8-K
0001580864false00015808642023-08-082023-08-08

 

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, 2023

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 August 8, 2023, Vroom, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2023. 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, 2023, 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, 2023, 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, 2023.

99.2

 

Earnings Conference Call Presentation for the Quarter Ended June 30, 2023.

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, 2023

By:

/s/ Robert R. Krakowiak

 

 

Robert R. Krakowiak

 

 

Chief Financial Officer

 

 


EX-99.1

https://cdn.kscope.io/2bdbe80c02aa535bde6bd41ff3f43880-img63169428_0.jpg

Exhibit 99.1

 

Vroom Announces Second Quarter 2023 Results

Continued Progress on Long-Term Roadmap Driving GPPU Improvement and Cost Reductions

 

NEW YORK – August 8, 2023 – 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, 2023.

 

HIGHLIGHTS OF SECOND QUARTER 2023 VERSUS FIRST QUARTER 2023

 

5% sequential growth in Ecommerce units - first quarter with sequential growth since the introduction of the Long-Term Roadmap in Q2 2022
$2,954 Ecommerce gross profit per unit (GPPU) as compared to $2,552
$(66.3) million net loss as compared to $(75.0) million
$(56.3) million Adjusted EBITDA as compared to $(64.8) million
Continued to reduce sequential cost per unit in 4 out of 5 SG&A financial levers outlined in our Long-Term Roadmap
Improving Adjusted EBITDA mid-point guidance for the full year 2023

 

Tom Shortt, Chief Executive Officer of Vroom, said, “In the second quarter of 2023, consistent with our Long-Term Roadmap, we continued to make progress on our three key objectives and four strategic initiatives, improving Adjusted EBITDA by $8.5 million sequentially. Ecommerce GPPU increased from $2,552 in Q1 2023 to $2,954 in Q2 2023, benefiting from GPPU on unaged units, which exceeded $5,000, as well as vehicle inventory reserves taken in prior periods. During the second quarter of 2023, 80% of our units sold were aged units, or units held greater than 180 days. We continue to drive process improvements across titling and registration, pricing, marketing, sales, reconditioning and logistics. Looking forward to Q3 2023, we expect <40% of our mix to be aged units. We expect to deliver sequential Adjusted EBITDA improvements through the balance of the year.”

 

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “We succeeded in reducing per-unit costs across 1) logistics, 2) sales, 3) titling, registration and support, and 4) fixed costs. We further strengthened our balance sheet by repurchasing $18 million of our convertible notes and enhanced our liquidity by selling our non-investment grade notes from UACC’s 2023-1 securitization. During the second half of 2023, we will continue to pursue opportunities to reduce costs, strengthen our balance sheet and enhance our liquidity.”


 

 

 


 

SECOND QUARTER 2023 FINANCIAL DISCUSSION

 

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

 

Ecommerce Results

 

 

 

Three Months Ended
June 30,

 

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

 

Change

 

 

% Change

 

 

2023

 

 

2022

 

 

 

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

 

 

 

4,127

 

 

 

 

9,233

 

 

 

 

(5,106

)

 

 

(55.3

)%

 

 

 

8,060

 

 

 

 

28,706

 

 

 

 

(20,646

)

 

 

(71.9

)%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

126,529

 

 

$

 

308,123

 

 

$

 

(181,594

)

 

 

(58.9

)%

 

$

 

250,636

 

 

$

 

960,747

 

 

$

 

(710,111

)

 

 

(73.9

)%

Product revenue

 

 

 

11,696

 

 

 

 

13,509

 

 

 

 

(1,813

)

 

 

(13.4

)%

 

 

 

23,222

 

 

 

 

36,248

 

 

 

 

(13,026

)

 

 

(35.9

)%

Total ecommerce revenue

 

$

 

138,225

 

 

$

 

321,632

 

 

$

 

(183,407

)

 

 

(57.0

)%

 

$

 

273,858

 

 

$

 

996,995

 

 

$

 

(723,137

)

 

 

(72.5

)%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

 

$

 

1,196

 

 

$

 

20,000

 

 

$

 

(18,804

)

 

 

(94.0

)%

 

$

 

602

 

 

$

 

31,580

 

 

$

 

(30,978

)

 

 

(98.1

)%

Product gross profit

 

 

 

10,993

 

 

 

 

13,509

 

 

 

 

(2,516

)

 

 

(18.6

)%

 

 

 

21,621

 

 

 

 

36,248

 

 

 

 

(14,627

)

 

 

(40.4

)%

Total ecommerce gross profit

 

$

 

12,189

 

 

$

 

33,509

 

 

$

 

(21,320

)

 

 

(63.6

)%

 

$

 

22,223

 

 

$

 

67,828

 

 

$

 

(45,605

)

 

 

(67.2

)%

Average vehicle selling price per ecommerce unit

 

$

 

30,659

 

 

$

 

33,372

 

 

$

 

(2,713

)

 

 

(8.1

)%

 

$

 

31,096

 

 

$

 

33,469

 

 

$

 

(2,373

)

 

 

(7.1

)%

Product revenue per ecommerce unit

 

 

 

2,834

 

 

 

 

1,463

 

 

 

 

1,371

 

 

 

93.7

%

 

 

 

2,881

 

 

 

 

1,263

 

 

 

 

1,618

 

 

 

128.1

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

 

$

 

290

 

 

$

 

2,166

 

 

$

 

(1,876

)

 

 

(86.6

)%

 

$

 

75

 

 

$

 

1,100

 

 

$

 

(1,025

)

 

 

(93.2

)%

Product gross profit per ecommerce unit

 

 

 

2,664

 

 

 

 

1,463

 

 

 

 

1,201

 

 

 

82.1

%

 

 

 

2,683

 

 

 

 

1,263

 

 

 

 

1,420

 

 

 

112.4

%

Total gross profit per ecommerce unit

 

$

 

2,954

 

 

$

 

3,629

 

 

$

 

(675

)

 

 

(18.6

)%

 

$

 

