8-K
Vroom, Inc. (VRM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 8, 2022
VROOM, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-39315 | 90-1112566 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation or organization) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
3600 W Sam Houston Pkwy S, Floor 4Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
(518) 535-9125
(Registrant’s telephone number, include area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value per share | VRM | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 8, 2022, Vroom, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
On August 9, 2022, members of the Company’s management will hold an earnings conference call to discuss the Company’s financial results for the quarter ended June 30, 2022, and the presentation furnished as Exhibit 99.2 to this Current Report on Form 8-K will accompany management’s comments.
The information contained in Item 2.02, including Exhibit 99.1 hereto and in Item 7.01, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits relating to Item 2.02 and Item 7.01 shall be deemed to be furnished, and not filed:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated August 8, 2022. |
| 99.2 | Earnings Conference Call Presentation for the Quarter Ended June 30, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VROOM, INC. | ||
|---|---|---|
| Date: August 8, 2022 | By: | /s/ Robert R. Krakowiak |
| Robert R. Krakowiak | ||
| Chief Financial Officer |
EX-99.1
Exhibit 99.1
Vroom Announces Record Ecommerce Gross Profit Per Unit of $3,629
Substantial Progress on Long-Term Roadmap
NEW YORK – August 8, 2022 – Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the second quarter ended June 30, 2022.
HIGHLIGHTS OF SECOND QUARTER 2022 VERSUS FIRST QUARTER 2022
• Ecommerce gross profit per unit of $3,629, up 106%
• SG&A expenses decreased $35.0 million
• Net loss improved from $310.5 million to $115.1 million
• Adjusted EBITDA loss improved from $107.4 million to $85.6 million
Tom Shortt, Chief Executive Officer of Vroom, commented: “The second quarter of 2022 marked substantial progress for Vroom against our four strategic initiatives outlined in our recent investor and analyst event. We announced record Ecommerce gross profit per unit and improved our adjusted EBITDA from the prior quarter. We also began scaling UACC-originated loans for Vroom, which contributed to our improvement in gross profit per unit. I would like to thank all of our Vroommates and our third-party partners for their support in serving our customers.”
Bob Krakowiak, Vroom’s Chief Financial Officer, commented: “I am proud of our achievements in the second quarter. Our Ecommerce gross profit per unit of $3,629 reflects our commitment to our first key objective of prioritizing unit economics. We are making progress in reducing our cost structure as detailed in our business realignment plan presented in May. We realized a $35 million sequential improvement in SG&A and, as a result of our initiatives, we ended the quarter with $533 million in liquidity. Based on our progress, we are continuing to forecast year-end liquidity of approximately $500 million at the midpoint.”
SECOND QUARTER 2022 FINANCIAL RESULTS
All financial comparisons are on a year-over-year basis unless otherwise noted.
Ecommerce Results
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||
| (in thousands, except unit<br>data and average days to sale) | (in thousands, except unit<br>data and average days to sale) | |||||||||||||||||||
| Ecommerce units sold | 9,233 | 18,268 | (9,035 | ) | (49.5 | )% | 28,706 | 33,772 | (5,066 | ) | (15.0 | )% | ||||||||
| Ecommerce revenue: | ||||||||||||||||||||
| Vehicle revenue | $ | 308,123 | $ | 559,010 | (250,887 | ) | (44.9 | )% | $ | 960,747 | $ | 967,324 | (6,577 | ) | (0.7 | )% | ||||
| Product revenue | 13,509 | 20,653 | (7,144 | ) | (34.6 | )% | 36,248 | 34,647 | 1,601 | 4.6 | % | |||||||||
| Total ecommerce revenue | $ | 321,632 | $ | 579,663 | (258,031 | ) | (44.5 | )% | $ | 996,995 | $ | 1,001,971 | (4,976 | ) | (0.5 | )% | ||||
| Ecommerce gross profit: | ||||||||||||||||||||
| Vehicle gross profit | $ | 20,000 | $ | 28,985 | (8,985 | ) | (31.0 | )% | $ | 31,580 | $ | 46,828 | (15,248 | ) | (32.6 | )% | ||||
| Product gross profit | 13,509 | 20,653 | (7,144 | ) | (34.6 | )% | 36,248 | 34,647 | 1,601 | 4.6 | % | |||||||||
| Total ecommerce gross profit | $ | 33,509 | $ | 49,638 | (16,129 | ) | (32.5 | )% | $ | 67,828 | $ | 81,475 | (13,647 | ) | (16.7 | )% | ||||
| Average vehicle selling price per ecommerce unit | $ | 33,372 | $ | 30,601 | 2,771 | 9.1 | % | $ | 33,469 | $ | 28,643 | 4,826 | 16.8 | % | ||||||
| Gross profit per ecommerce unit: | ||||||||||||||||||||
| Vehicle gross profit per ecommerce unit | $ | 2,166 | $ | 1,587 | 579 | 36.5 | % | $ | 1,100 | $ | 1,387 | (287 | ) | (20.7 | )% | |||||
| Product gross profit per ecommerce unit | 1,463 | 1,131 | 332 | 29.4 | % | 1,263 | 1,026 | 237 | 23.1 | % | ||||||||||
| Total gross profit per ecommerce unit | $ | 3,629 | $ | 2,718 | 911 | 33.5 | % | $ | 2,363 | $ | 2,413 | (50 | ) | (2.1 | )% | |||||
| Ecommerce average days to sale | 128 | 68 | 60 | 88.2 | % | 110 | 76 | 34 | 44.7 | % |
All values are in US Dollars.
