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Vroom Announces Record Ecommerce Gross Profit Per Unit of $4,206

Continued Progress on Long-Term Roadmap

Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the third quarter ended September 30, 2022.

HIGHLIGHTS OF THIRD QUARTER 2022 VERSUS SECOND QUARTER 2022

  • Ecommerce gross profit per unit of $4,206, up 16%
  • SG&A expenses decreased $18.3 million
  • Net loss improved from $(115.1) million to $(51.1) million
  • Adjusted EBITDA improved from $(85.6) million to $(73.3) million
  • Adjusted EBITDA excluding non-recurring costs improved from $(77.3) million to $(57.5) million

Tom Shortt, Chief Executive Officer of Vroom, commented: “We continued to make progress on our three key objectives and four strategic initiatives as outlined during our Investor Day in May. We are intensely focused on improving the customer experience. For the month of October, 98% of our customers received their completed registrations before the expiration of their initial temporary tags. We will continue this focus as we work to achieve our goal of becoming best-in-class in titling and registration. We achieved Ecommerce gross profit per unit of $4,206, improved our Adjusted EBITDA excluding non-recurring costs to $(57.5) million and reduced our leverage by $56 million. I would like to thank all of our Vroommates, UACC Colleagues and third-party partners for their contributions in transforming our business and improving our customer experience."

Bob Krakowiak, Vroom’s Chief Financial Officer, commented: “I am pleased with our financial and operational performance in the third quarter. We took several actions to maximize liquidity and strengthen our balance sheet, including unlocking $59 million of restricted cash, repurchasing a portion of our convertible notes and completing our second securitization since the acquisition of UACC. Based on our progress, we are forecasting year-end cash liquidity near the midpoint of our previous guidance of $450 to $565 million.”

THIRD QUARTER 2022 FINANCIAL RESULTS

All financial comparisons are on a year-over-year basis unless otherwise noted.

Ecommerce Results

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

 

Change

 

 

% Change

 

2022

 

 

2021

 

 

 

Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except unit data and average days to sale)

 

 

 

 

 

 

 

 

 

(in thousands, except unit data and average days to sale)

 

 

 

 

 

 

 

 

Ecommerce units sold

 

 

 

6,428

 

 

 

 

19,683

 

 

 

 

(13,255

)

 

 

(67.3

)%

 

 

 

35,134

 

 

 

 

53,455

 

 

 

 

(18,321

)

 

 

(34.3

)%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

212,980

 

 

$

 

677,170

 

 

$

 

(464,190

)

 

 

(68.5

)%

 

$

 

1,173,727

 

 

$

 

1,644,494

 

 

$

 

(470,767

)

 

 

(28.6

)%

Product revenue

 

 

 

12,461

 

 

 

 

24,508

 

 

 

 

(12,047

)

 

 

(49.2

)%

 

 

 

48,709

 

 

 

 

59,155

 

 

 

 

(10,446

)

 

 

(17.7

)%

Total ecommerce revenue

 

$

 

225,441

 

 

$

 

701,678

 

 

$

 

(476,237

)

 

 

(67.9

)%

 

$

 

1,222,436

 

 

$

 

1,703,649

 

 

$

 

(481,213

)

 

 

(28.2

)%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

 

$

 

14,573

 

 

$

 

25,875

 

 

$

 

(11,302

)

 

 

(43.7

)%

 

$

 

46,153

 

 

$

 

72,704

 

 

$

 

(26,551

)

 

 

(36.5

)%

Product gross profit

 

 

 

12,461

 

 

 

 

24,508

 

 

 

 

(12,047

)

 

 

(49.2

)%

 

 

 

48,709

 

 

 

 

59,155

 

 

 

 

(10,446

)

 

 

(17.7

)%

Total ecommerce gross profit

 

$

 

27,034

 

 

$

 

50,383

 

 

$

 

(23,349

)

 

 

(46.3

)%

 

$

 

94,862

 

 

$

 

131,859

 

 

$

 

(36,997

)

 

 

(28.1

)%

Average vehicle selling price per ecommerce unit

 

$

 

33,133

 

 

$

 

34,404

 

 

$

 

(1,271

)

 

 

(3.7

)%

 

$

 

33,407

 

 

$

 

30,764

 

 

$

 

2,643

 

 

 

