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Vroom Reports Strong Fourth Quarter and Full Year 2021 Growth

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Vroom Delivers Record Ecommerce Units

Quarterly and FY 2021 Ecommerce Unit Sales Up 93% and 117% YoY, respectively

Quarterly and FY 2021 Ecommerce Gross Profit Up 64% and 171% YoY, respectively

NEW YORK, February 28, 2022--(BUSINESS WIRE)--Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the fourth quarter and fiscal year ended December 31, 2021.

HIGHLIGHTS OF FOURTH QUARTER 2021

  • 21,243 ecommerce units sold, up 93% YoY

  • Ecommerce revenue of $738.7 million, up 159% YoY

  • Ecommerce gross profit of $32.9 million, up 64% YoY

  • Announced acquisition of UACC

HIGHLIGHTS OF FISCAL YEAR 2021

  • 74,698 ecommerce units sold, up 117% YoY

  • Ecommerce revenue of $2,442.4 million, up 167% YoY

  • Ecommerce gross profit of $164.7 million, up 171% YoY

"I am proud of what we accomplished in 2021" commented Mr. Paul Hennessy, Chief Executive Officer of Vroom. "We achieved record unit sales and revenues, record ecommerce gross profit per unit and a record number of vehicle acquisitions from consumers. At the same time, we expanded both our reconditioning capacity and last mile delivery operations. We look forward to the continued evolution of our business in 2022 as we welcome our new Chief Operating Officer, Tom Shortt, to lead our efforts to achieve operational excellence and deliver an outstanding customer experience, as well as the team from UACC, as we build out our captive financing arm and improve our unit economics. I have never been more optimistic about the future for Vroom."

Mr. Robert Krakowiak, Vroom’s Chief Financial Officer, commented: "we are pleased with our full year progress on ecommerce gross profit per unit, expanding by 25% for the full year despite fourth quarter headwinds. Additionally, we continue to leverage SG&A per ecommerce transaction, which reduced by 18% on a year-over-year basis. For 2022, we expect a further increase in ecommerce GPPU and continued leverage of our SG&A spend as we begin to capture the benefits of captive financing and sharpen our focus on incremental unit economics throughout our business."

FOURTH QUARTER 2021 FINANCIAL DISCUSSION

All financial comparisons for the fourth quarter are on a year-over-year basis unless otherwise noted.

Ecommerce Results

Three Months Ended
December 31,

Year Ended
December 31,

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

21,243

11,022

10,221

92.7

%

74,698

34,488

40,210

116.6

%

Ecommerce revenue:

Vehicle revenue

$

715,874

$

274,552

$

441,322

160.7

%

$

2,360,368

$

884,560

$

1,475,808

166.8

%

Product revenue

22,846

10,398

12,448

119.7

%

82,001

30,891

51,110

165.5

%

Total ecommerce revenue

$

738,720

$

284,950

$

453,770

159.2

%

$

2,442,369

$

915,451

$

1,526,918

166.8

%

Ecommerce gross profit:

Vehicle gross profit

$

10,042

$

9,674

$

368

3.8

%

$

82,745

$

29,970

$

52,775

176.1

%

Product gross profit

22,846

10,398

12,448

119.7

%

82,001

30,891

51,110

165.5

%

Total ecommerce gross profit

$

32,888

$

20,072

$

12,816

63.9

%

$

164,746

$

60,861

$

103,885

170.7

%

Average vehicle selling price per ecommerce unit

$

33,699

$

24,909

$

8,790

35.3

%

$

31,599

$

25,648

$

5,951

23.2

%

Gross profit per ecommerce unit:

Vehicle gross profit per ecommerce unit

$

473

$

878

$

(405

)

(46.1

)%

$

1,108

$

869

$

239

27.5

%

Product gross profit per ecommerce unit

1,075

943

132

14.0

%

1,098

896

202

22.5

%

Total gross profit per ecommerce unit

$

1,548

$

1,821

$

(273

)

(15.0

)%

$

2,206

$

1,765

$

441

25.0

%

Ecommerce average days to sale

76

77

(1

)

(1.3

)%

74

66

8

12.1

%

Fourth Quarter 2021

Ecommerce Units

Ecommerce units sold increased 92.7% to 21,243 as a result of higher inventory levels, strong national brand recognition driven by our national advertising campaign and higher marketing spend, as well as growing consumer acceptance of our business model. The increase was also attributable to strong market demand 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 132.9% to 2,338,718.