2,758

 

 

$

 

2,363

 

 

$

 

395

 

 

 

16.7

%

Ecommerce average days to sale

 

 

 

327

 

 

 

 

128

 

 

 

 

199

 

 

 

155.4

%

 

 

 

304

 

 

 

 

110

 

 

 

 

194

 

 

 

175.9

%

 

 

2

 


 

Results by Segment

 

 

 

Three Months Ended
June 30,

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

% Change

 

 

2023

 

 

2022

 

 

Change

 

 

% Change

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

4,127

 

 

 

9,233

 

 

 

(5,106

)

 

 

(55.3

)%

 

 

8,060

 

 

 

28,706

 

 

 

(20,646

)

 

 

(71.9

)%

Wholesale

 

 

1,834

 

 

 

5,867

 

 

 

(4,033

)

 

 

(68.7

)%

 

 

3,003

 

 

 

15,980

 

 

 

(12,977

)

 

 

(81.2

)%

All Other (1)

 

 

309

 

 

 

1,047

 

 

 

(738

)

 

 

(70.5

)%

 

 

665

 

 

 

2,746

 

 

 

(2,081

)

 

 

(75.8

)%

Total units

 

 

6,270

 

 

 

16,147

 

 

 

(9,877

)

 

 

(61.2

)%

 

 

11,728

 

 

 

47,432

 

 

 

(35,704

)

 

 

(75.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

138,225

 

 

$

321,632

 

 

$

(183,407

)

 

 

(57.0

)%

 

$

273,858

 

 

$

996,995

 

 

$

(723,137

)

 

 

(72.5

)%

Wholesale

 

 

30,800

 

 

 

82,901

 

 

 

(52,101

)

 

 

(62.8

)%

 

 

44,695

 

 

 

222,885

 

 

 

(178,190

)

 

 

(79.9

)%

Retail Financing (2)

 

 

42,128

 

 

 

32,121

 

 

 

10,007

 

 

 

31.2

%

 

 

74,116

 

 

 

79,808

 

 

 

(5,692

)

 

 

(7.1

)%

All Other (3)

 

 

14,025

 

 

 

38,783

 

 

 

(24,758

)

 

 

(63.8

)%

 

 

28,976

 

 

 

99,524

 

 

 

(70,548

)

 

 

(70.9

)%

Total revenue

 

$

225,178

 

 

$

475,437

 

 

$

(250,259

)

 

 

(52.6

)%

 

$

421,645

 

 

$

1,399,212

 

 

$

(977,567

)

 

 

(69.9

)%

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

12,189

 

 

$

33,509

 

 

$

(21,320

)

 

 

(63.6

)%

 

$

22,223

 

 

$

67,828

 

 

$

(45,605

)

 

 

(67.2

)%

Wholesale

 

 

(3,993

)

 

 

(1,934

)

 

 

(2,059

)

 

 

106.5

%

 

 

(3,931

)

 

 

(4,686

)

 

 

755

 

 

 

16.1

%

Retail Financing (2)

 

 

34,068

 

 

 

28,720

 

 

 

5,348

 

 

 

18.6

%

 

 

59,842

 

 

 

73,682

 

 

 

(13,840

)

 

 

(18.8

)%

All Other (3)

 

 

3,737

 

 

 

6,062

 

 

 

(2,325

)

 

 

(38.4

)%

 

 

6,672

 

 

 

11,173

 

 

 

(4,501

)

 

 

(40.3

)%

Total gross profit

 

$

46,001

 

 

$

66,357

 

 

$

(20,356

)

 

 

(30.7

)%

 

$

84,806

 

 

$

147,997

 

 

$

(63,191

)

 

 

(42.7

)%

Gross profit (loss) per unit (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

2,954

 

 

$

3,629

 

 

$

(675

)

 

 

(18.6

)%

 

$

2,758

 

 

$

2,363

 

 

$

395

 

 

 

16.7

%

Wholesale

 

$

(2,177

)

 

$

(330

)

 

$

(1,847

)

 

 

559.7

%

 

$

(1,309

)

 

$

(293

)

 

$

(1,016

)

 

 

346.8

%

 

(1)
All Other units consist of retail sales of used vehicles from TDA.
(2)
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.
(3)
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.
(4)
Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

 

SG&A

 

 

 

Three Months Ended
June 30,

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

2022

 

 

Change

 

 

% Change

 

 

 

2023

 

 

 

2022

 

 

Change

 

 

% Change

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

Compensation & benefits

 

$

 

41,957

 

 

$

 

68,891

 

 

$

(26,934

)

 

 

(39.1

)%

 

$

 

92,622

 

 

$

 

143,416

 

 

$

(50,794

)

 

 

(35.4

)%

Marketing expense

 

 

 

14,970

 

 

 

 

21,138

 

 

 

(6,168

)

 

 

(29.2

)%

 

 

 

26,441

 

 

 

 

54,874

 

 

 

(28,433

)

 

 

(51.8

)%

Outbound logistics

 

 

 

1,970

 

 

 

 

8,232

 

 

 

(6,262

)

 

 

(76.1

)%

 

 

 

4,042

 

 

 

 

34,980

 

 

 

(30,938

)

 

 

(88.4

)%

Occupancy and related costs

 

 

 

4,284

 

 

 

 

5,721

 

 

 

(1,437

)

 

 

(25.1

)%

 

 

 

9,025

 

 

 

 

11,367

 

 

 

(2,342

)

 

 

(20.6

)%

Professional fees

 

 

 

3,635

 

 

 

 

6,827

 

 

 

(3,192

)

 

 

(46.8

)%

 

 

 

10,227

 

 

 

 

20,126

 

 

 

(9,899

)

 

 

(49.2

)%

Software and IT costs

 

 

 

8,987

 

 

 

 

11,306

 

 

 

(2,319

)

 

 

(20.5

)%

 

 

 

18,328

 

 

 

 

22,129

 

 

 

(3,801

)

 

 

(17.2

)%

Other

 

 

 

11,152

 

 

 

 

30,875

 

 

 

(19,723

)

 

 

(63.9

)%

 

 

 

22,807

 

 

 

 

54,092

 

 

 

(31,285

)

 

 

(57.8

)%

Total selling, general & administrative expenses

 

$

 

86,955

 

 

$

 

152,990

 

 

$

(66,035

)

 

 

(43.2

)%

 

$

 

183,492

 

 

$

 

340,984

 

 

$

(157,492

)

 

 

(46.2

)%

 

3

 


 

 

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;

 

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

 

EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues 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 severance costs, gain on debt extinguishment, severe weather-related costs, goodwill impairment charge, realignment costs, acquisition related costs, and other costs related to lease impairment charges associated with closing one of our physical office locations. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related 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. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. See Note 16 — Financial Instruments and Fair Value Measurements to our condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the three months ended June 30, 2023. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions.

