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Vroom Reports Strong Third Quarter 2021 Results

Vroom Delivers Record Ecommerce Units and Gross Profit

Ecommerce Unit Sales Up 123% YoY

Ecommerce Gross Profit Up 161% YoY

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, 2021 (“Q3 2021”).

HIGHLIGHTS OF THIRD QUARTER 2021

  • 19,683 ecommerce units sold, up 123% YoY
  • Ecommerce revenue of $701.7 million, up 216% YoY
  • Ecommerce gross profit of $50.4 million, up 161% YoY
  • Vroom enters into definitive agreement to acquire United Auto Credit Corporation ("UACC")
  • Vroom appoints new Chief Financial Officer

Paul Hennessy, Chief Executive Officer of Vroom, commented:

“Vroom had yet another strong quarter that continued the momentum that has been building all year. By executing well across our organization, we delivered triple digit year-over-year growth in both ecommerce units and gross profit, as well as improvement in unit economics. We also continued to optimize our mix of inventory sources throughout the quarter, with approximately 81% of our retail inventory sold sourced from consumers, enabling us to scale our inventory while maintaining strong unit economics. Looking ahead, we intend to continue to focus on strong execution and maintain the momentum in our business to drive continued growth in unit sales and on improving unit economics. We also are excited to move forward with our acquisition of United Auto Credit Corporation, which will accelerate our strategic objective to establish a captive financing arm.”

THIRD QUARTER 2021 FINANCIAL DISCUSSION

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,

 

 

 

 

 

 

 

 

 

2021

 

2020

 

 

Change

 

% Change

 

2021

 

2020

 

 

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

 

 

 

19,683

 

 

 

 

8,823

 

 

 

 

10,860

 

 

 

123.1

%

 

 

 

53,455

 

 

 

 

23,466

 

 

 

 

29,989

 

 

 

127.8

%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

677,170

 

 

$

 

213,943

 

 

$

 

463,227

 

 

 

216.5

%

 

$

 

1,644,494

 

 

$

 

610,008

 

 

$

 

1,034,486

 

 

 

169.6

%

Product revenue

 

 

 

24,508

 

 

 

 

7,818

 

 

 

 

16,690

 

 

 

213.5

%

 

 

 

59,155

 

 

 

 

20,493

 

 

 

 

38,662

 

 

 

188.7

%

Total ecommerce revenue

 

$

 

701,678

 

 

$

 

221,761

 

 

$

 

479,917

 

 

 

216.4

%

 

$

 

1,703,649

 

 

$

 

630,501

 

 

$

 

1,073,148

 

 

 

170.2

%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

 

$

 

25,875

 

 

$

 

11,486

 

 

$

 

14,389

 

 

 

125.3

%

 

$

 

72,704

 

 

$

 

20,296

 

 

$

 

52,408

 

 

 

258.2

%

Product gross profit

 

 

 

24,508

 

 

 

 

7,818

 

 

 

 

16,690

 

 

 

213.5

%

 

 

 

59,155

 

 

 

 

20,493

 

 

 

 

38,662

 

 

 

188.7

%

Total ecommerce gross profit

 

$

 

50,383

 

 

$

 

19,304

 

 

$

 

31,079

 

 

 

161.0

%

 

$

 

131,859

 

 

$

 

40,789

 

 

$

 

91,070

 

 

 

223.3

%

Average vehicle selling price per ecommerce unit

 

$

 

34,404

 

 

$

 

24,248

 

 

$

 

10,156

 

 

 

41.9

%

 

$

 

30,764

 

 

$

 

25,995

 

 

$

 

4,769

 

 

 

18.3

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

 

$

 

1,315

 

 

$

 

1,302

 

 

$

 

13

 

 

 

1.0

%

 

$

 

1,360

 

 

$

 

865

 

 

$

 

495

 

 

 

57.2

%

Product gross profit per ecommerce unit

 

 

 

1,245

 

 

 

 

886

 

 

 

 

359

 

 

 

40.5

%

 

 

 

1,107

 

 

 

 

873

 

 

 

