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Vroom Reports Third Quarter 2020 Results

·12 min read

Vroom Delivers Record Ecommerce Units and Gross Profit

Ecommerce Unit Sales Up 59% YoY

Ecommerce Gross Profit Up 120% YoY

Vroom, Inc. (NASDAQ:VRM), a leading e-commerce platform for buying and selling used vehicles, today announced financial results for the third quarter ended September 30, 2020 ("Q3 2020").

HIGHLIGHTS OF THIRD QUARTER 2020

  • 8,823 ecommerce units sold, up 59% YoY

  • Ecommerce revenue of $221.8 million, up 25% YoY

  • Ecommerce gross profit of $19.3 million, up 120% YoY

Paul Hennessy, Chief Executive Officer of Vroom, commented:

"I am very pleased with our results for the third quarter, in which we successfully managed the challenges presented by the COVID-19 pandemic, outperformed our plan, demonstrated the strength of our business model, and hit the accelerator on significantly scaling our business. By doing the things we said we would do -- adding vehicle inventory, increasing marketing, relying on data to drive decision making, and enhancing our customer experience -- we increased the velocity of the Vroom flywheel, drove conversion and increased GPPU. We will continue to execute our plan and invest in the growth of our business as we transform the market for buying and selling used vehicles."

COVID-19 Update

Note: All sequential comparisons are on a current quarter over prior quarter basis.

After the initial disruption in our ecommerce operations due to the COVID-19 pandemic, consumer demand for used vehicles has returned to pre-COVID-19 levels and, in the three months ended September 30, 2020, we experienced continued strong consumer demand for our ecommerce solutions and contact-free delivery. Ecommerce units sold increased sequentially 31.4% to 8,823 units driven by increased consumer demand, higher inventory levels and increased marketing spend, and ecommerce revenue increased sequentially 26.3% to $221.8 million.

Ecommerce gross profit and gross profit per unit experienced strong sequential growth of 167.4% to $19.3 million and 103.5% to $2,188 per unit, respectively.

THIRD QUARTER 2020 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,

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

2020

 

 

 

Change

 

 

% Change

 

2019

 

 

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

 

 

 

5,563

 

 

 

 

8,823

 

 

 

 

3,260

 

 

 

58.6

%

 

 

 

12,606

 

 

 

 

23,466

 

 

 

 

10,860

 

 

 

86.1

%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

174,510

 

 

$

 

213,943

 

 

$

 

39,433

 

 

 

22.6

%

 

$

 

381,709

 

 

$

 

610,008

 

 

$

 

228,299

 

 

 

59.8

%

Product revenue

 

 

 

3,603

 

 

 

 

7,818

 

 

 

 

4,215

 

 

 

117.0

%

 

 

 

7,212

 

 

 

 

20,493

 

 

 

 

13,281

 

 

 

184.2

%

Total ecommerce revenue

 

$

 

178,113

 

 

$

 

221,761

 

 

$

 

43,648

 

 

 

24.5

%

 

$

 

388,921

 

 

$

 

630,501

 

 

$

 

241,580

 

 

 

62.1

%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

 

$

 

5,171

 

 

$

 

11,486

 

 

$

 

6,315

 

 

 

122.1

%

 

$

 

14,611

 

 

$

 

20,296

 

 

$

 

5,685

 

 

 

38.9

%

Product gross profit

 

 

 

3,603

 

 

 

 

7,818

 

 

 

 

4,215

 

 

 

117.0

%

 

 

 

7,212

 

 

 

 

20,493

 

 

 

 

13,281

 

 

 

184.2

%

Total ecommerce gross profit

 

$

 

8,774

 

 

$

 

19,304

 

 

$

 

10,530

 

 

 

120.0

%

 

$

 

21,823

 

 

$

 

40,789

 

 

$

 

18,966

 

 

 

86.9

%

Average vehicle selling price per ecommerce unit

 

$

 

31,370

 

 

$

 

24,248

 

 

$

 

(7,122

)

 

 

(22.7

)%

 

$

 

30,280

 

 

$

 

25,995

 

 

$

 

(4,285

)

 

 

(14.2

)%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

 

$

 

929

 

 

$

 

1,302

 

 

$

 

373

 

 

 

40.2

%

 

$

 

1,159

 

 

$

 

865

 

 

$

 

(294

)

 

 

(25.4

)%

Product gross profit per ecommerce unit

 

 

 

648

 

 

 

 

886

 