Ecommerce Revenue

Ecommerce revenue increased 159.2% to $738.7 million.

  • Ecommerce Vehicle revenue increased 160.7% to $715.9 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 $24,909 to $33,699, primarily attributable to market appreciation.

  • Ecommerce Product revenue increased 119.7% to $22.8 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 $943 to $1,075 per unit.

Ecommerce Gross Profit

Ecommerce gross profit increased 63.9% to $32.9 million.

  • Ecommerce Vehicle gross profit increased 3.8% to $10.1 million. The increase in ecommerce Vehicle gross profit was primarily due to an increase in ecommerce units sold, offset by a 46.1% decrease in ecommerce Vehicle gross profit per unit, which decreased from $878 to $473.

  • Ecommerce Product gross profit increased 119.7% to $22.8 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 $943 to $1,075 per unit.

Ecommerce Gross Profit per Unit

Ecommerce gross profit per unit decreased 15.0% to $1,548.

  • Ecommerce Vehicle gross profit per unit decreased 46.1% to $473, primarily driven by lower sales margins as a result of high acquisition costs for premium vehicles in the third quarter, combined with the retail depreciation for these vehicles during the fourth quarter, as well as higher reconditioning costs due to labor shortages and elevated demand at third-party reconditioning partners.

  • Ecommerce Product gross profit per unit increased 14.0% to $1,075, primarily driven by an increase in the average loan size as a result of a higher average selling price per unit, as well as higher attachment rates on other value-added products.

Results by Segment

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020 (1)

Change

% Change

2021

2020 (1)

Change

% Change

(in thousands, except unit data)

(in thousands, except unit data)

Units:

Ecommerce

21,243

11,022

10,221

92.7

%

74,698

34,488

40,210

116.6

%

Wholesale

8,742

6,998

1,744

24.9

%

37,163

21,108

16,055

76.1

%

TDA

2,105

1,777

328

18.5

%

7,212

7,385

(173

)

(2.3

)%

Total units

32,090

19,797

12,293

62.1

%

119,073

62,981

56,092

89.1

%

Revenue:

Ecommerce

$

738,720

$

284,950

$

453,770

159.2

%

$

2,442,369

$

915,451

$

1,526,918

166.8

%

Wholesale

121,543

75,111

46,432

61.8

%

498,981

245,580

253,401

103.2

%

TDA

70,944

45,437

25,507

56.1

%

229,872

195,295

34,577

17.7

%

All Other (2)

3,284

331

2,953

892.1

%

13,033

1,374

11,659

848.5

%

Total revenue

$

934,491

$

405,829

$

528,662

130.3

%

$

3,184,255

$

1,357,700

$

1,826,555

134.5

%

Gross profit (loss):

Ecommerce

$

32,888

$

20,072

$

12,816

63.9

%

$

164,746

$

60,861

$

103,885

170.7

%

Wholesale

7,783

(2,938

)

10,721

364.9

%

18,120

(1,432

)

19,552

1,365.4

%

TDA

2,163

2,878

(715

)

(24.8

)%

11,907

11,677

230

2.0

%

All Other (2)

1,872

94

1,778

1,891.5

%

7,326

439

6,887

1,568.8

%

Total gross profit

$

44,706

$

20,106

$

24,600

122.4

%

$

202,099

$

71,545

$

130,554

182.5

%

Gross profit (loss) per unit (3):

Ecommerce

$

1,548

$

1,821

$

(273

)

(15.0

)%

$

2,206

$

1,765

$

441

25.0

%

Wholesale

$

890

$

(420

)

$

1,310

311.9

%

$

488

$

(68

)

$

556

817.6

%

TDA

$

1,028

$

1,620

$

(592

)

(36.5

)%

$

1,651

$

1,581

$

70

4.4

%

(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, which was acquired in January 2021, 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 62.1% to 32,090.

  • Ecommerce units sold increased 92.7% to 21,243, as discussed above.

  • Wholesale units sold increased 24.9% to 8,742, 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 18.5% to 2,105, primarily due to strong market demand generally for used vehicles and higher inventory levels.

Total Revenue

Total revenue increased 130.3% to $934.5 million.

  • Ecommerce revenue increased 159.2% to $738.7 million, as discussed above.