 

234

 

 

 

26.8

%

Total gross profit per ecommerce unit

 

$

 

2,560

 

 

$

 

2,188

 

 

$

 

372

 

 

 

17.0

%

 

$

 

2,467

 

 

$

 

1,738

 

 

$

 

729

 

 

 

41.9

%

Ecommerce average days to sale

 

 

 

68

 

 

 

 

52

 

 

 

 

16

 

 

 

30.8

%

 

 

 

73

 

 

 

 

62

 

 

 

 

11

 

 

 

17.7

%

Ecommerce Units

Ecommerce units sold increased 123.1% to 19,683 driven by higher inventory levels, strong national brand recognition driven by our national advertising campaign and increased marketing spend, and increased demand due to growing consumer acceptance of our business model. The increase was also attributable to strong market demand generally for used vehicles, caused in part by the shortage of microchips and delays in new car manufacturing. Average monthly unique visitors to our platform increased 140.9% to 2,236,168.

Ecommerce Revenue

Ecommerce revenue increased 216.4% to $701.7 million.

  • Ecommerce Vehicle revenue increased 216.5% to $677.2 million. The increase in ecommerce Vehicle revenue was primarily attributable to the increase in ecommerce units sold as well as an increase in the average selling price per unit, which increased from $24,248 to $34,404, primarily attributable to market appreciation.
  • Ecommerce Product revenue increased 213.5% to $24.5 million. The increase in ecommerce Product revenue was primarily attributable to the increase in ecommerce units sold as well as an increase in ecommerce Product revenue per unit, which increased from $886 to $1,245 per unit.

Ecommerce Gross Profit

Ecommerce gross profit increased 161.0% to $50.4 million.

  • Ecommerce Vehicle gross profit increased 125.3% to $25.9 million. The increase in ecommerce Vehicle gross profit was primarily due to an increase in ecommerce units sold.
  • Ecommerce Product gross profit increased 213.5% to $ 24.5 million. The increase in ecommerce Product gross profit was primarily attributable to the increase in ecommerce units sold as well as an increase in ecommerce Product gross profit per unit, which increased from $886 to $1,245 per unit.

Ecommerce Gross Profit per Unit

Ecommerce gross profit per unit increased 17.0% to $2,560.

  • Ecommerce Vehicle gross profit per unit increased slightly to $1,315, primarily driven by improvements in reconditioning costs, partially offset by lower sales margins as a result of higher purchase prices of vehicle acquisitions.
  • Ecommerce Product gross profit per unit increased 40.5% to $1,245, primarily driven by higher attachment rates and an increase in the average loan size as a result of a higher average selling price per unit.

Results by Segment

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

2021

 

2020 (1)

 

Change

 

% Change

 

2021

 

2020 (1)

 

Change

 

% Change

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

19,683

 

 

 

8,823

 

 

 

10,860

 

 

 

123.1

%

 

 

53,455

 

 

 

23,466

 

 

 

29,989

 

 

 

127.8

%

Wholesale

 

 

9,760

 

 

 

6,166

 

 

 

3,594

 

 

 

58.3

%

 

 

28,421

 

 

 

14,110

 

 

 

14,311

 

 

 

101.4

%

TDA

 

 

1,749

 

 

 

1,463

 

 

 

286

 

 

 

19.5

%

 

 

5,107

 

 

 

5,608

 

 

 

(501

)

 

 

(8.9

)%

Total units

 

 

31,192

 

 

 

16,452

 

 

 

14,740

 

 

 

89.6

%

 

 

86,983

 

 

 

43,184

 

 

 

43,799

 

 

 

101.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

701,678

 

 

$

221,761

 

 

$

479,917

 

 

 

216.4

%

 

$

1,703,649

 

 

$

630,501

 

 

$

1,073,148

 

 

 

170.2

%

Wholesale

 

 

131,306

 

 

 

63,972

 

 

 

67,334

 

 

 

105.3

%

 

 

377,438

 

 

 

170,469

 

 

 

206,969

 

 

 

121.4

%

TDA

 

 