 

 

 

238

 

 

 

36.7

%

 

 

 

572

 

 

 

 

873

 

 

 

 

301

 

 

 

52.6

%

Total gross profit per ecommerce unit

 

$

 

1,577

 

 

$

 

2,188

 

 

$

 

611

 

 

 

38.7

%

 

$

 

1,731

 

 

$

 

1,738

 

 

$

 

7

 

 

 

0.4

%

Ecommerce average days to sale

 

 

 

71

 

 

 

 

52

 

 

 

 

(19

)

 

 

(26.8

)%

 

 

 

67

 

 

 

 

62

 

 

 

 

(5

)

 

 

(7.5

)%

Ecommerce Units

Ecommerce units sold increased 58.6% to 8,823 driven by increased consumer demand, higher inventory levels and increased marketing spend. Average monthly unique visitors to our platform increased 19.4% to 928,277.

Ecommerce Revenue

Ecommerce revenue increased 24.5% to $221.8 million.

  • Ecommerce Vehicle revenue increased 22.6% to $214.0 million. The increase in ecommerce Vehicle revenue was primarily attributable to the increase in ecommerce units sold, partially offset by a decrease in the average selling price per unit, which decreased from $31,370 to $24,248. The decrease in average selling price was driven by demand predicted by our data analytics.

  • Ecommerce Product revenue increased 117.0% to $7.8 million. The increase in ecommerce Product revenue was primarily attributable to the increase in ecommerce units sold, and further increased by an improvement in ecommerce Product revenue per unit, which increased from $648 to $886 per unit. The increase in ecommerce Product revenue per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Ecommerce Gross Profit

Ecommerce gross profit increased 120.0% to $19.3 million.

  • Ecommerce Vehicle gross profit increased 122.1% to $11.5 million. The increase in ecommerce Vehicle gross profit was due to a $373 increase in ecommerce Vehicle gross profit per unit, driven primarily by improvements in inbound logistics and reconditioning costs and the increase in ecommerce units sold.

  • Ecommerce Product gross profit increased 117.0% to $7.8 million. The increase in ecommerce Product gross profit was primarily attributable to the increase in ecommerce units sold, and further increased by an improvement in ecommerce Product gross profit per unit, which increased from $648 to $886 per unit. The increase in Product gross profit per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Ecommerce Gross Profit per Unit

Ecommerce gross profit per unit increased 38.7% to $2,188.

  • Ecommerce Vehicle gross profit per unit increased 40.2% to $1,302, driven primarily by improvements in inbound logistics and reconditioning costs.

  • Ecommerce Product gross profit per unit increased 36.7% to $886. The increase in Product gross profit per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Results by Segment

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

2020

 

 

Change

 

 

% Change

 

2019

 

 

2020

 

 

Change

 

 

% Change

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

5,563

 

 

 

8,823

 

 

 

3,260

 

 

 

58.6

%

 

 

12,606

 

 

 

23,466

 

 

 

10,860

 

 

 

86.1

%

TDA

 

 

3,282

 

 

 

1,463

 

 

 

(1,819

)

 

 

(55.4

)%

 

 

9,444

 

 

 

5,608

 

 

 

(3,836

)

 

 

(40.6

)%

Wholesale

 

 

5,420

 

 

 

6,166

 

 

 

746

 

 

 

13.8

%

 

 

16,046

 

 

 

14,110

 

 

 

(1,936

)

 

 

(12.1

)%

Total units

 

 

14,265

 

 

 

16,452

 

 

 

2,187

 

 

 

15.3

%

 

 

38,096

 

 

 

43,184

 

 

 

5,088

 

 

 

13.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

178,113

 

 

$

221,761

 

 

$

43,648

 

 

 

24.5

%

 

$

388,921

 

 

$

630,501

 

 

$

241,580

 

 

 

62.1

%

TDA

 

 

103,106

 

 

 

37,272

 

 

 

(65,834

)

 

 

(63.9

)%

 

 

281,603

 

 

 

150,901

 

 

 

(130,702

)

 

 

(46.4

)%

Wholesale

 

 

59,054

 

 

 

63,972

 

 

 

4,918

 

 

 

8.3

%

 

 

165,705

 

 

 

170,469

 

 

 

4,764

 

 

 

2.9

%

Total revenue

 

$

340,273

 

 

$

323,005

 

 

$

(17,268

)

 

 

(5.1

)%

 

$

836,229

 

 

$

951,871

 