Results by Segment
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021(1) | Change | % Change | 2022 | 2021(1) | Change | % Change | |||||||||||||||
| (in thousands, except unit data) | (in thousands, except unit data) | |||||||||||||||||||||
| Units: | ||||||||||||||||||||||
| Ecommerce | 9,233 | 18,268 | (9,035 | ) | (49.5 | )% | 28,706 | 33,772 | (5,066 | ) | (15.0 | )% | ||||||||||
| Wholesale | 5,867 | 10,020 | (4,153 | ) | (41.4 | )% | 15,980 | 18,661 | (2,681 | ) | (14.4 | )% | ||||||||||
| All Other (2) | 1,047 | 1,583 | (536 | ) | (33.9 | )% | 2,746 | 3,358 | (612 | ) | (18.2 | )% | ||||||||||
| Total units | 16,147 | 29,871 | (13,724 | ) | (45.9 | )% | 47,432 | 55,791 | (8,359 | ) | (15.0 | )% | ||||||||||
| Revenue: | ||||||||||||||||||||||
| Ecommerce | $ | 321,632 | $ | 579,663 | $ | (258,031 | ) | (44.5 | )% | $ | 996,995 | $ | 1,001,971 | $ | (4,976 | ) | (0.5 | )% | ||||
| Wholesale | 82,901 | 128,108 | (45,207 | ) | (35.3 | )% | 222,885 | 246,132 | (23,247 | ) | (9.4 | )% | ||||||||||
| Retail Financing (3) | 32,121 | — | 32,121 | 100.0 | % | 79,808 | — | 79,808 | 100.0 | % | ||||||||||||
| All Other (4) | 38,783 | 54,119 | (15,336 | ) | (28.3 | )% | 99,524 | 104,905 | (5,381 | ) | (5.1 | )% | ||||||||||
| Total revenue | $ | 475,437 | $ | 761,890 | $ | (286,453 | ) | (37.6 | )% | $ | 1,399,212 | $ | 1,353,008 | $ | 46,204 | 3.4 | % | |||||
| Gross profit (loss): | ||||||||||||||||||||||
| Ecommerce | $ | 33,509 | $ | 49,638 | $ | (16,129 | ) | (32.5 | )% | $ | 67,828 | $ | 81,475 | $ | (13,647 | ) | (16.7 | )% | ||||
| Wholesale | (1,934 | ) | 8,516 | (10,450 | ) | (122.7 | )% | (4,686 | ) | 8,234 | (12,920 | ) | (156.9 | )% | ||||||||
| Retail Financing (3) | 28,720 | — | 28,720 | 100.0 | % | 73,682 | — | 73,682 | 100.0 | % | ||||||||||||
| All Other (4) | 6,062 | 4,974 | 1,088 | 21.9 | % | 11,173 | 9,595 | 1,578 | 16.4 | % | ||||||||||||
| Total gross profit | $ | 66,357 | $ | 63,128 | $ | 3,229 | 5.1 | % | $ | 147,997 | $ | 99,304 | $ | 48,693 | 49.0 | % | ||||||
| Gross profit (loss) per unit (5): | ||||||||||||||||||||||
| Ecommerce | $ | 3,629 | $ | 2,718 | $ | 911 | 33.5 | % | $ | 2,363 | $ | 2,413 | $ | (50 | ) | (2.1 | )% | |||||
| Wholesale | $ | (330 | ) | $ | 850 | $ | (1,180 | ) | (138.8 | )% | $ | (293 | ) | $ | 441 | $ | (734 | ) | (166.4 | )% |
(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 EndedJune 30, | Six Months EndedJune 30, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change | % Change | Change | % Change | |||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||
| Compensation & benefits | 68,891 | 51,811 | $ | 17,080 | 33.0 | % | 143,416 | 91,681 | $ | 51,735 | 56.4 | % | ||||||||
| Marketing expense | 21,138 | 23,495 | (2,357 | ) | (10.0 | )% | 54,874 | 53,053 | 1,821 | 3.4 | % | |||||||||
| Outbound logistics | 8,232 | 20,153 | (11,921 | ) | (59.2 | )% | 34,980 | 35,271 | (291 | ) | (0.8 | )% | ||||||||
| Occupancy and related costs | 5,721 | 4,042 | 1,679 | 41.5 | % | 11,367 | 7,964 | 3,403 | 42.7 | % | ||||||||||
| Professional fees | 6,827 | 4,259 | 2,568 | 60.3 | % | 20,126 | 8,257 | 11,869 | 143.7 | % | ||||||||||
| Software and IT costs | 11,306 | 6,855 | 4,451 | 64.9 | % | 22,129 | 12,135 | 9,994 | 82.4 | % | ||||||||||
| Other | 30,875 | 13,283 | 17,592 | 132.4 | % | 54,092 | 24,403 | 29,689 | 121.7 | % | ||||||||||
| Total selling, general & administrative expenses | 152,990 | 123,898 | $ | 29,092 | 23.5 | % | 340,984 | 232,764 | $ | 108,220 | 46.5 | % |
All values are in US Dollars.
