Vroom, Inc.

Vroom reported third-quarter revenue of $236 million, up 5% sequentially, and e-commerce units up 11%. E-commerce GPPU increased 6% to $3,144, while adjusted EBITDA loss widened to $64.5 million, an $8.2 million sequential increase. Cash and cash equivalents were $209 million at quarter-end, down $29.3 million sequentially, and total available liquidity was about $282 million including approximately $73 million at UACC. For full year 2023, management updated adjusted EBITDA loss guidance to $225 million-$245 million and year-end cash and cash equivalents guidance to $137 million-$162 million; they also said UACC available liquidity could be about $60 million at the end of Q4, with up to an additional $20 million possible if residual certificates are sold, implying midpoint liquidity could be up to $230 million.

Tom Shortt framed the quarter as part of a transition back toward growth while still working down aged inventory and improving unit economics. He emphasized that Vroom has improved customer experience, reduced costs, and made progress on its long-term roadmap, but acknowledged 2023 was pressured by titling and registration issues and UACC portfolio performance. His tone was cautiously optimistic, saying the company feels well positioned for 2024 and is now beginning to pursue additional capital to scale the business.

Bob Krakowiak highlighted that the quarter’s $64.5 million adjusted EBITDA loss was driven by higher realized net losses and an unfavorable mark-to-market on UACC receivables, partially offset by higher e-commerce gross profit. He said adjusted SG&A was reduced by about $3 million sequentially despite higher unit volume, and the business recovered about $48 million of cash and inventory as aged units were sold through and more inventory was financed on the floorplan facility. He also noted $209 million of cash and cash equivalents at quarter-end, around $73 million of available liquidity at UACC, and reiterated the updated year-end cash guidance of $137 million-$162 million.

Analysts pressed on the sharp increase in the “other loss” line, and management said it reflected both mark-to-market losses on the UACC residual portfolio and additional loans originated since the 2023-1 securitization; they did not break out the mix between Vroom and UACC. On liquidity, Tom Shortt said Vroom is at the early stage of pursuing capital to scale the business, while Bob Krakowiak said underwriting changes at UACC have been made and early signs of portfolio improvement are visible, though it will take time to show up in results. In response to questions about aged inventory, management said the company is down to only a few hundred aged cars and expects only a small amount, if any, to remain by year-end, with nothing material heading into 2024.