60,582

 

 

 

36,955

 

 

 

23,627

 

 

 

63.9

%

 

 

158,928

 

 

 

149,858

 

 

 

9,070

 

 

 

6.1

%

All Other (2)

 

 

3,190

 

 

 

317

 

 

 

2,873

 

 

 

906.3

%

 

 

9,749

 

 

 

1,043

 

 

 

8,706

 

 

 

834.7

%

Total revenue

 

$

896,756

 

 

$

323,005

 

 

$

573,751

 

 

 

177.6

%

 

$

2,249,764

 

 

$

951,871

 

 

$

1,297,893

 

 

 

136.4

%

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

50,383

 

 

$

19,304

 

 

$

31,079

 

 

 

161.0

%

 

$

131,859

 

 

$

40,789

 

 

$

91,070

 

 

 

223.3

%

Wholesale

 

 

2,103

 

 

 

3,343

 

 

 

(1,240

)

 

 

(37.1

)%

 

 

10,337

 

 

 

1,506

 

 

 

8,831

 

 

 

586.4

%

TDA

 

 

3,805

 

 

 

2,675

 

 

 

1,130

 

 

 

42.2

%

 

 

9,743

 

 

 

8,799

 

 

 

944

 

 

 

10.7

%

All Other (2)

 

 

1,798

 

 

 

123

 

 

 

1,675

 

 

 

1,361.8

%

 

 

5,454

 

 

 

345

 

 

 

5,109

 

 

 

1,480.9

%

Total gross profit

 

$

58,089

 

 

$

25,445

 

 

$

32,644

 

 

 

128.3

%

 

$

157,393

 

 

$

51,439

 

 

$

105,954

 

 

 

206.0

%

Gross profit per unit (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

2,560

 

 

$

2,188

 

 

$

372

 

 

 

17.0

%

 

$

2,467

 

 

$

1,738

 

 

$

729

 

 

 

41.9

%

Wholesale

 

$

215

 

 

$

542

 

 

$

(327

)

 

 

(60.3

)%

 

$

364

 

 

$

107

 

 

$

257

 

 

 

240.2

%

TDA

 

$

2,175

 

 

$

1,828

 

 

$

347

 

 

 

19.0

%

 

$

1,907

 

 

$

1,569

 

 

$

338

 

 

 

21.5

%

(1)

We reclassified other revenue and gross profit related to the vehicle repair service at TDA from the TDA reportable segment to the “All Other” category to conform to current year presentation.

(2)

All Other revenues and gross profit consist of the CarStory business and vehicle repair services at TDA.

(3)

Gross profit per unit metrics exclude the CarStory business and vehicle repair services at TDA.

Total Units

Total units sold increased 89.6% to 31,192.

  • Ecommerce units sold increased 123.1% to 19,683, as discussed above.
  • Wholesale units sold increased 58.3% to 9,760, primarily driven by an increase in wholesale units purchased from consumers, a higher number of trade-in vehicles associated with the increase in the number of ecommerce units sold and strong wholesale market demand for used vehicles.
  • TDA units sold increased 19.5% to 1,749, primarily due to strong market demand generally for used vehicles and higher inventory levels.

Total Revenue

Total revenue increased 177.6% to $896.8 million.

  • Ecommerce revenue increased 216.4% to $701.7 million, as discussed above.
  • Wholesale revenue increased 105.3% to $131.3 million. The increase in wholesale revenue was primarily attributable to the increase in wholesale units sold as well as a higher average selling price per unit, which increased from $10,375 to $13,453, primarily attributable to market appreciation.
  • TDA revenue increased 63.9% to $60.6 million, primarily due to a higher average selling price per unit, which increased from $24,316 to $33,474 as well as the increase in TDA units sold.

Total Gross Profit

Total gross profit increased 128.3% to $58.1 million.

  • Ecommerce gross profit increased 161.0% to $50.4 million, as discussed above.
  • Wholesale gross profit decreased 37.1% to $2.1 million. Wholesale gross profit decreased primarily due to a lower Wholesale gross profit per unit of $327, partially offset by an increase in wholesale units sold.
  • TDA gross profit increased 42.2% to $3.8 million. TDA gross profit increased primarily due to an increase in TDA gross profit per unit of $347 as well as an increase in TDA units sold.