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 securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, 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 securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, 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 EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain
We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense and we calculate Adjusted EBITDA as EBITDA adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, 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 15 months. 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. The following table presents a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain to net loss, which is the most directly comparable U.S. GAAP measure:
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in thousands) | (in thousands) | |||||||||||
| Net loss | $ | (115,089 | ) | $ | (65,807 | ) | $ | (425,548 | ) | $ | (142,996 | ) |
| Adjusted to exclude the following: | ||||||||||||
| Interest expense | 9,533 | 3,880 | 18,913 | 7,692 | ||||||||
| Interest income | (3,935 | ) | (2,062 | ) | (7,887 | ) | (4,358 | ) | ||||
| (Benefit) provision for income taxes | 256 | 194 | (22,984 | ) | 350 | |||||||
| Depreciation and amortization | 10,115 | 3,122 | 18,010 | 6,028 | ||||||||
| EBITDA | $ | (99,120 | ) | $ | (60,673 | ) | $ | (419,496 | ) | $ | (133,284 | ) |
| Realignment costs | $ | 9,529 | $ | — | $ | 9,529 | $ | — | ||||
| Acquisition related costs | — | — | 5,653 | — | ||||||||
| Change in fair value of finance receivables | 1,846 | — | 7,467 | — | ||||||||
| Goodwill impairment charge | — | — | 201,703 | — | ||||||||
| Other | 2,127 | — | 2,127 | — | ||||||||
| Adjusted EBITDA | $ | (85,618 | ) | $ | (60,673 | ) | $ | (193,017 | ) | $ | (133,284 | ) |
| Securitization gain | — | — | $ | (29,617 | ) | — | ||||||
| Adjusted EBITDA excluding securitization gain | $ | (85,618 | ) | $ | (60,673 | ) | $ | (222,634 | ) | $ | (133,284 | ) |
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
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, 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". We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding. 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. 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 Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain to net loss and net loss per share, which are the most directly comparable U.S. GAAP measures:
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| Net loss | $ | (115,089 | ) | $ | (65,807 | ) | $ | (425,548 | ) | $ | (142,996 | ) |
| Net loss attributable to common stockholders | $ | (115,089 | ) | $ | (65,807 | ) | $ | (425,548 | ) | $ | (142,996 | ) |
| Add: Realignment costs | 9,529 | — | 9,529 | — | ||||||||
| Add: Acquisition related costs | — | — | 5,653 | — | ||||||||
| Add: Change in fair value of finance receivables | 1,846 | — | 7,467 | — | ||||||||
| Add: Goodwill impairment charge | — | — | 201,703 | — | ||||||||
| Add: Other | 2,127 | — | 2,127 | — | ||||||||
| Non-GAAP net loss | $ | (101,587 | ) | $ | (65,807 | ) | $ | (199,069 | ) | $ | (142,996 | ) |
| Subtract: Securitization gain | — | — | (29,617 | ) | — | |||||||
| Non-GAAP net loss excluding securitization gain | $ | (101,587 | ) | $ | (65,807 | ) | $ | (228,686 | ) | $ | (142,996 | ) |
| Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 138,075,210 | 136,507,177 | 137,667,419 | 136,002,344 | ||||||||
| Net loss per share, basic and diluted | $ | (0.83 | ) | $ | (0.48 | ) | $ | (3.09 | ) | $ | (1.05 | ) |
| Impact of realignment costs | 0.07 | — | 0.07 | — | ||||||||
| Impact of acquisition related costs | — | — | 0.04 | — | ||||||||
| Impact of change in fair value of finance receivables | 0.01 | — | 0.05 | — | ||||||||
| Impact of goodwill impairment charge | — | — | 1.47 | — | ||||||||
| Impact of other | 0.02 | — | 0.02 | — | ||||||||
| Non-GAAP net loss per share, basic and diluted | $ | (0.73 | ) | $ | (0.48 | ) | $ | (1.44 | ) | $ | (1.05 | ) |
| Impact of securitization gain | — | — | (0.22 | ) | — | |||||||
| Non-GAAP net loss per share excluding securitization gain, basic and diluted | $ | (0.73 | ) | $ | (0.48 | ) | $ | (1.66 | ) | $ | (1.05 | ) |
SECOND QUARTER 2022 AS COMPARED TO FIRST QUARTER 2022
| Three Months Ended<br>June 30, | Three Months Ended<br>March 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | Change | % Change | |||||||||||
| (in thousands, except unit data) | ||||||||||||||
| Total revenues | $ | 475,437 | $ | 923,775 | $ | (448,338 | ) | (48.5 | )% | |||||
| Total gross profit | $ | 66,357 | $ | 81,640 | $ | (15,283 | ) | (18.7 | )% | |||||
| Ecommerce units sold | 9,233 | 19,473 | (10,240 | ) | (52.6 | )% | ||||||||
| Ecommerce revenue | $ | 321,632 | $ | 675,364 | $ | (353,732 | ) | (52.4 | )% | |||||
| Ecommerce gross profit | $ | 33,509 | $ | 34,320 | $ | (811 | ) | (2.4 | )% | |||||
| Vehicle gross profit per ecommerce unit | $ | 2,166 | $ | 595 | $ | 1,571 | 264.0 | % | ||||||
| Product gross profit per ecommerce unit | 1,463 | 1,168 | 295 | 25.3 | % | |||||||||
| Total gross profit per ecommerce unit | $ | 3,629 | $ | 1,763 | $ | 1,866 | 105.8 | % | ||||||
| Wholesale units sold | 5,867 | 10,113 | (4,246 | ) | (42.0 | )% | ||||||||
