Business Wire | Nov 9, 2021 04:06PM EST

Vroom Reports Strong Third Quarter 2021 Results

Nov. 09, 2021

NEW YORK--(BUSINESS WIRE)--Nov. 09, 2021--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, 2021 ("Q3 2021").

HIGHLIGHTS OF THIRD QUARTER 2021

* 19,683 ecommerce units sold, up 123% YoY

* Ecommerce revenue of $701.7 million, up 216% YoY

* Ecommerce gross profit of $50.4 million, up 161% YoY

* Vroom enters into definitive agreement to acquire United Auto Credit Corporation ("UACC")

* Vroom appoints new Chief Financial Officer

Paul Hennessy, Chief Executive Officer of Vroom, commented:

"Vroom had yet another strong quarter that continued the momentum that has been building all year. By executing well across our organization, we delivered triple digit year-over-year growth in both ecommerce units and gross profit, as well as improvement in unit economics. We also continued to optimize our mix of inventory sources throughout the quarter, with approximately 81% of our retail inventory sold sourced from consumers, enabling us to scale our inventory while maintaining strong unit economics. Looking ahead, we intend to continue to focus on strong execution and maintain the momentum in our business to drive continued growth in unit sales and on improving unit economics. We also are excited to move forward with our acquisition of United Auto Credit Corporation, which will accelerate our strategic objective to establish a captive financing arm."

THIRD QUARTER 2021 FINANCIAL DISCUSSION

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

Ecommerce Results

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 Change % Change 2021 2020 Change % Change

(in thousands, except unit (in thousands, except unit data and average days to data and average days to sale) sale)

Ecommerceunits 19,683 8,823 10,860 123.1 % 53,455 23,466 29,989 127.8 %sold

Ecommerce revenue:

Vehicle $ 677,170 $ 213,943 $ 463,227 216.5 % $ 1,644,494 $ 610,008 $ 1,034,486 169.6 %revenue

Product 24,508 7,818 16,690 213.5 % 59,155 20,493 38,662 188.7 %revenue

Totalecommerce $ 701,678 $ 221,761 $ 479,917 216.4 % $ 1,703,649 $ 630,501 $ 1,073,148 170.2 %revenue

Ecommercegross profit:

Vehiclegross $ 25,875 $ 11,486 $ 14,389 125.3 % $ 72,704 $ 20,296 $ 52,408 258.2 %profit

Productgross 24,508 7,818 16,690 213.5 % 59,155 20,493 38,662 188.7 %profit

Totalecommerce $ 50,383 $ 19,304 $ 31,079 161.0 % $ 131,859 $ 40,789 $ 91,070 223.3 %grossprofit

Averagevehicleselling $ 34,404 $ 24,248 $ 10,156 41.9 % $ 30,764 $ 25,995 $ 4,769 18.3 %price perecommerceunit

Grossprofitper ecommerceunit:

Vehiclegrossprofit $ 1,315 $ 1,302 $ 13 1.0 % $ 1,360 $ 865 $ 495 57.2 %perecommerceunit

Productgrossprofit 1,245 886 359 40.5 % 1,107 873 234 26.8 %perecommerceunit

Totalgrossprofit $ 2,560 $ 2,188 $ 372 17.0 % $ 2,467 $ 1,738 $ 729 41.9 %perecommerceunit

Ecommerceaverage 68 52 16 30.8 % 73 62 11 17.7 %days tosale

Ecommerce Units

Ecommerce units sold increased 123.1% to 19,683 driven by higher inventory levels, strong national brand recognition driven by our national advertising campaign and increased marketing spend, and increased demand due to growing consumer acceptance of our business model. The increase was also attributable to strong market demand generally 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 140.9% to 2,236,168.

Ecommerce Revenue

Ecommerce revenue increased 216.4% to $701.7 million.

* Ecommerce Vehicle revenue increased 216.5% to $677.2 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 $24,248 to $34,404, primarily attributable to market appreciation.

* Ecommerce Product revenue increased 213.5% to $24.5 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 $886 to $1,245 per unit.

Ecommerce Gross Profit

Ecommerce gross profit increased 161.0% to $50.4 million.

* Ecommerce Vehicle gross profit increased 125.3% to $25.9 million. The increase in ecommerce Vehicle gross profit was primarily due to an increase in ecommerce units sold.

* Ecommerce Product gross profit increased 213.5% to $ 24.5 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 $886 to $1,245 per unit.

