the guidance really is very simple is that.

Speaker Change: But the real the real reason to pull back on any formal guidance is really just because of the highest level of uncertainty. So it's less about the business model. It's more of that if tomorrow thorough skin doubled then it's really hard to assess exactly what the impact is at this stage show that level of uncertainty just makes it that it's easy.

Speaker Change: If we were to provide some form of guidance and then and then there is some like Crazy news that comes out in some shape or form then suddenly you get into all those triggers where.

Speaker Change: You've guided to something in and how does that affect it and how do you then speak to the market about that and it just makes life a lot more complicated I think if if there is nothing strange coming further in the next couple of months and quarters and I think things become relatively predictable in the way that we've always been able to relatively well predict.

Speaker Change: To just.

Speaker Change: Refrain from providing any guidance.

Speaker Change: And in all of our can take question number two.

Speaker Change: Yes, I would say.

Speaker Change: If you just look at our dealer revenue about 20% of it comes from pay per sale.

Speaker Change: With the remaining 80% being sort of recurring subscription based.

Ryan Meyers: Okay, got it.

Speaker Change: But the real the real reason to pull back on any formal guidance is really just because of the highest level of uncertainty. So it's less about the business model. It's more of that if tomorrow thorough skin doubled then it's really hard to assess exactly what the impact is at this stage show that level of uncertainty just makes it that is.

Ryan Meyers: And then just one sort of clarification question. I think you guys had said this in your prepared remarks, but it sounds like, you know, with the loss of the American Express business, that's now been filled and picked up by the business that you guys are working with, AAA. Is that the right way to understand that? Yeah, it's on its way. So I wouldn't say that it's 100% filled up, but it's obviously because these programs take time to ramp up, but it's getting very close to those levels. Got it.

Speaker Change: But then I think OEM, obviously is the.

Speaker Change: Others are variable.

Speaker Change: Revenue component right.

Speaker Change: <unk>.

Speaker Change: That can move up or down quite significantly dependent upon sort of how Oems.

Speaker Change: Sure recalibrate their their incentive strategies going forward so.

Speaker Change: Easier to just.

Speaker Change: Refrain from providing any guidance.

Speaker Change: I think when you've got a.

Speaker Change: And in all of our can take question number two.

Speaker Change: A relatively small revenue base.

Speaker Change: Yes, I would say.

Speaker Change: With I think a decent chunk of it that's non subscription revenue.

Speaker Change: If you just look at our dealer revenue about 20% of it comes from pay per sale.

Ryan Meyers: Thanks for taking my question, guys.

Speaker Change: The.

Speaker Change: With the remaining 80% being sort of recurring subscription based.

Speaker Change: The volatility that we've seen makes it very difficult to sort of predict those those non <unk> subscription based revenue lines and they can have a material impact as a result.

Thomas White: The next question comes from Tom White, D.A. Davison, please go ahead. Good morning, thanks for taking my questions.

Speaker Change: But that I think OEM, obviously is the other.

Speaker Change: Those are variable.

Thomas White: Two, if I could, I guess just first on Paris, Jantoon, you know, in the letter you kind of touch on how not all OEMs will be kind of impacted the same. I was hoping you could just kind of update us on... Your franchise dealers like sort of what is your kind of exposure to Different OEMs. I think you guys skew a little bit more towards kind of the Asian OEMs some of the Japanese brands I'm just curious like is there a reason to think that you know your specific mix of of certified dealers will you know be Will be better or worse able to kind of navigate what's happening.

Speaker Change: Revenue component right.

Speaker Change: That's very helpful. Thank you.

Speaker Change: That can move up or down quite significantly dependent upon sort of how Oems.

Speaker Change: Follow up.

Speaker Change: There were a lot of great details in the prepared remarks, some shareholder letter around the progress of the Truecar plus offering.

Speaker Change: Sure recalibrate their their incentive strategies going forward so.

Speaker Change: We really appreciate it and maybe just following up to Chris's question.

Speaker Change: I think when you've got a.

Speaker Change: A relatively small revenue base.