8.6

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

 

$

 

2,267

 

 

$

 

1,315

 

 

$

 

952

 

 

 

72.4

%

 

$

 

1,314

 

 

$

 

1,360

 

 

$

 

(46

)

 

 

(3.4

)%

Product gross profit per ecommerce unit

 

 

 

1,939

 

 

 

 

1,245

 

 

 

 

694

 

 

 

55.7

%

 

 

 

1,386

 

 

 

 

1,107

 

 

 

 

279

 

 

 

25.2

%

Total gross profit per ecommerce unit

 

$

 

4,206

 

 

$

 

2,560

 

 

$

 

1,646

 

 

 

64.3

%

 

$

 

2,700

 

 

$

 

2,467

 

 

$

 

233

 

 

 

9.4

%

Ecommerce average days to sale

 

 

 

186

 

 

 

 

68

 

 

 

 

118

 

 

 

173.5

%

 

 

 

118

 

 

 

 

73

 

 

 

 

45

 

 

 

61.6

%

Results by Segment

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

 

2022

 

 

2021(1)

 

 

Change

 

% Change

 

2022

 

 

2021(1)

 

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

6,428

 

 

 

19,683

 

 

 

(13,255

)

 

 

(67.3

)%

 

 

35,134

 

 

 

53,455

 

 

 

(18,321

)

 

 

(34.3

)%

Wholesale

 

 

3,128

 

 

 

9,760

 

 

 

(6,632

)

 

 

(68.0

)%

 

 

19,108

 

 

 

28,421

 

 

 

(9,313

)

 

 

(32.8

)%

All Other (2)

 

 

662

 

 

 

1,583

 

 

 

(921

)

 

 

(58.2

)%

 

 

3,408

 

 

 

3,358

 

 

 

50

 

 

 

1.5

%

Total units

 

 

10,218

 

 

 

31,026

 

 

 

(20,808

)

 

 

(67.1

)%

 

 

57,650

 

 

 

85,234

 

 

 

(27,584

)

 

 

(32.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

225,441

 

 

$

701,678

 

 

$

(476,237

)

 

 

(67.9

)%

 

$

1,222,436

 

 

$

1,703,649

 

 

$

(481,213

)

 

 

(28.2

)%

Wholesale

 

 

47,604

 

 

 

131,306

 

 

 

(83,702

)

 

 

(63.7

)%

 

 

270,489

 

 

 

377,438

 

 

 

(106,949

)

 

 

(28.3

)%

Retail Financing (3)

 

 

40,654

 

 

 

 

 

 

40,654

 

 

 

100.0

%

 

 

120,005

 

 

 

 

 

 

120,005

 

 

 

100.0

%

All Other (4)

 

 

27,098

 

 

 

63,772

 

 

 

(36,674

)

 

 

(57.5

)%

 

 

126,622

 

 

 

168,677

 

 

 

(42,055

)

 

 

(24.9

)%

Total revenue

 

$

340,797

 

 

$

896,756

 

 

$

(555,959

)

 

 

(62.0

)%

 

$

1,739,552

 

 

$

2,249,764

 

 

$

(510,212

)

 

 

(22.7

)%

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

27,034

 

 

$

50,383

 

 

$

(23,349

)

 

 

(46.3

)%

 

$

94,862

 

 

$

131,859

 

 

$

(36,997

)

 

 

(28.1

)%

Wholesale

 

 

(1,574

)

 

 

2,103

 

 

 

(3,677

)

 

 

(174.8

)%

 

 

(6,260

)

 

 

10,337

 

 

 

(16,597

)

 

 

(160.6

)%

Retail Financing (3)

 

 

35,954

 

 

 

 

 

 

35,954

 

 

 

100.0

%

 

 

109,637

 

 

 

 

 

 

109,637

 

 

 

100.0

%

All Other (4)

 

 

5,917

 

 

 

5,603

 

 

 

314

 

 

 

5.6

%

 

 

17,089

 

 

 

15,197

 

 

 

1,892

 

 

 

12.4

%

Total gross profit

 

$

67,331

 

 

$

58,089

 

 

$

9,242

 

 

 

15.9

%

 

$

215,328

 

 

$

157,393

 

 

$

57,935

 

 

 

36.8

%

Gross profit (loss) per unit (5):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

4,206

 

