Vroom Reports Second Quarter 2020 Results

Vroom Delivers Ahead of Growth Plan
Ecommerce Unit Sales Up 74%NEW YORK, Aug. 12, 2020 (GLOBE NEWSWIRE) — Vroom, Inc. (NASDAQ:VRM), a leading e-commerce platform for buying and selling used vehicles, today announced financial results for the second quarter ended June 30, 2020 (“Q2 2020”).HIGHLIGHTS OF SECOND QUARTER 20206,713 Ecommerce units sold, 1,110 TDA units sold, 3,259 Wholesale units soldRevenue of $253.1 millionGross profit of $7.6 millionAdjusted EBITDA of $(39.0) million^(a)Loss from operations of $(41.4) millionAdjusted loss from operations of $(40.1) million^(a)Net loss of $(63.2) millionNon-GAAP net loss of $(40.7) million^(a)Net loss per share of $(2.00)Non-GAAP net loss per share, as adjusted of $(0.34)^{(a)           (a)} See section entitled “Non-GAAP Measures” for adjustment details and reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP.Paul Hennessy, Chief Executive Officer of Vroom, commented: “I am pleased with our results for the second quarter, in which we performed substantially ahead of our growth plan, and I am encouraged by both the continued validation of the Vroom model and the performance of our employees in a tough environment. During the course of this single quarter, we managed through significant swings in demand and numerous operational challenges brought on by the COVID-19 pandemic. In response to the drop in demand and uncertainty around vehicle pricing early in the pandemic, we chose to de-risk the business by significantly reducing our inventory during the first half of the quarter. As demand increased and pricing became more stable through the second half of the quarter, we pivoted to start rebuilding inventory and continue to do so. These lower inventory levels prevented us from fulfilling all of the demand that materialized in the second half of the quarter. We believe we continue to be well positioned to navigate the challenges presented by the COVID-19 crisis and take advantage of shifting consumer buying and selling patterns in favor of ecommerce.” SECOND QUARTER 2020 FINANCIAL DISCUSSIONAll financial comparisons are on a year-over-year basis unless otherwise noted.Ecommerce ResultsEcommerce UnitsEcommerce units sold increased 74.1% to 6,713. Average monthly unique visitors to our website increased 59.1% to 999,899.  Ecommerce RevenueEcommerce revenue increased 45.2% to $175.6 million.Ecommerce Vehicle revenue increased 43.8% to $170.5 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 $30,749 to $25,393.Ecommerce Product revenue increased 114.3% to $5.1 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 $618 to $761 per unit.Ecommerce Gross ProfitEcommerce gross profit was flat year-over-year at $7.2 million.Ecommerce Vehicle gross profit decreased 57.0% to $2.1 million. The decrease in ecommerce Vehicle gross profit was primarily attributable to a $960 decrease in ecommerce Vehicle gross profit per unit as a result of pricing actions taken in the beginning of the quarter in response to declines in demand related to COVID-19.Ecommerce Product gross profit increased 114.3% to $5.1 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 $618 to $761 per unit.Ecommerce Gross Profit per UnitEcommerce gross profit per unit decreased 43.2% to $1,075.Ecommerce Vehicle gross profit per unit decreased 75.4% to $314.Ecommerce Product gross profit per unit increased 23.1% to $761.Results by SegmentTotal UnitsTotal units sold decreased 8.0% to 11,082.Ecommerce units sold increased 74.1% to 6,713.TDA units sold decreased 60.2% to 1,110 due to government mandated “stay at home” orders and other disruptions related to the COVID-19 pandemic in the Houston area.Wholesale units sold decreased 39.6% to 3,259 primarily due to a reduction of wholesale grade units purchased from consumers during the early stage of the COVID-19 pandemic.Total RevenueTotal revenue decreased 3.0% to $253.1 million.Ecommerce revenue increased 45.2% to $175.6 million as discussed above.TDA revenue decreased 68.9% to $26.6 million. TDA revenue decreased primarily due to the decrease in TDA units sold and a lower average selling price per unit, which decreased from $29,310 to $23,114.Wholesale revenue decreased 6.6% to $50.9 million. The decrease in wholesale revenue was primarily attributable to the decrease in wholesale units sold, partially offset by a higher average selling price per wholesale unit, which increased from $10,106 to $15,625, primarily driven by the sale of un-reconditioned retail vehicles through wholesale auctions in the early stage of the COVID-19 pandemic.Total Gross ProfitTotal gross profit decreased 45.1% to $7.6 million.Ecommerce gross profit was flat year-over-year at $7.2 million, as discussed above.TDA gross profit decreased 84.7% to $0.9 million. TDA gross profit decreased in part due to a decrease in TDA gross profit per unit of $1,310, primarily as a result of pricing actions taken in the beginning of the quarter in response to declines in demand related to COVID-19 and due to the decrease in TDA units sold.Wholesale gross profit decreased 220.9% to a loss of $0.5 million. Wholesale gross profit decreased primarily due to a decrease in wholesale gross profit per unit of $250 and the decrease in wholesale units sold.Total Gross Profit per UnitTotal gross profit per unit decreased 40.3% to $686.Ecommerce gross profit per unit decreased 43.2% to $1,075.TDA gross profit per unit decreased 62.7% to $778.Wholesale gross profit per unit decreased 301.2% to a loss of $167.  SG&ASelling, general and administrative expenses increased 9.7% to $47.9 million. The increase was primarily due to a $3.1 million increase in compensation and benefits and a $2.8 million increase in outbound logistics costs. These increases were offset by a $1.8 million decrease in professional fees and a $1.2 million decrease in marketing expense.Loss from Operations and Net LossLoss from operations increased 32.0% to $41.4 million and includes $4.1 million of stock-based compensation expense, of which $1.3 million is one-time expense accelerated by our IPO.Net loss increased 89.6% to $63.2 million, and includes $1.3 million of a one-time, IPO-related acceleration of non-cash stock-based compensation expense and a $21.3 million one-time, IPO-related non-cash revaluation of a preferred stock warrant.Non-GAAP MeasuresIn 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 EBITDAEBITDA 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.Adjusted loss from operationsNon-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted^(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 and (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. The computation of Non-GAAP net loss per share, as adjusted, is as follows:Financial OutlookWe expect another quarter of significant year-over-year growth in ecommerce unit sales and revenue for Q3 2020 and improvement in total ecommerce gross profit per unit. For Q3 2020, we expect the following results and comparisons on a year-over-year basis:Ecommerce unit sales of 8,500-8,800, average total revenue per unit of $23,500 and average gross profit per unit of $1,600-$1,700.TDA unit sales of 1,400-1,600, average total revenue per unit of $23,500 and average gross profit per unit of $1,000-$1,100.Wholesale unit sales of 3,500-4,500, average revenue per unit of $10,000 and average gross profit per unit of $100-$200.Total revenue of $268 million -$290 million.Total gross profit of $16 million-$18 million.Net loss per share of $(0.42)-$(0.37).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: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 August 12, 2020 and are subject to substantial uncertainty. See “Forward-Looking Statements” below.Conference Call & Webcast InformationVroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, August 12, 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 8738028. 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.Investor Relations:
Vroom
Allen Miller
[email protected]
Media Contact:
Moxie Communications Group
Alyssa Galella
[email protected]
(562) 294-6261Forward-Looking StatementsThis 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 June 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.
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