VRM - Vroom Announces Third Quarter 2023 Results

November, 07 2023 04:05 PM Vroom Inc.

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

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, 2023.

HIGHLIGHTS OF THIRD QUARTER 2023 VERSUS SECOND QUARTER 2023

11% sequential growth in Ecommerce units
$3,144 Ecommerce gross profit per unit (GPPU) as compared to $2,954
Continued reductions in fixed costs per unit as well as per unit costs across marketing, logistics, and titling and registrations and support
$(82.9) million net loss as compared to $(66.3) million
$(64.5) million Adjusted EBITDA as compared to $(56.3) million

Tom Shortt, Chief Executive Officer of Vroom, said, “In the third quarter of 2023, consistent with our Long-Term Roadmap, we continued to make progress on our three key objectives and four strategic initiatives. Our ecommerce unit growth rate doubled sequentially to 11%, while we also sequentially improved GPPU and reduced SG&A spend. Ecommerce GPPU increased to $3,144 in Q3 2023 from $2,954 in Q2 2023, benefiting from an improved mix of unaged vehicles sold within the quarter. During the third quarter of 2023, 34% of our units sold were aged units, or units held greater than 180 days. Adjusted EBITDA declined sequentially, driven by headwinds in the loan portfolio performance at UACC due to higher delinquencies and realized net losses, partially offset by improved unit economics. We continue to drive process improvements across titling and registration, pricing, marketing, sales, reconditioning and logistics.”

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “We succeeded in reducing per-unit costs across 1) marketing, 2) logistics, 3) titling, registration and support, and 4) fixed costs. We further strengthened our balance sheet by recovering $48 million of cash trapped on the balance sheet as we sold through aged inventory, and ended the quarter with cash and cash equivalents of approximately $209 million. We will continue to pursue opportunities to reduce costs, strengthen our balance sheet and enhance our liquidity and intend to seek additional capital through equity or debt financing.”

THIRD QUARTER 2023 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,










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



4,561




6,428




(1,867
)


(29.0
)%



12,621




35,134




(22,513
)


(64.1
)%
Ecommerce revenue:






























Vehicle revenue

$

136,949


$

212,980


$

(76,031
)


(35.7
)%

$

387,585


$

1,173,727


$

(786,142
)


(67.0
)%
Product revenue



12,902




12,461




441



3.5
%



36,128




48,709




(12,581
)


(25.8
)%
Total ecommerce revenue

$

149,851


$

225,441


$

(75,590
)


(33.5
)%

$

423,713


$

1,222,436


$

(798,723
)


(65.3
)%
Ecommerce gross profit:






























Vehicle gross profit

$

2,354


$

14,573


$

(12,219
)


(83.8
)%

$

2,956


$

46,153


$

(43,197
)


(93.6
)%
Product gross profit



11,985




12,461




(476
)


(3.8
)%



33,610




48,709




(15,099
)


(31.0
)%
Total ecommerce gross profit

$

14,339


$

27,034


$

(12,695
)


(47.0
)%

$

36,566


$

94,862


$

(58,296
)


(61.5
)%
Average vehicle selling price per ecommerce unit

$

30,026


$

33,133


$

(3,107
)


(9.4
)%

$

30,710


$

33,407


$

(2,697
)


(8.1
)%
Product revenue per ecommerce unit



2,829




1,939




890



45.9
%



2,863




1,386




1,477



106.5
%
Gross profit per ecommerce unit:






























Vehicle gross profit per ecommerce unit

$

516


$

2,267


$

(1,751
)


(77.2
)%

$

234


$

1,314


$

(1,080
)


(82.2
)%
Product gross profit per ecommerce unit



2,628




1,939




689



35.5
%



2,663




1,386




1,277



92.1
%
Total gross profit per ecommerce unit

$

3,144


$

4,206


$

(1,062
)


(25.2
)%

$

2,897


$

2,700


$

197



7.3
%
Ecommerce average days to sale



202




186




16



8.6
%



266




118




148



125.4
%

Results by Segment



Three Months Ended September 30,








Nine Months Ended September 30,









2023


2022


Change


% Change


2023


2022


Change


% Change



(in thousands, except unit data)








(in thousands, except unit data)







Units:
























Ecommerce


4,561



6,428



(1,867
)