4

 


 

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 expect such costs to continue to decline due to the improvements across our operations.

Adjusted EBITDA excluding securitization gain

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

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

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

 

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

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

 

(in thousands)

 

Net loss

 

$

(66,318

)

 

$

(115,089

)

 

$

(141,362

)

 

$

(425,548

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

8,938

 

 

 

9,533

 

 

 

18,857

 

 

 

18,913

 

Interest income

 

 

(4,921

)

 

 

(3,935

)

 

 

(10,863

)

 

 

(7,887

)

Provision (benefit) for income taxes

 

 

385

 

 

 

256

 

 

 

658

 

 

 

(22,984

)

Depreciation and amortization

 

 

10,536

 

 

 

10,115

 

 

 

21,173

 

 

 

18,010

 

EBITDA

 

$

(51,380

)

 

$

(99,120

)

 

$

(111,537

)

 

$

(419,496

)

Severance costs

 

$

2,277

 

 

$

 

 

$

6,381

 

 

$

 

Gain on debt extinguishment

 

 

(10,931

)

 

 

 

 

 

(19,640

)

 

 

 

Hail storm costs

 

 

2,353

 

 

 

 

 

 

2,353

 

 

 

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

 

 

 

201,703

 

Realignment costs

 

 

 

 

 

9,529

 

 

 

 

 

 

9,529

 

Acquisition related costs

 

 

 

 

 

 

 

 

 

 

 

5,653

 

Other

 

 

1,352

 

 

 

2,127

 

 

 

1,352

 

 

 

2,127

 

Adjusted EBITDA

 

$

(56,329

)

 

$

(87,464

)

 

$

(121,091

)

 

$

(200,484

)

Non-recurring costs to address operational and customer experience issues

 

 

126

 

 

 

8,274

 

 

 

785

 

 

 

9,274

 

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

 

$

(56,203

)

 

$

(79,190

)

 

$

(120,306

)

 

$

(191,210

)

Securitization gain

 

 

 

 

 

 

 

 

 

 

 

(29,617

)

Adjusted EBITDA excluding securitization gain

 

$

(56,329

)

 

$

(87,464

)

 

$

(121,091

)

 

$

(230,101

)

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

 

$

(56,203

)

 

$

(79,190

)

 

$

(120,306

)

 

$

(220,827

)

 

5

 


 

SECOND QUARTER 2023 AS COMPARED TO FIRST QUARTER 2023

 

 

 

Three Months Ended
June 30,

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2023

 

 

Change

 

 

% Change

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Total revenues

 

$

225,178

 

 

$

196,467

 

 

$

28,711

 

 

 

14.6

%

Total gross profit

 

$

46,001

 

 

$

38,805

 

 

$

7,196

 

 

 

18.5

%

Ecommerce units sold

 

 

4,127

 

 

 

3,933

 

 

 

194

 

 

 

4.9

%

Ecommerce revenue

 

$

138,225

 

 

$

135,633

 

 

$

2,592

 

 

 

1.9

%

Ecommerce gross profit

 

$

12,189

 

 

$

10,035

 

 

$

2,154

 

 

 

21.5

%

Vehicle gross profit (loss) per ecommerce unit

 

$

290

 

 

$

(151

)

 

$

441

 

 

 

292.1

%

Product gross profit per ecommerce unit

 

 

2,664

 

 

 

2,703

 

 

 

(39

)

 

 

(1.4

)%

Total gross profit per ecommerce unit

 

$

2,954

 

 

$

2,552

 

 

$

402

 

 

 

15.8

%

Wholesale units sold

 

 

1,834

 

 

 

1,169

 

 

 

665

 

 

 

56.9

%

Wholesale revenue

 

$

30,800

 

 

$

13,895

 

 

$

16,905

 

 

 

121.7

%

Wholesale gross (loss) profit

 

$

(3,993

)

 

$

62

 

 

$

(4,055

)

 

 

(6,540.3

)%

Wholesale gross (loss) profit per unit

 

$

(2,177

)

 

$

53

 

 

$

(2,230

)

 

 

(4,207.5

)%

Retail Financing revenue

 

$

42,128

 

 

$

31,988

 

 

$

10,140

 

 

 

31.7

%

Retail Financing gross profit

 

$

34,068

 

 

$

25,774

 

 

$

8,294

 

 

 

32.2

%

Total selling, general, and administrative expenses

 

$

86,955

 

 

$

96,537

 

 

$

(9,582

)

 

 

(9.9

)%

 

 

 

Three Months Ended
June 30,

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2023

 

 

Change

 

 

% Change

 

 

 

(in thousands)

 

 

 

 

Net loss

 

$

(66,318

)

 

$

(75,044

)

 

$

8,726

 

 

 

11.6

%

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

8,938

 

 

 

9,919

 

 

 

(981

)

 

 

(9.9

)%

Interest income

 

 

(4,921

)

 

 

(5,942

)

 

 

1,021

 

 

 

17.2

%

Provision for income taxes

 

 

385

 

 

 

273

 

 

 

112

 

 

 

41.0

%

Depreciation and amortization

 

 

10,536

 

 

 

10,637

 

 