 

$

115,642

 

 

 

13.8

%

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

8,774

 

 

$

19,304

 

 

$

10,530

 

 

 

120.0

%

 

$

21,823

 

 

$

40,789

 

 

$

18,966

 

 

 

86.9

%

TDA

 

 

6,650

 

 

 

2,798

 

 

 

(3,852

)

 

 

(57.9

)%

 

 

18,830

 

 

 

9,144

 

 

 

(9,686

)

 

 

(51.4

)%

Wholesale

 

 

247

 

 

 

3,343

 

 

 

3,096

 

 

 

1,253.4

%

 

 

875

 

 

 

1,506

 

 

 

631

 

 

 

72.1

%

Total gross profit

 

$

15,671

 

 

$

25,445

 

 

$

9,774

 

 

 

62.4

%

 

$

41,528

 

 

$

51,439

 

 

$

9,911

 

 

 

23.9

%

Gross profit per unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

1,577

 

 

$

2,188

 

 

$

611

 

 

 

38.7

%

 

$

1,731

 

 

$

1,738

 

 

$

7

 

 

 

0.4

%

TDA

 

$

1,974

 

 

$

1,828

 

 

$

(146

)

 

 

(7.4

)%

 

$

1,931

 

 

$

1,569

 

 

$

(362

)

 

 

(18.8

)%

Wholesale

 

$

46

 

 

$

542

 

 

$

496

 

 

 

1,078.3

%

 

$

55

 

 

$

107

 

 

$

52

 

 

 

94.5

%

Total gross profit per unit

 

$

1,099

 

 

$

1,547

 

 

$

448

 

 

 

40.8

%

 

$

1,090

 

 

$

1,191

 

 

$

101

 

 

 

9.3

%

Total Units

Total units sold increased 15.3% to 16,452.

  • Ecommerce units sold increased 58.6% to 8,823, as discussed above.

  • TDA units sold decreased 55.4% to 1,463, primarily due to continued disruptions related to the COVID-19 pandemic in the Houston area.

  • Wholesale units sold increased 13.8% to 6,166, primarily due to an increase of wholesale grade units purchased from consumers.

Total Revenue

Total revenue decreased 5.1% to $323.0 million.

  • Ecommerce revenue increased 24.5% to $221.8 million, as discussed above.

  • TDA revenue decreased 63.9% to $37.3 million. TDA revenue decreased primarily due to the decrease in TDA units sold and a lower average selling price per unit, which decreased from $30,236 to $24,316.

  • Wholesale revenue increased 8.3% to $64.0 million. The increase in wholesale revenue was primarily attributable to the increase in wholesale units sold, partially offset by a decrease in wholesale average selling price per unit, which decreased from $10,896 to $10,375.

Total Gross Profit

Total gross profit increased 62.4% to $25.4 million.

  • Ecommerce gross profit increased 120.0% to $19.3 million, as discussed above.

  • TDA gross profit decreased 57.9% to $2.8 million. TDA gross profit decreased primarily due to lower TDA units sold and a decrease in TDA gross profit per unit of $146.

  • Wholesale gross profit increased to $3.3 million. Wholesale gross profit increased primarily due to an increase in wholesale gross profit per unit of $496.

Total Gross Profit per Unit

Total gross profit per unit increased 40.8% to $1,547.

  • Ecommerce gross profit per unit increased 38.7% to $2,188.

  • TDA gross profit per unit decreased 7.4% to $1,828.

  • Wholesale gross profit per unit increased to $542.

SG&A

 

 

 

Three Months Ended

September 30,

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

2020

 

 

Change

 

 

% Change

 

 

2019

 

 

 

2020

 

 

Change

 

 

% Change

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Compensation & benefits

 

$

 

19,050

 

 

$

 

22,881

 

 

$

3,831

 

 

 

20.1

%

 

$

 

52,018

 

 

$

 

63,821

 

 

$

11,803

 

 

 

22.7

%

Marketing expense

 

 

 

14,606

 

 

 

 

15,341

 

 

 

735

 

 

 

5.0

%

 

 

 

34,442

 

 

 

 

44,829

 

 

 

10,387

 

 

 

30.2

%

Outbound logistics

 

 

 

4,255

 

 

 

 

8,500

 

 

 

4,245

 

 

 

99.8

%

 

 

 

9,199

 

 

 

 

19,762

 

 

 

10,563

 

 

 

114.8

%

Occupancy and related costs

 

