Vroom Announces Record Ecommerce Gross Profit Per Unit of $3,629

August 8, 2022

Substantial Progress on Long-Term Roadmap

NEW YORK–(BUSINESS WIRE)–Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the second quarter ended June 30, 2022.

HIGHLIGHTS OF SECOND QUARTER 2022 VERSUS FIRST QUARTER 2022

Ecommerce gross profit per unit of $3,629, up 106%
SG&A expenses decreased $35.0 million
Net loss improved from $310.5 million to $115.1 million
Adjusted EBITDA loss improved from $107.4 million to $85.6 million

Tom Shortt, Chief Executive Officer of Vroom, commented: “The second quarter of 2022 marked substantial progress for Vroom against our four strategic initiatives outlined in our recent investor and analyst event. We announced record Ecommerce gross profit per unit and improved our adjusted EBITDA from the prior quarter. We also began scaling UACC-originated loans for Vroom, which contributed to our improvement in gross profit per unit. I would like to thank all of our Vroommates and our third-party partners for their support in serving our customers.”

Bob Krakowiak, Vroom’s Chief Financial Officer, commented: “I am proud of our achievements in the second quarter. Our Ecommerce gross profit per unit of $3,629 reflects our commitment to our first key objective of prioritizing unit economics. We are making progress in reducing our cost structure as detailed in our business realignment plan presented in May. We realized a $35 million sequential improvement in SG&A and, as a result of our initiatives, we ended the quarter with $533 million in liquidity. Based on our progress, we are continuing to forecast year-end liquidity of approximately $500 million at the midpoint.”

SECOND QUARTER 2022 FINANCIAL RESULTS

All financial comparisons are on a year-over-year basis unless otherwise noted.

Ecommerce Results

	Three Months Ended June 30,											Six Months Ended June 30,
	2022		2021			Change			% Change			2022		2021			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		9,233		18,268			(9,035	)		(49.5	)%		28,706		33,772			(5,066	)		(15.0	)%
Ecommerce revenue:
Vehicle revenue	$	308,123	$	559,010	$		(250,887	)		(44.9	)%	$	960,747	$	967,324	$		(6,577	)		(0.7	)%
Product revenue		13,509		20,653			(7,144	)		(34.6	)%		36,248		34,647			1,601			4.6	%
Total ecommerce revenue	$	321,632	$	579,663	$		(258,031	)		(44.5	)%	$	996,995	$	1,001,971	$		(4,976	)		(0.5	)%
Ecommerce gross profit:
Vehicle gross profit	$	20,000	$	28,985	$		(8,985	)		(31.0	)%	$	31,580	$	46,828	$		(15,248	)		(32.6	)%
Product gross profit		13,509		20,653			(7,144	)		(34.6	)%		36,248		34,647			1,601			4.6	%
Total ecommerce gross profit	$	33,509	$	49,638	$		(16,129	)		(32.5	)%	$	67,828	$	81,475	$		(13,647	)		(16.7	)%
Average vehicle selling price per ecommerce unit	$	33,372	$	30,601	$		2,771			9.1	%	$	33,469	$	28,643	$		4,826			16.8	%
Gross profit per ecommerce unit:
Vehicle gross profit per ecommerce unit	$	2,166	$	1,587	$		579			36.5	%	$	1,100	$	1,387	$		(287	)		(20.7	)%
Product gross profit per ecommerce unit		1,463		1,131			332			29.4	%		1,263		1,026			237			23.1	%
Total gross profit per ecommerce unit	$	3,629	$	2,718	$		911			33.5	%	$	2,363	$	2,413	$		(50	)		(2.1	)%
Ecommerce average days to sale		128		68			60			88.2	%		110		76			34			44.7	%

Results by Segment

	Three Months Ended June 30,											Six Months Ended June 30,
	2022			2021⁽¹⁾		Change			% Change			2022			2021⁽¹⁾		Change			% Change
	(in thousands, except unit data)											(in thousands, except unit data)
Units:
Ecommerce		9,233			18,268		(9,035	)		(49.5	)%		28,706			33,772		(5,066	)		(15.0	)%
Wholesale		5,867			10,020		(4,153	)		(41.4	)%		15,980			18,661		(2,681	)		(14.4	)%
All Other ⁽²⁾		1,047			1,583		(536	)		(33.9	)%		2,746			3,358		(612	)		(18.2	)%
Total units		16,147			29,871		(13,724	)		(45.9	)%		47,432			55,791		(8,359	)		(15.0	)%