| Wholesale revenue | $ | 82,901 | $ | 139,984 | $ | (57,083 | ) | (40.8 | )% | |||||
| Wholesale gross loss | $ | (1,934 | ) | $ | (2,753 | ) | $ | 819 | 29.7 | % | ||||
| Wholesale gross loss per unit | $ | (330 | ) | $ | (272 | ) | $ | (58 | ) | (21.2 | )% | |||
| Retail Financing revenue | $ | 32,121 | $ | 47,687 | $ | (15,566 | ) | (32.6 | )% | |||||
| Retail Financing gross profit | $ | 28,720 | $ | 44,963 | $ | (16,243 | ) | (36.1 | )% | |||||
| Total selling, general, and administrative expenses | $ | 152,990 | $ | 187,994 | $ | (35,004 | ) | (18.6 | )% | |||||
| Three Months Ended<br>June 30, | Three Months Ended<br>March 31, | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| 2022 | 2022 | Change | % Change | |||||||||||
| (in thousands) | ||||||||||||||
| Net loss | $ | (115,089 | ) | $ | (310,459 | ) | $ | 195,370 | 62.9 | % | ||||
| Adjusted to exclude the following: | ||||||||||||||
| Interest expense | 9,533 | 9,380 | 153 | 1.6 | % | |||||||||
| Interest income | (3,935 | ) | (3,952 | ) | 17 | 0.4 | % | |||||||
| (Benefit) provision for income taxes | 256 | (23,240 | ) | 23,496 | 101.1 | % | ||||||||
| Depreciation and amortization | 10,115 | 7,895 | 2,220 | 28.1 | % | |||||||||
| EBITDA | $ | (99,120 | ) | $ | (320,376 | ) | $ | 221,256 | 69.1 | % | ||||
| Realignment costs | $ | 9,529 | $ | — | $ | 9,529 | 100.0 | % | ||||||
| Acquisition related costs | — | 5,653 | (5,653 | ) | (100.0 | )% | ||||||||
| Change in fair value of finance receivables | 1,846 | 5,621 | (3,775 | ) | (67.2 | )% | ||||||||
| Goodwill impairment charge | — | 201,703 | (201,703 | ) | (100.0 | )% | ||||||||
| Other | 2,127 | — | 2,127 | 100.0 | % | |||||||||
| Adjusted EBITDA | $ | (85,618 | ) | $ | (107,399 | ) | $ | 21,781 | 20.3 | % | ||||
| Securitization gain | — | (29,617 | ) | 29,617 | 100.0 | % | ||||||||
| Adjusted EBITDA excluding securitization gain | $ | (85,618 | ) | $ | (137,016 | ) | $ | 51,398 | 37.5 | % |
Conference Call & Webcast Information
Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Tuesday, August 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, 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 June 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.
Investor Relations:
Vroom
Liam Harrington
investors@vroom.com
Media Contact:
Current Global
Danny Finlay
dfinlay@currentglobal.com
VROOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
| As of | |||||
|---|---|---|---|---|---|
| December 31, | |||||
| 2021 | |||||
| ASSETS | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 532,642 | $ | 1,132,325 | ||
| Restricted cash (including restricted cash of consolidated VIEs of 33.5 million and 0 million, respectively) | 153,741 | 82,450 | |||
| Accounts receivable, net of allowance of 19.5 million and 8.9 million, respectively | 60,122 | 105,433 | |||
| Finance receivables at fair value (including finance receivables of consolidated VIEs of 13.6 million and 0 million, respectively) | 14,461 | — | |||
| Finance receivables held for sale, net (including finance receivables of consolidated VIEs of 253.1 million and 0 million, respectively) | 295,303 | — | |||
| Inventory | 535,772 | 726,384 | |||
| Beneficial interests in securitizations | 13,432 | — | |||
| Prepaid expenses and other current assets | 61,430 | 55,700 | |||
| Total current assets | 1,666,903 | 2,102,292 | |||
| Finance receivables at fair value (including finance receivables of consolidated VIEs of 164.6 million and 0 million, respectively) | 213,323 | — | |||
| Property and equipment, net | 49,836 | 37,042 | |||
| Intangible assets, net | 172,425 | 28,207 | |||
| Goodwill | — | 158,817 | |||
| Operating lease right-of-use assets | 11,281 | 15,359 | |||
| Other assets | 28,531 | 25,033 | |||
| Total assets | 2,142,299 | $ | 2,366,750 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current Liabilities: | |||||
| Accounts payable | 43,631 | $ | 52,651 | ||
| Accrued expenses | 107,091 | 121,508 | |||
| Vehicle floorplan | 422,452 | 512,801 | |||
| Warehouse credit facilities of consolidated VIEs | 210,577 | — | |||
| Current portion of securitization debt of consolidated VIEs at fair value | 115,325 | — | |||
| Deferred revenue | 17,800 | 75,803 | |||
| Operating lease liabilities, current | 7,097 | 6,889 | |||
| Other current liabilities | 22,139 | 57,604 | |||
| Total current liabilities | 946,112 | 827,256 | |||
| Long term debt, net of current portion (including securitization debt of consolidated VIEs of 51.8 million and 0 million at fair value, respectively) | 674,331 | 610,618 | |||
| Operating lease liabilities, excluding current portion | 8,347 | 9,592 | |||
| Other long-term liabilities | 18,458 | 4,090 | |||
| Total liabilities | 1,647,248 | 1,451,556 | |||
| Commitments and contingencies (Note 13) | |||||
| Stockholders’ equity: | |||||
| Common stock, 0.001 par value; 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 138,102,755 and 137,092,891 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 135 | 135 | |||
| Additional paid-in-capital | 2,069,246 | 2,063,841 | |||
| Accumulated deficit | (1,574,330 | ) | (1,148,782 | ) | |
| Total stockholders’ equity | 495,051 | 915,194 | |||
| Total liabilities and stockholders’ equity | 2,142,299 | $ | 2,366,750 |
All values are in US Dollars.
VROOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenue: | ||||||||||||
| Retail vehicle, net | $ | 341,724 | $ | 608,116 | $ | 1,048,910 | $ | 1,062,439 | ||||
| Wholesale vehicle | 82,901 | 128,108 | 222,885 | 246,132 | ||||||||
| Product, net | 14,324 | 22,306 | 38,773 | 37,878 | ||||||||
| Finance | 32,121 | — | 79,808 | — | ||||||||
| Other | 4,367 | 3,360 | 8,836 | 6,559 | ||||||||
| Total revenue | 475,437 | 761,890 | 1,399,212 | 1,353,008 | ||||||||
| Cost of sales: | ||||||||||||
| Retail vehicle | 319,903 | 577,636 | 1,015,412 | 1,012,903 | ||||||||
| Wholesale vehicle | 84,834 | 119,592 | 227,571 | 237,898 | ||||||||
| Finance | 3,402 | — | 6,126 | — | ||||||||
| Other | 941 | 1,534 | 2,106 | 2,903 | ||||||||
| Total cost of sales | 409,080 | 698,762 | 1,251,215 | 1,253,704 | ||||||||
| Total gross profit | 66,357 | 63,128 | 147,997 | 99,304 | ||||||||
| Selling, general and administrative expenses | 152,990 | 123,898 | 340,984 | 232,764 | ||||||||
| Depreciation and amortization | 10,039 | 3,058 | 17,895 | 5,900 | ||||||||
| Impairment charges | 3,407 | — | 205,110 | — | ||||||||
| Loss from operations | (100,079 | ) | (63,828 | ) | (415,992 | ) | (139,360 | ) | ||||
| Interest expense | 9,533 | 3,880 | 18,913 | 7,692 | ||||||||
| Interest income | (3,935 | ) | (2,062 | ) | (7,887 | ) | (4,358 | ) | ||||
| Other loss (income), net | 9,156 | (33 | ) | 21,514 | (48 | ) | ||||||
| Loss before provision for income taxes | (114,833 | ) | (65,613 | ) | (448,532 | ) | (142,646 | ) | ||||
| Provision (benefit) for income taxes | 256 | 194 | (22,984 | ) | 350 | |||||||
| Net loss | $ | (115,089 | ) | $ | (65,807 | ) | $ | (425,548 | ) | $ | (142,996 | ) |
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.83 | ) | $ | (0.48 | ) | $ | (3.09 | ) | $ | (1.05 | ) |
| Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | 138,075,210 | 136,507,177 | 137,667,419 | 136,002,344 |
VROOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| 2021 | |||||
| Operating activities | |||||
| Net loss | (425,548 | ) | $ | (142,996 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||
| Impairment charges | 205,110 | — | |||
| Depreciation and amortization | 18,010 | 6,028 | |||
| Amortization of debt issuance costs | 2,523 | 698 | |||
| Realized gain on the 2022-1 securitization transaction | (29,617 | ) | — | ||
| Deferred taxes | (23,855 | ) | — | ||
| Losses on finance receivables and securitization debt, net | 29,457 | — | |||
| Stock-based compensation expense | 5,405 | 8,212 | |||
| Provision to record inventory at lower of cost or net realizable value | (2,006 | ) | 3,093 | ||
| Other, net | 3,466 | 2,818 | |||
| Changes in operating assets and liabilities: | |||||
| Finance receivables, held for sale | |||||
| Originations of finance receivables held for sale | (319,314 | ) | — | ||
| Principal payments received on finance receivables held for sale | 23,179 | — | |||
| Proceeds from sale of finance receivables held for sale, net | 271,820 | — | |||
| Other | (4,011 | ) | — | ||
| Accounts receivable | 34,192 | (41,393 | ) | ||
| Inventory | 192,618 | (99,412 | ) | ||
| Prepaid expenses and other current assets | 13,513 | (26,669 | ) | ||
| Other assets | (1,670 | ) | (3,948 | ) | |
| Accounts payable | (15,352 | ) | 36,507 | ||
| Accrued expenses | (23,832 | ) | 26,306 | ||
| Deferred revenue | (58,003 | ) | 16,788 | ||
| Other liabilities | (33,604 | ) | 62,117 | ||
| Net cash used in operating activities | (137,519 | ) | (151,851 | ) | |
| 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 | 74,690 | — | |||
| Proceeds from sale of finance receivables at fair value, net | 29,026 | — | |||
| Principal payments received on beneficial interests | 2,720 | — | |||
| Purchase of property and equipment | (16,046 | ) | (8,943 | ) | |
| Acquisition of business, net of cash acquired of 47.9 million | (267,488 | ) | (76,145 | ) | |
| Net cash used in investing activities | (226,573 | ) | (85,088 | ) | |
| Financing activities | |||||
| Principal repayment under secured financing agreements | (105,563 | ) | — | ||
| Proceeds from vehicle floorplan | 1,074,184 | 1,070,110 | |||
| Repayments of vehicle floorplan | (1,164,533 | ) | (1,035,727 | ) | |
| Proceeds from warehouse credit facilities | 261,700 | — | |||
| Repayments of warehouse credit facilities | (228,744 | ) | — | ||
| Other financing activities | (1,344 | ) | — | ||
| Proceeds from issuance of convertible senior notes | — | 625,000 | |||
| Issuance costs paid for convertible senior notes | — | (16,175 | ) | ||
| Proceeds from exercise of stock options | — | 4,381 | |||
| Net cash (used in) provided by financing activities | (164,300 | ) | 647,589 | ||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (528,392 | ) | 410,650 | ||
| 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 | 686,383 | $ | 1,500,689 |
All values are in US Dollars.
