Industry and Market Information Financial Presentation and Use of Non-GAAP Financial Measures during 2023 we intend to resume growth, sell through aged inventory, improve variable costs per unit, continue to reduce fixed costs and convert balance sheet items into 1. Prioritize unit economics and growth 3. Maximize liquidity Third Quarter 2023 Earnings November 7th, 2023 Forward Looking Statements Certain monetary amounts, percentages and other figures included in this presentation have been subject to round ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39315 VROOM, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 901112566 (I.R.S. Employer Identif ...

Vroom, Inc. (NASDAQ:VRM) Q2 2023 Earnings Conference Call August 9, 2023 8:30 AM ET Company Participants Jon Sandison - VP, IR Tom Shortt - CEO Bob Krakowiak - CFO Conference Call Participants Sharon Zackfia - William Blair Operator Thank you for standing by and welcome to Vroom’s Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the call o ...

Part I - Financial Information [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Vroom's Q2 2023 unaudited financials show decreased assets, increased liabilities, and a significant net loss on reduced revenue [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to $1.59 billion, liabilities increased to $1.25 billion, and equity declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $237,925 | $398,915 | | Inventory | $208,871 | $320,648 | | Total current assets | $889,573 | $1,220,109 | | Total assets | $1,591,869 | $1,619,027 | | **Liabilities & Equity** | | | | Vehicle floorplan | $132,480 | $276,988 | | Total current liabilities | $667,363 | $703,320 | | Total liabilities | $1,253,633 | $1,143,786 | | Total stockholders' equity | $338,236 | $475,241 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2023 revenues fell to $225.2 million with a $66.3 million net loss, reflecting a strategic shift prioritizing unit economics Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $225,178 | $475,437 | $421,645 | $1,399,212 | | Total gross profit | $46,001 | $66,357 | $84,806 | $147,997 | | Loss from operations | $(52,611) | $(100,079) | $(120,874) | $(415,992) | | Net loss | $(66,318) | $(115,089) | $(141,362) | $(425,548) | | Net loss per share | $(0.48) | $(0.83) | $(1.02) | $(3.09) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2023 net cash used in operations increased to $232.1 million, with overall cash decreasing by $167.8 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(232,125) | $(137,519) | | Net cash provided by (used in) investing activities | $94,694 | $(226,573) | | Net cash used in financing activities | $(30,348) | $(164,300) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(167,779)** | **$(528,392)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue and unit sales declines to a strategic shift prioritizing unit economics, cost reduction, and liquidity maximization - The company's long-term roadmap prioritizes unit economics over growth, aims to significantly reduce operating expenses, and maximize liquidity[254](index=254&type=chunk) - Vroom executed two reductions in force in January and April 2023, cutting approximately **395 employees** combined, with expected annualized cost savings of **$27.0 million** and **$15.0 million**, respectively[261](index=261&type=chunk)[262](index=262&type=chunk) - The company repurchased **$32.8 million** of its Convertible Senior Notes in H1 2023 for **$13.2 million**, recognizing a gain on debt extinguishment of **$19.6 million**[260](index=260&type=chunk)[416](index=416&type=chunk) Key Operating Metrics Comparison | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Ecommerce units sold | 4,127 | 9,233 | 8,060 | 28,706 | | Vehicle gross profit per ecommerce unit | $290 | $2,166 | $75 | $1,100 | | Product gross profit per ecommerce unit | $2,664 | $1,463 | $2,683 | $1,263 | | Total gross profit per ecommerce unit | $2,954 | $3,629 | $2,758 | $2,363 | [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Q2 2023 total revenue fell 52.6% to $225.2 million, driven by declining ecommerce units, with SG&A expenses decreasing 43.2% Ecommerce Segment Performance - Q2 2023 vs Q2 2022 | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Ecommerce units sold | 4,127 | 9,233 | (55.3)% | | Vehicle revenue | $126,529K | $308,123K | (58.9)% | | Product revenue | $11,696K | $13,509K | (13.4)% | | Total ecommerce gross profit | $12,189K | $33,509K | (63.6)% | | Vehicle gross profit per unit | $290 | $2,166 | (86.6)% | | Product gross profit per unit | $2,664 | $1,463 | 82.1% | Wholesale Segment Performance - Q2 2023 vs Q2 2022 | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Wholesale units sold | 1,834 | 5,867 | (68.7)% | | Wholesale revenue | $30,800K | $82,901K | (62.8)% | | Wholesale gross loss | $(3,993)K | $(1,934)K | 106.5% | Retail Financing Segment Performance - Q2 2023 vs Q2 2022 | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Retail Financing revenue | $42,128K | $32,121K | 31.2% | | Retail Financing gross profit | $34,068K | $28,720K | 18.6% | - SG&A expenses decreased by **$66.0 million** (**43.2%**) in Q2 2023 compared to Q2 2022, primarily due to reductions in compensation & benefits, outbound logistics, and marketing[372](index=372&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, Vroom held $237.9 million in cash, relying on credit facilities, and anticipates sufficient liquidity for the next twelve months - As of June 30, 2023, the company held **$237.9 million** in cash and cash equivalents and **$66.3 million** in restricted cash[410](index=410&type=chunk) - The company has a committed credit line of up to **$500.0 million** under its 2022 Vehicle Floorplan Facility, maturing March 31, 2024[418](index=418&type=chunk) - UACC has four warehouse credit facilities with an aggregate borrowing limit of **$850.0 million**, with **$177.9 million** outstanding as of June 30, 2023[427](index=427&type=chunk) - Management believes existing cash and credit facilities are sufficient to support operations for at least the next twelve months[411](index=411&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its variable-rate debt, totaling $310.4 million - The company's main market risk is interest rate fluctuations on its variable-rate debt, which includes the **$132.5 million** Vehicle Floorplan Facility and **$177.9 million** in Warehouse Credit Facilities[440](index=440&type=chunk)[441](index=441&type=chunk) - A hypothetical **10%** change in interest rates during H1 2023 would have changed interest expense by **$1.1 million**[441](index=441&type=chunk) [Controls and Procedures](index=76&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2023, with no material changes to internal controls - As of June 30, 2023, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[445](index=445&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended June 30, 2023[446](index=446&type=chunk) Part II - Other Information [Legal Proceedings](index=77&type=section&id=Item%201.%20Legal%20Proceedings) Vroom faces a securities class action, shareholder derivative lawsuits, and a Texas Attorney General petition regarding trade practices - The company is defending against a consolidated securities class action lawsuit (In re: Vroom, Inc. Securities Litigation) alleging violations of the Exchange Act and Securities Act[447](index=447&type=chunk) - Multiple shareholder derivative lawsuits have been filed and are currently stayed pending the resolution of the main securities litigation[448](index=448&type=chunk)[449](index=449&type=chunk) - The Attorney General of Texas filed a petition against the company alleging violations of the Texas Deceptive Trade Practices Act related to vehicle marketing, titling, and registration[450](index=450&type=chunk) [Risk Factors](index=79&type=page&id=Item%201A.%20Risk%20Factors) Key risks include potential Nasdaq delisting, $1.1 billion in indebtedness, and challenges with the UACC acquisition including rising credit losses - The company faces a risk of delisting from Nasdaq if its stock price fails to maintain the minimum **$1.00** bid price, despite having regained compliance in June 2023[454](index=454&type=chunk)[455](index=455&type=chunk) - As of June 30, 2023, the company had approximately **$1.1 billion** in consolidated indebtedness, which could limit operational flexibility and increase vulnerability to adverse economic conditions[458](index=458&type=chunk) - The company may not realize the anticipated benefits of the UACC acquisition, which is critical to its long-term strategy, due to integration challenges and increased legal and regulatory scrutiny[466](index=466&type=chunk) - UACC is experiencing higher credit losses and loss severity on its automotive finance receivables due to rising interest rates, inflation, and vehicle depreciation, which negatively impacts operating results and the ability to securitize loans on favorable terms[468](index=468&type=chunk)[472](index=472&type=chunk)[477](index=477&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No material change occurred in the planned use of proceeds from the company's June 2020 IPO - There has been no material change in the planned use of proceeds from the company's June 2020 IPO[478](index=478&type=chunk) [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) On August 7, 2023, the company amended its 2022 Vehicle Floorplan Facility with Ally Bank and Ally Financial - On August 7, 2023, the company amended its 2022 Vehicle Floorplan Facility with Ally Bank and Ally Financial[481](index=481&type=chunk) [Exhibits](index=86&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Quarterly Report on Form 10-Q, including key agreements and officer certifications

Vroom, Inc. (NASDAQ:VRM) Q1 2023 Results Conference Call May 10, 2023 8:30 AM ET Company Participants Jon Sandison - VP, IR Tom Shortt - CEO Bob Krakowiak - CFO Conference Call Participants Rajat Gupta - JPMorgan Chase Sharon Zackfia - William Blair Operator Thank you for standing by and welcome to Vroom’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. ...