 

$

2,560

 

 

$

1,646

 

 

 

64.3

%

 

$

2,700

 

 

$

2,467

 

 

$

233

 

 

 

9.4

%

Wholesale

 

$

(503

)

 

$

215

 

 

$

(718

)

 

 

(334.0

)%

 

$

(328

)

 

$

364

 

 

$

(692

)

 

 

(190.1

)%

(1)

 

In the second quarter of 2022, we reevaluated our reporting segments based on relative revenue and gross profit and significance in our long term strategy. As a result of that analysis, we determined to no longer report TDA as a separate operating segment. As of June 30, 2022, we are organized into three reportable segments: Ecommerce, Wholesale, and Retail Financing. We reclassified TDA revenue and TDA gross profit from the TDA reportable segment to the “All Other” category to conform to current year presentation.

(2)

 

All Other units consist of retail sales of used vehicles from TDA.

(3)

 

The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022.

(4)

 

All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business.

(5)

 

Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

SG&A

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

% Change

 

2022

 

 

2021

 

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

Compensation & benefits

 

$

 

55,694

 

 

$

 

53,900

 

 

$

1,794

 

 

 

3.3

%

 

$

 

199,111

 

 

$

 

145,580

 

 

$

53,531

 

 

 

36.8

%

Marketing expense

 

 

 

14,945

 

 

 

 

35,214

 

 

 

(20,269

)

 

 

(57.6

)%

 

 

 

69,818

 

 

 

 

88,267

 

 

 

(18,449

)

 

 

(20.9

)%

Outbound logistics

 

 

 

4,945

 

 

 

 

22,717

 

 

 

(17,772

)

 

 

(78.2

)%

 

 

 

39,925

 

 

 

 

57,987

 

 

 

(18,062

)

 

 

(31.1

)%

Occupancy and related costs

 

 

 

6,041

 

 

 

 

4,635

 

 

 

1,406

 

 

 

30.3

%

 

 

 

17,408

 

 

 

 

12,599

 

 

 

4,809

 

 

 

38.2

%

Professional fees

 

 

 

6,459

 

 

 

 

7,694

 

 

 

(1,235

)

 

 

(16.1

)%

 

 

 

26,585

 

 

 

 

15,951

 

 

 

10,634

 

 

 

66.7

%

Software and IT costs

 

 

 

11,277

 

 

 

 

7,232

 

 

 

4,045

 

 

 

55.9

%

 

 

 

33,406

 

 

 

 

19,367

 

 

 

14,039

 

 

 

72.5

%

Other

 

 

 

35,282

 

 

 

 

17,326

 

 

 

17,956

 

 

 

103.6

%

 

 

 

89,374

 

 

 

 

41,731

 

 

 

47,643

 

 

 

114.2

%

Total selling, general & administrative expenses

 

$

 

134,643

 

 

$

 

148,718

 

 

$

(14,075

)

 

 

(9.5

)%

 

$

 

475,627

 

 

$

 

381,482

 

 

$

94,145

 

 

 

24.7

%

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance:

  • EBITDA;
  • Adjusted EBITDA;
  • Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues;
  • Adjusted EBITDA excluding securitization gain;
  • Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues;
  • Non-GAAP net loss;
  • Non-GAAP net loss per share;
  • Non-GAAP net loss excluding securitization gain; and
  • Non-GAAP net loss per share excluding securitization gain.

These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with U.S. GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. We have reconciled all non-GAAP financial measures with the most directly comparable U.S. GAAP financial measures.

EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues, Non-GAAP net loss, Non-GAAP net loss per share, Non-GAAP net loss excluding securitization gain, and Non-GAAP net loss per share excluding securitization gain are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA

We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense.

Adjusted EBITDA

We calculate Adjusted EBITDA as EBITDA adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, gain on debt extinguishment, goodwill impairment charge and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within "Other assets". Changes in fair value of finance receivables can fluctuate significantly from period to period and relate primarily to historical loans and debt which have been securitized, and acquired on February 1, 2022 from UACC. Our ongoing business model is to originate or purchase finance receivables with the intent to sell which we recognize at the lower of cost or fair value. Therefore, these historical finance receivables acquired, which are accounted for under the fair value option, will experience fluctuations in value from period to period. We believe it is appropriate to remove this temporary volatility from our Adjusted EBITDA results to better reflect our ongoing business model. Additionally, these historical finance receivables acquired from UACC are expected to run-off within approximately 12 months.