Ecommerce Gross Profit per Unit

Ecommerce gross profit per unit increased 17.0% to $2,560.

* Ecommerce Vehicle gross profit per unit increased slightly to $1,315, primarily driven by improvements in reconditioning costs, partially offset by lower sales margins as a result of higher purchase prices of vehicle acquisitions.

* Ecommerce Product gross profit per unit increased 40.5% to $1,245, primarily driven by higher attachment rates and an increase in the average loan size as a result of a higher average selling price per unit.

Results by Segment

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 ^(1) Change % Change 2021 2020 ^(1) Change % Change

(in thousands, except (in thousands, except unit unit data) data)

Units:

Ecommerce 19,683 8,823 10,860 123.1 % 53,455 23,466 29,989 127.8 %

Wholesale 9,760 6,166 3,594 58.3 % 28,421 14,110 14,311 101.4 %

TDA 1,749 1,463 286 19.5 % 5,107 5,608 (501 ) (8.9 ) %

Total 31,192 16,452 14,740 89.6 % 86,983 43,184 43,799 101.4 %units



Revenue:

Ecommerce $ 701,678 $ 221,761 $ 479,917 216.4 % $ 1,703,649 $ 630,501 $ 1,073,148 170.2 %

Wholesale 131,306 63,972 67,334 105.3 % 377,438 170,469 206,969 121.4 %

TDA 60,582 36,955 23,627 63.9 % 158,928 149,858 9,070 6.1 %

All Other 3,190 317 2,873 906.3 % 9,749 1,043 8,706 834.7 %^(2)

Total $ 896,756 $ 323,005 $ 573,751 177.6 % $ 2,249,764 $ 951,871 $ 1,297,893 136.4 %revenue

Gross profit:

Ecommerce $ 50,383 $ 19,304 $ 31,079 161.0 % $ 131,859 $ 40,789 $ 91,070 223.3 %

Wholesale 2,103 3,343 (1,240 ) (37.1 ) 10,337 1,506 8,831 586.4 % %

TDA 3,805 2,675 1,130 42.2 % 9,743 8,799 944 10.7 %

All Other 1,798 123 1,675 1,361.8 % 5,454 345 5,109 1,480.9 %^(2)

Totalgross $ 58,089 $ 25,445 $ 32,644 128.3 % $ 157,393 $ 51,439 $ 105,954 206.0 %profit

Grossprofit per unit^(3):

Ecommerce $ 2,560 $ 2,188 $ 372 17.0 % $ 2,467 $ 1,738 $ 729 41.9 %

Wholesale $ 215 $ 542 $ (327 ) (60.3 ) $ 364 $ 107 $ 257 240.2 % %

TDA $ 2,175 $ 1,828 $ 347 19.0 % $ 1,907 $ 1,569 $ 338 21.5 %

(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 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 89.6% to 31,192.

* Ecommerce units sold increased 123.1% to 19,683, as discussed above.

* Wholesale units sold increased 58.3% to 9,760, 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 19.5% to 1,749, primarily due to strong market demand generally for used vehicles and higher inventory levels.

Total Revenue

Total revenue increased 177.6% to $896.8 million.

* Ecommerce revenue increased 216.4% to $701.7 million, as discussed above.

* Wholesale revenue increased 105.3% to $131.3 million. The increase in wholesale revenue was primarily attributable to the increase in wholesale units sold as well as a higher average selling price per unit, which increased from $10,375 to $13,453, primarily attributable to market appreciation.

* TDA revenue increased 63.9% to $60.6 million, primarily due to a higher average selling price per unit, which increased from $24,316 to $33,474 as well as the increase in TDA units sold.

Total Gross Profit

Total gross profit increased 128.3% to $58.1 million.

* Ecommerce gross profit increased 161.0% to $50.4 million, as discussed above.

* Wholesale gross profit decreased 37.1% to $2.1 million. Wholesale gross profit decreased primarily due to a lower Wholesale gross profit per unit of $327, partially offset by an increase in wholesale units sold.

* TDA gross profit increased 42.2% to $3.8 million. TDA gross profit increased primarily due to an increase in TDA gross profit per unit of $347 as well as an increase in TDA units sold.

Gross Profit per Unit

* Ecommerce gross profit per unit increased 17.0% to $2,560, as discussed above.

