TrueCar is looking to shore up revenue from military-related sales due to the sudden end of its USAA business this year.
In the third quarter, the company reported improved net income but lower revenue, which it blamed on the coronavirus pandemic and the loss of the USAA partnership.
TrueCar said in February the partnership with USAA would terminate at the close of the third quarter. It marked the end of a 13-year revenue-sharing partnership, which represented about 29 percent of the vehicles sold by dealers to buyers who connect through the TrueCar marketplace.
TrueCar has since sought to recapture some of that business, launching in May a new program called TrueCar Military.
“Since learning of USAA’s decision not to renew our partnership, just days before the February earnings call, we knew we had to move quickly and decisively,” TrueCar CEO Mike Darrow said in an earnings call Thursday.
For TrueCar Military, the company has launched a dedicated marketing campaign with NASCAR driver Jesse Iwuji, and has made some inroads with dealers and automakers, Darrow said. He said the program is a “key lever for growth for the coming quarters.”
The company continues to see dealer churn. Its franchise dealership count fell to 10,745 at the end of the third quarter from 11,267 at the end of the second quarter, and its independent dealership count dipped to 3,858, compared with 4,131.
Vehicle sales declined 20 percent on a year-over-year basis to 213,869 in the third quarter. Average monthly unique visitors to TrueCar’s site rose 24 percent to 9.5 million.
Third-quarter revenue dropped 10 percent to $77.2 million. Net income was $11.6 million, compared with a loss of $7.7 million in the year-ago quarter.