 

(101

)

 

 

(0.9

)%

EBITDA

 

$

(51,380

)

 

$

(60,157

)

 

$

8,777

 

 

 

14.6

%

Severance costs

 

$

2,277

 

 

$

4,104

 

 

$

(1,827

)

 

 

(44.5

)%

Gain on debt extinguishment

 

 

(10,931

)

 

 

(8,709

)

 

 

(2,222

)

 

 

25.5

%

Hail storm costs

 

 

2,353

 

 

 

 

 

 

2,353

 

 

 

100.0

%

Other

 

 

1,352

 

 

 

 

 

 

1,352

 

 

 

100.0

%

Adjusted EBITDA

 

$

(56,329

)

 

$

(64,762

)

 

$

8,433

 

 

 

13.0

%

Non-recurring costs to address operational and customer experience issues

 

 

126

 

 

 

659

 

 

 

(533

)

 

 

(80.8

)%

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

 

$

(56,203

)

 

$

(64,103

)

 

$

7,900

 

 

 

(12.3

)%

Securitization gain

 

 

 

 

 

 

 

 

 

 

 

0.0

%

Adjusted EBITDA excluding securitization gain

 

$

(56,329

)

 

$

(64,762

)

 

$

8,433

 

 

 

13.0

%

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

 

$

(56,203

)

 

$

(64,103

)

 

$

7,900

 

 

 

12.3

%

 

6

 


 

Financial Outlook

 

For the full year 2023, we updated our guidance to reflect an improved outlook on Adjusted EBITDA performance and convertible note repurchases:

 

Adjusted EBITDA(1) of $(225.0) to $(200.0) million;
Year-end cash and cash equivalents of $137.0 to $187.0 million; reflecting $13.0 million of convertible note repurchases.

 

(1) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for the full year 2023 Financial Outlook is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for the second quarter 2023 in the reconciliation table in the Non-GAAP Financial Measures section above.

 

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of August 8, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” below.

 

Conference Call & Webcast Information

 

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, August 9, 2023 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.

 

7

 


 

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 with respect to, our execution of and the expected benefits from our long term roadmap, declining costs due to improvements across our operations, and other cost-saving initiatives; our future results of operations and financial position, including our ability to improve our unit economics and future growth, including with respect to our Adjusted EBITDA and liquidity, our ability to improve our transaction processes, increase and optimize our internal sales force, sell through aged vehicles, improve variable cost per unit, such as logistics costs and marketing costs, and reduce fixed costs; and our plans to enhance liquidity and strengthen our balance sheet. 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, 2022, as updated by our Quarterly report on Form 10-Q for the quarter ended June 30, 2023, 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

Jon Sandison

investors@vroom.com

 

Media Contact:

 

Vroom

Chris Hayes

chris.hayes@vroom.com

 

 

8

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

As of
June 30,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

237,925

 

 

$

398,915

 

Restricted cash (including restricted cash of consolidated VIEs of $44.9 million and $24.7 million, respectively)

 

 

66,306

 

 

 

73,095

 

Accounts receivable, net of allowance of $9.9 million and $21.5 million, respectively

 

 

9,565

 

 

 

13,967

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $12.4 million and $11.5 million, respectively)

 

 

13,117

 

 

 

12,939

 

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $204.4 million and $305.9 million, respectively)

 

 

290,015

 

 

 

321,626

 

Inventory

 

 

208,871

 

 

 

320,648

 

Beneficial interests in securitizations

 

 

6,553

 

 

 

20,592

 

Prepaid expenses and other current assets (including other current assets of consolidated VIEs of $20.9 million and $11.7 million, respectively)

 

 

57,221

 

 

 

58,327

 

Total current assets

 

 

889,573

 

 

 

1,220,109

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $442.4 million and $119.6 million, respectively)

 

 

454,580

 

 

 

140,235

 

Property and equipment, net

 

 

50,689

 

 

 

50,201

 

Intangible assets, net

 

 

145,399

 

 

 

158,910

 

Operating lease right-of-use assets

 

 

26,837

 

 

 

23,568

 

Other assets

 

 

24,791

 

 

 

26,004

 

Total assets

 

$

1,591,869

 

 

$

1,619,027

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

29,345

 

 

$

34,702

 

Accrued expenses

 

 

58,307

 

 

 

76,795

 

Vehicle floorplan

 

 

132,480

 

 

 

276,988

 

Warehouse credit facilities of consolidated VIEs

 

 

177,864

 

 

 

229,518

 

Current portion of long term debt (including current portion of securitization debt of consolidated VIEs at fair value of $219.4 million and $47.2 million, respectively)

 

 

231,471

 

 

 

47,239

 

Deferred revenue

 

 

16,717

 

 

 

10,655

 

Operating lease liabilities, current

 

 

9,267

 

 

 

9,730

 

Other current liabilities (including other current liabilities of consolidated VIEs of $2.8 million and $1.5 million, respectively)

 

 

11,912

 

 

 

17,693

 

Total current liabilities

 

 

667,363

 

 

 

703,320

 

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $197.6 million and $32.6 million at fair value, respectively)

 

 

544,931

 

 

 

402,154

 

Operating lease liabilities, excluding current portion

 

 

23,929

 

 

 

20,129

 

Other long-term liabilities (including other long-term liabilities of consolidated VIEs of $9.2 million and $7.4 million, respectively)

 

 

17,410

 

 

 

18,183

 

Total liabilities

 

 

1,253,633

 

 

 

1,143,786

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 139,649,290 and 138,201,903 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

135

 

 

 

135

 

Additional paid-in-capital

 

 

2,080,155

 

 

 

2,075,798

 

Accumulated deficit

 

 

(1,742,054

)

 

 

(1,600,692

)

Total stockholders’ equity

 

 

338,236

 

 

 

475,241

 

Total liabilities and stockholders’ equity

 

$

1,591,869

 

 

$

1,619,027

 

 

9

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle, net

 

$

136,568

 

 

$

341,724

 

 

$

271,838

 