* Wholesale gross profit per unit decreased 60.3% to $215 as a result sales margin compression due to unfavorable wholesale price movements, which declined during the first half of the third quarter of 2021.

* TDA gross profit per unit increased 19.0% to $2,175 driven by increased TDA product gross profit per unit of $221, primarily due to improvements in inbound logistics costs and increased TDA vehicle gross profit per unit of $126, primarily due to an increase in the average loan size as a result of a higher average selling price per unit.

SG&A

(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 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 89.6% to 31,192.

* Ecommerce units sold increased 123.1% to 19,683, as discussed above.

* Wholesale units sold increased 58.3% to 9,760, 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 19.5% to 1,749, primarily due to strong market demand generally for used vehicles and higher inventory levels.

Total Revenue

Total revenue increased 177.6% to $896.8 million.

* Ecommerce revenue increased 216.4% to $701.7 million, as discussed above.

* Wholesale revenue increased 105.3% to $131.3 million. The increase in wholesale revenue was primarily attributable to the increase in wholesale units sold as well as a higher average selling price per unit, which increased from $10,375 to $13,453, primarily attributable to market appreciation.

* TDA revenue increased 63.9% to $60.6 million, primarily due to a higher average selling price per unit, which increased from $24,316 to $33,474 as well as the increase in TDA units sold.

Total Gross Profit

Total gross profit increased 128.3% to $58.1 million.

* Ecommerce gross profit increased 161.0% to $50.4 million, as discussed above.

* Wholesale gross profit decreased 37.1% to $2.1 million. Wholesale gross profit decreased primarily due to a lower Wholesale gross profit per unit of $327, partially offset by an increase in wholesale units sold.

* TDA gross profit increased 42.2% to $3.8 million. TDA gross profit increased primarily due to an increase in TDA gross profit per unit of $347 as well as an increase in TDA units sold.

Gross Profit per Unit

* Ecommerce gross profit per unit increased 17.0% to $2,560, as discussed above.

* Wholesale gross profit per unit decreased 60.3% to $215 as a result sales margin compression due to unfavorable wholesale price movements, which declined during the first half of the third quarter of 2021.

* TDA gross profit per unit increased 19.0% to $2,175 driven by increased TDA product gross profit per unit of $221, primarily due to improvements in inbound logistics costs and increased TDA vehicle gross profit per unit of $126, primarily due to an increase in the average loan size as a result of a higher average selling price per unit.

SG&A

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 Change % Change 2021 2020 Change % Change

(in thousands) (in thousands)

Compensation & $ 53,900 $ 22,881 $ 31,019 135.6 % $ 145,580 $ 63,821 $ 81,759 128.1 %benefits

Marketing 35,214 15,341 19,873 129.5 % 88,267 44,829 43,438 96.9 %expense

Outbound 22,717 8,500 14,217 167.3 % 57,987 19,762 38,225 193.4 %logistics

Occupancy and 4,635 2,610 2,025 77.6 % 12,599 7,574 5,025 66.3 %related costs

Professional 7,694 1,773 5,921 334.0 % 15,951 5,697 10,254 180.0 %fees

Other 24,558 10,022 14,536 145.0 % 61,098 25,735 35,363 137.4 %

Total selling,general & $ 148,718 $ 61,127 $ 87,591 143.3 % $ 381,482 $ 167,418 $ 214,064 127.9 %administrativeexpenses

Selling, general and administrative expenses increased 143.3% to $148.7 million. The increase was primarily due to:

* $31.0 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;

* $19.9 million increase in marketing expense as we expanded our national broad-reach brand advertising, produced new commercials, and increased performance and online marketing as we continue to grow our listed inventory;

* $14.2 million increase in outbound logistics costs primarily attributable to the growth in ecommerce units sold, which increased outbound logistics costs by $10.5 million, and increases in market rates of logistics providers, which increased outbound logistics costs by $3.7 million;

* $5.9 million increase in professional fees primarily related to acquisition related costs incurred in connection with the definitive agreement to acquire UACC, as well as increased consulting expenses in the marketing and engineering departments; and

* $14.5 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 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.

