While AutoWeb sustained a net loss of more than $5 million during the second quarter, new president and chief executive officer Jared Rowe insisted the company “made great progress” with regard to a significant revamp of how it operates as a digital marketing platform providing advertising solutions for dealers and OEMs.
On Thursday, AutoWeb reported that its total revenues for the second quarter that ended June 30 came in at $29.3 million, down from $34.6 million a year earlier. The company’s advertising revenues totaled $6.9 million with click revenues constituting $5.8 million.
However, the company posted a net loss of $5.2 million or $0.41 per share. During the second quarter of last year, AutoWeb posted net income of $0.3 million or $0.02 per share.
Nonetheless, Rowe — who arrived at AutoWeb back in April after holding senior positions at FordDirect, Cox Automotive and Cerberus-backed YP Holdings — defended the company’s performance.
The company explained the decline in total revenues was primarily due to lower retail dealer count and lower lead and click volumes. The company attributed the quarterly loss to the decrease driven by investments in new traffic acquisition strategies and testing of new traffic sources.
“During the second quarter, we made great progress in working towards the completion of our operating review and the development of a new strategic plan,” Rowe said in a news release shared by the company. “This included a comprehensive review of our products, traffic acquisition strategies, pricing policies, distribution channels and organizational capabilities and structure.
“Although we are still engaged in our strategic review, we have already begun to redevelop and invest in the key pillars of our business, which will continue to impact short-term profitability, particularly as we invest in new product development and test new traffic acquisition strategies to improve quality and consumer targeting,” he continued.
“In an effort to improve consumer-to-advertiser matching, we are also investing to enhance our click algorithm, which we expect to complete and deploy later this year. Further, we plan to restructure our organization to better align with our revised strategic imperatives,” Rowe went on to say.
While the revenue and net loss figures likely aren’t what the company wants, AutoWeb made improvements in connection with its cash and credit situations.
As of June 30, the company reported its cash and cash equivalents totaled $18.3 million, compared to $15.2 million on March 31 and $25.0 million when 2017 closed, with the reduction from year-end primarily driven by the repayment of AutoWeb’s $8.0 million revolving line of credit.
The company added that total debt was reduced to $1.0 million compared to $9.0 million as of Dec. 31.
What’s the prognosis for AutoWeb’s financial fortunes going forward?
“With just over three months at AutoWeb, I am very encouraged by the progress our team has made to evolve our go-to-market approach. However, there is still work to be done to determine the proper new/used car targeting mix, channel mix and product mix, among other strategic decisions,” Rowe said.
“We look forward to laying this out in greater detail in the coming months as we finalize our revised strategic plan. We continue to expect that the enhancement of our platform and advertising solutions will enable AutoWeb to return to growth and profitability,” he added.