 

$

1,048,910

 

Wholesale vehicle

 

 

30,800

 

 

 

82,901

 

 

 

44,695

 

 

 

222,885

 

Product, net

 

 

11,924

 

 

 

14,324

 

 

 

23,424

 

 

 

38,773

 

Finance

 

 

42,128

 

 

 

32,121

 

 

 

74,116

 

 

 

79,808

 

Other

 

 

3,758

 

 

 

4,367

 

 

 

7,572

 

 

 

8,836

 

Total revenue

 

 

225,178

 

 

 

475,437

 

 

 

421,645

 

 

 

1,399,212

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle

 

 

134,539

 

 

 

319,903

 

 

 

270,263

 

 

 

1,015,412

 

Wholesale vehicle

 

 

34,793

 

 

 

84,834

 

 

 

48,626

 

 

 

227,571

 

Product

 

 

704

 

 

 

 

 

 

1,601

 

 

 

 

Finance

 

 

8,060

 

 

 

3,402

 

 

 

14,274

 

 

 

6,126

 

Other

 

 

1,081

 

 

 

941

 

 

 

2,075

 

 

 

2,106

 

Total cost of sales

 

 

179,177

 

 

 

409,080

 

 

 

336,839

 

 

 

1,251,215

 

Total gross profit

 

 

46,001

 

 

 

66,357

 

 

 

84,806

 

 

 

147,997

 

Selling, general and administrative expenses

 

 

86,955

 

 

 

152,990

 

 

 

183,492

 

 

 

340,984

 

Depreciation and amortization

 

 

10,304

 

 

 

10,039

 

 

 

20,835

 

 

 

17,895

 

Impairment charges

 

 

1,353

 

 

 

3,407

 

 

 

1,353

 

 

 

205,110

 

Loss from operations

 

 

(52,611

)

 

 

(100,079

)

 

 

(120,874

)

 

 

(415,992

)

Gain on debt extinguishment

 

 

(10,931

)

 

 

 

 

 

(19,640

)

 

 

 

Interest expense

 

 

8,938

 

 

 

9,533

 

 

 

18,857

 

 

 

18,913

 

Interest income

 

 

(4,921

)

 

 

(3,935

)

 

 

(10,863

)

 

 

(7,887

)

Other loss, net

 

 

20,236

 

 

 

9,156

 

 

 

31,476

 

 

 

21,514

 

Income (loss) before provision for income taxes

 

 

(65,933

)

 

 

(114,833

)

 

 

(140,704

)

 

 

(448,532

)

Provision (benefit) for income taxes

 

 

385

 

 

 

256

 

 

 

658

 

 

 

(22,984

)

Net loss

 

$

(66,318

)

 

$

(115,089

)

 

$

(141,362

)

 

$

(425,548

)

Net loss per share attributable to common stockholders, basic

 

$

(0.48

)

 

$

(0.83

)

 

$

(1.02

)

 

$

(3.09

)

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

 

 

139,146,848

 

 

 

138,075,210

 

 

 

138,838,866

 

 

 

137,667,419

 

 

 

10

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(141,362

)

 

$

(425,548

)

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

 

 

 

 

 

 

Impairment charges

 

 

1,353

 

 

 

205,110

 

Gain on debt extinguishment

 

 

(19,640

)

 

 

 

Depreciation and amortization

 

 

21,173

 

 

 

18,010

 

Amortization of debt issuance costs

 

 

2,248

 

 

 

2,523

 

Realized gains on securitization transactions

 

 

 

 

 

(29,617

)

Deferred taxes

 

 

 

 

 

(23,855

)

Losses on finance receivables and securitization debt, net

 

 

42,532

 

 

 

29,457

 

Stock-based compensation expense

 

 

4,357

 

 

 

5,405

 

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

 

 

(11,811

)

 

 

(2,006

)

Provision for bad debt

 

 

529

 

 

 

11,119

 

Provision to record finance receivables held for sale at lower of cost or fair value

 

 

1,651

 

 

 

1,986

 

Amortization of unearned discounts on finance receivables at fair value

 

 

(13,414

)

 

 

(8,788

)

Other, net

 

 

(7,579

)

 

 

(851

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Finance receivables, held for sale

 

 

 

 

 

 

Originations of finance receivables held for sale

 

 

(274,707

)

 

 

(319,314

)

Principal payments received on finance receivables held for sale

 

 

42,862

 

 

 

23,179

 

Proceeds from sale of finance receivables held for sale, net

 

 

 

 

 

271,820

 

Other

 

 

505

 

 

 

(4,011

)

Accounts receivable

 

 

3,873

 

 

 

34,192

 

Inventory

 

 

123,588

 

 

 

192,618

 

Prepaid expenses and other current assets

 

 

16,611

 

 

 

13,513

 

Other assets

 

 

1,213

 

 

 

(1,670

)

Accounts payable

 

 

(5,357

)

 

 

(15,352

)

Accrued expenses

 

 

(19,042

)

 

 

(23,832

)

Deferred revenue

 

 

6,062

 

 

 

(58,003

)

Other liabilities

 

 

(7,770

)

 

 

(33,604

)

Net cash used in operating activities

 

 

(232,125

)

 

 

(137,519

)

Investing activities

 

 

 

 

 

 

Finance receivables at fair value

 

 

 

 

 

 

Purchases of finance receivables at fair value

 

 

(3,392

)

 

 

(49,475

)

Principal payments received on finance receivables at fair value

 

 

91,892

 

 

 

74,690

 

Proceeds from sale of finance receivables at fair value, net

 

 

 

 

 

29,026

 

Consolidation of VIEs

 

 

11,409

 

 

 

 

Principal payments received on beneficial interests

 

 

3,306

 

 

 

2,720

 

Purchase of property and equipment

 

 

(8,521

)

 

 

(16,046

)

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

 

 

 

 

 

(267,488

)

Net cash provided by (used in) investing activities

 

 

94,694

 

 

 

(226,573

)

Financing activities

 

 

 