Speaker Change: Could you also discuss the potential cost savings realized at the pilot data group over the larger proportion of volumes now being contracted to the D C plus channel.

Speaker Change: With.

Speaker Change: A decent chunk of it that's non subscription revenue.

Speaker Change: The.

Speaker Change: The volatility that we've seen makes it very difficult to sort of predict those those non <unk> subscription based revenue lines and they can have a material impact as a result.

Speaker Change: Additionally has there been any cultural pushback at the stores considering that transactions through end to end online channels might impact the store associates variable pay.

Speaker Change: Yes.

Yeah.

Speaker Change: That's very helpful. Thank you.

Speaker Change: These are all good questions.

Speaker Change: Follow up.

Speaker Change: I'm trying to think.

Speaker Change: There were a lot of great details in the prepared remarks, some shareholder letter around the progress of the Truecar plus offering.

Jantoon Reigersman: That's my first one and then just and then second one is just Kind of uses the capital just curious if you're giving any more serious consideration about about buying back stock here. Thanks Yeah, so let me, on the first one. The comment was less about alluding to whether we're better or worse positioned. I think it's just hard to say at this stage. I think it was more intended to say long-term probably not all OEMs are impacted equal. And so what we do is obviously we're very focused on helping OEMs with their respective issues to help solve those through our programs. And so what we mean with if somebody is more impacted or needs a specific type of help, then obviously we'll jump in and we feel that there are opportunities there.

Speaker Change: How to answer it and concisely. So yeah. So there are a lot of there are a lot of.

Speaker Change: We really appreciate it and maybe just following up to Chris's question.

Speaker Change: Savings are important so number one.

Speaker Change: Could you also discuss the potential cost savings realized at the pilot dealer group over the larger proportion of volumes now being contracted to the D C plus channel.

Speaker Change: There.

Speaker Change: You can start selling as a dealership $24 seven right. So that's really important so in other words at night. When people are sleeping you arrive and you also is the next morning, you effectively have sales happening throughout the night. So that's number one number two is obviously they are able to expand their <unk>.

Speaker Change: Additionally has there been any cultural pushback at the stores considering that transactions through end to end online channels might impact the store associates variable pay.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: These are all good questions.

Speaker Change: Graphical footprint effectively.

Speaker Change: I'm trying to think.

Speaker Change: Number three is obviously people at leisure at their home looking at attaching products feel more confident and feel more confident with peer reviews et cetera, and so there is a different group of customers that effectively the dealers able to address and serve that half.

Speaker Change: I have to answer and concisely. So yeah. So there are a lot of their level.

Speaker Change: Savings are important so number one.

Speaker Change: There.

Speaker Change: You can start selling as a dealership $24 seven right. So that's really important so in other words at night. When people are sleeping you arrive and you also is the next morning, you effectively have sales happening throughout the night. So that's number one number two is obviously they are able to expand their <unk>.

Jantoon Reigersman: And so it really depends on the type of impact that each of these OEMs have. We indeed skew a little bit more Asian mix more broadly, but this also shifts very much throughout the year. So that really depends. And at the end of the day, it also really depends on like inventory mix and then eventually obviously the type of incentives the OEMs are willing to put on these cars. So I think it's less about whether we're better or worse positioned because I don't think I really think there is such a thing currently in within the new space.

Speaker Change: Have different type of needs them the ones that are really enjoying going into a dealership.

Speaker Change: So the answer is yes, so it's not just purely by volume, but it's also provide the type of consumers are obviously pursuing.

Speaker Change: Then you go into the back end side of things. So really now suddenly you can be much more efficient with your sales team throughout the day and really serve.

Speaker Change: Graphical footprint effectively.

Speaker Change: Number three is obviously people at leisure at their home looking at attaching products feel more confident feel more confident with peer reviews et cetera, and so there is a different group of customers that effectively the dealers able to address and serve that half to half.

The people that are in the store.

Speaker Change: And.

Speaker Change: Effectively yourselves team pure on the phone per se chasing potential needs.

Speaker Change: And so as a result, I think he can become much more efficient on that side over time, obviously, depending on the type of dealerships that you'd even consider weather sales commissions should even be part of the of the online sales and then.