Part I - Financial Information [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Q1 2023 financial statements reflect significant revenue contraction and a **$75.0 million** net loss, with increased cash used in operations [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets rose to **$1.65 billion** due to finance receivables, while liabilities increased to **$1.25 billion** and equity declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $316,714 | $398,915 | | Inventory | $212,982 | $320,648 | | Finance receivables at fair value (net) | $536,270 | $153,174 | | Total assets | $1,651,636 | $1,619,027 | | **Liabilities & Equity** | | | | Vehicle floorplan | $147,428 | $276,988 | | Total liabilities | $1,249,398 | $1,143,786 | | Total stockholders' equity | $402,238 | $475,241 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2023 revenue declined **78.7%** to **$196.5 million**, resulting in a **$75.0 million** net loss, an improvement from prior year Q1 2023 vs. Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total revenue | $196,467 | $923,775 | | Total gross profit | $38,805 | $81,640 | | Selling, general and administrative expenses | $96,537 | $187,994 | | Impairment charges | $0 | $201,703 | | Loss from operations | $(68,263) | $(315,913) | | Net loss | $(75,044) | $(310,459) | | Net loss per share, basic and diluted | $(0.54) | $(2.26) | - The company recognized a gain on debt extinguishment of **$8.7 million** in Q1 2023 from repurchasing convertible senior notes[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$85.0 million**, while investing activities provided **$46.8 million**, reversing prior trends Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(85,021) | $(15,078) | | Net cash provided by (used in) investing activities | $46,818 | $(211,963) | | Net cash used in financing activities | $(45,099) | $(190,204) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(83,302)** | **$(417,245)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail restructuring, debt repurchase gains, a **Nasdaq delisting notice**, and re-evaluation of reportable segments - The company has **three reportable segments**: Ecommerce, Wholesale, and Retail Financing. The former TDA segment is now included in the "All Other" category[32](index=32&type=chunk)[224](index=224&type=chunk) - In January 2023, the company executed a reduction in force of approximately **275 employees**, incurring severance costs of approximately **$4.1 million**[219](index=219&type=chunk) - During Q1 2023, the company repurchased **$14.6 million** in principal of its Convertible Senior Notes for **$5.9 million**, recognizing a gain on debt extinguishment of **$8.7 million**[58](index=58&type=chunk)[153](index=153&type=chunk) - Subsequent to the quarter end, on April 14, 2023, the company received a **Nasdaq delisting notice** for failing to meet the **$1.00 minimum bid price** requirement[242](index=242&type=chunk) - On April 26, 2023, the company implemented another reduction in force, cutting approximately **120 employees** with expected severance costs of **$2.0 million** in Q2 2023[247](index=247&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2023 revenue and unit sales decline to strategic shifts, focusing on unit economics and long-term operational improvements [Key Operating and Financial Metrics](index=49&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Q1 2023 metrics show a **79.8%** drop in Ecommerce units, negative vehicle gross profit, but increased total gross profit per unit from product financing Key Operating Metrics Comparison | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Ecommerce units sold | 3,933 | 19,473 | | Vehicle gross (loss) profit per ecommerce unit | $(151) | $595 | | Product gross profit per ecommerce unit | $2,703 | $1,168 | | **Total gross profit per ecommerce unit** | **$2,552** | **$1,763** | | Ecommerce average days to sale | 279 | 91 | [Results of Operations](index=60&type=section&id=Results%20of%20Operations) Total revenue declined **78.7%** YoY across all segments, while SG&A expenses were significantly reduced by **48.6%** through cost-cutting measures - Ecommerce units sold decreased **79.8% YoY**, driven by the strategic decision to prioritize unit economics over volume and a reduction in sales support staff[357](index=357&type=chunk) - Ecommerce vehicle gross profit per unit turned **negative to ($151)** from $595 in the prior year, primarily due to lower sales margins on aged inventory and higher reconditioning costs[362](index=362&type=chunk) - Ecommerce product gross profit per unit increased **131.4% to $2,703**, driven by higher interest income from finance receivables originated by UACC[364](index=364&type=chunk) - SG&A expenses decreased by **$91.5 million (48.6%) YoY**, reflecting significant cuts in outbound logistics (**$24.7M**), compensation & benefits (**$23.9M**), and marketing (**$22.3M**)[374](index=374&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$316.7 million** in cash and believes existing liquidity is sufficient for the next twelve months, supported by cost reductions and debt repurchases - The company had **$316.7 million** in cash and