Gross Profit per Unit

  • Ecommerce gross profit per unit increased 17.0% to $2,560, as discussed above.
  • Wholesale gross profit per unit decreased 60.3% to $215 as a result sales margin compression due to unfavorable wholesale price movements, which declined during the first half of the third quarter of 2021.
  • TDA gross profit per unit increased 19.0% to $2,175 driven by increased TDA product gross profit per unit of $221, primarily due to improvements in inbound logistics costs and increased TDA vehicle gross profit per unit of $126, primarily due to an increase in the average loan size as a result of a higher average selling price per unit.

SG&A

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

2021

 

2020

 

Change

 

% Change

 

2021

 

2020

 

Change

 

% Change

 

 

(in thousands)

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

Compensation & benefits

 

$

 

53,900

 

 

$

 

22,881

 

 

$

31,019

 

 

 

135.6

%

 

$

 

145,580

 

 

$

 

63,821

 

 

$

81,759

 

 

 

128.1

%

Marketing expense

 

 

 

35,214

 

 

 

 

15,341

 

 

 

19,873

 

 

 

129.5

%

 

 

 

88,267

 

 

 

 

44,829

 

 

 

43,438

 

 

 

96.9

%

Outbound logistics

 

 

 

22,717

 

 

 

 

8,500

 

 

 

14,217

 

 

 

167.3

%

 

 

 

57,987

 

 

 

 

19,762

 

 

 

38,225

 

 

 

193.4

%

Occupancy and related costs

 

 

 

4,635

 

 

 

 

2,610

 

 

 

2,025

 

 

 

77.6

%

 

 

 

12,599

 

 

 

 

7,574

 

 

 

5,025

 

 

 

66.3

%

Professional fees

 

 

 

7,694

 

 

 

 

1,773

 

 

 

5,921

 

 

 

334.0

%

 

 

 

15,951

 

 

 

 

5,697

 

 

 

10,254

 

 

 

180.0

%

Other

 

 

 

24,558

 

 

 

 

10,022

 

 

 

14,536

 

 

 

145.0

%

 

 

 

61,098

 

 

 

 

25,735

 

 

 

35,363

 

 

 

137.4

%

Total selling, general & administrative expenses

 

$

 

148,718

 

 

$

 

61,127

 

 

$

87,591

 

 

 

143.3

%

 

$

 

381,482

 

 

$

 

167,418

 

 

$

214,064

 

 

 

127.9

%

Selling, general and administrative expenses increased 143.3% to $148.7 million. The increase was primarily due to:

  • $31.0 million increase in compensation and benefits due to an increase in headcount and an increase in variable fees for third-party sales and sales support providers as a result of an increase in units sold;
  • $19.9 million increase in marketing expense as we expanded our national broad-reach brand advertising, produced new commercials, and increased performance and online marketing as we continue to grow our listed inventory;
  • $14.2 million increase in outbound logistics costs primarily attributable to the growth in ecommerce units sold, which increased outbound logistics costs by $10.5 million, and increases in market rates of logistics providers, which increased outbound logistics costs by $3.7 million;
  • $5.9 million increase in professional fees primarily related to acquisition related costs incurred in connection with the definitive agreement to acquire UACC, as well as increased consulting expenses in the marketing and engineering departments; and
  • $14.5 million increase in other selling, general and administrative expenses primarily related to volume-based fees for software licenses and other variable expenses as our business continues to scale as well as additional insurance costs associated with being a publicly traded company and growing inventory.

We expect selling, general and administrative expenses to increase in the future as we continue to scale our business, integrate and invest in UACC, invest in and improve our customer experience, and continue expanding our proprietary logistics and reconditioning networks.

Loss from Operations and Net Loss

Loss from operations increased 154.9% to $94.0 million. Net loss increased 159.2% to $98.1 million.