Speaker Change: A different type of needs them the ones that are really enjoying going into a dealership.

Jantoon Reigersman: However, I do think that the adaptability to really help the OEMs where they would like to emphasize and where they would like to like effectively adjust some of their pain points is something that we are very capable and we've proven to be very capable. So we obviously have to navigate that somewhat smartly as we go through this.

Speaker Change: So the answer is yes, so it's not just purely by volume, but it's also by the type of consumers are obviously pursuing.

Speaker Change: You can then once you start moving to the next phase you really start thinking about you're going to even start thinking about real estate cost and.

Speaker Change: Then you go into the back end side of things. So really now suddenly you can be much more efficient with your sales team throughout the day and really serve.

Speaker Change: And location cost effectively it's like how much inventory do you actually need to have on our prime real estate location or can you actually use a secondary location et cetera.

Jantoon Reigersman: Then on your second question on the capital allocation, the answer is always yes. I think this is right. Like we've obviously been asked this a lot and we have a significant cash balance in play.

Speaker Change: The people that are in the store.

Speaker Change: And.

Speaker Change: Effectively yourself steam pure on the phone per se chasing potential needs.

Speaker Change: The complexity that always comes from scaling a product like <unk> and <unk>.

Speaker Change: And so as a result, I think he can become much more efficient on that side over time, obviously, depending on the type of dealerships that you'd even consider weather sales commissions should even be part of the of the online sales and then.

Jantoon Reigersman: We very often review, right, almost continuously review our capital allocation strategies and do that the right way and share buybacks are always one tool in that effectively basket of tools that we have and so that is something that we always consider and at the right time will consider. Okay, thank you.

Speaker Change: It's both the complexity as well as an opportunity is.

Speaker Change: As a dealership when you run multiple stores.

Speaker Change: How are you going to actually deal with online sales.

From an operational perspective so.

Speaker Change: And then once you start moving to the next phase you really start thinking about you're going to even start thinking about real estate cost in June.

Speaker Change: Do you have a single person in all different stores being responsible for online sales and do that and carry multiple brands.

Speaker Change: And location cost effectively it's like how much inventory do you actually need to have on our prime rib.

Speaker Change: Like if some if somebody from an online sale comes and wants to pick up the garbage picked it up on a centralized location or a like one of the brand dealerships. All these type of little nuances actually really matter and they matter a lot and also like Ben the cost burden to the dealership alright. So it all comes down to <unk>.

Christopher Pierce: The next question comes from Chris Pierce, Needham, please go ahead. Hey, good morning. On TC Plus and the dealer you cited, can you just, is there a way to know if these units are additive to like units they wouldn't have sold or, and then can you remind me or remind us, is there an increased economic benefit to TrueCar from these units given I think the dealer probably makes a higher margin given less sales commission in these units? Like what's the push and pull there? Yeah, Chris, absolutely. So on the first, the answer is yes. So and this is this is what's really exciting about this.

Speaker Change: Real estate location or can you actually use a secondary location et cetera.

Speaker Change: The complexity that always comes from scaling a product like <unk> and it's both the complexity as well as an opportunity is.

Speaker Change: As a dealership when you run multiple stores.

Speaker Change: Efficiencies or inefficiencies.

Speaker Change: How are you going to actually deal with online sales.

Speaker Change: And so the ability to start selling more with less friction.

Speaker Change: From an operational perspective so.

Speaker Change: Less logistical complexity is something that's super attractive and more importantly, also start selling in off hours or sell to people that otherwise would've been reluctance to walk into a store or would have walked in by necessity or would've taken a lot of time in the store now suddenly you can run all the operations much more.

Speaker Change: Do you have a single person in all different stores being responsible for online sales and do that and carry multiple brands.

Speaker Change: Like if some if somebody from an online sale comes and wants to pick up the garbage picked it up on a centralized location or a like one of the brand dealerships. All these type of little nuances actually really matter and they matter a lot and also then the cost burden to the dealership right. So it all comes down to <unk>.