 

 

2,770

 

 

 

 

2,610

 

 

 

(160

)

 

 

(5.8

)%

 

 

 

8,041

 

 

 

 

7,574

 

 

 

(467

)

 

 

(5.8

)%

Professional fees

 

 

 

3,497

 

 

 

 

1,773

 

 

 

(1,724

)

 

 

(49.3

)%

 

 

 

9,378

 

 

 

 

5,697

 

 

 

(3,681

)

 

 

(39.3

)%

Other

 

 

 

6,756

 

 

 

 

10,022

 

 

 

3,266

 

 

 

48.3

%

 

 

 

18,131

 

 

 

 

25,735

 

 

 

7,604

 

 

 

41.9

%

Total selling, general & administrative expenses

 

$

 

50,934

 

 

$

 

61,127

 

 

$

10,193

 

 

 

20.0

%

 

$

 

131,209

 

 

$

 

167,418

 

 

$

36,209

 

 

 

27.6

%

Selling, general and administrative expenses increased 20.0% to $61.1 million. The increase was primarily due to a $3.6 million increase in stock-based compensation included within compensation and benefits, a $4.2 million increase in outbound logistics costs partially attributable to the growth in ecommerce units sold, which increased outbound logistics costs by $2.5 million, and increases in market rates of logistics providers, which increased outbound logistics costs by $1.7 million, and a $3.3 million increase in other selling, general and administrative expenses primarily related to additional insurance costs associated with being a publicly traded company. These increases were offset by a $1.7 million decrease in professional fees.

We expect selling, general and administrative expenses to increase in the future as we scale our business and sell more ecommerce units. We will also continue to invest in and improve our customer experience and invest in expanding our proprietary logistics network including our last-mile delivery operations.

Loss from Operations and Net Loss

Loss from operations slightly increased 0.3% to $36.9 million. Net loss decreased 4.8% to $37.9 million.

Non-GAAP Measures

In addition to our results determined in accordance with accounting principles generally accepted in the United States, or 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 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 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 GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

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 and the one-time, IPO related non-cash revaluation of a preferred stock warrant. We calculate Adjusted loss from operations as operating loss adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense and 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 and the one-time, IPO related non-cash revaluation of a preferred stock warrant. The following table presents a reconciliation of the Non-GAAP measures to the most directly comparable financial measures prepared in accordance with GAAP, for each of the periods presented.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

 

(in thousands)

 

 

(in thousands)

 

Net loss

 

$

(39,764

)

 

$

(37,850

)

 

$

(100,243

)

 

$

(142,137

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

3,797

 

 

 

2,259

 

 

 

9,903

 

 

 

6,382

 

Interest income

 

 

(1,190

)

 

 

(1,289

)

 

 

(4,454

)

 

 

(3,960

)

Provision for income taxes

 

 

48

 

 

 

33

 

 

 

122

 

 

 

138

 

Depreciation and amortization expense

 

 

1,537

 

 

 

1,196

 

4,683

3,255

EBITDA

$

(35,572

)

$

(35,651

)

$

(89,989

)

$

(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

Adjusted EBITDA

$

(35,572

)

$

(35,651

)

$

(89,989

)

$

(114,590

)

Adjusted loss from operations

Three Months Ended

September 30,

Nine Months Ended

September 30,

2019

2020

2019

2020

(in thousands)

(in thousands)

Loss from operations

$

(36,780

)

$

(36,873

)

$

(94,232

)

$

(119,218

)

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

1,262

Adjusted loss from operations

$

(36,780

)

$

(36,873

)

$

(94,232

)

$

(117,956

)

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2019

2020

2019

2020

(in thousands, except share and per share amounts)

Net loss

$

(39,764

)

$

(37,850

)

$

(100,243

)

$

(142,137

)

Accretion of redeemable convertible preferred stock

(65,686

)

(109,529

)

Net loss attributable to common stockholders

$

(105,450

)

$

(37,850

)

$

(209,772

)

$

(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

Non-GAAP net loss

$

(105,450

)

$

(37,850

)

$

(209,772

)

$

(120,405

)

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

8,615,682

121,123,472

8,591,554

53,731,475

Net loss per share, basic and diluted

$

(12.24

)

$

(0.31

)

$

(24.42

)

$

(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

Non-GAAP net loss per share, basic and diluted

$

(12.24

)

$

(0.31

)

$

(24.42

)

$

(2.25

)

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

$

(0.31

)

