Vroom Announces Fourth Quarter and Full Year 2022 Results

28 February 2023 at 4:05 pm·5-min read

Significant Sequential Cost Reductions and Continued Progress on Long-Term Roadmap

NEW YORK, February 28, 2023--(BUSINESS WIRE)--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, 2022.

HIGHLIGHTS OF FOURTH QUARTER 2022 VERSUS THIRD QUARTER 2022

Ecommerce gross profit per unit of $1,233 as compared to $4,206
SG&A expenses of $90.8 million as compared to $134.6 million
Net income of $24.8 million as compared to net loss of $(51.1) million
Adjusted EBITDA of $(70.9) million as compared to $(73.3) million
Adjusted EBITDA excluding securitization gain and non-recurring costs of $(70.5) million as compared to $(73.5) million

HIGHLIGHTS OF FISCAL YEAR 2022⁽¹⁾ VERSUS FISCAL YEAR 2021

Ecommerce gross profit per unit of $2,545 compared to $2,206
SG&A expenses of $566.4 million compared to $547.8 million
Net loss of $(451.9) million compared to $(370.9) million
Adjusted EBITDA of $(337.2) million compared to $(340.2) million
Adjusted EBITDA excluding securitization gain and non-recurring costs of $(357.4) million compared to $(340.2) million

^{(1) Fiscal year 2022 includes UACC's results of operations starting on February 1, 2022.}

Tom Shortt, Chief Executive Officer of Vroom, said, "In the fourth quarter we continued to make progress on our three key objectives and four strategic initiatives. We significantly reduced operating expenses quarter over quarter and continued to improve our operations and customer experience. We improved our titling process enabling us to end the year with 87% of units available for sale or pending sale versus 52% at the end of Q3, however it also increased the age of our inventory available for sale and inventory sold.

Gross profit per unit declined from $4,206 in Q3 to $1,233 in Q4 primarily due to three items. The decline quarter over quarter was impacted primarily by three items. First, the percentage of sales from aged units increased 5X from Q3 to Q4; 36% of our units sold during the 4th quarter were aged units we’ve held >270 days. Second, increased industry wide market depreciation. Third, higher inventory reserves primarily driven by recent electric unit OEM price decreases.

During 2022 we strategically slowed down the business while we improved our customer experience and processes across titling and registration, pricing, marketing, reconditioning and logistics, and began to insource our sales function from our primary third-party resource. During 2023, we expect to resume growth, sell through aged vehicles, improve variable cost per unit and reduce fixed costs."

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, "During the fourth quarter we further maximized liquidity and strengthened our balance sheet by repurchasing $198 million of our convertible notes and unlocking $70 million of cash-in-inventory and restricted cash. Combined with earlier note repurchases, we repurchased $254 million of our convertible notes throughout 2022. During 2023, we will continue to pursue opportunities to enhance our liquidity."

FOURTH QUARTER 2022 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,
	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		4,144			21,243			(17,099	)		(80.5	)%		39,278		74,698		(35,420	)		(47.4	)%
Ecommerce revenue:
Vehicle revenue	$	131,069		$	715,874	$		(584,805	)		(81.7	)%	$	1,304,797	$	2,360,368	$	(1,055,571	)		(44.7	)%
Product revenue		10,689			22,846			(12,157	)		(53.2	)%		59,398		82,001		(22,603	)		(27.6	)%
Total ecommerce revenue	$	141,758		$	738,720	$		(596,962	)		(80.8	)%	$	1,364,195	$	2,442,369	$	(1,078,174	)		(44.1	)%
Ecommerce gross profit:
Vehicle gross profit	$	(5,579	)	$	10,042	$		(15,621	)		(155.6	)%	$	40,575	$	82,745	$	(42,170	)		(51.0	)%
Product gross profit		10,689			22,846			(12,157	)		(53.2	)%		59,398		82,001		(22,603	)		(27.6	)%
Total ecommerce gross profit	$	5,110		$	32,888	$		(27,778	)		(84.5	)%	$	99,973	$	164,746	$	(64,773	)		(39.3	)%
Average vehicle selling price per ecommerce unit	$	31,629		$	33,699	$		(2,070	)		(6.1	)%	$	33,220	$	31,599	$	1,621			5.1	%
Gross profit per ecommerce unit:
Vehicle gross profit per ecommerce unit	$	(1,346	)	$	473	$		(1,819	)		(384.6	)%	$	1,033	$	1,108	$	(75	)		(6.8	)%
Product gross profit per ecommerce unit		2,579			1,075			1,504			139.9	%		1,512		1,098		414			37.7	%
Total gross profit per ecommerce unit	$	1,233		$	1,548	$		(315	)		(20.3	)%	$	2,545	$	2,206	$	339			15.4	%
Ecommerce average days to sale		244			76			168			221.1	%		131		74		57			77.2	%

Results by Segment

	Three Months Ended December 31,										Year Ended December 31,
	2022		2021⁽¹⁾		Change			% Change			2022		2021⁽¹⁾		Change			% Change

	(in thousands, except unit data)										(in thousands, except unit data)
Units:
Ecommerce		4,144		21,243		(17,099	)		(80.5	)%		39,278		74,698		(35,420	)		(47.4	)%
Wholesale		1,768		8,742		(6,974	)		(79.8	)%		20,876		37,163		(16,287	)		(43.8	)%
All Other ⁽²⁾		350		2,105		(1,755	)		(83.4	)%		3,758		7,212		(3,454	)		(47.9	)%
Total units		6,262		32,090		(25,828	)		(80.5	)%		63,912		119,073		(55,161	)		(46.3	)%

Revenue:
Ecommerce	$	141,758	$	738,720	$	(596,962	)		(80.8	)%	$	1,364,195	$	2,442,369	$	(1,078,174	)		(44.1	)%
Wholesale		23,039		121,543		(98,504	)		(81.0	)%		293,528		498,981		(205,453	)		(41.2	)%
Retail Financing ⁽³⁾		32,537		—		32,537			100.0	%		152,542		—		152,542			100.0	%
All Other ⁽⁴⁾		...