 

 

 

Proceeds from borrowings under secured financing agreements

 

 

261,991

 

 

 

 

Principal repayment under secured financing agreements

 

 

(103,980

)

 

 

(105,563

)

Proceeds from financing of beneficial interests in securitizations

 

 

24,506

 

 

 

 

Principal repayments of financing of beneficial interests in securitizations

 

 

(2,304

)

 

 

 

Proceeds from vehicle floorplan

 

 

182,734

 

 

 

1,074,184

 

Repayments of vehicle floorplan

 

 

(327,242

)

 

 

(1,164,533

)

Proceeds from warehouse credit facilities

 

 

211,400

 

 

 

261,700

 

Repayments of warehouse credit facilities

 

 

(263,216

)

 

 

(228,744

)

Repurchases of convertible senior notes

 

 

(13,194

)

 

 

 

Other financing activities

 

 

(1,043

)

 

 

(1,344

)

Net cash used in financing activities

 

 

(30,348

)

 

 

(164,300

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(167,779

)

 

 

(528,392

)

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

 

 

472,010

 

 

 

1,214,775

 

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

 

$

304,231

 

 

$

686,383

 

 

11

 


 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(unaudited)

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

25,983

 

 

$

16,299

 

Cash paid for income taxes

 

$

3,682

 

 

$

2,062

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Finance receivables from consolidation of 2022-2 securitization transaction

 

$

180,706

 

 

$

 

Elimination of beneficial interest from the consolidation of 2022-2 securitization transaction

 

$

9,811

 

 

$

 

Securitization debt from consolidation of 2022-2 securitization transaction

 

$

186,386

 

 

$

 

Reclassification of finance receivables held for sale to finance receivables at fair value, net

 

$

248,081

 

 

$

 

Fair value of beneficial interests received in securitization transactions

 

$

 

 

$

16,473

 

 

12

 


EX-99.2

Exhibit 99.2

 

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vroom Second Quarter 2023 Earnings August 2023


 

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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 long-term roadmap and cost-saving initiatives, including our ability to improve our transaction processes and customer service experience, increase and optimize our internal sales force, sell through aged vehicles, improve variable cost per unit, such as logistics costs and marketing costs, and reduce fixed costs, 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 our intention to return to growth, for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year 2023, including with respect to adjusted EBITDA and 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 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, 2022, as updated by our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, each of which are 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 in the Appendix to this presentation.


 

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we are Focused on our objectives and Strategic initiatives during 2022 we improved the customer experience, improved our processes, and reduced our debt. during 2023 we intend to resume growth, sell through aged inventory, improve variable costs per unit, continue to reduce fixed costs and convert balance sheet items into cash while living within our means 3 key objectives 4 focused strategic initiatives 1.Prioritize unit economics and growth 2. Improve Costs per unit 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 4 Strategic initiatives expected to build a profitable business model V 3


 

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second quarter 2023 highlights ($56.3)M of Adjusted EBITDA(1), an $8.5M / 13% sequential improvement 5% Ecommerce unit growth sequentially $2,954 Ecommerce Gross Profit Per Unit (GPPU), a $402 sequential improvement, driven by GPPU on unaged units (<181 days) 80% of units sold in Q2-23 were >180 days, compared to 77% in Q1-23, 75% in Q4-22 and 49% in Q3-22 ~$2M reduction in Adjusted SG&A(2) on higher unit volumes ~$18M of convertible notes repurchased for $7M(3) Updating our guidance to reflect improved outlook on FY-23 adjusted EBITDA performance and convert repurchases2q 2023 Performance Highlights fy 2023 guidance first quarter 2023 second quarter 2023 total revenue ecommerce units ecommerce gppu adjusted ebitda (1) adjusted ebitda ex. non-recurring costs (1) adjusted ebitda ex. securitization gain & non-recurring costs (1) net loss(4) $196.5 million 3,933 $2,552 ($64.8) million ($64.1) million ($64.1) million ($75.0) million $225.2 million 4,127 $2,954 ($56.3) million ($56.2) million ($56.2) million ($66.3) million fy 2023 guidance previous guidance updated guidance adjusted ebitda (1) (5) year-end cash and cash equivalents (6) ($200) - ($250) million$150 - $200 million ($200) - ($225) million $137 - $187 million updated for 1h-23 convert purchases(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. We calculate adjusted selling, general & administrative expenses as selling, general & administrative expenses adjusted to exclude realignment costs, acquisition related costs, acceleration of non-cash stock based compensation, non-recurring costs to address operational and customer experience issues, UACC selling, general & administrative expenses and other costs (3) $18M in aggregate principal amount net of deferred issuance costs. (4) First quarter 2023 net loss includes a $9M gain on debt extinguishment. Second quarter 2023 net loss includes a $11M gain on debt extinguishment. (5) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for 2023 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. These estimates are forward-looking statements that reflect the Company’s expectations as of August 8, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” on Slide 2 (6) Represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability. execution of long-term roadmap on track V 4


 

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second quarter operational highlights operational progress on our 4 strategic initiatives financial lever Product GPPU Vehicle GPPUGPPU & SG&A - Logistics(1)Balance Sheet - Inventory SG&A - Sales(1) SG&A – Titling, Registration & Support(1) SG&A - Marketing(1) SG&A - Fixed(1)(4) Initiative Originate and securitize Vroom loans through UACC Optimize pricing through predictive data and regionalization Optimize assortment Synchronize end-to-end supply chain to increase velocity and optimize flow Optimize sales channels by selective insourcing and digitization Streamline and digitize title and registration process Improve marketing effectiveness Grow fixed cost slower than revenue 1q23 to 2q23 $2,954 Ecommerce GPPU, a $402 improvement80% of Q2 units sold were aged (>180 days), negatively impacting GPPU We expect aged units (>180 days) to be <40% of sales in Q3 We expect continued sequential improvement in GPPU in 2H~17% sequential improvement in all-in logistics cost per unit (2) ~43% sequential improvement in inventory turns Ramping unit acquisitions to facilitate unit growth Higher cash in inventory due to ramp up of acquisitions, expect to recover in 2H-23 ~26% sequential improvement in selling cost per unit~29% sequential improvement in titling, registration and support cost per unit(3)~$3.5M increase in marketing costs ~12% sequential improvement in fixed cost per unit driven primarily by the benefit of reductions in force completed in January and April(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) 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. (4) Fixed cost 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 intended to build a profitable business model V 5