Jantoon Reigersman: And at some point, I would love to actually provide you guys with a lot more detail on it and actually literally like, present you guys with a case study on it. But long story short is yes. So there's there are two things that have really happened there in the case study, which is one is clearly a shift from people that historically were obviously just leads basically becoming fully online purchasers, number one, and then number two, also significantly increasing the volumes that we were bringing to that dealer. And so there are really two things happening, right?

Speaker Change: Efficiencies. So so net net I think there are a lot of cost savings to be had.

Speaker Change: <unk>.

Speaker Change: For the dealerships and I think as we go through forward.

Speaker Change: Efficiencies or inefficiencies.

Speaker Change: With every one of the dealerships is going to vary depending on what they are very focused on themselves, but it is very obvious that further dealerships. This is a really interesting value proposition and obviously it will allow for the bi to effectively be split in a different form and for us to be able to monetize this in an attractive way.

Speaker Change: And so the ability to start selling more with less friction.

Speaker Change: Less logistical complexity is something that's super attractive and more importantly, also start selling in off hours or sell to people that otherwise would have been reluctant to walk into a store or would have walked in by necessity or would've taken a lot of time in the store now suddenly you can run all the operations much more.

Jantoon Reigersman: Both makeshift to online as well as increased volumes.

Great color. Thanks, a lot trying to run all of our good luck.

Jantoon Reigersman: And so I think as a case study, that's a really good, good case study that we're really excited about. And obviously now we feel we should add a couple more dealers on to effectively run similar case studies, both because they're slightly different DMAs and see how that behaviors or whether the behavior is any different. And two, also adding more brands, because obviously that also will then increase inventory, but also obviously we'll see the behavior and different behaviors that are happening online. And so these are, we're almost like for lack of a better word, and as one of our board members often tells me, it's we're kind of going slow in order to go fast, which is really honing in on to understanding this in detail.

Speaker Change: Patiency. So so net net I think there are a lot of cost savings to be had.

Speaker Change: As a reminder, if you wish to ask a question. Please press star and one. The next question comes from Martin Marvin Fong of <unk>. Please go ahead.

Speaker Change: <unk>.

Speaker Change: For the dealerships and I think as we go through forward.

Marvin Fong: Hi, good morning, Thanks for taking my question.

Speaker Change: With every one of the dealerships is going to vary depending on what they are very focused on themselves, but it is very obvious that further dealerships. This is a really interesting value proposition and obviously it will allow for the bi to effectively be split in a different form and for us to be able to monetize this in an attractive way.

Speaker Change: First you're.

Speaker Change: You referenced.

Speaker Change: You expect CDK in Turkey on to come online I think somewhere around July how confident are you in that timeline.

Speaker Change: Maybe clue us in I think.

Speaker Change: You mentioned that the delays are sort of outside of your control.

Speaker Change: Great color. Thanks, a lot trying to run all of our good luck.

Speaker Change: Sure.

Speaker Change: Working on something related to macro that's kind of tying the attention just maybe some insight there would be great.

Speaker Change: As a reminder, if you wish to ask a question. Please press star and one. The next question comes from Martin Marvin Fong of <unk>. Please go ahead.

Speaker Change: Yes, yes, absolutely so so.

Jantoon Reigersman: And then as soon as these DMS providers are kind of up to date and ready for us to automate these things, then we can really start pushing the scaling much faster and much harder. But I think so far, these results are effectively confirming all the hypotheses in the thesis we had in the past. And Chris, what was your second question again on the, oh, the economic side. On modernization. Monetization. So currently, we're not doing, like, the monetization is just as if it's a lead. This is really because we're focused on, like, we're obviously asking a lot from these dealers at this stage, because obviously there's close integration happening.

Speaker Change: So the one that we've been working with mostly has been CDK, Turkey on as we've just.

Speaker Change: Hi, good morning, Thanks for taking my question.

Started engaging with so.

Speaker Change: First.

Speaker Change: They're like we'll probably run through that timeline with them in relatively short order.

Speaker Change: You referenced.

Speaker Change: Do you expect CDK in Turkey on to come online I think somewhere around July how confident are you in that timeline and could you just maybe clue us in I think you mentioned that the delays are sort of outside of your control.

