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As used in this Annual Report on Form 10-K, the terms “TrueCar”, “the Company,” “we,” “us” and “our” refer to TrueCar, Inc., and its wholly owned subsidiaries, TrueCar.com, Inc. and ALG, Inc., unless the context indicates otherwise. TrueCar.com, Inc. is referred to as “TrueCar.com” and ALG, Inc. is referred to as “ALG”.
Special Note Regarding Forward Looking Statements and Industry and Market Data
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases you can identify forward-looking statements because they contain words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “likely,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:
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our future financial performance and our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses, ability to generate cash flow, and ability to achieve, and maintain, future profitability; |
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our relationship with key industry participants, including car dealers and automobile manufacturers; |
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anticipated trends, growth rates and challenges in our business and in the markets in which we operate; |
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our ability to anticipate market needs and develop new and enhanced products and services to meet those needs, and our ability to successfully monetize them; |
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maintaining and expanding our customer base; |
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the impact of competition in our industry and innovation by our competitors; |
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our anticipated growth and growth strategies and our ability to effectively manage that growth; |
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our ability to sell our products and expand internationally; |
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our failure to anticipate or adapt to future changes in our industry; |
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the impact of seasonality on our business; |
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our ability to hire and retain necessary qualified employees to expand our operations; |
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the impact of any failure of our solutions or solution innovations; |
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our reliance on our third-party service providers; |
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the evolution of technology affecting our products, services and markets; |
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our ability to adequately protect our intellectual property; |
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the anticipated effect on our business of litigation to which we are a party; |
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our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business; |
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the increased expenses and administrative workload associated with being a public company; |
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failure to maintain an effective system of internal controls necessary to accurately report our financial results and prevent fraud; |
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our liquidity and working capital requirements; |
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the estimates and estimate methodologies used in preparing our consolidated financial statements and determining option exercise prices; |
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the future trading prices of our common stock and the impact of securities analysts’ reports on these prices; |
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the preceding and other factors discussed in Part I, Item 1A, “Risk Factors,” and in other reports we may file with the Securities and Exchange Commission from time to time; and |
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the factors set forth in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievments to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Given these uncertainties, you should
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not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
This Annual Report on Form 10-K also contains estimates and other statistical data, including those relating to our industry and the market in which we operate, which we have obtained or derived from industry publications and reports, including reports from Autodata Corp., USA, Borrell Associates, J.D. Power and Associates, NADA, R.L. Polk & Co., Automotive News and other publicly available information. These industry publications and reports do not guarantee the accuracy and completeness of their information although the authors generally indicate that they have obtained the information from sources believed to be reliable. The information involves a number of estimates and assumptions. You are cautioned not to give undue weight to these estimates and assumptions. Based on our industry experience, we believe that the publications and reports are reliable and that the conclusions contained in the publications and reports are reasonable. However, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause actual results to differ materially from those expressed in the industry publications and reports.
PART I
Item 1.Business
Overview
Our mission is to transform the car-buying experience for consumers and the way that the automotive industry attracts customers and sells cars. We have established an intelligent, data-driven online platform operating on a common technology infrastructure, powered by proprietary data and analytics. We operate our company-branded platform on the TrueCar website and our branded mobile experience. In addition, we customize and operate our platform on a co-branded basis for our many affinity group marketing partners, including financial institutions like USAA and American Express, membership-based organizations like Consumer Reports, AARP and AAA, and employee buying programs for large enterprises such as IBM and Walmart. We enable users to obtain market-based pricing data on new and used cars, and to connect with our network of TrueCar Certified Dealers. We also allow automobile manufacturers, known in the industry as OEMs, to connect with TrueCar users in the purchase process and efficiently deliver incentives specifically targeted to individual consumers.