(29.0
)%


12,621



35,134



(22,513
)


(64.1
)%
Wholesale


2,270



3,128



(858
)


(27.4
)%


5,273



19,108



(13,835
)


(72.4
)%
All Other ⁽¹⁾


357



662



(305
)


(46.1
)%


1,022



3,408



(2,386
)


(70.0
)%
Total units


7,188



10,218



(3,030
)


(29.7
)%


18,916



57,650



(38,734
)


(67.2
)%

























Revenue:
























Ecommerce

$
149,851


$
225,441


$
(75,590
)


(33.5
)%

$
423,713


$
1,222,436


$
(798,723
)


(65.3
)%
Wholesale


30,898



47,604



(16,706
)


(35.1
)%


75,593



270,489



(194,896
)


(72.1
)%
Retail Financing ⁽²⁾


40,823



40,654



169



0.4
%


114,939



120,005



(5,066
)


(4.2
)%
All Other ⁽³⁾


14,062



27,098



(13,036
)


(48.1
)%


43,034



126,622



(83,588
)


(66.0
)%
Total revenue

$
235,634


$
340,797


$
(105,163
)


(30.9
)%

$
657,279


$
1,739,552


$
(1,082,273
)


(62.2
)%
Gross profit (loss):
























Ecommerce

$
14,339


$
27,034


$
(12,695
)


(47.0
)%

$
36,566


$
94,862


$
(58,296
)


(61.5
)%
Wholesale


(1,495
)


(1,574
)


79



5.0
%


(5,426
)


(6,260
)


834



13.3
%
Retail Financing ⁽²⁾


32,341



35,954



(3,613
)


(10.0
)%


92,184



109,637



(17,453
)


(15.9
)%
All Other ⁽³⁾


2,909



5,917



(3,008
)


(50.8
)%


9,576



17,089



(7,513
)


(44.0
)%
Total gross profit

$
48,094


$
67,331


$
(19,237
)


(28.6
)%

$
132,900


$
215,328


$
(82,428
)


(38.3
)%
Gross profit (loss) per unit ⁽⁴⁾ :
























Ecommerce

$
3,144


$
4,206


$
(1,062
)


(25.2
)%

$
2,897


$
2,700


$
197



7.3
%
Wholesale

$
(659
)

$
(503
)

$
(156
)


31.0
%

$
(1,029
)

$
(328
)

$
(701
)


213.7
%

(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 September 30,








Nine Months Ended September 30,









2023


2022


Change


% Change


2023


2022


Change


% Change



(in thousands)








(in thousands)







Compensation & benefits

$

37,695


$

55,694


$
(17,999
)


(32.3
)%

$

130,318


$

199,111


$
(68,793
)


(34.6
)%
Marketing expense



13,429




14,945



(1,516
)


(10.1
)%



39,871




69,818



(29,947
)


(42.9
)%
Outbound logistics



2,209




4,945



(2,736
)


(55.3
)%



6,251




39,925



(33,674
)


(84.3
)%
Occupancy and related costs



4,575




6,041



(1,466
)


(24.3
)%



13,600




17,408



(3,808
)


(21.9
)%
Professional fees



5,277




6,459



(1,182
)


(18.3
)%



15,504




26,585



(11,081
)


(41.7
)%
Software and IT costs



9,227




11,277



(2,050
)


(18.2
)%



27,555




33,406



(5,851
)


(17.5
)%
Other



7,174




35,282



(28,108
)


(79.7
)%



29,979




89,374



(59,395
)


(66.5
)%
Total selling, general & administrative expenses

$

79,586


$

134,643


$
(55,057
)


(40.9
)%

$

263,078


$

475,627


$
(212,549
)


(44.7
)%

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 which relate to impairment of long-lived assets. 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 September 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 September 30,


Nine Months Ended September 30,



2023


2022


2023


2022



(in thousands)


(in thousands)

Net loss

$
(82,857
)

$
(51,127
)

$
(224,219
)

$
(476,675
)
Adjusted to exclude the following:












Interest expense


12,058



9,704



30,915



28,617

Interest income


(5,506
)


(5,104
)


(16,369
)


(12,991
)
Provision (benefit) for income taxes


260



899



918



(22,085
)
Depreciation and amortization


11,248



9,995



32,421



28,005

EBITDA

$
(64,797
)

