Vroom Reports Strong Fourth Quarter and Full Year 2021 Growth

February 28, 2022

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–(BUSINESS WIRE)–$VRM #VRM–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		$	(129,793	)	$	(60,662	)		$	(370,911	)	$	(202,799	)
Net loss attributable to common stockholders		$	(129,793	)	$	(60,662	)		$	(370,911	)	$	(202,799	)
Add: One-time IPO related acceleration of non-cash stock based compensation			—			—				—			1,262
Add: One-time IPO related non-cash revaluation of preferred stock warrant			—			—				—			20,470
Add: Acquisition related costs			1,678			2,080				5,090			2,080
Non-GAAP net loss		$	(128,115	)	$	(58,582	)		$	(365,821	)	$	(178,987	)

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted			136,948,461			132,187,850				136,429,791			73,345,569

Net loss per share, basic and diluted		$	(0.95	)	$	(0.46	)		$	(2.72	)	$	(2.76	)
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			—			—				—			0.28
Impact of acquisition related costs			0.01			0.02				0.04			0.03
Non-GAAP net loss per share, basic and diluted		$	(0.94	)	$	(0.44	)		$	(2.68	)	$	(2.43	)
Non-GAAP net loss per share, as adjusted, basic and diluted^(a)		$	(0.94	)	$	(0.44	)		$	(2.68	)	$	(1.37	)

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

		Three Months Ended 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)
Non-GAAP net loss		$	(128,115	)	$	(58,582	)		$	(365,821	)	$	(178,987	)
Non-GAAP net loss, as adjusted		$	(128,115	)	$	(58,582	)		$	(365,821	)	$	(178,987	)

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted			136,948,461			132,187,850				136,429,791			73,345,569
Add: unweighted adjustment for common stock issued in connection with IPO			—			—				—			24,437,500
Add: unweighted adjustment for conversion of redeemable convertible preferred stock in connection with IPO			—			—				—			85,533,394
Add: unweighted adjustment for common stock issued in connection with follow-on public offering			—			—				—			10,800,000
Less: Adjustment for the impact of the above items already included in weighted-average number of shares outstanding for the periods presented			—			—				—			(63,865,903	)
Weighted-average number of shares outstanding used to compute net loss per share, as adjusted, basic and diluted			136,948,461			132,187,850				136,429,791			130,250,560

Non-GAAP net loss per share, as adjusted, basic and diluted		$	(0.94	)	$	(0.44	)		$	(2.68	)	$	(1.37	)

Financial Outlook

For the first quarter 2022, we expect the following results:

Total revenues⁽¹⁾ of approximately $875 million.
Ecommerce unit sales of 18,000 to 19,000.
Ecommerce gross profit per unit of approximately $1,500.
Adjusted EBITDA^{(1) (2)} of approximately ($130) million.

(1)		Inclusive of UACC from acquisition date of February 1, 2022.
(2)		A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for our first quarter 2022 Financial Outlook is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, these costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for the fourth quarter 2021 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 February 28, 2022 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 Tuesday, March 1, 2022 at 8:30 a.m. ET.

The conference call can be accessed via telephone by dialing 1-833-519-1297 (or 914-800-3868 for international access) and entering the conference ID 9567145. 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.

Contacts

Investor Relations:
Vroom

Allen Miller

investors@vroom.com

Media Contact:
Moxie Communications Group

Alyssa Galella

vroom@moxiegrouppr.com
(562) 294-6261

Read full story here