| Supplemental disclosure of cash flow information: | ||||
|---|---|---|---|---|
| Cash paid for interest | $ | 16,299 | $ | 6,713 |
| Cash paid for income taxes | $ | 2,062 | $ | 269 |
| Supplemental disclosure of non-cash investing and financing activities: | ||||
| Fair value of beneficial interests received in securitization transactions | $ | 16,473 | $ | — |
| Issuance of common stock for CarStory acquisition | $ | — | $ | 39,030 |
| Fair value of unvested stock options assumed for acquisition of business | $ | — | $ | 1,017 |
EX-99.2
Exhibit 99.2
Vroom Second Quarter 2022 Earnings August 2022
disclaimer Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding the expected timeline, our execution of and the expected benefits from our business Realignment Plan and cost-saving initiatives, our expectations regarding our business strategy and plans, including our ongoing efforts to integrate and develop United Auto Credit Corporation into a captive finance operation, as well as our ability to scale our business, address operational challenges, expand reconditioning capacity, invest in logistics and improve our end-to-end customer experience, and statements regarding our future results of operations and financial position, including our ability to improve our unit economics, lower our operating expenses and our financial outlook including with respect to our liquidity, our profitability, changes to our leadership team, and our cash balances, for the fiscal year 2022. 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 presentation, 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 June 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 presentation. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Industry and Market Information To the extent this presentation includes information concerning the industry and the markets in which the Company operates, including general observations, expectations, market position, market opportunity and market size, such information is based on management's knowledge and experience in the markets in which we operate, including publicly available information from independent industry analysts and publications, as well as the Company’s own estimates. Our estimates are based on third-party sources, as well as internal research, which the Company believes to be reasonable, but which are inherently uncertain and imprecise. Accordingly, you are cautioned not to place undue reliance on such market and industry information. Financial Presentation and Use of Non-GAAP Financial Measures Certain monetary amounts, percentages and other figures included in this presentation have been subject to rounding adjustments. Certain other amounts that appear in this presentation may not sum due to rounding. This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are in addition to, and not a substitute or superior to, measures of financial performance prepared in accordance with GAAP. 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. We have reconciled all non-GAAP financial measures with the most directly comparable U.S. GAAP financial measures.
We are Focused on our objectives and Strategic initiatives We aim to improve the customer experience while we live within our means, prioritize profitability and liquidity, and drive unit economics 3 Key Objectives 1. Prioritize unit economics over growth 2. reduce operating expenses 3. Maximize liquidity 4 Focused Strategic Initiatives Build a well-oiled transaction machine Build a well-oiled metal machine Build a regional operating model Build a captive finance offering 4 Strategic initiatives expected to build a profitable business model 3 V
Second quarter operational highlights strategic initiatives driving planned improvements key performance indicators $51m, from ($137)m to ($86)m, sequential improvement in adjusted ebitda excluding securitization gain; a 38% improvement (1) $3,629 ecommerce gross profit per unit (gppu) reflecting progress toward our long-term goal $52m reduction in adjusted sg&a vs 1q 2022(2) progress on strategic objectives development of captive financing operation on plan pricing initiatives driving gppu improvements significant improvement in transaction processing including titling and registration continued titling and registration tech development. Planned deployment in 2h 2022 toward goal of becoming best in class in titling and registration 2q 2022 performance highlights first quarter second quarter total revenue $924 million $475 million ecommerce units 19,473 9,233 ecommerce gppu $1,763 $3,629 adjusted ebitda (1) ($107) million ($86) million adjusted ebitda ex. Securitization gain (1) ($137) million ($86) million net loss(3) ($310) million ($115) million previously issued fy 2022 guidance (4) guidance current outlook ecommerce units 45,000 - 55,000 expect low-end or below adjusted ebitda (1) (4) ($375) - ($325) million expect mid-point or better year-end liquidity (5) $450 - $565 million expect mid-point adjusted ebitda and adjusted ebitda excluding securitization gain are non-gaap measures. For a definition of adjusted ebitda and adjusted ebitda excluding securitization gain, and a reconciliation to the most comparable gaap measure, please see the appendix. Adjusted sg&a is a non-gaap measure. For a definition and reconciliation to the most comparable gaap measure, please see the appendix. First quarter net loss includes a $202 million non-cash impairment charge. A reconciliation of non-gaap guidance measures to corresponding gaap measures for 2022 guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, these costs and expenses that may be incurred in the future. Represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability. Progress on our long-term roadmap 4 V