Speaker Change: For CDK really the issue has been twofold, one is resource allocation and second of all obviously CDK is also more complex.

Speaker Change: Architecturally and more complex organization in the backend.

Speaker Change: <unk> <unk>.

Speaker Change: Working on something related to macro that's kind of tying the attention just maybe some insight there would be great.

Speaker Change: As a result for.

Speaker Change: For them to adapt accordingly is a little bit trickier, so when as soon as we do something and we effectively them tested.

Speaker Change: Yes, absolutely so.

Speaker Change: So the one that we've been working with mostly has been CDK <unk>.

Jantoon Reigersman: We're learning a lot. There's a lot of things we're doing. So. We're monetizing it as if it's a regular lead at this point. We're not yet monetizing it really at a TrueCar Plus basis. And we only want to start doing that once we properly start scaling, because we don't want the monetization to be affecting any of the testing and trial and error we're doing today.

Speaker Change: Austin.

Speaker Change: Products are slightly buggy or have some issues and then kind of they need to put the team back in and Theres, a little bit of iteration that happens there I think the good news is.

Speaker Change: Just started engaging with so.

Speaker Change: There are like we'll probably run through that timeline with them in relatively short order.

Speaker Change: For CDK really the issue has been twofold, one is resource allocation and second of all obviously CDK is also more complex.

Speaker Change: They are very focused on is the tricky bit is a day also are looking to re platform as an organization. So there's always some.

Speaker Change: And delayed it comes with that and obviously most of the focus but I think we're confident to have the right product development roadmap now with them to be able to do that and in parallel obviously work salary, we're accelerating key integrations with <unk>, as well, which which probably will be an easier and faster.

Speaker Change: Architecturally and more complex organization in the backend.

Christopher Pierce: Okay, and then just lastly for me, on the pause of the, you know, the dealer sales headcount, is it, you know, are you anticipating that there's going to be uncertainty from the dealers and the OEMs, or are you actually hearing that from dealers right now and it's kind of affecting what you had thought was going to be your go-to-market, or are you just sort of building it in because of, you know, the elevated uncertainty? Yeah, elevated uncertainty, we're just building it in. There's no reason to go like, let's, let's, let's feel out the market a little bit more.

Speaker Change: As a result for them to adapt accordingly is a little bit trickier. So when as soon as we do something and we effectively then tested.

Speaker Change: Austin.

Speaker Change: Our products are slightly buggy or have some issues and then kind of they need to put the team back in and Theres, a little bit of iteration that happens there.

Speaker Change: Integration is the case, because obviously they do not carry the same.

Speaker Change: CDK.

Speaker Change: Got it thanks for that and my follow up.

Speaker Change: The good news is.

Speaker Change: Theyre very focused on is the tricky bit is a day also are looking to re platform as an organization. So there's always some.

Speaker Change: I think we all acknowledge the uncertainty here.

Speaker Change: Youre not providing guidance.

Speaker Change: Just a higher level question on what.

Jantoon Reigersman: Let's be a little bit more efficient first. See, see kind of what how this is going to play out. Be there to be helpful for the dealers. That's really the main focus right now. So it's really an anticipation. Also, it's not necessarily because there's a we're reacting to something specific.

Speaker Change: And delayed it comes with that and obviously most of the focus but I think we're confident to have the right product development roadmap now with them to be able to do that and in parallel obviously accelerate and were accelerating key integrations with <unk>, as well, which which probably will be an easier and faster.

Speaker Change: What youre seeing in your dealer dealership conversations and how their behavior I mean should we just assume that there is just general paralysis in the sales channel or.

Speaker Change: Or are there actually some signings going on just maybe.

Speaker Change: Deeper.

Speaker Change: Insight on what's going on in the field that would be great.

Christopher Pierce: Okay, perfect. Thanks for the clarification.

Speaker Change: Our integration is the case, because obviously they do not carry the same.

Speaker Change: Yes, it's a good question and the honest answer from Harvard.

Speaker Change: CDK.

Speaker Change: It's a so far so good to be very honest, so theres just a lot of uncertainty.

