Company: TRUE
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001327318-25-000036
Chunk: 326

Company: TrueCar, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 326
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 general negative association with our business. In addition, a termination by an affinity group marketing partner may result in the loss of the data it provided to us about automobile transactions. This loss of data may decrease the quantity and quality of the information that we provide to consumers and may also reduce our ability to identify transactions for which we can invoice dealers. Further, certain of our marketing partners are affiliated with well-established brands that consumers may perceive as trustworthy and 

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reputable. To the extent we lose our affiliation with such brands or consumer views of such brands decline, consumer perceptions of our own brand may be negatively impacted. If our relationships with affinity group marketing partners change, our business, revenue, operating results and prospects may be harmed.

If key industry participants, including car dealers, affinity partners and automobile manufacturers, perceive us in a negative light or our relationships with them suffer harm, our ability to grow and our financial performance may be damaged.

Our primary source of revenue consists of fees paid by TrueCar Certified Dealers to us in connection with the opportunity to sell automobiles to our users. Our value proposition to such users depends on our ability to provide pricing information on automobiles from a sufficient number of automobile dealers by brand and in a given consumer’s geographic area. If our relationships with our network of TrueCar Certified Dealers suffer harm in a manner that leads to the departure of these dealers from our network, then our revenue and ability to maintain and grow unique visitor traffic would be adversely affected.

For example, at the end of 2011 and the beginning of 2012, many dealers canceled their agreements with us following regulatory and publicity-related challenges, and our franchise dealer count fell over 50% in a three month period. In 2015, a contractual dispute with a large dealer group led to an approximately 5% decrease to our franchise dealer count during the third quarter of that year. At June 30, 2025, our franchise dealer count was 8,292.

TrueCar Certified Dealers have no contractual obligation to maintain their relationship with us. Accordingly, these dealers may leave our network at any time or may develop or use other products or services in lieu of ours. Further, while we believe that our service provides a lower cost, accountable customer acquisition channel, dealers may have difficulty rationalizing their marketing spend across TrueCar and other channels, which may dilute our dealer value proposition. If we are unable to create and maintain a compelling value proposition for dealers to become and remain TrueCar Certified Dealers, our dealer network may fail to grow and the number