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. While we expect to continue to incur these costs over the next few quarterly periods, we do not expect these costs to continue to be incurred once our operational issues have been resolved.

Adjusted EBITDA excluding securitization gain

We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC's finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results.

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues.

The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Net loss

 

$

(51,127

)

 

$

(98,122

)

 

$

(476,675

)

 

$

(241,118

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,704

 

 

 

7,028

 

 

 

28,617

 

 

 

14,720

 

Interest income

 

 

(5,104

)

 

 

(2,930

)

 

 

(12,991

)

 

 

(7,288

)

(Benefit) provision for income taxes

 

 

899

 

 

 

29

 

 

 

(22,085

)

 

 

379

 

Depreciation and amortization

 

 

9,995

 

 

 

3,469

 

 

 

28,005

 

 

 

9,497

 

EBITDA

 

$

(35,633

)

 

$

(90,526

)

 

$

(455,129

)

 

$

(223,810

)

Realignment costs

 

$

3,243

 

 

$

 

 

$

12,772

 

 

$

 

Acquisition related costs

 

 

 

 

 

3,412

 

 

 

5,653

 

 

 

3,412

 

Change in fair value of finance receivables

 

 

(3,012

)

 

 

 

 

 

4,455

 

 

 

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

201,703

 

 

 

 

Gain on debt extinguishment

 

 

(37,917

)

 

 

 

 

 

(37,917

)

 

 

 

Other

 

 

 

 

 

 

 

 

2,127

 

 

 

 

Adjusted EBITDA

 

$

(73,319

)

 

$

(87,114

)

 

$

(266,336

)

 

$

(220,398

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recurring costs to address operational and customer experience issues

 

 

15,785

 

 

 

 

 

 

25,059

 

 

 

 

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

 

$

(57,534

)

 

$

(87,114

)

 

$

(241,277

)

 

$

(220,398

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Securitization gain

 

 

(15,972

)

 

 

 

 

 

(45,589

)

 

 

 

Adjusted EBITDA excluding securitization gain

 

$

(89,291

)

 

$

(87,114

)

 

$

(311,925

)

 

$

(220,398

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

 

$

(73,506

)

 

$

(87,114

)

 

$

(286,866

)

 

$

(220,398

)

Non-GAAP net loss

We calculate Non-GAAP net loss as net loss adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge, gain on debt extinguishment, and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within "Other assets".

Non-GAAP net loss per share

We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding.

Non-GAAP net loss excluding securitization gain

We calculate Non-GAAP net loss excluding securitization gain as Non-GAAP net loss adjusted to exclude the securitization gain from the sale of UACC's finance receivables.

Non-GAAP net loss per share excluding securitization gain

We calculate Non-GAAP net loss per share excluding securitization gain as Non-GAAP net loss excluding securitization gain divided by weighted average number of shares outstanding.

The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss and net loss per share, which are the most directly comparable U.S. GAAP measures:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(in thousands, except share and per share amounts)

 

Net loss

 

$

(51,127

)

 

$

(98,122

)

 

$

(476,675

)

 

$

(241,118

)

Net loss attributable to common stockholders

 

$

(51,127

)

 

$

(98,122

)

 

$

(476,675

)

 

$

(241,118

)

Add: Realignment costs

 

 

3,243

 

 

 

 

 

 

12,772

 

 

 

 

Add: Acquisition related costs

 

 

 

 

 

3,412

 

 

 

5,653

 

 

 

3,412

 

Add: Change in fair value of finance receivables

 

 

(3,012

)

 

 

 

 

 

4,455

 

 

 

 

Add: Goodwill impairment charge

 

 

 

 

 

 

 

 

201,703

 

 

 

 

Subtract: Gain on debt extinguishment

 

 

(37,917

)

 

 

 

 

 

(37,917

)

 

 

 

Add: Other

 

 

 

 

 

 

 

 

2,127

 

 

 

 

Non-GAAP net loss

 

$

(88,813

)

 

$

(94,710

)

 

$

(287,882

)

 

$

(237,706

)

Subtract: Securitization gain

 

 

(15,972

)

 

 

 