Josh Patwa: The next question comes from Rajat Guetta, J.P. Morgan. Hi, good morning, this is Josh Patwa on for Rajat Gupta. Thanks for taking our questions.

Speaker Change: Got it thanks for that and my follow up.

Speaker Change: I think we all acknowledge the uncertainty here.

But I think that that's also what we try to relate in the letter where we tried to kind of walk the new launches right, where it's like Q1 was actually a pretty good quarter.

Speaker Change: Respect you're not providing guidance.

Josh Patwa: I was just hoping to get some further color on your decision to not provide guidance for the second quarter, despite the subscription nature of the business, and also since most manufacturers have held pricing stable on model year 25 vehicles through early June. Along the same line of thought, would you be able to share an update on the dealer revenue split between subscriptions and paper sale? Thanks, and have a follow-up.

Speaker Change: A higher level question on.

Speaker Change: What youre seeing in your dealer dealership conversations and how their behavior I mean should we just assume that there is just general paralysis in the sales channel or.

Speaker Change: April clearly held off accordingly as well.

Speaker Change: And so.

Speaker Change: Are there actually some signings going on just maybe.

Speaker Change: It's just hard to extrapolate because you're just fell whats coming from left field, but I think so far so good.

Speaker Change: Deeper.

Speaker Change: Insight on what's going on in a few of them would be great.

Speaker Change: Ed.

Speaker Change: Yes, it's a good question and the honest answer from Harvard.

Speaker Change: Morale and just overarching.

Jantoon Reigersman: Yeah, I'll take the first one. I'll have Oliver answer you the second one. So the guidance really is very simple, is that if we were to provide some form of guidance, and then there's some crazy news that comes out in some shape or form, then suddenly you get into all those triggers where you've guided to something, and then how does that affect, and then how do you then speak to the market about that? And it just makes life a lot more complicated. I think if there's nothing strange coming further in the next couple of months and quarters, and I think things become relatively predictable in a way that we've always been able to relatively well predict, but the real reason to pull back on any form of guidance is really just because of the height level of uncertainty.

Speaker Change: The success of the relative dealers and so now obviously don't forget that as.

Speaker Change: So far so good to be very honest, so theres just a lot of uncertainty.

Speaker Change: As has been the case already for a couple of years I think independence will suffer alright, and the smaller independents will continue to suffer.

Speaker Change: But I think that that's also what we try to relate in the letter where we tried to kind of.

Speaker Change: Wolf, the new launches right, where it's like Q1 was actually a pretty good quarter.

Speaker Change: Until affordability becomes obviously.

Speaker Change: Some easing there, but I think from from the perspective of all.

Speaker Change: April clearly held off accordingly as well.

Speaker Change: And so.

Speaker Change: The franchises and the new cars.

Speaker Change: It's just hard to extrapolate because you're just fell whats coming from left field, but I think so far so good to be the morale and just overarching.

Speaker Change: I think they are holding up so far they're holding up strong in and obviously people are still buying them.

Speaker Change: It's hard to say whether this is new.

Speaker Change: <unk> bye.

Tariffs or whether this is business as usual.

Speaker Change: The successful is the relative dealers and so now obviously don't forget them.

Speaker Change: We will see and we'll see how this flows through but so far there is no there is no <unk>.

Speaker Change: As has been the case already for a couple of years I think independence will suffer alright, and the smaller independents will continue to suffer.

Speaker Change: <unk> in the field itself.

Speaker Change: Yes. Thanks.

Oliver Foley: So it's less about the business model. It's more that if tomorrow tariffs get doubled, then it's really hard to assess exactly what the impact is at this stage. So that level of uncertainty just makes it that it's easier to just refrain from providing any guidance.

Speaker Change: Thanks, so much trying to appreciate it.

Speaker Change: Until affordability becomes obviously.

Speaker Change: This concludes our question and answer session I would now like to turn the conference back over to Anton for closing remarks.

Speaker Change: Some easing there, but I think from from the perspective of.

Speaker Change: The franchises and the new cars.

Speaker Change: I think they are holding up so far they're holding up strong and obviously people are still buying them.

