8-K
false000158086400015808642022-11-072022-11-07

 

 

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): November 7, 2022

 

 

VROOM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

Delaware

 

001-39315

 

90-1112566

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

3600 W Sam Houston Pkwy S, Floor 4
Houston, 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 November 7, 2022, Vroom, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 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 November 8, 2022, members of the Company’s management will hold an earnings conference call to discuss the Company’s financial results for the quarter ended September 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 November 7, 2022.

99.2

 

Earnings Conference Call Presentation for the Quarter Ended September 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: November 7, 2022

 

By:

 

/s/ Robert R. Krakowiak

 

 

 

 

Robert R. Krakowiak

 

 

 

 

Chief Financial Officer

 

 


EX-99.1

https://cdn.kscope.io/3028bc007a1550bd4f4a81b87c6f8c2c-img63169428_0.jpg  

Exhibit 99.1

 

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

Continued Progress on Long-Term Roadmap

 

NEW YORK – November 7, 2022 – 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

%

 

 

2

 


 

 

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.

 

 

3

 


 

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.

 

4

 


 

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.

 

5

 


 

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

)

 

6

 


 

 

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.

 

7

 


 

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

)

 

8

 


 

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

%

 

9

 


 

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.

 

Investor Relations:

 

Vroom

Liam Harrington

investors@vroom.com

 

Media Contact:

 

Current Global

Danny Finlay

dfinlay@currentglobal.com

 

 

10

 


 

 

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

 

 

 

11

 


 

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

 

 

 

12

 


 

 

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

 

 

13

 


 

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

 

 

14

 


EX-99.2

Exhibit 99.2

 

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vroom Third Quarter2022 Earnings November 2022


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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, 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 September 30, 2022, each of which is available on our Investor Relations website at ir.vroom.comand 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 in the Appendix to this presentation.


https://cdn.kscope.io/3028bc007a1550bd4f4a81b87c6f8c2c-img64092949_2.jpg 

 

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 4 Focused Strategic Initiatives 1 Prioritize unit economics over growth 2 Significantly reduce operating expenses 3 Maximize liquidity Build a well-oiled transaction machine Build a well-oiled metal machine Build a regional operating model Build a captive finance offering 3 4 Strategic initiatives expected to build a profitable business model 3


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Third quarter highlights key performance indicators $20M improvement in Adjusted EBITDA ex. non-recurring costs, a 26% sequential improvement(1) $4,206 Ecommerce Gross Profit Per Unit (GPPU) $21M sequential reduction in Adjusted SG&A driven by lower variable and fixed costs(2) $16M gain on UACC securitization $59M sequential reduction in restricted cash primarily driven by improvements in titling and registration progress on key objectives and strategic initiatives 98% of customers received their registration before the expiration of their initial temporary tag in October Transitioning Stafford reconditioning center to the TDA service center location Long-term roadmap planned to slowly insource sales over time; unexpected staff reductions at our third-party sales partner mid-quarter resulted in accelerated insourcing of the sales function; we expect to be fully staffed in 1Q 2023 Continued focus on reducing variable and fixed costs $56M repurchase of convertible notes for $18M(3) 3q 2022 Performance Highlights previously issued fy 2022 Guidance (5) Second quarter Third quarter Guidance Current outlook Total Revenue $475.4 million $340.8 million Ecommerce units 45,000 - 55,000 Expect below range Ecommerce Units 9,233 6,428 Adjusted EBITDA (1) (5) ($375) - ($325) million Expect better than mid-point Ecommerce GPPU $3,629 $4,206 Year-end liquidity (6) $450 - $565 million Expect near mid-point Adjusted EBITDa (1) ($85.6) million ($73.3) million Adjusted EBITDa ex. Non-recurring costs (1) ($77.3) million ($57.5) million Adjusted EBITDa ex. Securitization gain & Non-recurring costs (1) ($77.3) million ($73.5) million Net loss(4) ($115.1) million ($51.1) million (1) Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs, and Adjusted EBITDA excluding securitization gain and non-recurring costs are non-GAAP measures. For definitions and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Adjusted SG&A is a non-GAAP measure. For a definition and reconciliation to the most comparable GAAP measure, please see the appendix. (3) $56M in aggregate principal amount net of deferred issuance costs. (4) Third quarter net loss includes a $38M gain on debt extinguishment. (5) 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. (6) Represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability. Execution on long-term roadmap on track 4