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 loss from operations, Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted. 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 loss from operations, Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA, Adjusted EBITDA, Adjusted loss from operations, Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted, facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA and Adjusted EBITDA

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 the one-time, IPO related acceleration of non-cash stock-based compensation expense, the one-time, IPO related non-cash revaluation of a preferred stock warrant and costs related to our acquisition of UACC. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable U.S. GAAP measure:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands)

 

(in thousands)

Net loss

 

$

(98,122

)

 

$

(37,850

)

 

$

(241,118

)

 

$

(142,137

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

7,028

 

 

 

2,259

 

 

 

14,720

 

 

 

6,382

 

Interest income

 

 

(2,930

)

 

 

(1,289

)

 

 

(7,288

)

 

 

(3,960

)

Provision for income taxes

 

 

29

 

 

 

33

 

 

 

379

 

 

 

138

 

Depreciation and amortization expense

 

 

3,469

 

 

 

1,196

 

 

 

9,497

 

 

 

3,255

 

EBITDA

 

$

(90,526

)

 

$

(35,651

)

 

$

(223,810

)

 

$

(136,322

)

One-time IPO related acceleration of non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

1,262

 

One-time IPO related non-cash revaluation of preferred stock warrant

 

 

 

 

 

 

 

 

 

 

 

20,470

 

Acquisition related costs

 

 

3,412

 

 

 

 

 

 

3,412

 

 

 

 

Adjusted EBITDA

 

$

(87,114

)

 

$

(35,651

)

 

$

(220,398

)

 

$

(114,590

)

Adjusted loss from Operations

We calculate Adjusted loss from operations as loss from operations adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense and costs related to our acquisition of UACC. The following table presents a reconciliation of Adjusted loss from operations to loss from operations, which is the most directly comparable U.S. GAAP measure:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands)

 

(in thousands)

Loss from operations

 

$

(94,005

)

 

$

(36,873

)

 

$

(233,365

)

 

$

(119,218

)

Add: One-time IPO related acceleration of non-cash stock based compensation

 

 

 

 

 

 

 

 

 

 

 

1,262

 

Add: Acquisition related costs

 

 

3,412

 

 

 

 

 

 

3,412

 

 

 

 

Adjusted loss from operations

 

$

(90,593

)

 

$

(36,873

)

 

$

(229,953

)

 

$

(117,956

)

Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted

We calculate Non-GAAP net loss as net loss adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense, the one-time, IPO related non-cash revaluation of a preferred stock warrant and costs related to our acquisition of UACC. We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding. The following table presents a reconciliation of Non-GAAP net loss and Non-GAAP net loss per share 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,

 

 

2021

 

2020

 

2021

 

2020

 

(in thousands, except share and per share amounts)

 

Net loss

 

$

(98,122

)

 

$

(37,850

)

 

$

(241,118

)

 

$

(142,137

)

Net loss attributable to common stockholders

 

$

(98,122

)

 

$

(37,850

)

 

$

(241,118

)

 

$

(142,137

)

Add: One-time IPO related acceleration of non-cash stock based compensation

 

 

 

 

 

 

 

 

 

 

 

1,262

 

Add: One-time IPO related non-cash revaluation of preferred stock warrant

 

 

 

 

 

 

 

 

 

 

 

20,470

 

Add: Acquisition related costs

 

 

3,412

 

 

 

 

 

 

3,412

 

 

 

 

Non-GAAP net loss

 

$

(94,710

)

 

$

(37,850

)

 

$

(237,706

)

 

$

(120,405

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

136,766,015

 

 

 

121,123,472

 

 

 

136,256,901

 

 

 

53,731,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.72

)

 

$

(0.31

)

 

$

(1.77

)

 

$

(2.65

)

Impact of one-time IPO related acceleration of non-cash stock based compensation

 

 

 

 

 

 

 

 

 

 

 

0.02

 

Impact of one-time IPO related non-cash revaluation of preferred stock warrant

 

 

 

 

 

 

 

 

 

 

 

0.38

 

Impact of acquisition related costs

 