 

 

(45,589

)

 

 

 

Non-GAAP net loss excluding securitization gain

 

$

(104,785

)

 

$

(94,710

)

 

$

(333,471

)

 

$

(237,706

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted

 

 

138,118,679

 

 

 

136,766,015

 

 

 

137,817,839

 

 

 

136,256,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.37

)

 

$

(0.72

)

 

$

(3.46

)

 

$

(1.77

)

Impact of realignment costs

 

 

0.02

 

 

 

 

 

 

0.09

 

 

 

 

Impact of acquisition related costs

 

 

 

 

 

0.02

 

 

 

0.04

 

 

 

0.03

 

Impact of change in fair value of finance receivables

 

 

(0.02

)

 

 

 

 

 

0.03

 

 

 

 

Impact of goodwill impairment charge

 

 

 

 

 

 

 

 

1.46

 

 

 

 

Impact of gain on debt extinguishment

 

 

(0.27

)

 

 

 

 

 

(0.28

)

 

 

 

Impact of other

 

 

 

 

 

 

 

 

0.02

 

 

 

 

Non-GAAP net loss per share, basic and diluted

 

$

(0.64

)

 

$

(0.70

)

 

$

(2.10

)

 

$

(1.74

)

Impact of securitization gain

 

 

(0.12

)

 

 

 

 

 

(0.33

)

 

 

 

Non-GAAP net loss per share excluding securitization gain and non-recurring costs to address operational and customer experience issues, basic and diluted

 

$

(0.76

)

 

$

(0.70

)

 

$

(2.43

)

 

$

(1.74

)

THIRD QUARTER 2022 AS COMPARED TO SECOND QUARTER 2022

 

Three Months Ended

September 30,

 

Three Months Ended

June 30,

 

 

 

 

 

 

 

 

2022

 

2022

 

 

Change

 

 

% Change

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Total revenues

 

$

340,797

 

 

$

475,437

 

 

$

(134,640

)

 

 

(28.3

)%

Total gross profit

 

$

67,331

 

 

$

66,357

 

 

$

974

 

 

 

1.5

%

Ecommerce units sold

 

 

6,428

 

 

 

9,233

 

 

 

(2,805

)

 

 

(30.4

)%

Ecommerce revenue

 

$

225,441

 

 

$

321,632

 

 

$

(96,191

)

 

 

(29.9

)%

Ecommerce gross profit

 

$

27,034

 

 

$

33,509

 

 

$

(6,475

)

 

 

(19.3

)%

Vehicle gross profit per ecommerce unit

 

$

2,267

 

 

$

2,166

 

 

$

101

 

 

 

4.7

%

Product gross profit per ecommerce unit

 

 

1,939

 

 

 

1,463

 

 

 

476

 

 

 

32.5

%

Total gross profit per ecommerce unit

 

$

4,206

 

 

$

3,629

 

 

$

577

 

 

 

15.9

%

Wholesale units sold

 

 

3,128

 

 

 

5,867

 

 

 

(2,739

)

 

 

(46.7

)%

Wholesale revenue

 

$

47,604

 

 

$

82,901

 

 

$

(35,297

)

 

 

(42.6

)%

Wholesale gross loss

 

$

(1,574

)

 

$

(1,934

)

 

$

360

 

 

 

18.6

%

Wholesale gross loss per unit

 

$

(503

)

 

$

(330

)

 

$

(173

)

 

 

(52.4

)%

Retail Financing revenue

 

$

40,654

 

 

$

32,121

 

 

$

8,533

 

 

 

26.6

%

Retail Financing gross profit

 

$

35,954

 

 

$

28,720

 

 

$

7,234

 

 

 

25.2

%

Total selling, general, and administrative expenses

 

$

134,643

 

 

$

152,990

 

 

$

(18,347

)

 

 

(12.0

)%

 

 

Three Months Ended

September 30,

 

Three Months Ended

June 30,

 

 

 

 

 

 

 

 

2022

 

2022

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

Net loss

 

$

(51,127

)

 

$

(115,089

)

 

$

63,962

 

 

 

55.6

%

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,704

 

 

 

9,533

 

 

 

171

 

 

 

1.8

%

Interest income

 

 

(5,104

)

 

 

(3,935

)

 

 

(1,169

)

 

 