$

(0.29

)

$

(0.77

)

$

(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 in connection 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,

2019

2020

2019

2020

(in thousands, except share and per share amounts)

Non-GAAP net loss

$

(105,450

)

$

(37,850

)

$

(209,772

)

$

(120,405

)

Add: Accretion of redeemable convertible preferred stock

65,686

109,529

Non-GAAP net loss, as adjusted

$

(39,764

)

$

(37,850

)

$

(100,243

)

$

(120,405

)

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

8,615,682

121,123,472

8,591,554

53,731,475

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

24,437,500

24,437,500

24,437,500

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

85,533,394

85,533,394

85,533,394

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

10,800,000

10,800,000

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

129,386,576

130,162,603

129,362,448

129,604,796

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

$

(0.31

)

$

(0.29

)

$

(0.77

)

$

(0.93

)

Financial Outlook

We expect another quarter of significant year-over-year growth in ecommerce unit sales and revenue for Q4 2020 and continued strength in total ecommerce gross profit per unit. Through the third quarter, our year-to-date ecommerce units sold has grown 86% over the prior year. Combined with our strong sequential growth quarter to quarter, we believe we are on track for continued growth into 2021. For Q4 2020, we expect the following results:

  • Ecommerce unit sales of 10,500 to 11,500, implying 25% sequential growth and Q4 year over year growth of 74% at the middle of the guidance range.

  • Average ecommerce selling price per unit of $24,500 to $25,500 and average ecommerce gross profit per unit of $2,050 to $2,150.

  • TDA unit sales of 1,400 to 1,600, average selling price per unit of $24,500 to $25,500 and average gross profit per unit of $1,650 to $1,750.

  • Wholesale unit sales of 6,000 to 7,000, average selling price per unit of $9,500 to $10,500 and average gross profit per unit of breakeven to $100.

  • Total revenue of $372 to $414 million.

  • Total gross profit of $24 to $28 million.

  • EBITDA of ($52) to ($44) million.

  • Stock-based compensation expense of $4.3 million.

  • Net loss per share of ($0.41) to ($0.35).

Prior to our IPO, our shares outstanding primarily consisted of shares of redeemable convertible preferred stock, which automatically converted to shares of common stock upon the consummation of our IPO. In addition, all warrants outstanding were exercised upon the IPO or shortly thereafter, and certain stock-based compensation shares were issued or vested upon the IPO. We expect the following number of GAAP weighted average shares outstanding for the remainder of 2020:

Quarter

YTD

Q4 2020

130,300,000

72,900,000

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 11, 2020 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 11, 2020 at 5:00 p.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 7077759. 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 for future results of operations. 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 Quarterly report on Form 10-Q for the quarter ended September 30, 2020 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

December 31,

September 30,

2019

2020

ASSETS

Current Assets:

Cash and cash equivalents

$

217,734

$

1,161,362

Restricted cash

1,853

27,961

Accounts receivable, net of allowance of $789 and $1,809, respectively

30,848

33,799

Inventory

205,746

299,411

Prepaid expenses and other current assets

9,149

16,257

Total current assets

465,330

1,538,790

Property and equipment, net

7,828

10,051

Intangible assets, net

572

160

Goodwill

78,172

78,172

Operating lease right-of-use assets

14,337

Other assets

11,485

13,433

Total assets

$

563,387

$

1,654,943

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK

AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current Liabilities:

Accounts payable

$

18,987

$

29,630

Accrued expenses

38,491

47,641

Vehicle floorplan

173,461

248,967

Deferred revenue

17,323

17,299

Operating lease liabilities, current

4,621

Other current liabilities

11,572

16,375

Total current liabilities

259,834

364,533

Operating lease liabilities, excluding current portion

10,674

Other long-term liabilities

3,073

1,886

Total liabilities

262,907

377,093

Commitments and contingencies (Note 8)

Redeemable convertible preferred stock, $0.001 par value; 86,123,364

and 10,000,000 shares authorized as of December 31, 2019 and September 30, 2020,

respectively; 83,568,628 and zero shares issued and outstanding as of

December 31, 2019 and September 30, 2020, respectively

874,332

Stockholders’ (deficit) equity:

Common stock, $0.001 par value; 113,443,854 and 500,000,000 shares authorized as of

December 31, 2019 and September 30, 2020, respectively; 8,650,922 and

130,230,591 shares issued and outstanding as of December 31, 2019 and September

30, 2020, respectively

8

130

Additional paid-in-capital

1,994,929

Accumulated deficit

(573,860

)