Revenue:
Ecommerce	$	321,632		$	579,663	$	(258,031	)		(44.5	)%	$	996,995		$	1,001,971	$	(4,976	)		(0.5	)%
Wholesale		82,901			128,108		(45,207	)		(35.3	)%		222,885			246,132		(23,247	)		(9.4	)%
Retail Financing ⁽³⁾		32,121			—		32,121			100.0	%		79,808			—		79,808			100.0	%
All Other ⁽⁴⁾		38,783			54,119		(15,336	)		(28.3	)%		99,524			104,905		(5,381	)		(5.1	)%
Total revenue	$	475,437		$	761,890	$	(286,453	)		(37.6	)%	$	1,399,212		$	1,353,008	$	46,204			3.4	%
Gross profit (loss):
Ecommerce	$	33,509		$	49,638	$	(16,129	)		(32.5	)%	$	67,828		$	81,475	$	(13,647	)		(16.7	)%
Wholesale		(1,934	)		8,516		(10,450	)		(122.7	)%		(4,686	)		8,234		(12,920	)		(156.9	)%
Retail Financing ⁽³⁾		28,720			—		28,720			100.0	%		73,682			—		73,682			100.0	%
All Other ⁽⁴⁾		6,062			4,974		1,088			21.9	%		11,173			9,595		1,578			16.4	%
Total gross profit	$	66,357		$	63,128	$	3,229			5.1	%	$	147,997		$	99,304	$	48,693			49.0	%
Gross profit (loss) per unit ⁽⁵⁾:
Ecommerce	$	3,629		$	2,718	$	911			33.5	%	$	2,363		$	2,413	$	(50	)		(2.1	)%
Wholesale	$	(330	)	$	850	$	(1,180	)		(138.8	)%	$	(293	)	$	441	$	(734	)		(166.4	)%

(1)		In the second quarter of 2022, we reevaluated our reporting segments based on relative revenue and gross profit and significance in our long term strategy. As a result of that analysis, we determined to no longer report TDA as a separate operating segment. As of June 30, 2022, we are organized into three reportable segments: Ecommerce, Wholesale, and Retail Financing. We reclassified TDA revenue and TDA gross profit from the TDA reportable segment to the “All Other” category to conform to current year presentation.
(2)		All Other units consist of retail sales of used vehicles from TDA.
(3)		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.
(4)		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.
(5)		Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

SG&A

	Three Months Ended June 30,												Six Months Ended June 30,
		2022			2021		Change			% Change				2022			2021		Change			% Change
	(in thousands)												(in thousands)
Compensation & benefits	$		68,891	$		51,811	$	17,080			33.0	%	$		143,416	$		91,681	$	51,735			56.4	%
Marketing expense			21,138			23,495		(2,357	)		(10.0	)%			54,874			53,053		1,821			3.4	%
Outbound logistics			8,232			20,153		(11,921	)		(59.2	)%			34,980			35,271		(291	)		(0.8	)%
Occupancy and related costs			5,721			4,042		1,679			41.5	%			11,367			7,964		3,403			42.7	%
Professional fees			6,827			4,259		2,568			60.3	%			20,126			8,257		11,869			143.7	%
Software and IT costs			11,306			6,855		4,451			64.9	%			22,129			12,135		9,994			82.4	%
Other			30,875			13,283		17,592			132.4	%			54,092			24,403		29,689			121.7	%
Total selling, general & administrative expenses	$		152,990	$		123,898	$	29,092			23.5	%	$		340,984	$		232,764	$	108,220			46.5	%

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 securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain. 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 securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain, 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 EBITDA excluding securitization gain, Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain

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 realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within “Other assets”. Changes in fair value of finance receivables can fluctuate significantly from period to period and relate 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. Therefore, these historical finance receivables acquired, which are accounted for under the fair value option, will experience fluctuations in value from period to period. We believe it is appropriate to remove this temporary volatility from our Adjusted EBITDA results to better reflect our ongoing business model. Additionally, these historical finance receivables acquired from UACC are expected to run-off within approximately 15 months. 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. The following table presents a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain to net loss, which is the most directly comparable U.S. GAAP measure:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(in thousands)						(in thousands)
Net loss	$	(115,089	)	$	(65,807	)	$	(425,548	)	$	(142,996	)
Adjusted to exclude the following:
Interest expense		9,533			3,880			18,913			7,692
Interest income		(3,935	)		(2,062	)		(7,887	)		(4,358	)
(Benefit) provision for income taxes		256			194			(22,984	)		350
Depreciation and amortization		10,115			3,122			18,010			6,028
EBITDA	$	(99,120	)	$	(60,673	)	$	(419,496	)	$	(133,284	)
Realignment costs	$	9,529		$	—		$	9,529		$	—
Acquisition related costs		—			—			5,653			—
Change in fair value of finance receivables		1,846			—			7,467			—
Goodwill impairment charge		—			—			201,703			—
Other		2,127			—			2,127			—
Adjusted EBITDA	$	(85,618	)	$	(60,673	)	$	(193,017	)	$	(133,284	)
Securitization gain		—			—		$	(29,617	)		—
Adjusted EBITDA excluding securitization gain	$	(85,618	)	$	(60,673	)	$	(222,634	)	$	(133,284	)

Non-GAAP net loss, Non-GAAP net loss per share, Non-GAAP net loss excluding securitization gain, and Non-GAAP net loss per share excluding securitization gain

We calculate Non-GAAP net loss as net loss adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge, and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within “Other assets”. We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding. We calculate Non-GAAP net loss excluding securitization gain as Non-GAAP net loss adjusted to exclude the securitization gain from the sale of UACC’s finance receivables. We calculate Non-GAAP net loss per share excluding securitization gain as Non-GAAP net loss excluding securitization gain divided by weighted average number of shares outstanding. The following table presents a reconciliation of Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain to net loss and net loss per share, which are the most directly comparable U.S. GAAP measures:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(in thousands, except share and per share amounts)
Net loss	$	(115,089	)	$	(65,807	)	$	(425,548	)	$	(142,996	)
Net loss attributable to common stockholders	$	(115,089	)	$	(65,807	)	$	(425,548	)	$	(142,996	)
Add: Realignment costs		9,529			—			9,529			—
Add: Acquisition related costs		—			—			5,653			—
Add: Change in fair value of finance receivables		1,846			—			7,467			—
Add: Goodwill impairment charge		—			—			201,703			—
Add: Other		2,127			—			2,127			—
Non-GAAP net loss	$	(101,587	)	$	(65,807	)	$	(199,069	)	$	(142,996	)
Subtract: Securitization gain		—			—			(29,617	)		—
Non-GAAP net loss excluding securitization gain	$	(101,587	)	$	(65,807	)	$	(228,686	)	$	(142,996	)

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		138,075,210			136,507,177			137,667,419			136,002,344

Net loss per share, basic and diluted	$	(0.83	)	$	(0.48	)	$	(3.09	)	$	(1.05	)
Impact of realignment costs		0.07			—			0.07			—
Impact of acquisition related costs		—			—			0.04			—
Impact of change in fair value of finance receivables		0.01			—			0.05			—
Impact of goodwill impairment charge		—			—			1.47			—
Impact of other		0.02			—			0.02			—
Non-GAAP net loss per share, basic and diluted	$	(0.73	)	$	(0.48	)	$	(1.44	)	$	(1.05	)
Impact of securitization gain		—			—			(0.22	)		—
Non-GAAP net loss per share excluding securitization gain, basic and diluted	$	(0.73	)	$	(0.48	)	$	(1.66	)	$	(1.05	)

SECOND QUARTER 2022 AS COMPARED TO FIRST QUARTER 2022
	Three Months Ended June 30,				Three Months Ended March 31,
	2022				2022				Change			% Change
	(in thousands, except unit data)
Total revenues		$	475,437			$	923,775		$	(448,338	)		(48.5	)%
Total gross profit		$	66,357			$	81,640		$	(15,283	)		(18.7	)%
Ecommerce units sold			9,233				19,473			(10,240	)		(52.6	)%
Ecommerce revenue		$	321,632			$	675,364		$	(353,732	)		(52.4	)%
Ecommerce gross profit		$	33,509			$	34,320		$	(811	)		(2.4	)%
Vehicle gross profit per ecommerce unit		$	2,166			$	595		$	1,571			264.0	%
Product gross profit per ecommerce unit			1,463				1,168			295			25.3	%
Total gross profit per ecommerce unit		$	3,629			$	1,763		$	1,866			105.8	%
Wholesale units sold			5,867				10,113			(4,246	)		(42.0	)%
Wholesale revenue		$	82,901			$	139,984		$	(57,083	)		(40.8	)%
Wholesale gross loss		$	(1,934	)		$	(2,753	)	$	819			29.7	%
Wholesale gross loss per unit		$	(330	)		$	(272	)	$	(58	)		(21.2	)%
Retail Financing revenue		$	32,121			$	47,687		$	(15,566	)		(32.6	)%
Retail Financing gross profit		$	28,720			$	44,963		$	(16,243	)		(36.1	)%
Total selling, general, and administrative expenses		$	152,990			$	187,994		$	(35,004	)		(18.6	)%