Speaker Change: But I just I would like to thank everybody for taking the time to participate in our call.

Oliver Foley: And then Oliver can take question number two. Yeah, I'd say, you know, if you just look at our dealer revenue, about 20% of it comes from paper sale, you know, with the remaining 80% being sort of recurring subscription based. But then I think OEM obviously is the other sort of variable revenue component, right? And that can that can move up or down quite significantly depending upon sort of how OEMs. They're recalibrate their incentive strategies going forward. So, you know, I think when you've got a relatively small revenue base, you know, with, I think, a decent chunk of it that's non-subscription revenue, you know, the...

Speaker Change: It's hard to say, whether this is a nervous by three tariffs or whether this is business as usual.

Speaker Change: I want to thank the team I know with all the macro volatility around us it's amazing to see the team and firm keep steady focus.

Speaker Change: We will see and we'll see how this flow through but so far there is no. There is no red flag in the field itself.

Speaker Change: And do we need to do so.

Speaker Change: Everyone and thank you today for listening.

Speaker Change: Yes.

Speaker Change: Thanks, so much trying to appreciate it.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect Goodbye.

Speaker Change: This concludes our question and answer session I would now like to turn the conference back over to Jonathan for closing remarks.

Speaker Change: But I just I would like to thank everybody for taking the time to participate within our coal.

Speaker Change: I want to thank the team I know with all the macro volatility around losses, it's amazing to see the team and firm keep steady focus and do what we need to do so thank you everyone and thank you today for listening.

Josh Patwa: The volatility that we've seen makes it very difficult to predict those non-subscription-based revenue lines, and they can have a material impact as a result. That's very helpful. Thank you.

Jantoon Reigersman: As a follow-up, you know, there were a lot of great details in the prepared remarks and shareholder letter around the progress of the TrueCar Plus offering, which we really appreciate. And maybe just following up to Chris's question, could you also discuss the potential cost savings realized at the pilot dealer group with a larger proportion of volumes now being transacted through the TC Plus channel? Additionally, has there been any cultural pushback at the stores considering that transactions through end-to-end online channels might impact the store associates' variable pay? Thank you.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect Goodbye.

Jantoon Reigersman: Yeah, these are all good questions. I'm trying to think how to answer them concisely. So yeah, so there are a lot of savings that are important. So number one, you can start selling as a dealership 24-7, right? So that's really important. So in other words, at night, when people are sleeping, you arrive in the office the next morning, you effectively have sales happening throughout the night. So that's number one. Number two is, obviously, they're able to expand their almost their geographical footprint effectively, right? Number three is obviously people at leisure at their home, looking at attaching products, feel more confident, feel more confident with peer reviews, etc.

Jantoon Reigersman: And so there's a different group of customers that effectively the dealer is able to address and serve that have different type of needs than the ones that really enjoy going into a dealership. So the answer is, yeah, so it's not just purely by volume, but it's also by the type of consumers they're obviously pursuing. Then you go into the backend side of things. So really now suddenly you can be much more efficient with your sales team throughout the day and really serve the people that are in the store and have effectively your sales team fewer on the phone per se, chasing potential leads.

Jantoon Reigersman: And so as a result, I think you can become much more efficient on that side over time, obviously, depending on the type of dealerships they could even consider whether sales commission should even be part of the online sales. And then you can then, once you start moving to the next phase, you really start thinking about, you can even start thinking about real estate costs and location costs effectively. It's like how much inventory do you actually need to have on a prime real estate location? Or can you actually use a secondary location, et cetera?

Jantoon Reigersman: I think the complexity that always comes from scaling a product like TrueCar Plus is that, and it's both the complexity as well as an opportunity as a dealership when you run multiple stores, how are you gonna actually deal with online sales from an operational perspective? So. Do you have a single person in all different stores being responsible for online sales? Do they then carry multiple brands? If somebody from an online sale comes and wants to pick up the car, do they pick it up on a centralized location or one of the brand dealerships? All these type of little nuances actually really matter.