$
(35,633
)

$
(176,334
)

$
(455,129
)
Severance costs

$
274


$
—


$
6,655


$
—

Gain on debt extinguishment


—



(37,917
)


(19,640
)


(37,917
)
Hail storm costs


—



—



2,353



—

Goodwill impairment charge


—



—



—



201,703

Realignment costs


—



3,243



—



12,772

Acquisition related costs


—



—



—



5,653

Other


—



—



1,352



2,127

Adjusted EBITDA

$
(64,523
)

$
(70,307
)

$
(185,614
)

$
(270,791
)
Non-recurring costs to address operational and customer experience issues


32



15,785



818



25,059

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

$
(64,491
)

$
(54,522
)

$
(184,796
)

$
(245,732
)
Securitization gain


—



(15,972
)


—



(45,589
)
Adjusted EBITDA excluding securitization gain

$
(64,523
)

$
(86,279
)

$
(185,614
)

$
(316,380
)
Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

$
(64,491
)

$
(70,494
)

$
(184,796
)

$
(291,321
)

THIRD QUARTER 2023 AS COMPARED TO SECOND QUARTER 2023



Three Months Ended September 30,


Three Months Ended June 30,









2023


2023


Change


% Change


(in thousands, except unit data)







Total revenues

$
235,634


$
225,178


$
10,456



4.6
%
Total gross profit

$
48,094


$
46,001


$
2,093



4.5
%
Ecommerce units sold


4,561



4,127



434



10.5
%
Ecommerce revenue

$
149,851


$
138,225


$
11,626



8.4
%
Ecommerce gross profit

$
14,339


$
12,189


$
2,150



17.6
%
Vehicle gross profit (loss) per ecommerce unit

$
516


$
290


$
226



77.9
%
Product gross profit per ecommerce unit


2,628



2,664



(36
)


(1.4
)%
Total gross profit per ecommerce unit

$
3,144


$
2,954


$
190



6.4
%
Wholesale units sold


2,270



1,834



436



23.8
%
Wholesale revenue

$
30,898


$
30,800


$
98



0.3
%
Wholesale gross (loss) profit

$
(1,495
)

$
(3,993
)

$
2,498



62.6
%
Wholesale gross (loss) profit per unit

$
(659
)

$
(2,177
)

$
1,518



69.7
%
Retail Financing revenue

$
40,823


$
42,128


$
(1,305
)


(3.1
)%
Retail Financing gross profit

$
32,341


$
34,068


$
(1,727
)


(5.1
)%
Total selling, general, and administrative expenses

$
79,586


$
86,955


$
(7,369
)


(8.5
)%



Three Months Ended September 30,


Three Months Ended June 30,









2023


2023


Change


% Change



(in thousands)




Net loss

$
(82,857
)

$
(66,318
)

$
(16,539
)


24.9
%
Adjusted to exclude the following:












Interest expense


12,058



8,938



3,120



34.9
%
Interest income


(5,506
)


(4,921
)


(585
)


11.9
%
Provision for income taxes


260



385



(125
)


(32.5
)%
Depreciation and amortization


11,248



10,536



712



6.8
%
EBITDA

$
(64,797
)

$
(51,380
)

$
(13,417
)


26.1
%
Severance costs

$
274


$
2,277


$
(2,003
)


(88.0
)%
Gain on debt extinguishment


—



(10,931
)


10,931



100.0
%
Hail storm costs


—



2,353



(2,353
)


(100.0
)%
Other


—



1,352



(1,352
)


(100.0
)%
Adjusted EBITDA

$
(64,523
)

$
(56,329
)

$
(8,194
)


14.5
%
Non-recurring costs to address operational and customer experience issues


32



126



(94
)


(74.3
)%
Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

$
(64,491
)

$
(56,203
)

$
(8,288
)


(14.7
)%
Securitization gain


—



—



—



0.0
%
Adjusted EBITDA excluding securitization gain

$
(64,523
)

$
(56,329
)

$
(8,194
)


14.5
%
Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

$
(64,491
)

$
(56,203
)

$
(8,288
)


14.7
%

Financial Outlook

For the full year 2023, we updated our guidance on Adjusted EBITDA performance and year-end cash and cash equivalents:

Adjusted EBITDA ⁽¹⁾ of $(245.0) to $(225.0) million;
Year-end cash and cash equivalents of $137.0 to $162.0 million.