Second quarter Operational highlights Operational progress on our 4 strategic initiatives Financial Lever Initiative 1q to 2q progress Product GPPU Originate and securitize Vroom loans through UACC $3,629 Ecommerce GPPU Development of captive financing operation on plan Began improvements to our pricing model Vehicle GPPU Optimize pricing through predictive data and regionalization Optimize assortment GPPU & SG&A - Logistics(1) Synchronize end-to-end supply chain to increase velocity and optimize flow ~$20M reduction in all-in logistics costs(2) Optimizing logistics operations began in 3Q 2022 Balance Sheet - Inventory 21% improvement in available for sale inventory as a result of transforming the titling process SG&A - Sales(1) Optimize sales channels by selective insourcing and digitization ~$8M reduction in sales costs.(3) Began sales pilot and ecommerce initiatives SG&A - T&R(1) Streamline and digitize title and registration process ~$3M increase as we focus on improving the customer experience while we make improvements in transaction processes(4) Continued tech development with deployments planned in 2H 2022 SG&A - Marketing(1) Improve marketing effectiveness ~$15M reduction in marketing costs(5) Reduction in cost per opportunity SG&A - Fixed(1) Grow fixed cost slower than revenue ~$12M reduction in fixed costs(6) Planned relocation of Texas reconditioning facility to a lower cost existing TDA service site (1) Constitutes a component of Adjusted SG&A which is a non-GAAP measure. For a definition and reconciliation to the most comparable GAAP measure, please see the appendix. (2) All-in logistics costs include compensation and benefits related to operating our proprietary logistics network in addition to fuel, tolls, and maintenance expenses related to operating our proprietary logistics network and third-party transportation fees. (3) $8 million reduction primarily in fees paid to third-party sales and sales support providers. (4) Costs related to titling & registration operations exclude non-recurring costs. (5) Reduction in marketing expense excluding other costs. (6) Fixed costs reflect costs across compensation & benefits, occupancy, other SG&A, and professional fee expenses. Fixed costs exclude non-recurring costs, realignment costs, and SG&A related to UACC operations. 4 Strategic initiatives designed to build a profitable business model 5 V
Vroom Second Quarter 2022 Financial Update
Second quarter financial summary record gppu; reduced operating costs 2q 2022 performance highlights 2q 2022 performance vs 1q 2022 first quarter second quarter total revenue $924 million $475 million ecommerce units 19,473 9,233 ecommerce gppu $1,763 $3,629 adjusted ebitda (1) ($107) million ($86) million adjusted ebitda ex. Securitization gain (1) ($137) million ($86) million net loss(2) ($310) million ($115) million total revenue down 49% revenue decline consistent with strategic decision to reduce ecommerce units ecommerce units down 53% chose to reduce the number of ecommerce units to focus on improving operational execution record ecommerce gppu of $3,629 up 106% focus on optimizing gppu over unit volume adjusted ebitda loss improves $21 million(1) $51 million improvement in adjusted ebitda excluding securitization gain compared to the first quarter(1) driven by gppu improvement as well as decreased variable and fixed costs includes $8 million of non-recurring costs to address operational and customer experience issues adjusted ebitda excluding securitization gain and non-recurring costs improved by $59 million from the first quarter (1) adjusted ebitda, adjusted ebitda excluding securitization gain, and adjusted ebitda excluding non-recurring costs and securitization gain are non-gaap measures. For a definition of adjusted ebitda, adjusted ebitda excluding securitization gain, and adjusted ebitda excluding non-recurring costs and securitization gain, and a reconciliation to the most comparable gaap measure, please see the appendix. First quarter net loss includes a $202 million non-cash impairment charge. $51m improvement in adjusted ebitda ex. Securitization gain, $59m ex. Non-recurring, securitization gain (1) 7 V
Second quarter financial highlights Record GPPU Sequential trends 2q 2022 Performance vs 1q 2022 -114% -89% -41% ($120) ($137) ($86) 4Q 2021 1Q 2022 2Q2022 21,243 19,473, 9,233 +93% +26% -49% 4Q 2021 1Q 2022 2Q 2022 $473 $595 $2,166 -46% -48% +36% 4Q2021 1Q2022 2Q 2022 $1,075 $1,168 $1,463 +14% +29% 29% 4Q2021 1Q2022 2Q 2022 -11% -50% -179% ($5,642) ($7,036) ($9,273) 4Q 2021 1Q 2022 2Q 2022 Adjusted ebitda ($m) (1) Ecommerce units Ecommerce VGPPU (2) Ecommerce PGPPU (3) Adjusted ebitda per unit (1) (4) yoy yoy yoy yoy yoy Adj. ebitda ex. securitization gain improved $51 million(1) Driven by GPPU improvement as well as decreased variable and fixed costs Ecommerce units down 53% Chose to reduce the number of units to focus on improving operational execution Ecommerce vehicle GPPU up 264% Primarily driven by revised pricing algorithms to focus on optimizing gross profit per unit vs volume Ecommerce product GPPU up 25% Driven primarily by interest income due to a higher volume of loans held by UACC for Vroom customers Adj. ebitda ex. securitization gain per ecommerce unit down 32%(1) Cost reductions did not decline at the same rate as unit volumes Increase in titling & registration costs as we focus on improving the customer experience and the transaction process (1) Adjusted EBITDA excluding securitization gain are non-GAAP measures. For a definition of Adjusted EBITDA excluding securitization gain and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Vehicle gross profit per unit. (3) Product gross profit per unit. (4) Per ecommerce unit. Progress on our long-term roadmap 8 V
