Providing sales leads to dealerships is hardly new. Third-party companies have done it for years, if not decades. But first-quarter earnings statements from four publicly traded lead providers — TrueCar, CarGurus, Cars.com and AutoWeb — read at times like statements from Internet startups.
They tout soaring revenue and growth. Profits? Uh, not so much. In fact, balance sheets are listed before profit-and-loss statements, because what matters is how much cash the company is burning.
Take CarGurus. Revenue surged 47 percent to $98.7 million. The company was eager to say that monthly unique visitors rose 33 percent to 30.8 million. Independent studies show CarGurus now is the largest, most-visited automotive shopping site, with the most mobile traffic, most-engaged shoppers and most shopping time spent on its site.
Oh, by the way, net profit fell 13 percent to $3.7 million.
Cars.com's story was also dramatic, though different. Revenue grew 4.4 percent to $160 million. Monthly unique visitors rose 9 percent to 19.4 million. But net collapsed 97 percent to $929,000. Why? Nonrecurring costs — settling an activist stockholder campaign, an acquisition — plus costs due to having gone public and changes in the company's capital structure.
My, perhaps unfair, interpretation: the costs of moving out of the parents' basement and becoming an adult, public company. But at least they had profits.
TrueCar's revenue rose 7 percent to $81.1 million, and unique monthly visitors climbed 6.8 percent to 7.8 million. "In the first quarter, we established good momentum" on multiple fronts, CEO Chip Perry said. "We believe we are well positioned to achieve healthy growth rates in 2019." But neither Perry nor his CFO mentioned the word "profit" in the press release. Rightly so: TrueCar's net loss widened to $9.1 million from $6.8 million a year earlier.
AutoWeb had it worse: Revenue fell 13 percent while net swung to a loss of $10.3 million from a gain of $484,000. The results "are disappointing to everyone," said newly installed CEO Jared Rowe. He promised to lay out a new strategy this year "to return AutoWeb to growth." And, presumably, profits.
You can reach James B. Treece at jtreece@crain.com