29.7

%

(Benefit) provision for income taxes

 

 

899

 

 

 

256

 

 

 

643

 

 

 

251.2

%

Depreciation and amortization

 

 

9,995

 

 

 

10,115

 

 

 

(120

)

 

 

(1.2

)%

EBITDA

 

$

(35,633

)

 

$

(99,120

)

 

$

63,487

 

 

 

64.1

%

Realignment costs

 

$

3,243

 

 

$

9,529

 

 

$

(6,286

)

 

 

(66.0

)%

Change in fair value of finance receivables

 

 

(3,012

)

 

 

1,846

 

 

 

(4,858

)

 

 

(263.2

)%

Gain on debt extinguishment

 

 

(37,917

)

 

 

 

 

 

(37,917

)

 

 

100.0

%

Other

 

 

 

 

 

2,127

 

 

 

(2,127

)

 

 

(100.0

)%

Adjusted EBITDA

 

$

(73,319

)

 

$

(85,618

)

 

$

12,299

 

 

 

14.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recurring costs to address operational and customer experience issues

 

 

15,785

 

 

 

8,274

 

 

 

7,511

 

 

 

90.8

%

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

 

$

(57,534

)

 

$

(77,344

)

 

$

19,810

 

 

 

25.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Securitization gain

 

 

(15,972

)

 

 

 

 

 

(15,972

)

 

 

100.0

%

Adjusted EBITDA excluding securitization gain

 

$

(89,291

)

 

$

(85,618

)

 

$

(3,673

)

 

 

(4.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

 

$

(73,506

)

 

$

(77,344

)

 

$

3,838

 

 

 

5.0

%

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Tuesday, November 8, 2022 at 8:30 a.m. ET.

To access the conference call, please register at this embedded link. Registered participants will be sent a unique PIN to access the call. A listen-only webcast will also be available via the same link and at ir.vroom.com. An archived webcast of the conference call will be accessible on the website within 48 hours of its completion.

About Vroom (Nasdaq: VRM)

Vroom is an innovative, end-to-end ecommerce platform that offers a better way to buy and a better way to sell used vehicles. The Company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers an extensive selection of vehicles, transparent pricing, competitive financing, and contact-free, at-home pick-up and delivery. For more information visit www.vroom.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding expected timelines, our execution of and the expected benefits from our business realignment plan and cost-saving initiatives, including our ability to improve our transaction processes and customer service experience, our expectations regarding our business strategy and plans, including our ongoing ability to integrate and develop United Auto Credit Corporation into a captive finance operation, and, for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year ended December 31, 2022, including with respect to our liquidity. These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated by our Quarterly report on Form 10-Q for the quarter ended September 30, 2022, each of which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

VROOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

As of

 

As of

 

 

September 30,

 

December 31,

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

509,660

 

 

$

1,132,325

 

Restricted cash (including restricted cash of consolidated VIEs of $19.5 million and $0 million, respectively)

 

 

94,305

 

 

 

82,450

 

Accounts receivable, net of allowance of $26.7 million and $8.9 million, respectively

 

 

23,733

 

 

 

105,433

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $10.9 million and $0 million, respectively)

 

 

13,644

 

 

 

 

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $137.1 million and $0 million, respectively)

 

 

210,729

 

 

 

 

Inventory

 

 

437,828

 

 

 

726,384

 

Beneficial interests in securitizations

 

 

23,984

 

 

 

 

Prepaid expenses and other current assets

 

 

58,576

 

 

 

55,700

 

Total current assets

 

 

1,372,459

 

 

 

2,102,292

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $135.8 million and $0 million, respectively)

 

 

166,382

 

 

 

 

Property and equipment, net

 

 

50,520

 

 

 

37,042

 

Intangible assets, net

 

 

165,668

 

 

 

28,207

 

Goodwill

 

 

 

 

 

158,817

 

Operating lease right-of-use assets

 

 

24,392

 

 

 

15,359

 

Other assets

 

 

29,539

 

 

 

25,033

 

Total assets

 

$

1,808,960

 

 

$

2,366,750

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

36,800

 

 

$

52,651

 

Accrued expenses

 

 

103,903

 

 

 

121,508

 

Vehicle floorplan

 

 

345,272

 

 

 

512,801

 

Warehouse credit facilities of consolidated VIEs

 