 

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Quarterly progression Operational improvements driving performance ($ in millions) Adjusted EBITDA ex. Securitization gain and Non-recurring costs (1) Adjusted EBITDA ex. non-recurring costs Securitization Gain Ecommerce gppu $1,763 $3,629 $4,206 $1,233 $2,552 $2,954 q1 2022 q2 2022 q3 2022 q4 2022 q1 2023 q2 2023 gppu % of units >180 days $1,763 $3,629 $4,206 $1,233 $2,552 $2,954 4% 11% 49% 75% 77% 80% (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.6 We remain focused on our long-term roadmap to deliver profitable growth V


 

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vroom Second Quarter 2023 Financial Update


 

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2nd quarter 2023 financial summary Continued progress on long term roadmap 2Q 2023 Performance Highlights first quarter 2023 second quarter 2023 Total Revenue ecommerce units ecommerce gppu adjusted ebitda (1) adjusted ebitda ex. non-recurring costs (1) adjusted ebitda ex. securitization gain & non-recurring costs (1) net loss(2) cash and cash equivalents(3) $196.5 million 3,933 $2,552 ($64.8) million ($64.1) million ($64.1) million ($75.0) million $316.7 million $225.2 million 4,127 $2,954 ($56.3) million ($56.2) million ($56.2) million ($66.3) million $237.9 million 2q 2023 Performance vs 1q 2023 15% increase in total revenue, 5% increase in ecommerce units sold Modest increase in units sold Ongoing focus on operational improvement over sales volume $2,954 ecommerce gppu, up 16% ~$11M / $2,594 per unit negative impact of selling through aged (>180 days) units $8.5m sequential increase in adjusted ebitda (1) Driven by reduced operating costs and higher GPPU Cash and liquidity ~$18M of convertible notes repurchased for ~$7M(4), further reducing our leverage ~$11M increase in cash in inventory due to ramping up inventory, we expect to recover significant amount of the balance in 2H-23 Completed sale of 2023-1 non-investment grade notes and completed secured repo financing on securitization interests held per risk retention requirements, improving UACC’s available liquidity(5) to ~$93M as of 6/30/2023 (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) First quarter 2023 net income includes a $9M gain on debt extinguishment. Second quarter 2023 net income includes a $11M gain on debt extinguishment. (3) Represents unrestricted cash and cash equivalents. Excludes restricted cash, warehouse and floorplan availability (4) $18M in aggregate principal amount net of deferred issuance costs. (5) Represents cash and cash equivalents and warehouse availability 8 $8.5m improvement in adjusted ebitda (1) V


 

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2nd quarter performance drivers 2nd quarter adjusted ebitda (1) ($ in millions) $(65) 1Q 2023 (1) $1 Ecommerce Volume $2 Ecommerce Gross Profit $2 Adjusted SG&A (2) $4 UACC/Wholesale and Other $(56) 2Q 2023 (1) $2m increase in Ecommerce gross profit 5% sequential unit growth Strong GPPU on unaged (<181 days) inventory $2M sequential decrease in adjusted sg&a(2) Cost per unit improvements in logistics, selling, titling, registration and support Ramp up of marketing spend to support growth initiatives and inventory 3/31/23 Cash and Cash Equivalents(3) 2Q Adjusted EBITDA (1) Interest Expense (net) Cash in Inventory 6/30/23 Cash and Cash Equivalents (3) (excluding Convert Repurchase) Convert Repurchase(4) 6/30/23 Cash and Cash Equivalents (3) $93 UACC Liquidity(5) $331 6/30/23 Available Liquidity(6) $317 ($56) ($4) ($11) $245 $7 $238 $11m sequential increase in cash in inventory Increase driven by floorplan requirements related to our acquisition ramp up, ~$16M of cash in inventory tied to new units, to be recovered in Q3 Partially offset by selling through aged units that were curtailed on the floorplan $18m repurchase of convertible notes for $7m(4) Decreased leverage liquidity actions in q2-23 ~$23M sale of 2023-1 securitization non-investment grade notes ~$24M in secured repo financing on securitization interests held per risk retention requirements (1) Adjusted EBITDA 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. We calculate adjusted selling, general & administrative expenses as selling, general & administrative expenses adjusted to exclude realignment costs, acquisition related costs, acceleration of non-cash stock based compensation, non-recurring costs to address operational and customer experience issues, UACC selling, general & administrative expenses and other costs (3) Represents unrestricted cash and cash equivalents. Excludes restricted cash and floorplan availability. (4) $18M in aggregate principal amount net of deferred issuance costs. (5) Represents warehouse availability as of 6/30/2023 (6) Represents unrestricted cash and cash equivalents and warehouse availability as of 6/30/2023 9 $8.5m improvement in adjusted ebitda (1) V


 