Loss from Operations and Net Loss

Loss from operations increased 154.9% to $94.0 million. Net loss increased 159.2% to $98.1 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 costs related to our acquisition of UACC. 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

(in thousands) (in thousands)

Net loss $ (98,122 ) $ (37,850 ) $ (241,118 ) $ (142,137 )

Adjusted to exclude the following:

Interest expense 7,028 2,259 14,720 6,382

Interest income (2,930 ) (1,289 ) (7,288 ) (3,960 )

Provision for income 29 33 379 138 taxes

Depreciation and 3,469 1,196 9,497 3,255 amortization expense

EBITDA $ (90,526 ) $ (35,651 ) $ (223,810 ) $ (136,322 )

One-time IPO relatedacceleration of - - - 1,262 non-cash stock-basedcompensation

One-time IPO relatednon-cash revaluation - - - 20,470 of preferred stockwarrant

Acquisition related 3,412 - 3,412 - costs

Adjusted EBITDA $ (87,114 ) $ (35,651 ) $ (220,398 ) $ (114,590 )

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 costs related to our acquisition of UACC. 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

(in thousands) (in thousands)

Loss from operations $ (94,005 ) $ (36,873 ) $ (233,365 ) $ (119,218 )

Add: One-time IPOrelated acceleration - - - 1,262 of non-cash stockbased compensation

Add: Acquisition 3,412 - 3,412 - related costs

Adjusted loss from $ (90,593 ) $ (36,873 ) $ (229,953 ) $ (117,956 )operations

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 costs related to our acquisition of UACC. 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

(in thousands, except share and per share amounts)

Net loss $ (98,122 ) $ (37,850 ) $ (241,118 ) $ (142,137 )

Net lossattributable to $ (98,122 ) $ (37,850 ) $ (241,118 ) $ (142,137 )commonstockholders

Add: One-timeIPO relatedacceleration of - - - 1,262 non-cash stockbasedcompensation

Add: One-timeIPO relatednon-cash - - - 20,470 revaluation ofpreferred stockwarrant

Add: Acquisition 3,412 - 3,412 - related costs

Non-GAAP net $ (94,710 ) $ (37,850 ) $ (237,706 ) $ (120,405 )loss



Weighted-averagenumber of sharesoutstanding usedto compute net 136,766,015 121,123,472 136,256,901 53,731,475 loss per share,basic anddiluted



Net loss pershare, basic and $ (0.72 ) $ (0.31 ) $ (1.77 ) $ (2.65 )diluted

Impact ofone-time IPOrelatedacceleration of - - - 0.02 non-cash stockbasedcompensation

Impact ofone-time IPOrelated non-cash - - - 0.38 revaluation ofpreferred stockwarrant

Impact ofacquisition 0.02 - 0.03 - related costs

Non-GAAP netloss per share, $ (0.70 ) $ (0.31 ) $ (1.74 ) $ (2.25 )basic anddiluted

Non-GAAP netloss per share,as adjusted, $ (0.70 ) $ (0.29 ) $ (1.74 ) $ (0.93 )basic anddiluted^(a)

(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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

(in thousands, except share and per share amounts)

Non-GAAP net $ (94,710 ) $ (37,850 ) $ (237,706 ) $ (120,405 )loss

Non-GAAP netloss, as $ (94,710 ) $ (37,850 ) $ (237,706 ) $ (120,405 )adjusted



Weighted-averagenumber of sharesoutstanding usedto compute net 136,766,015 121,123,472 136,256,901 53,731,475 loss per share,basic anddiluted

Add: unweightedadjustment forcommon stock - - - 24,437,500 issued inconnection withIPO

Add: unweightedadjustment forconversion ofredeemable - - - 85,533,394 convertiblepreferred stockin connectionwith IPO

Add: unweightedadjustment forcommon stockissued in - 10,800,000 - 10,800,000 connection withfollow-on publicoffering

Less: Adjustmentfor the impactof the aboveitems alreadyincluded in - (1,760,869 ) - (44,897,573 )weighted-averagenumber of sharesoutstanding forthe periodspresented

Weighted-averagenumber of sharesoutstanding usedto compute net 136,766,015 130,162,603 136,256,901 129,604,796 loss per share,as adjusted,basic anddiluted



Non-GAAP netloss per share,as adjusted, $ (0.70 ) $ (0.29 ) $ (1.74 ) $ (0.93 )basic anddiluted

Financial Outlook

For the full year 2021, we continue to expect triple digit year-over-year growth in ecommerce unit sales and more than 200% year-over-year growth in aggregate gross profit. For the fourth quarter 2021, we expect the following results:

* Ecommerce unit sales of 20,000 to 20,500, implying year over year growth of 84% at the mid-point of the guidance range.