 

0.02

 

 

 

 

 

 

0.03

 

 

 

 

Non-GAAP net loss per share, basic and diluted

 

$

(0.70

)

 

$

(0.31

)

 

$

(1.74

)

 

$

(2.25

)

Non-GAAP net loss per share, as adjusted, basic and diluted(a)

 

$

(0.70

)

 

$

(0.29

)

 

$

(1.74

)

 

$

(0.93

)

(a)Non-GAAP net loss per share, as adjusted has been computed to give effect to, as of the beginning of each period presented, (i) the shares of common stock issued in connection with our IPO, (ii) the automatic conversion of all outstanding shares of redeemable convertible preferred stock into shares of common stock that occurred upon the consummation of our IPO and (iii) the shares of common stock issued with our follow-on public offering. The computation of Non-GAAP net loss per share, as adjusted is as follows:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2021

 

2020

 

2021

 

2020

 

(in thousands, except share and per share amounts)

 

Non-GAAP net loss

 

$

(94,710

)

 

$

(37,850

)

 

$

(237,706

)

 

$

(120,405

)

Non-GAAP net loss, as adjusted

 

$

(94,710

)

 

$

(37,850

)

 

$

(237,706

)

 

$

(120,405

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

136,766,015

 

 

 

121,123,472

 

 

 

136,256,901

 

 

 

53,731,475

 

Add: unweighted adjustment for common stock issued in connection with IPO

 

 

 

 

 

 

 

 

 

 

 

24,437,500

 

Add: unweighted adjustment for conversion of redeemable convertible preferred stock in connection with IPO

 

 

 

 

 

 

 

 

 

 

 

85,533,394

 

Add: unweighted adjustment for common stock issued in connection with follow-on public offering

 

 

 

 

 

10,800,000

 

 

 

 

 

 

10,800,000

 

Less: Adjustment for the impact of the above items already included in weighted-average number of shares outstanding for the periods presented

 

 

 

 

 

(1,760,869

)

 

 

 

 

 

(44,897,573

)

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

 

 

136,766,015

 

 

 

130,162,603

 

 

 

136,256,901

 

 

 

129,604,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net loss per share, as adjusted, basic and diluted

 

$

(0.70

)

 

$

(0.29

)

 

$

(1.74

)

 

$

(0.93

)

Financial Outlook

For the full year 2021, we continue to expect triple digit year-over-year growth in ecommerce unit sales and more than 200% year-over-year growth in aggregate gross profit. For the fourth quarter 2021, we expect the following results:

  • Ecommerce unit sales of 20,000 to 20,500, implying year over year growth of 84% at the mid-point of the guidance range.
  • Average ecommerce selling price per unit of $35,000 to $36,000 and average ecommerce gross profit per unit of $2,100 to $2,300.
  • Wholesale unit sales of 6,500 to 7,500, average selling price per unit of $13,000 to $14,000 and average gross profit per unit of $550 to $750.
  • TDA unit sales of 1,500 to 1,600, average selling price per unit of $35,000 to $36,000 and average gross profit per unit of $1,800 to $2,000.
  • Total revenue of $865 to $900 million.
  • Total gross profit of $50 to $58 million.
  • Adjusted EBITDA* of $(104) to $(95) million.
  • Stock-based compensation expense of $4.2 million.
  • Net loss per share, as adjusted* of $(0.77) to $(0.70).

*A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for our fourth quarter 2021 Financial Outlook 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. We have provided a reconciliation of GAAP to non-GAAP financial measures for the third quarter 2021 in the reconciliation table in the Non-GAAP Financial Measures section above.

We expect the following number of GAAP weighted average shares outstanding for the fourth quarter and the full year 2021:

 

Quarter

 

YTD

2021

136,897,954

 

136,417,164

These estimates exclude any shares potentially issuable under stock-based compensation plans.

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of November 9, 2021 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, November 10, 2021 at 8:30 a.m. ET.

