Vroom Announces Second Quarter 2023 Results

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

NEW YORK, August 08, 2023--(BUSINESS WIRE)--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

%

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

)%

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.

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

)

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

%

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.

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.

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

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

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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20230808120348/en/

Contacts

Investor Relations:

Vroom
Jon Sandison
investors@vroom.com

Media Contact:

Vroom
Chris Hayes
chris.hayes@vroom.com

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