	Three Months Ended June 30,			Three Months Ended March 31,
	2022			2022			Change			% Change
	(in thousands)
Net loss	$	(115,089	)	$	(310,459	)	$	195,370			62.9	%
Adjusted to exclude the following:
Interest expense		9,533			9,380			153			1.6	%
Interest income		(3,935	)		(3,952	)		17			0.4	%
(Benefit) provision for income taxes		256			(23,240	)		23,496			101.1	%
Depreciation and amortization		10,115			7,895			2,220			28.1	%
EBITDA	$	(99,120	)	$	(320,376	)	$	221,256			69.1	%
Realignment costs	$	9,529		$	—		$	9,529			100.0	%
Acquisition related costs		—			5,653			(5,653	)		(100.0	)%
Change in fair value of finance receivables		1,846			5,621			(3,775	)		(67.2	)%
Goodwill impairment charge		—			201,703			(201,703	)		(100.0	)%
Other		2,127			—			2,127			100.0	%
Adjusted EBITDA	$	(85,618	)	$	(107,399	)	$	21,781			20.3	%
Securitization gain		—			(29,617	)		29,617			100.0	%
Adjusted EBITDA excluding securitization gain	$	(85,618	)	$	(137,016	)	$	51,398			37.5	%

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Tuesday, August 8, 2022 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, our execution of and the expected benefits from our business realignment plan and cost-saving initiatives, our expectations regarding our business strategy and plans, including our ongoing ability to integrate and develop United Auto Credit Corporation into a captive finance operation, and, for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year ended December 31, 2022, including with respect to our liquidity. 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, 2021, as updated by our Quarterly report on Form 10-Q for the quarter ended June 30, 2022, each of which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

VROOM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited)

	As of June 30,			As of December 31,
	As of June 30,			As of December 31,
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	532,642		$	1,132,325
Restricted cash (including restricted cash of consolidated VIEs of $33.5 million and $0 million, respectively)		153,741			82,450
Accounts receivable, net of allowance of $19.5 million and $8.9 million, respectively		60,122			105,433
Finance receivables at fair value (including finance receivables of consolidated VIEs of $13.6 million and $0 million, respectively)		14,461			—
Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $253.1 million and $0 million, respectively)		295,303			—
Inventory		535,772			726,384
Beneficial interests in securitizations		13,432			—
Prepaid expenses and other current assets		61,430			55,700
Total current assets		1,666,903			2,102,292
Finance receivables at fair value (including finance receivables of consolidated VIEs of $164.6 million and $0 million, respectively)		213,323			—
Property and equipment, net		49,836			37,042
Intangible assets, net		172,425			28,207
Goodwill		—			158,817
Operating lease right-of-use assets		11,281			15,359
Other assets		28,531			25,033
Total assets	$	2,142,299		$	2,366,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	43,631		$	52,651
Accrued expenses		107,091			121,508
Vehicle floorplan		422,452			512,801
Warehouse credit facilities of consolidated VIEs		210,577			—
Current portion of securitization debt of consolidated VIEs at fair value		115,325			—
Deferred revenue		17,800			75,803
Operating lease liabilities, current		7,097			6,889
Other current liabilities		22,139			57,604
Total current liabilities		946,112			827,256
Long term debt, net of current portion (including securitization debt of consolidated VIEs of $51.8 million and $0 million at fair value, respectively)		674,331			610,618
Operating lease liabilities, excluding current portion		8,347			9,592
Other long-term liabilities		18,458			4,090
Total liabilities		1,647,248			1,451,556
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 138,102,755 and 137,092,891 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		135			135
Additional paid-in-capital		2,069,246			2,063,841
Accumulated deficit		(1,574,330	)		(1,148,782	)
Total stockholders’ equity		495,051			915,194
Total liabilities and stockholders’ equity	$	2,142,299		$	2,366,750