The conference call can be accessed via telephone by dialing 1-833-519-1297 (or 914-800-3868 for international access) and entering the conference ID 5685139. A live audio webcast will also be available 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 our expectations regarding our business strategy and plans, including our ability to integrate and develop United Auto Credit Corporation into a captive finance operation, as well as our ability to scale our business, grow inventory, expand reconditioning capacity, invest in logistics and improve our end-to-end customer experience, and for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the fourth quarter and the year ended December 31, 2021. 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, 2020, as updated by our Quarterly report on Form 10-Q for the quarter ended September 30, 2021, each of which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

 

VROOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

As of

 

As of

 

 

September 30,

 

December 31,

 

 

2021

 

2020

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,326,543

 

 

$

1,056,213

 

Restricted cash

 

 

69,574

 

 

 

33,826

 

Accounts receivable, net of allowance of $4,937 and $2,803, respectively

 

 

89,900

 

 

 

60,576

 

Inventory

 

 

601,753

 

 

 

423,647

 

Prepaid expenses and other current assets

 

 

62,390

 

 

 

23,617

 

Total current assets

 

 

2,150,160

 

 

 

1,597,879

 

Property and equipment, net

 

 

30,559

 

 

 

15,092

 

Intangible assets, net

 

 

29,762

 

 

 

34

 

Goodwill

 

 

158,817

 

 

 

78,172

 

Operating lease right-of-use assets

 

 

16,994

 

 

 

17,137

 

Other assets

 

 

23,251

 

 

 

15,742

 

Total assets

 

$

2,409,543

 

 

$

1,724,056

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

59,522

 

 

$

32,925

 

Accrued expenses

 

 

104,694

 

 

 

59,405

 

Vehicle floorplan

 

 

441,473

 

 

 

329,231

 

Deferred revenue

 

 

64,087

 

 

 

24,822

 

Operating lease liabilities, current

 

 

6,872

 

 

 

6,052

 

Other current liabilities

 

 

66,904

 

 

 

30,275

 

Total current liabilities

 

 

743,552

 

 

 

482,710

 

Convertible senior notes

 

 

609,811

 

 

 

 

Operating lease liabilities, excluding current portion

 

 

11,325

 

 

 

12,093

 

Other long-term liabilities

 

 

4,204

 

 

 

2,151

 

Total liabilities

 

 

1,368,892

 

 

 

496,954

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 136,897,954 and 134,043,969 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

135

 

 

 

132

 

Additional paid-in-capital

 

 

2,059,505

 

 

 

2,004,841

 

Accumulated deficit

 

 

(1,018,989

)

 

 

(777,871

)

Total stockholders’ equity

 

 

1,040,651

 

 

 

1,227,102

 

Total liabilities and stockholders’ equity

 

$

2,409,543

 

 

$

1,724,056

 

 

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,

 

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle, net

 

$

735,716

 

 

$

249,518

 

 

$

1,798,155

 

 

$

754,380

 

Wholesale vehicle

 

 

131,306

 

 

 

63,972

 

 

 

377,438

 

 

 

170,469

 

Product, net

 

 

26,544

 

 

 

9,198

 

 

 

64,422

 

 

 

25,979

 

Other

 

 

3,190

 

 

 

317

 

 

 

9,749

 

 

 

1,043

 

Total revenue

 

 

896,756

 

 

 

323,005

 

 

 

2,249,764

 

 

 

951,871

 

Cost of sales

 

 

838,667

 

 

 

297,560

 

 

 

2,092,371

 

 

 

900,432

 

Total gross profit

 

 

58,089

 

 

 

25,445

 

 

 

157,393

 

 

 

51,439

 

Selling, general and administrative expenses

 

 

148,718

 

 

 

61,127

 

 

 

381,482

 

 

 

167,418

 

Depreciation and amortization

 

 

3,376

 

 

 

1,191

 

 

 

9,276

 

 

 

3,239

 

Loss from operations

 

 

(94,005

)

 

 

(36,873

)

 

 

(233,365

)

 

 

(119,218

)

Interest expense

 

 

7,028

 

 

 

2,259

 

 

 

14,720

 

 

 

6,382

 

Interest income

 