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fy2023 cash and cash equivalents and liquidity outlook cash and liquidity drivers Expect to continue to reduce operating loss each quarter as we grow units, increase GPPU and improve unit economics Expect to free up cash in inventory as we sell through remaining aged units and increase percentage of inventory floored as a result of recent renegotiation Expect continued progress on initiatives to release cash trapped on the balance sheet 12/31/23 Mid-Point Liquidity excludes any additional potential debt repurchases Cash and Cash Equivalents guidance of $137M - $187M updated to reflect 1H-23 convert repurchases $399 12/31/22 Cash and Cash Equivalents (1) ($121) 2023-1H Interest EBITDA (2) ($8) Cash in Inventory Expense ($13) Cash Initiatives Repurchases ($33) 6/30/23 Cash and Cash $14 2023-2H Mid-Point $238 2023-2H Interest Equivalents (1) ($91) 2023-2H Cash in Adjusted EBITDA (2)(3) ($13) Floorplan Restricted Expense $38 2023-2H Cash Inventory ($15) 12/31/23 Mid-Point Cash $5 12/31/23 UACC Initiatives $162 Potential Residual Cash and Cash Equivalents(1) $74 12/31/23 Mid-Point Liquidity (4) $25 Sale $261 Potential Liquidity (5) (1) Represents unrestricted cash and cash equivalents. Excludes restricted cash, warehouse and floorplan availability. (2) Adjusted EBITDA, Adjusted EBITDA is a non-GAAP measure. For definitions and a reconciliation to the most comparable GAAP measure, please see the appendix (3) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for 2023 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. These estimates are forward-looking statements that reflect the Company’s expectations as of August 8, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” on Slide 2 (4) Represents forecast warehouse availability as of 12/31/23 (5) Represents forecast unrestricted cash and cash equivalents and warehouse availability as of 12/31/2023 10 Continued focus on cash and maximizing liquidity V


 

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Summary Q2 2023 Highlights Continued execution of our Long-Term Roadmap focused on 4 strategic initiatives expected to build a profitable business model Achieved sequential GPPU improvement of $402 Continued to transform pricing algorithms, implement variable shipping fees, and improve our acquisition model Continued to ramp up marketing spend and acquisitions Continued to drive variable cost reductions Reduced cost per unit in logistics, selling, titling, registration and support Reduced fixed cost run rate with reduction in force in April and continued focused on managing costs Reduced fixed cost per unit Strengthened our balance sheet by repurchasing $18M of convertible notes(1) Building a platform to grow the business Improved processes across registration, titling, support, marketing, sales, reconditioning, and logistics fy2023 outlook Improving full year Adjusted EBITDA(2) mid-point guidance to ($212.5M) Anticipate improved GPPU as we normalize mix of aged units Anticipate improved fixed cost run rate Continue to focus on converting balance sheet items into cash and recovering cash in inventory Expect per unit economics to improve sequentially Significant focus on reducing marketing cost per unit Reduced selling cost per unit Reduced titling, registration and support cost per unit Reduced logistics costs per unit Reduced fixed cost structure (1) $18M in aggregate principal amount net of deferred issuance costs. (2) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for 2023 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. These estimates are forward-looking statements that reflect the Company’s expectations as of August 8, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” on Slide 2 Positioned for growth and improved cost per unit V 11


 

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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. We calculate Adjusted EBITDA as EBITDA adjusted to exclude severance costs, gain on debt extinguishment, severe weather-related costs, goodwill impairment charge, realignment costs, acquisition related costs, and other costs related to lease impairment charges associated with closing one of our physical office locations. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related 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. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions. 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 expect such costs to continue to decline due to the improvements across our operations. 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 June 30, 2023 Three Months ended March 31, 2023 Three Months ended December 31, 2022 Three Months ended September 30, 2022 Three Months ended June 30, 2022 Three Months ended March 31, 2022 in thousands Net loss Adjusted to exclude the following: Interest expense Interest income Provision for income taxes Depreciation and amortization EBITDA Severance costs Gain on debt extinguishment Goodwill impairment charge Realignment cost Acceleration of non-cash stock-based compensation Hail storm costs Acquisition related costs Other Adjusted EBITDA Non-recurring costs to address operational and customer experience issues Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issue Securitization gain Adjusted EBITDA excluding securitization gain and non-recurring cost to address operational and customer experience issue $(66,318) 8938 (4,921) 385 10,536 $(51,380) $2277(10931)- - - 2,353 – 1,352 $(56329) $126 $ (56,203) – $(56,329) $(56,203) $(75,044)9,919 (5,942) 273 10,637 $(60,157) $4,104 (8,709) - - - - - - $(64,762) $659 $(64,103) $– $(64,762) $(64,103) $24,765 12,076 (6,372) 2,405 10,702 $43,576 $- (126,767) – 2,253 2,439 - - 3,679 $74,820 $374 $ (74,446) - $(74,820) $ (74,446) $ (51,127) 9,704 (5,104) 899 (9,995) (35,633) $- (37,917) 3,243 $(70,307) $15,785 (54,552) $(15,9972) $(86,279) $(70,494) $(115,089)9,533 (3,935) 256 10,115 (99,120) 9,529 2,127 $(87,464) $8,274 $(79,190) $- $(87,464) $(79,190) $ (310,459) 9,380 (3,952) (23,240) 7,895 $(320,376) $- 201,703 5,653 - - - - - - $(113,020) $ 1,000 $(112,020) $(29,617) $(142,637) $(141,637) 13 V


 

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Reconciliation of Non-GAAP Financial measures (continued) Adjusted SG&A We calculate adjusted selling, general & administrative expenses as selling, general & administrative expenses adjusted to exclude severance costs, non-recurring costs to address operational and customer experience issues, UACC selling, general & administrative expenses, realignment costs, acceleration of non-cash stock-based compensation, acquisition related costs, 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: Total selling, general & administrative expenses Adjusted to exclude the following: Acquisition related costs Severance costs Non-recurring costs to address operational and customer experience issues UACC selling, general & administrative expenses Realignment costs Acceleration of non-cash stock-based compensation Other Adjusted selling, general & administrative expenses Three Months Ended June 30, Three Months Ended March 31,Three Months Ended Three Months Ended Three Months Ended December 31, September 30,June 30, 2023 2023 20222022 2022 Three Months Ended March 31, 2022 (in thousands) 86,955$ 96,537 $90,760 134,643 $ 152,990 $ 187.994 5,653 2,277 126 20,351 4,104 659 25,3271.867 15,785 8.274 1,000 19,108 18,012 16,646 10,557 187 2,226 6,122 2,439 2,127 $ 64,201 $ 66.447 $ 67.159 $ 98,620 $ 119.821 $ 170,784 14 V


 

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thank you 15 V