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Third quarter Operational highlights Operational progress on our 4 strategic initiatives Financial Lever Initiative 2q to 3q progress Product GPPU Originate and securitize Vroom loans through UACC $4,206 Ecommerce GPPU Continued improvements to pricing model Development of captive financing on plan 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 ~$5M reduction in all-in logistics costs(2) Improved Vroom-operated linehaul and last mile service Transitioning Stafford reconditioning center to the TDA service center location Balance Sheet – Inventory As we continue to improve the titling process we expect this to increase the number of vehicles we list for sale and reduce the number of vehicles listed as coming soon. We expect this to improve our inventory turns SG&A - Sales(1) Optimize sales channels by selective insourcing and digitization SG&A – Titling, Registration & Support(1) Streamline and digitize title and registration process Unexpected staff reductions at our third-party sales partner accelerated insourcing our sales function. $1.3M reduction in selling costs(3) Significant improvement in registration process. 98% of customers received their registration before the expiration of their initial temporary tag in October Continued improvement in titling of vehicles not listed for sale. As we receive titles of aged vehicles we expect pressure on 4Q GPPU ~$5.9M reduction in titling, registration and support costs(4) SG&A - Marketing(1) Improve marketing effectiveness ~$4M reduction in marketing costs Continued focus on marketing ROI SG&A - Fixed(1) Grow fixed cost slower than revenue ~$4M decrease in fixed costs(5) We continue to focus on fixed cost reduction (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) Primarily reflects third-party and owned compensation costs related to sales operations. (4) Titling, registration, & support costs include compensation & benefits related to these functions as well as third-party support costs and associated processing fees. Excludes non-recurring costs. (5) 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


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ecommerce unit trends(1) In July As registrations and our customer experience (CX) improved we took steps to normalize unit sales; mid-quarter our third-party sales partner significantly reduced sales staff As registrations and CX improved, we took steps to normalize unit sales Mid-quarter large, unexpected reduction of sales staff by third-party partner Macroeconomic and other variables +36% -30% -13% July August September October(1) Ecommerce unit sales before return reserves. accelerated insourcing of our sales function; we expect to be fully staffed in 1q 2023 6


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Vroom Third Quarter 2022 Financial Update


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third quarter financial summary cost reductions; securitization gain, higher gppu drive sequential adjusted ebitda improvement 3q 2022 perfomance highlights 3q 2022 performance vs 2q 2022 second quarter third quarter Total Revenue $475.4 million $340.8 million Ecommerce Units 9,233 6,428 Ecommerce GPPU $3,629 $4,206 Adjusted EBITDa (1) ($85.6) million ($73.3) million Adjusted EBITDa ex. Non-recurring costs (1) ($77.3) million ($57.5) million Adjusted EBITDa ex. Securitization gain & Non-recurring costs (1) ($77.3) million ($73.5) million Net loss(2) ($115.1) million ($51.1) million 28% decrease in total revenue, 30% decrease in ecommerce units Ongoing focus on operational improvement over sales volume Ecommerce units also impacted by a reduction in third-party sales resources and macroeconomic conditions $4,206 ecommerce gppu, up 16% Realized further pricing optimization Higher per unit profit from UACC-based financing $20m improvement in adjusted ebitda ex. non-recurring costs(1) Decreased operating costs due to ongoing benefit of strategic initiatives and lower unit volume, as well as a $16M securitization gain Excludes $16M of non-recurring costs to address operational and customer experience issues, consisting primarily of $12M in rental car expenses $64m improvement in net loss Improved loss from operations as well as a $38M gain on debt extinguishment due to repurchase of convertible notes (1) Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs, and Adjusted EBITDA excluding securitization gain and non-recurring costs are non-GAAP measures. For definitions and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Third quarter net loss includes a $38M gain on debt extinguishment $20m improvement in adjusted ebitda ex. non-recurring costs (1) 8


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Third quarter financial highlights Sequential trends 3q 2022 Performance vs 2q 2022 Adjusted ebitda ex. Non-recurring costs ($m) (1) ($ 106) ($77) ($58) 1Q 2022 2Q 2022 3Q 2022 $20m improvement in adjusted ebitda ex. Non-recurring costs (1)Driven by higher GPPU, reduced operating costs, and a $16M securitization gain Excludes $16M of non-recurring costs to address operational and customer experience issues, consisting primarily of $12M in rental car expenses Ecommerce units 19,473 9,233 6,428 1Q 2022 2Q 2022 3Q 2022 30% decrease in ecommerce units Ongoing focus on operational improvement over volume as well as reduced third-party sales resources, macroeconomic and other factors Ecommerce VGPPU (2) $959 $2,166 $2,267 1Q 2022 2Q 2022 3Q 2022 5% increase in vehicle gppu Expanded sales margin due to further pricing optimization Ecommerce PGPPU (3) $1,168 $1,463 $1939 1Q 2022 2Q 2022 3Q 2022 33% increase in product gppuIncreased UACC-originated and serviced financing Ecommerce gppu $1,763 $3,629 $4,206 1Q 2022 2Q 2022 3Q 2022 16% increase in ecommerce gppu Realized further pricing optimization; higher per unit profit from UACC-based financing (1) Adjusted EBITDA excluding non-recurring costs is a non-GAAP measure. For a definition 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. $4,206 ecommerce gppu