2q 2022 adjusted ebitda ex. Securitization gain(1) ($ in millions) Commentary Lower unit volume offset by higher Ecom GPPU $15M increase in Non-Ecommerce GP, primarily driven by increased Retail Financing GP as our results benefitted from a full quarter of business activity vs the prior quarter $19M reduction in Outbound Logistics costs due to lower unit volumes $15M reduction in Marketing Expense driven by variable cost reductions and shifting towards more efficient marketing channels(3) $11M reduction in Compensation & Benefits primarily driven by the realignment plan (4) $8M impact from non-recurring costs to address operational and customer experience issues in the second quarter ($137) ($18) $17 $15 $19 $15 $11 ($77) ($8) ($86) $51M improvement $59M improvement 1Q 2022(1) Ecom Volume GP(2)Ecom GPPU(2) Non-Ecom GP Outbound Logistics Marketing(3)Comp & Benefits(4) Adj. EBITDA ex. Non-Recurring 2Q 2022(1)Non-Recurring CX and Operational Costs 2Q 2022(1) $14M improvement(1) Adjusted EBITDA, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding non-recurring costs and securitization gain are non-GAAP measures. For a definition of Adjusted EBITDA, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding non-recurring costs and securitization gain, and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Impact from Ecommerce volume gross profit is estimated by multiplying 1Q 2022 Ecom GPPU by the sequential change in units. Ecom GPPU impact is estimated by multiplying 2Q 2022 units by the sequential change in Ecom GPPU. (3) Excludes $2.1 million of other costs. (4) Excludes $4.9 million of realignment costs. $51m improvement in adjusted ebitda ex. securitization gain, $59m ex. Non-recurring, securitization gain(1) 9 V
Liquidity update ended quarter with $533 million in liquidity(1)($ in millions) Liquidity sources $450-$565M in liquidity expected at 12/31/2022E Provides flexibility in near term and ability to drive future growth $700m vehicle floorplan facility until March 2023 Other sources of liquidity Working capital efficiencies Future ABS and forward-flow transactions Ability to add modest leverage to UACC’s balance sheet $533 ($182)-($132) ($36)-($26) $5-$10 ~$10 $82-$107 $39-$64 $450-$565 6/30/22 Liquidity 3Q-4Q Adjusted EBIDTA(2) Capex Stock-Based Compensation UACC/Vroom Financing Restricted Cash Release Cash in Inventory 12/31/22E Liquidity (1) Represents unrestricted cash and cash equivalents. Excludes restricted cash and floorplan availability (2) Adjusted EBITDA is a non-GAAP measure. For a definition of Adjusted EBITDA and a reconciliation to the most comparable GAAP measure, please see the appendix. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for 2022 guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, these costs and expenses that may be incurred in the future. Forecasting year-end liquidity in the range of $450M-$565M 10 V
Summary Strong second quarter performance $51M, from ($137)M to ($86)M, sequential improvement in Adjusted EBITDA ex. securitization gain; a 38% improvement(1) Ecommerce gppu of $3,629 reflects progress toward our long-term goal $52m sequential reduction in adjusted SG&A(2) Development of captive financing operation on plan Significant improvement in transaction processing including titling & registration forecasting ~$500 million in liquidity at year end(3) Adjusted EBITDA and Adjusted EBITDA excluding securitization gain are non-GAAP measures. For a definition of Adjusted EBITDA and Adjusted EBITDA excluding securitization gain, and a reconciliation to the most comparable GAAP measure, please see the appendix. Adjusted SG&A is a non-GAAP measure. For a definition and reconciliation to the most comparable GAAP measure, please see the appendix. Represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability.progress on our long term roadmap 11 V
Vroom Appendix
Reconciliation of Non-GAAP Financial measuresEBITDA, Adjusted EBITDA, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense and we calculate Adjusted EBITDA as EBITDA adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, 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 15 months. We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables as it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results. 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 EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues to net loss, which is the most directly comparable U.S. GAAP measure: Three Months Ended June 30, Three Months Ended March 31, Three Months Ended December 31, 2022 2022 2021 Net loss (115,089) $ (310,459) $ (129,793) $ Adjusted to exclude the following: Interest expense 9,533 9,380 7,228 Interest income (3,935) (3,952) (3,053) (Benefit) provision for income taxes 256 (23,240) 375 Depreciation and amortization 10,115 7,895 3,718 EBITDA (99,120) $ (320,376) $ (121,525) $ Realignment costs 9,529 $ — $ — $ Acquisition related costs — 5,653 1,678 Change in fair value of finance receivables 1,846 5,621 — Goodwill impairment charge — 201,703 — Other 2,127 — — Adjusted EBITDA (85,618) $ (107,399) $ (119,847) $ Securitization gain — (29,617) — Adjusted EBITDA excluding securitization gain (85,618) $ (137,016) $ (119,847) $ Non-recurring costs to address operational and customer experience issues 8,274 — — Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues (77,344) $ (137,016) $ (119,847) 2022 Vroom, All rights reserved 13 V
Reconciliation of Non-GAAP Financial measures (cont’d) Adjusted selling, general & administrative expenses We calculate adjusted selling, general & administrative expenses as selling, general & administrative expenses adjusted to exclude realignment costs, acquisition related costs, non-recurring costs to address operational and customer experience issues, UACC selling, general & administrative expenses 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". The following table presents a reconciliation of adjusted selling, general & administrative expenses to selling, general & administrative expenses, which is the most directly comparable U.S. GAAP measure: Three Months Ended June 30, Three Months Ended March 31, Three Months Ended December 31, 2022 2022 2021 Total selling, general & administrative expenses $ 152,990 $ 187,994 $ 166,341 Adjusted to exclude the following: Realignment costs 6,122 — — Acquisition related costs — 5,653 1,678 Non-recurring costs to address operational and customer experience issues 8,274 — — UACC selling, general & administrative expenses 16,646 10,557 — Other 2,127 — — Adjusted selling, general & administrative expenses $ 119,821 $ 171,784 $ 164,663 (in thousands) Note: We exclude UACC selling, general & administrative expenses for comparability since only 2 months of expense are included in the first quarter vs 3 months of expense that are included in the second quarter, as UACC was acquired on February 1st, 2022. Such amounts are not excluded from adjusted EBITDA. 14 v 2022 Vroom, All rights reserved
Thank you! 15 v 2022 Vroom, All rights reserved.