 

(2,930

)

 

 

(1,289

)

 

 

(7,288

)

 

 

(3,960

)

Revaluation of preferred stock warrant

 

 

 

 

 

 

 

 

 

 

 

20,470

 

Other income, net

 

 

(10

)

 

 

(26

)

 

 

(58

)

 

 

(111

)

Loss before provision for income taxes

 

 

(98,093

)

 

 

(37,817

)

 

 

(240,739

)

 

 

(141,999

)

Provision for income taxes

 

 

29

 

 

 

33

 

 

 

379

 

 

 

138

 

Net loss

 

$

(98,122

)

 

$

(37,850

)

 

$

(241,118

)

 

$

(142,137

)

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

 

$

(0.72

)

 

$

(0.31

)

 

$

(1.77

)

 

$

(2.65

)

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

 

 

136,766,015

 

 

 

121,123,472

 

 

 

136,256,901

 

 

 

53,731,475

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

September 30,

 

 

2021

 

2020

Operating activities

 

 

 

 

 

 

Net loss

 

$

(241,118

)

 

$

(142,137

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

9,497

 

 

 

3,255

 

Amortization of debt issuance costs

 

 

1,784

 

 

 

656

 

Stock-based compensation expense

 

 

9,754

 

 

 

8,930

 

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

 

 

5,625

 

 

 

2,917

 

Revaluation of preferred stock warrant

 

 

 

 

 

20,470

 

Other

 

 

4,874

 

 

 

1,331

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(32,936

)

 

 

(4,297

)

Inventory

 

 

(183,731

)

 

 

(96,582

)

Prepaid expenses and other current assets

 

 

(39,356

)

 

 

(6,639

)

Other assets

 

 

(7,390

)

 

 

(2,246

)

Accounts payable

 

 

26,144

 

 

 

10,478

 

Accrued expenses

 

 

43,512

 

 

 

15,679

 

Deferred revenue

 

 

39,227

 

 

 

(24

)

Other liabilities

 

 

38,655

 

 

 

5,335

 

Net cash used in operating activities

 

 

(325,459

)

 

 

(182,874

)

Investing activities

 

 

 

 

 

 

Purchase of property and equipment

 

 

(18,786

)

 

 

(5,057

)

Acquisition of business, net of cash acquired

 

 

(75,875

)

 

 

 

Net cash used in investing activities

 

 

(94,661

)

 

 

(5,057

)

Financing activities

 

 

 

 

 

 

Proceeds from vehicle floorplan

 

 

1,901,457

 

 

 

842,865

 

Repayments of vehicle floorplan

 

 

(1,789,215

)

 

 

(767,359

)

Payment of vehicle floorplan upfront commitment fees

 

 

 

 

 

(1,125

)

Proceeds from issuance of convertible senior notes

 

 

625,000

 

 

 

 

Issuance costs paid for convertible senior notes

 

 

(16,129

)

 

 

 

Proceeds from the issuance of redeemable convertible preferred stock, net

 

 

 

 

 

21,694

 

Repurchase of common stock

 

 

 

 

 

(1,818

)

Common stock shares withheld to satisfy employee tax withholding obligations

 

 

 

 

 

(2,915

)

Proceeds from the issuance of common stock in connection with IPO, net of underwriting discount

 

 

 

 

 

504,023

 

Payments of costs related to IPO

 

 

 

 

 

(6,791

)

Proceeds from the issuance of common stock in connection with follow-on public offering, net of underwriting discount

 

 

 

 

 

569,471

 

Payments of costs related to follow-on public offering

 

 

 

 

 

(196

)

Proceeds from exercise of stock options

 

 

5,085

 

 

 

133

 

Other financing activities

 

 

 

 

 

(315

)

Net cash provided by financing activities

 

 

726,198

 

 

 

1,157,667

 

Net increase in cash, cash equivalents and restricted cash

 

 

306,078

 

 

 

969,736

 

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

 

 

1,090,039

 

 

 

219,587

 

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

 

$

1,396,117

 

 

$

1,189,323

 

 

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