* Average ecommerce selling price per unit of $35,000 to $36,000 and average ecommerce gross profit per unit of $2,100 to $2,300.

* Wholesale unit sales of 6,500 to 7,500, average selling price per unit of $13,000 to $14,000 and average gross profit per unit of $550 to $750.

* TDA unit sales of 1,500 to 1,600, average selling price per unit of $35,000 to $36,000 and average gross profit per unit of $1,800 to $2,000.

* Total revenue of $865 to $900 million.

* Total gross profit of $50 to $58 million.

* Adjusted EBITDA* of $(104) to $(95) million.

* Stock-based compensation expense of $4.2 million.

* Net loss per share, as adjusted* of $(0.77) to $(0.70).

*A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for our fourth quarter 2021 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 third quarter 2021 in the reconciliation table in the Non-GAAP Financial Measures section above.

We expect the following number of GAAP weighted average shares outstanding for the fourth quarter and the full year 2021:

Quarter YTD

2021 136,897,954 136,417,164

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 November 9, 2021 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 10, 2021 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 5685139. 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.

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 our expectations regarding our business strategy and plans, including our ability to integrate and develop United Auto Credit Corporation into a captive finance operation, as well as our ability to scale our business, grow inventory, expand reconditioning capacity, invest in logistics and improve our end-to-end customer experience, and for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the fourth quarter and the year ended December 31, 2021. 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, 2020, as updated by our Quarterly report on Form 10-Q for the quarter ended September 30, 2021, 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 As of

September 30, December 31,

2021 2020

ASSETS

Current Assets:

Cash and cash equivalents $ 1,326,543 $ 1,056,213

Restricted cash 69,574 33,826

Accounts receivable, net of allowance of 89,900 60,576 $4,937 and $2,803, respectively

Inventory 601,753 423,647

Prepaid expenses and other current assets 62,390 23,617

Total current assets 2,150,160 1,597,879

Property and equipment, net 30,559 15,092

Intangible assets, net 29,762 34

Goodwill 158,817 78,172

Operating lease right-of-use assets 16,994 17,137

Other assets 23,251 15,742

Total assets $ 2,409,543 $ 1,724,056

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable $ 59,522 $ 32,925

Accrued expenses 104,694 59,405

Vehicle floorplan 441,473 329,231

Deferred revenue 64,087 24,822

Operating lease liabilities, current 6,872 6,052

Other current liabilities 66,904 30,275

Total current liabilities 743,552 482,710

Convertible senior notes 609,811 -

Operating lease liabilities, excluding current 11,325 12,093 portion

Other long-term liabilities 4,204 2,151

Total liabilities 1,368,892 496,954

Commitments and contingencies (Note 10)

Stockholders' equity:

Common stock, $0.001 par value; 500,000,000shares authorized as of September 30, 2021 andDecember 31, 2020; 136,897,954 and 134,043,969 135 132 shares issued and outstanding as of September30, 2021 and December 31, 2020, respectively

Additional paid-in-capital 2,059,505 2,004,841

Accumulated deficit (1,018,989 ) (777,871 )

Total stockholders' equity 1,040,651 1,227,102

Total liabilities and stockholders' equity $ 2,409,543 $ 1,724,056

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,

2021

2020

2021

2020

Revenue:

Retail vehicle, net

$

735,716

$

249,518

$

1,798,155

$

754,380

Wholesale vehicle

131,306

63,972

377,438

170,469

Product, net

26,544

9,198

64,422

25,979

Other

3,190

317

9,749

1,043

Total revenue

896,756

323,005

2,249,764

951,871

Cost of sales

838,667

297,560

2,092,371

900,432

Total gross profit

58,089

25,445

157,393

51,439

Selling, general and administrative expenses

148,718

61,127

381,482

167,418

Depreciation and amortization

3,376

1,191

9,276

3,239

Loss from operations

(94,005

)

(36,873

)

(233,365

)

(119,218

)

Interest expense

7,028

2,259

14,720

6,382

Interest income

(2,930

)

(1,289

)

(7,288

)

(3,960

)

Revaluation of preferred stock warrant

-

-

-

20,470

Other income, net

(10

)

(26

)

(58

)

(111

)

Loss before provision for income taxes

(98,093

)

(37,817

)

(240,739

)

(141,999

)

Provision for income taxes

29

33

379

138

Net loss

$

(98,122

)