  • Wholesale revenue increased 61.8% to $121.5 million. The increase in wholesale revenue was primarily attributable to a higher average selling price per unit, which increased from $10,733 to $13,903, primarily due to market appreciation and to a lesser extent due to the increase in wholesale units sold.

  • TDA revenue increased 56.1% to $70.9 million, primarily due to a higher average selling price per unit, which increased from $24,546 to $32,963 as well as the increase in TDA units sold.

Total Gross Profit

Total gross profit increased 122.4% to $44.7 million.

  • Ecommerce gross profit increased 63.9% to $32.9 million, as discussed above.

  • Wholesale gross profit increased 364.9% to $7.8 million. Wholesale gross profit increased primarily due to a higher Wholesale gross profit per unit of $1,310.

  • TDA gross profit decreased 24.8% to $2.2 million. TDA gross profit decreased primarily due to a decrease in TDA gross profit per unit of $592.

Gross Profit per Unit

  • Ecommerce gross profit per unit decreased 15.0% to $1,548, as discussed above.

  • Wholesale gross profit per unit increased 311.9% to $890 as a result of favorable wholesale market conditions.

  • TDA gross profit per unit decreased 36.5% to $1,028 driven by a decrease in TDA vehicle gross profit per unit of $308, as well as a decrease in TDA product gross profit per unit of $284.

SG&A

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

Change

% Change

2021

2020

Change

% Change

(in thousands)

(in thousands)

Compensation & benefits

$

59,332

$

28,384

$

30,948

109.0

%

$

204,913

$

92,205

$

112,708

122.2

%

Marketing expense

37,214

17,564

19,650

111.9

%

125,481

62,393

63,088

101.1

%

Outbound logistics

27,800

10,500

17,300

164.8

%

85,788

30,262

55,526

183.5

%

Occupancy and related costs

4,849

3,210

1,639

51.1

%

17,448

10,784

6,664

61.8

%

Professional fees

8,435

4,863

3,572

73.5

%

24,386

10,560

13,826

130.9

%

Other

28,711

13,607

15,104

111.0

%

89,807

39,342

50,465

128.3

%

Total selling, general & administrative expenses

$

166,341

$

78,128

$

88,213

112.9

%

$

547,823

$

245,546

$

302,277

123.1

%

Selling, general and administrative expenses increased 112.9% to $166.3 million. The increase was primarily due to:

  • $30.9 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;

  • $19.7 million increase in marketing expense as we expanded our national broad-reach brand advertising and increased performance and online marketing as we continue to grow our listed inventory;

  • $17.3 million increase in outbound logistics costs primarily attributable to the growth in ecommerce units sold, which increased outbound logistics costs by $9.7 million, as well as increases in market rates of logistics providers, which increased outbound logistics costs by $7.6 million;

  • $3.6 million increase in professional fees primarily due to increased legal fees as well as consulting expenses in the engineering department; and

  • $15.1 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 continue 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. However, we believe these increases will be partially offset by operating leverage as our business continues to scale and we gain efficiencies from our investments in technology and process improvements.

Loss from Operations and Net Loss

Loss from operations increased 110.9% to $125.3 million. Net loss increased 114.0% to $129.8 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 acquisition related costs. 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
December 31,

Year Ended
December 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Net loss

$

(129,793

)

$

(60,662

)

$

(370,911

)

$

(202,799

)

Adjusted to exclude the following:

Interest expense

7,228

3,274

21,948

9,656

Interest income

(3,053

)

(1,936

)

(10,341

)

(5,896

)

Provision for income taxes

375

(54

)

754

84

Depreciation and amortization expense

3,718

1,399

13,215

4,654

EBITDA

$

(121,525

)

$

(57,979

)

$

(345,335

)

$

(194,301

)

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

1,678

2,080

5,090

2,080

Adjusted EBITDA

$

(119,847

)

$

(55,899

)

$

(340,245

)

$

(170,489

)

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 acquisition related costs. 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
December 31,

Year Ended
December 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Loss from operations

$

(125,250

)

$

(59,381

)

$

(358,615

)

$

(178,599

)

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

1,262

Add: Acquisition related costs

1,678

2,080

5,090

2,080

Adjusted loss from operations

$

(123,572

)

$

(57,301

)

$

(353,525

)

...

(175,257

)

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 acquisition related costs. 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
December 31,

Year Ended
December 31,

2021

2020

2021

2020

(in thousands, except share and per share amounts)

(in thousands, except share and per share amounts)

Net loss