(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 third 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 November 7, 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, November 8, 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 for the full year 2023; 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 and the potential impacts as we sell through our inventory, 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, including by seeking additional capital through equity or debt financing. 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 September 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 September 30,


As of December 31,



2023


2022

ASSETS






Current Assets:






Cash and cash equivalents

$
208,562


$
398,915

Restricted cash (including restricted cash of consolidated VIEs of $47.2 million and $24.7 million, respectively)


80,517



73,095

Accounts receivable, net of allowance of $8.9 million and $21.5 million, respectively


9,022



13,967

Finance receivables at fair value (including finance receivables of consolidated VIEs of $12.2 million and $11.5 million, respectively)


12,901



12,939

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $338.4 million and $305.9 million, respectively)


399,836



321,626

Inventory


240,676



320,648

Beneficial interests in securitizations


5,287



20,592

Prepaid expenses and other current assets (including other current assets of consolidated VIEs of $24.3 million and $11.7 million, respectively)


56,889



58,327

Total current assets


1,013,690



1,220,109

Finance receivables at fair value (including finance receivables of consolidated VIEs of $376.7 million and $119.6 million, respectively)


387,796



140,235

Property and equipment, net


49,220



50,201

Intangible assets, net


138,644



158,910

Operating lease right-of-use assets


30,836



23,568

Other assets (including other assets of consolidated VIEs of $2.0 million and $0 million, respectively)


26,525



26,004

Total assets

$
1,646,711


$
1,619,027

LIABILITIES AND STOCKHOLDERS’ EQUITY






Current Liabilities:






Accounts payable

$
27,280


$
34,702

Accrued expenses (including accrued expenses of consolidated VIEs of $3.3 million and $1.5 million, respectively)


57,435



76,795

Vehicle floorplan


212,486



276,988

Warehouse credit facilities of consolidated VIEs


294,653



229,518

Current portion of long term debt (including current portion of securitization debt of consolidated VIEs at fair value of $186.6 million and $47.2 million, respectively)


197,045



47,239

Deferred revenue


12,487



10,655

Operating lease liabilities, current


9,511



9,730

Other current liabilities


12,284



17,693

Total current liabilities


823,181



703,320

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $175.3 million and $32.6 million at fair value, respectively)


521,353



402,154

Operating lease liabilities, excluding current portion


26,938



20,129

Other long-term liabilities (including other long-term liabilities of consolidated VIEs of $9.5 million and $7.4 million, respectively)


16,969



18,183

Total liabilities


1,388,441



1,143,786

Commitments and contingencies (Note 13)






Stockholders’ equity:






Common stock, $0.001 par value; 500,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 139,752,858 and 138,201,903 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively


135



135

Additional paid-in-capital


2,083,046



2,075,798

Accumulated deficit


(1,824,911
)


(1,600,692
)
Total stockholders’ equity


258,270



475,241

Total liabilities and stockholders’ equity

$
1,646,711


$
1,619,027

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,



2023


2022


2023


2022

Revenue:












Retail vehicle, net

$
147,710


$
234,353


$
419,548


$
1,283,263

Wholesale vehicle


30,898



47,604



75,593



270,489

Product, net


13,075



13,181



36,499



51,954

Finance


40,823



40,654



114,939



120,005

Other


3,128



5,005



10,700



13,841

Total revenue


235,634



340,797



657,279



1,739,552

Cost of sales:












Retail vehicle


144,654



218,726



414,917



1,234,138

Wholesale vehicle


32,393



49,178



81,019



276,749

Product


917



—



2,518



—

Finance


8,481



4,699



22,755



10,368

Other


1,095



863



3,170



2,969

Total cost of sales


187,540



273,466



524,379



1,524,224

Total gross profit


48,094



67,331



132,900



215,328

Selling, general and administrative expenses


79,586



134,643



263,078



475,627

Depreciation and amortization


11,010



9,833



31,845



27,728

Impairment charges


—



1,017



1,353



206,127

Loss from operations


(42,502
)


(78,162
)


(163,376
)