 

135,453

 

 

 

 

Current portion of securitization debt of consolidated VIEs at fair value

 

 

54,652

 

 

 

 

Deferred revenue

 

 

16,313

 

 

 

75,803

 

Operating lease liabilities, current

 

 

8,268

 

 

 

6,889

 

Other current liabilities

 

 

19,061

 

 

 

57,604

 

Total current liabilities

 

 

719,722

 

 

 

827,256

 

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $40.8 million and $0 million at fair value, respectively)

 

 

607,790

 

 

 

610,618

 

Operating lease liabilities, excluding current portion

 

 

20,620

 

 

 

9,592

 

Other long-term liabilities

 

 

15,696

 

 

 

4,090

 

Total liabilities

 

 

1,363,828

 

 

 

1,451,556

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 138,154,063 and 137,092,891 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

135

 

 

 

135

 

Additional paid-in-capital

 

 

2,070,454

 

 

 

2,063,841

 

Accumulated deficit

 

 

(1,625,457

)

 

 

(1,148,782

)

Total stockholders’ equity

 

 

445,132

 

 

 

915,194

 

Total liabilities and stockholders’ equity

 

$

1,808,960

 

 

$

2,366,750

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle, net

 

$

234,353

 

 

$

735,716

 

 

$

1,283,263

 

 

$

1,798,155

 

Wholesale vehicle

 

 

47,604

 

 

 

131,306

 

 

 

270,489

 

 

 

377,438

 

Product, net

 

 

13,181

 

 

 

26,544

 

 

 

51,954

 

 

 

64,422

 

Finance

 

 

40,654

 

 

 

 

 

 

120,005

 

 

 

 

Other

 

 

5,005

 

 

 

3,190

 

 

 

13,841

 

 

 

9,749

 

Total revenue

 

 

340,797

 

 

 

896,756

 

 

 

1,739,552

 

 

 

2,249,764

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle

 

 

218,726

 

 

 

708,071

 

 

 

1,234,138

 

 

 

1,720,974

 

Wholesale vehicle

 

 

49,178

 

 

 

129,203

 

 

 

276,749

 

 

 

367,101

 

Finance

 

 

4,699

 

 

 

 

 

 

10,368

 

 

 

 

Other

 

 

863

 

 

 

1,393

 

 

 

2,969

 

 

 

4,296

 

Total cost of sales

 

 

273,466

 

 

 

838,667

 

 

 

1,524,224

 

 

 

2,092,371

 

Total gross profit

 

 

67,331

 

 

 

58,089

 

 

 

215,328

 

 

 

157,393

 

Selling, general and administrative expenses

 

 

134,643

 

 

 

148,718

 

 

 

475,627

 

 

 

381,482

 

Depreciation and amortization

 

 

9,833

 

 

 

3,376

 

 

 

27,728

 

 

 

9,276

 

Impairment charges

 

 

1,017

 

 

 

 

 

 

206,127

 

 

 

 

Loss from operations

 

 

(78,162

)

 

 

(94,005

)

 

 

(494,154

)

 

 

(233,365

)

Gain on debt extinguishment

 

 

(37,917

)

 

 

 

 

 

(37,917

)

 

 

 

Interest expense

 

 

9,704

 

 

 

7,028

 

 

 

28,617

 

 

 

14,720

 

Interest income

 

 

(5,104

)

 

 

(2,930

)

 

 

(12,991

)

 

 

(7,288

)

Other loss (income), net

 

 

5,383

 

 

 

(10

)

 

 

26,897

 

 

 

(58

)

Loss before provision for income taxes

 

 

(50,228

)

 

 

(98,093

)

 

 

(498,760

)

 

 

(240,739

)

Provision (benefit) for income taxes

 

 

899

 

 

 

29

 

 

 

(22,085

)

 

 

379

 

Net loss

 

$

(51,127

)

 

$

(98,122

)

 

$

(476,675

)

 

$

(241,118

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.37

)

 

$

(0.72

)

 

$

(3.46

)

 

$

(1.77

)

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

 

 

138,118,679

 

 

 

136,766,015

 

 

 

137,817,839

 

 

 

136,256,901

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Nine Months Ended

September 30,

 

 

2022

 

2021

Operating activities

 

 

 

 

 

 

Net loss

 