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Third quarter adjusted ebitda ex. non-recurring costs(1) ($ in millions) $77 $10 $4 $16 $9 $10 $9 $58 2Q 2022 (1) EcomVolume GP Ecom GPPU Securitization Gain Non-Ecom GP Comp & Benefits (2) Marketing, Logistics &Other 3Q 2022 (1) (1) Adjusted EBITDA excluding non-recurring costs is a non-GAAP measure. For a definition and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Excludes $2.2M of realignment costs. $20m improvement in adjusted ebitda ex. non-recurring costs (1) Lower unit volume partially offset by higher Ecom GPPU $16M gain on securitization $9M decrease in Non-Ecommerce GP primarily driven by lower interest income from third-party dealership finance receivables due to timing of securitization $10M reduction in Compensation & Benefits driven by focus on cost reductions $9M reduction in Marketing, Outbound Logistics, and other costs primarily due to lower unit volume and strategic initiatives 10


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Third quarter liquidity update Maintaining midpoint of liquidity guidance after deploying $18m to repurchase convertible notes(1) balance sheet update securitization/ uacc update $59m sequential reduction in restricted cash Primarily driven by improved transaction processing, including titling & registration $21m sequential reduction in cash in inventory Reduced inventory and improved transaction processing, including titling & registration $56m repurchase of convertible notes for $18m(2) Decreased leverage Extended floorplan agreement Now extends through March 2024 $16m securitization gain Despite more challenging market conditions $285M of financing receivables sold Transition to fully captive lending remains on track; origination volumes consistent with expectations (1) Liquidity represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability. (2) $56M in aggregate principal amount net of deferred issuance costs. Continue to Prioritize maximizing liquidity 11


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Liquidity update ended third quarter with $510m in liquidity (1) ($ in millions) $510 ($84-$59) $15-$35 $25-$80 ($16-$1) $450-$565 9/30/22 Liquidity 4Q Adjusted EBITDA (2) Restricted Cash Release Cash in Inventory Capex & Other 12/31/22E Liquidity (1) Liquidity 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 12


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Summary Continued focus on improving the customer experience while we live within our means, prioritize profitability and liquidity, and drive unit economics 98% of customers received their registration before the expiration of their initial temporary tag in October $20m sequential improvement in Adjusted EBITDA ex. non-recurring costs (1) $4,206 ecommerce gppu $21m sequential reduction in adjusted SG&A(2)$59m sequential reduction in restricted cash primarily driven by titling & registration process improvements $56m repurchase of convertible notes for $18m(3) $450-$565m in forecasted year-end liquidity (4) (1) Adjusted EBITDA excluding non-recurring costs is a non-GAAP measure. For a definition and a reconciliation to the most comparable GAAP measure, please see the appendix. (2) Adjusted SG&A is a non-GAAP measure. For a definition and reconciliation to the most comparable GAAP measure, please see the appendix. (3) $56M in aggregate principal amount net of deferred issuance costs. (4) Represents unrestricted cash and cash equivalents. Excludes restricted cash and floorplan availability. Continued Progress on our long-term roadmap 13


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Vroom Appendix


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Reconciliation of Non-GAAP Financial measures EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, 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 12 months. 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. 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. 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 September 30, Three Months Ended June 30, Three Months Ended March 31, 2022 2022 2022 (in thousands) Net loss (51,127) $ (115,089) $ (310,459) $ Adjusted to exclude the following: Interest expense 9,704 9,533 9,380 Interest income (5,104) (3,935) (3,952) (Benefit) provision for income taxes 899 256 (23,240) Depreciation and amortization 9,995 10,115 7,895 EBITDA (35,633) $ (99,120) $ (320,376) $ Realignment costs 3,243 $ 9,529 $ $ Acquisition related costs 5,653 Change in fair value of finance receivables (3,012) 1,846 5,621 Goodwill impairment charge 201,703 Gain on debt extinguishment (37,917) Other 2,127 Adjusted EBITDA (73,319) $ (85,618) $ (107,399) $ Non-recurring costs to address operational and customer experience issues 15,785 $ 8,274 $ 1,000 $ Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues (57,534) $ (77,344) $ (106,399) $ Securitization gain (15,972) $ (29,617) $ Adjusted EBITDA excluding securitization gain (89,291) $ (85,618) $ (137,016) $ Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues (73,506) $ (77,344) $ (136,016) $ 15 © 2022 vroom all rights reserved 15


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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 September 30, Three Months Ended June 30, Three Months Ended March 31, 2022 2022 2022 (in thousands) Total selling, general & administrative expenses $ 134,643 $ 152,990 $ 187,994 Adjusted to exclude the following: Realignment costs 2,226 6,122 Acquisition related costs 5,653 Non-recurring costs to address operational and customer experience issues 15,785 8,274 1,000 UACC selling, general & administrative expenses 18,012 16,646 10,557 Other 2,127 Adjusted selling, general & administrative expenses $ 98,620 $ 119,821 $ 170,784 16 ©2022 vroom all rights reserved 16


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Thank you 2022 ©vroom all rights reserved 17