(717,209

)

Total stockholders’ (deficit) equity

(573,852

)

1,277,850

Total liabilities, redeemable convertible preferred stock and stockholders’ (deficit) equity

$

563,387

$

1,654,943

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,

2019

2020

2019

2020

Revenue:

Retail vehicle, net

$

273,743

$

249,518

$

652,895

$

754,380

Wholesale vehicle

59,054

63,972

165,705

170,469

Product, net

7,029

9,198

16,265

25,979

Other

447

317

1,364

1,043

Total revenue

340,273

323,005

836,229

951,871

Cost of sales

324,602

297,560

794,701

900,432

Total gross profit

15,671

25,445

41,528

51,439

Selling, general and administrative expenses

50,934

61,127

131,209

167,418

Depreciation and amortization

1,517

1,191

4,551

3,239

Loss from operations

(36,780

)

(36,873

)

(94,232

)

(119,218

)

Interest expense

3,797

2,259

9,903

6,382

Interest income

(1,190

)

(1,289

)

(4,454

)

(3,960

)

Revaluation of preferred stock warrant

373

515

20,470

Other income, net

(44

)

(26

)

(75

)

(111

)

Loss before provision for income taxes

(39,716

)

(37,817

)

(100,121

)

(141,999

)

Provision for income taxes

48

33

122

138

Net loss

$

(39,764

)

$

(37,850

)

$

(100,243

)

$

(142,137

)

Accretion of redeemable convertible preferred stock

(65,686

)

(109,529

)

Net loss attributable to common stockholders

$

(105,450

)

$

(37,850

)

$

(209,772

)

$

(142,137

)

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

$

(12.24

)

$

(0.31

)

$

(24.42

)

$

(2.65

)

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

8,615,682

121,123,472

8,591,554

53,731,475

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Nine Months Ended

September 30,

2019

2020

Operating activities

Net loss

$

(100,243

)

$

(142,137

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

4,683

3,255

Amortization of debt issuance costs

269

656

Stock-based compensation expense

2,155

8,930

Loss on disposal of property and equipment

824

46

Provision for inventory obsolescence

3,872

2,917

Revaluation of preferred stock warrant

515

20,470

Other

226

1,285

Changes in operating assets and liabilities:

Accounts receivable

(15,029

)

(4,297

)

Inventory

(97,524

)

(96,582

)

Prepaid expenses and other current assets

(3,168

)

(6,639

)

Other assets

(2,389

)

(2,246

)

Accounts payable

8,769

10,478

Accrued expenses

9,995

15,679

Deferred revenue

2,530

(24

)

Other liabilities

4,487

5,335

Net cash used in operating activities

(180,028

)

(182,874

)

Investing activities

Purchase of property and equipment

(2,024

)

(5,057

)

Net cash used in investing activities

(2,024

)

(5,057

)

Financing activities

Repayments of long-term debt

(5,835

)

Proceeds from vehicle floorplan

705,281

842,865

Repayments of vehicle floorplan

(611,838

)

(767,359

)

Payment of vehicle floorplan upfront commitment fees

(1,125

)

Proceeds from the issuance of redeemable convertible preferred stock, net

21,694

Repurchase of common stock

(542

)

(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

365

133

Other financing activities

221

(315

)

Net cash provided by financing activities

87,652

1,157,667

Net (decrease) increase in cash, cash equivalents and restricted cash

(94,400

)

969,736

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

163,509

219,587

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

$

69,109

$

1,189,323

Supplemental disclosure of cash flow information:

Cash paid for interest

$

8,713

$

5,340

Cash paid for income taxes

$

209

$

163

Supplemental disclosure of non-cash investing and financing activities:

Accretion of redeemable convertible preferred stock

$

109,529

$

Costs related to IPO included in accrued expenses and accounts payable

$

113

$

Costs related to follow-on public offering included in accrued expenses and accounts payable

$

$

1,323

Conversion of redeemable convertible preferred stock warrant to common stock warrant

$

$

21,873

Issuance of common stock as upfront payment to nonemployee

$

$

2,127

Accrued property and equipment expenditures

$

342

$

55

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005858/en/

Contacts

Investor Relations:

Vroom
Allen Miller
investors@vroom.com

Media Contact:

Moxie Communications Group
Alyssa Galella
vroom@moxiegrouppr.com
(562) 294-6261