(494,154
)
Gain on debt extinguishment


—



(37,917
)


(19,640
)


(37,917
)
Interest expense


12,058



9,704



30,915



28,617

Interest income


(5,506
)


(5,104
)


(16,369
)


(12,991
)
Other loss, net


33,543



5,383



65,019



26,897

Income (loss) before provision for income taxes


(82,597
)


(50,228
)


(223,301
)


(498,760
)
Provision (benefit) for income taxes


260



899



918



(22,085
)
Net loss

$
(82,857
)

$
(51,127
)

$
(224,219
)

$
(476,675
)
Net loss per share attributable to common stockholders, basic

$
(0.59
)

$
(0.37
)

$
(1.61
)

$
(3.46
)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic


139,692,323



138,118,679



139,123,352



137,817,839

VROOM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)






Nine Months Ended September 30,



2023


2022

Operating activities






Net loss

$
(224,219
)

$
(476,675
)
Adjustments to reconcile net loss to net cash used in operating activities:






Impairment charges


1,353



206,127

Gain on debt extinguishment


(19,640
)


(37,917
)
Depreciation and amortization


32,421



28,005

Amortization of debt issuance costs


3,418



3,777

Realized gains on securitization transactions


—



(45,589
)
Deferred taxes


—



(23,855
)
Losses on finance receivables and securitization debt, net


80,246



39,464

Stock-based compensation expense


7,248



6,613

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


(15,867
)


(5,033
)
Provision for bad debt


995



18,448

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


4,375



3,831

Amortization of unearned discounts on finance receivables at fair value


(20,273
)


(12,121
)
Other, net


(11,792
)


(5,441
)
Changes in operating assets and liabilities:






Finance receivables, held for sale






Originations of finance receivables held for sale


(420,793
)


(483,167
)
Principal payments received on finance receivables held for sale


71,906



38,297

Proceeds from sale of finance receivables held for sale, net


—



509,612

Other


(868
)


(5,924
)
Accounts receivable


3,950



63,252

Inventory


95,839



293,589

Prepaid expenses and other current assets


17,316



12,420

Other assets


2,097



(2,678
)
Accounts payable


(7,422
)


(22,183
)
Accrued expenses


(19,914
)


(27,020
)
Deferred revenue


1,832



(59,490
)
Other liabilities


(7,839
)


(39,444
)
Net cash used in operating activities


(425,631
)


(23,102
)
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


136,644



106,829

Proceeds from sale of finance receivables at fair value, net


—



43,262

Consolidation of VIEs


11,409



—

Principal payments received on beneficial interests


4,334



5,571

Purchase of property and equipment


(11,553
)


(19,968
)
Acquisition of business, net of cash acquired of $47.9 million


—



(267,488
)
Net cash provided by (used in) investing activities


137,442



(181,269
)
Financing activities






Proceeds from borrowings under secured financing agreements


261,991



—

Principal repayment under secured financing agreements


(159,384
)


(176,909
)
Proceeds from financing of beneficial interests in securitizations


24,506



—

Principal repayments of financing of beneficial interests in securitizations


(5,699
)


—

Proceeds from vehicle floorplan


436,586



1,286,000

Repayments of vehicle floorplan


(501,088
)


(1,453,529
)
Proceeds from warehouse credit facilities


332,700



419,000

Repayments of warehouse credit facilities


(269,698
)


(460,566
)
Repurchases of convertible senior notes


(13,194
)


(18,458
)
Other financing activities


(1,462
)


(1,977
)
Net cash provided by (used in) financing activities


105,258



(406,439
)
Net decrease in cash, cash equivalents and restricted cash


(182,931
)


(610,810
)
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

$
289,079


$
603,965

VROOM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (unaudited)







Supplemental disclosure of cash flow information:






Cash paid for interest

$
40,424


$
24,619

Cash paid for income taxes

$
5,153


$
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

$
—


$
30,082

View source version on businesswire.com: https://www.businesswire.com/news/home/20231107135758/en/

Investor Relations:

Vroom
Jon Sandison
investors@vroom.com

Media:

Vroom
Chris Hayes
chris.hayes@vroom.com

Company Name:	Vroom Inc.
Stock Symbol:	VRM
Market:	NASDAQ
Website:	vroom.com

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