Jantoon Reigersman: And they matter a lot and also then the cost burden to the dealership. So it all comes down to either efficiencies or inefficiencies. And so the ability to start selling more with less friction and less logistical complexity is something that's super attractive. And more importantly, also start selling in off hours or sell to people that otherwise would have been reluctant to walk into a store or would have walked in by necessity or would have taken a lot of time in the store. Now suddenly you can run all the operations much more efficiently. So net-net, I think there are a lot of cost savings to be had for the dealerships.

Jantoon Reigersman: And I think as we go forward with every one of the dealerships, it's going to very depend on what they're very focused on themselves. But it's very obvious that for the dealerships, this is a really value proposition. And obviously it will allow for the buy to effectively be split in a different form and for us to be able to monetize this in an attractive way.

Jantoon Reigersman: Great Karl, thanks a lot Jantoon and Oliver, good luck.

Operator: As a reminder, if you wish to ask a question, please press star and 1.

Marvin Fong: The next question comes from Martin Marvin Fong, BTIG, please go ahead. Good morning. Thanks for taking my question. So, first, you referenced you expect CDK and TechEon to come online, I think, somewhere around July. You know, how confident are you in that timeline? I could just maybe clue us in. I think you mentioned that the delays are sort of outside of your control. I mean, is it that they're working on something related to macro that's kind of tying their attention? Just maybe some insight there would be great, and I have a follow-up. Yeah, absolutely.

Jantoon Reigersman: So, the one that we've been working with mostly has been CDK. TechEon, we've just started engaging with. So, we'll probably run through that timeline with them in relatively short order. For CDK, really, the issue has been twofold. So, one is just resource allocation, and second of all, obviously, CDK is also a more complex, architecturally a more complex organization in the back end. As a result, for them to adapt accordingly is a little bit trickier. So, as soon as we do something and we effectively then test it, often products are slightly buggy or have some issues, and then kind of they need to pull the team back in, and there's a little bit of iteration that happens there.

Jantoon Reigersman: I think the good news is they're very focused on it. The tricky bit is that they also are looking to re-platform as an organization. So, there's always some delay that comes with that, and obviously, a loss of focus. But I think we're confident to have the right product development roadmap now with them to be able to do that, and in parallel, obviously, we're accelerating the integrations with TechEon as well, which probably will be an easier and faster integration in any case, because obviously, they do not carry the same tech debt as CDK does. Thanks for that.

Marvin Fong: And my follow-up, I mean, I think we all acknowledge the uncertainty here and I respect you're not providing guidance. It's just a higher level question on what you're seeing in your dealership conversations and how they're behaving. I mean, should we just assume that there's this general paralysis in the sales channel or are there actually some signings going on?

Jantoon Reigersman: You know, just maybe a bit deeper insight on what's going on in the field would be great. Yeah, it's a good question. And the honest answer, Marvin, is like, it's like so far so good, to be very honest. So there's just a lot of uncertainty. But I think that that's also what we try to relay in the letter, where we try to kind of walk the nuances, right? Where it's like, Q1 was actually a pretty good quarter. April clearly held up accordingly as well. And so it's just hard to extrapolate because you just don't know what's coming from left field.

Jantoon Reigersman: But I think so far, so good. The morale and just overarching the success of the relative dealers. And so now obviously, like, don't forget that, like, as has been the case already for a couple of years, I think independence will suffer, right? And the smaller independence will continue to suffer until affordability becomes obviously, there's some easing there. But I think from the perspective of the franchises and the new cars, I think they're holding up so far, they're holding up strong and obviously people are still buying. It's hard to say whether this is a nervous buying pre-tariff or whether this is business as usual.

Jantoon Reigersman: We will see and we'll see how this flows through. But so far, there's no red flag in the field itself.

Jantoon Reigersman: Thanks so much, Jantoon. This concludes our question and answer session. I would now like to turn the conference back over to Jantoon for closing remarks. But I just would like to thank everybody for taking the time to participate in our call. I want to thank the team. I know with all the macro volatility around us, it's amazing to see the team and firm keep steady, focused, and do what we need to do. So thank you, everyone. And thank you today for listening. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Goodbye!