$

(37,850

)

$

(241,118

)

$

(142,137

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.72

)

$

(0.31

)

$

(1.77

)

$

(2.65

)

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

136,766,015

121,123,472

136,256,901

53,731,475

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenue:

Retail vehicle, $ 735,716 $ 249,518 $ 1,798,155 $ 754,380 net

Wholesale 131,306 63,972 377,438 170,469 vehicle

Product, net 26,544 9,198 64,422 25,979

Other 3,190 317 9,749 1,043

Total revenue 896,756 323,005 2,249,764 951,871

Cost of sales 838,667 297,560 2,092,371 900,432

Total gross 58,089 25,445 157,393 51,439 profit

Selling, generaland 148,718 61,127 381,482 167,418 administrativeexpenses

Depreciation and 3,376 1,191 9,276 3,239 amortization

Loss from (94,005 ) (36,873 ) (233,365 ) (119,218 )operations

Interest expense 7,028 2,259 14,720 6,382

Interest income (2,930 ) (1,289 ) (7,288 ) (3,960 )

Revaluation ofpreferred stock - - - 20,470 warrant

Other income, (10 ) (26 ) (58 ) (111 )net

Loss beforeprovision for (98,093 ) (37,817 ) (240,739 ) (141,999 )income taxes

Provision for 29 33 379 138 income taxes

Net loss $ (98,122 ) $ (37,850 ) $ (241,118 ) $ (142,137 )

Net loss pershareattributable tocommon $ (0.72 ) $ (0.31 ) $ (1.77 ) $ (2.65 )stockholders,basic anddiluted

Weighted-averagenumber of sharesoutstanding usedto compute netloss per share 136,766,015 121,123,472 136,256,901 53,731,475 attributable tocommonstockholders,basic anddiluted

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Nine Months Ended September 30,

2021

2020

Operating activities

Net loss

$

(241,118

)

$

(142,137

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

9,497

3,255

Amortization of debt issuance costs

1,784

656

Stock-based compensation expense

9,754

8,930

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

5,625

2,917

Revaluation of preferred stock warrant

-

20,470

Other

4,874

1,331

Changes in operating assets and liabilities:

Accounts receivable

(32,936

)

(4,297

)

Inventory

(183,731

)

(96,582

)

Prepaid expenses and other current assets

(39,356

)

(6,639

)

Other assets

(7,390

)

(2,246

)

Accounts payable

26,144

10,478

Accrued expenses

43,512

15,679

Deferred revenue

39,227

(24

)

Other liabilities

38,655

5,335

Net cash used in operating activities

(325,459

)

(182,874

)

Investing activities

Purchase of property and equipment

(18,786

)

(5,057

)

Acquisition of business, net of cash acquired

(75,875

)

-

Net cash used in investing activities

(94,661

)

(5,057

)

Financing activities

Proceeds from vehicle floorplan

1,901,457

842,865

Repayments of vehicle floorplan

(1,789,215

)

(767,359

)

Payment of vehicle floorplan upfront commitment fees

-

(1,125

)

Proceeds from issuance of convertible senior notes

625,000

-

Issuance costs paid for convertible senior notes

(16,129

)

-

Proceeds from the issuance of redeemable convertible preferred stock, net

-

21,694

Repurchase of common stock

-

(1,818

)

Common stock shares withheld to satisfy employee tax withholding obligations

-

(2,915

)

Proceeds from the issuance of common stock in connection with IPO, net of underwriting discount

-

504,023

Payments of costs related to IPO

-

(6,791

)

Proceeds from the issuance of common stock in connection with follow-on public offering, net of underwriting discount

-

569,471

Payments of costs related to follow-on public offering

-

(196

)

Proceeds from exercise of stock options

5,085

133

Other financing activities

-

(315

)

Net cash provided by financing activities

726,198

1,157,667

Net increase in cash, cash equivalents and restricted cash

306,078

969,736

Cash, cash equivalents and restricted cash at the beginning of period

1,090,039

219,587

Cash, cash equivalents and restricted cash at the end of period

$

1,396,117

$

1,189,323

View source version on businesswire.com: https://www.businesswire.com/news/home/20211109006374/en/

CONTACT: Investor Relations: Vroom Allen Miller investors@vroom.com

CONTACT: Media Contact: Moxie Communications Group Alyssa Galella vroom@moxiegrouppr.com (562) 294-6261