$

(476,675

)

 

$

(241,118

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Impairment charges

 

 

206,127

 

 

 

 

Gain on debt extinguishment

 

 

(37,917

)

 

 

 

Depreciation and amortization

 

 

28,005

 

 

 

9,497

 

Amortization of debt issuance costs

 

 

3,777

 

 

 

1,784

 

Realized gains on securitization transactions

 

 

(45,589

)

 

 

 

Deferred taxes

 

 

(23,855

)

 

 

 

Losses on finance receivables and securitization debt, net

 

 

39,464

 

 

 

 

Stock-based compensation expense

 

 

6,613

 

 

 

9,754

 

Provision to record inventory at lower of cost or net realizable value

 

 

(5,033

)

 

 

5,625

 

Other, net

 

 

4,717

 

 

 

4,874

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Finance receivables, held for sale

 

 

 

 

 

 

Originations of finance receivables held for sale

 

 

(483,167

)

 

 

 

Principal payments received on finance receivables held for sale

 

 

38,297

 

 

 

 

Proceeds from sale of finance receivables held for sale, net

 

 

509,612

 

 

 

 

Other

 

 

(5,924

)

 

 

 

Accounts receivable

 

 

63,252

 

 

 

(32,936

)

Inventory

 

 

293,589

 

 

 

(183,731

)

Prepaid expenses and other current assets

 

 

12,420

 

 

 

(39,356

)

Other assets

 

 

(2,678

)

 

 

(7,390

)

Accounts payable

 

 

(22,183

)

 

 

26,144

 

Accrued expenses

 

 

(27,020

)

 

 

43,512

 

Deferred revenue

 

 

(59,490

)

 

 

39,227

 

Other liabilities

 

 

(39,444

)

 

 

38,655

 

Net cash used in operating activities

 

 

(23,102

)

 

 

(325,459

)

Investing activities

 

 

 

 

 

 

Finance receivables at fair value

 

 

 

 

 

 

Originations of finance receivables at fair value

 

 

(49,475

)

 

 

 

Principal payments received on finance receivables at fair value

 

 

106,829

 

 

 

 

Proceeds from sale of finance receivables at fair value, net

 

 

43,262

 

 

 

 

Principal payments received on beneficial interests

 

 

5,571

 

 

 

 

Purchase of property and equipment

 

 

(19,968

)

 

 

(18,786

)

Acquisition of business, net of cash acquired of $47.9 million

 

 

(267,488

)

 

 

(75,875

)

Net cash used in investing activities

 

 

(181,269

)

 

 

(94,661

)

Financing activities

 

 

 

 

 

 

Principal repayment under secured financing agreements

 

 

(176,909

)

 

 

 

Proceeds from vehicle floorplan

 

 

1,286,000

 

 

 

1,901,457

 

Repayments of vehicle floorplan

 

 

(1,453,529

)

 

 

(1,789,215

)

Proceeds from warehouse credit facilities

 

 

419,000

 

 

 

 

Repayments of warehouse credit facilities

 

 

(460,566

)

 

 

 

Other financing activities

 

 

(1,977

)

 

 

 

Repayments of convertible senior notes

 

 

(18,458

)

 

 

 

Proceeds from issuance of convertible senior notes

 

 

 

 

 

625,000

 

Issuance costs paid for convertible senior notes

 

 

 

 

 

(16,129

)

Proceeds from exercise of stock options

 

 

 

 

 

5,085

 

Net cash (used in) provided by financing activities

 

 

(406,439

)

 

 

726,198

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(610,810

)

 

 

306,078

 

Cash, cash equivalents and restricted cash at the beginning of period

 

 

1,214,775

 

 

 

1,090,039

 

Cash, cash equivalents and restricted cash at the end of period

 

$

603,965

 

 

$

1,396,117

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(unaudited)

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

24,619

 

 

$

11,116

 

Cash paid for income taxes

 

$

2,062

 

 

$

329

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Fair value of beneficial interests received in securitization transactions

 

$

30,082

 

 

$

 

Accrued property and equipment expenditures

 

$

538

 

 

$

1,652

 

Issuance of common stock for CarStory acquisition

 

$

 

 

$

38,811

 

Fair value of unvested stock options assumed for acquisition of business

 

$

 

 

$

1,017

 

 

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