cash equivalents and **$72.0 million** in restricted cash as of March 31, 2023[385](index=385&type=chunk) - Management believes existing cash and credit facilities will be sufficient to support operations for at least the next twelve months[386](index=386&type=chunk) - The company is pursuing cost savings through reductions in force, with an expected **$27.0 million** in annualized savings from the January 2023 action and **$15.0 million** from the April 2023 action[387](index=387&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company faces interest rate risk from variable-rate debt, including **$147.4 million** on its Vehicle Floorplan Facility and **$124.2 million** on Warehouse Credit Facilities - The company is exposed to interest rate risk from its variable-rate Vehicle Floorplan Facility (**$147.4M** outstanding) and Warehouse Credit Facilities (**$124.2M** outstanding)[417](index=417&type=chunk) - A hypothetical **10% change** in interest rates in Q1 2023 would have changed interest expense by **$0.6 million**[417](index=417&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[421](index=421&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2023[422](index=422&type=chunk) Part II - Other Information [Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company faces multiple legal proceedings, including a securities class action, shareholder derivative lawsuits, and a Texas AG petition on deceptive trade practices - The company is defending against a consolidated securities class action lawsuit (In re: Vroom, Inc. Securities Litigation) alleging violations of the Exchange Act and Securities Act[424](index=424&type=chunk) - The Attorney General of Texas filed a petition against the company alleging violations of the Texas Deceptive Trade Practices Act related to marketing, titling, and registration of vehicles[427](index=427&type=chunk) - Multiple shareholder derivative lawsuits have been filed and are currently stayed pending the resolution of the main securities litigation[425](index=425&type=chunk)[426](index=426&type=chunk) [Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) Key risks include a **Nasdaq delisting notice** for failing the **$1.00** minimum bid price, substantial indebtedness, and challenges related to the UACC acquisition - The company received a notice from Nasdaq for its stock price closing below **$1.00** for 30 consecutive days, creating a risk of delisting from the Nasdaq Global Select Market[431](index=431&type=chunk) - A delisting would constitute a 'fundamental change' under the indenture for its convertible notes, allowing holders to require the company to repurchase the notes at par[433](index=433&type=chunk)[435](index=435&type=chunk) - Risks related to the UACC acquisition include potential failure to realize anticipated benefits, inability to sell automotive finance receivables on favorable terms, and exposure to increasing credit losses, particularly in the sub-prime sector[442](index=442&type=chunk)[445](index=445&type=chunk)[448](index=448&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No material change has occurred in the planned use of proceeds from the company's June 2020 Initial Public Offering - There has been no material change in the planned use of proceeds from the company's June 2020 IPO[454](index=454&type=chunk) [Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities during the reporting period - None[455](index=455&type=chunk) [Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including required certifications and interactive data files

Vroom, Inc. (NASDAQ:VRM) Q4 2022 Earnings Conference Call March 1, 2023 8:30 AM ET Company Participants Liam Harrington - Vice President of Investor Relations Tom Shortt - Chief Executive Officer Bob Krakowiak - Chief Financial Officer Conference Call Participants Rajat Gupta - JPMorgan Sharon Zackfia - William Blair Operator Good day, and thank you for standing by. Welcome to the Vroom Fourth Quarter and Full-Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speak ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Vroom, Inc. is an end-to-end e-commerce platform for buying and selling used vehicles, implementing a Business Realignment Plan in 2022 to prioritize unit economics and maximize liquidity - Vroom is an e-commerce platform for buying and selling used vehicles, operating through its Vroom, Texas Direct Auto (TDA), and CarStory brands It also owns United Auto Credit Corporation (UACC) for vehicle financing[23](index=23&type=chunk)[25](index=25&type=chunk) - In May 2022, the company adopted a Business Realignment Plan to slow unit sales growth and focus on improving unit economics, reducing costs, and maximizing liquidity and profitability[32](index=32&type=chunk) - The company's long-term strategy focuses on four key initiatives: building efficient transaction processes, optimizing vehicle pricing and supply chain, establishing a regional operating model, and developing a captive finance offering through UACC[34](index=34&type=chunk)[35](index=35&type=chunk) - The acquisition of UACC in February 2022 is a critical component of the strategy to create a captive financing arm, Vroom Financial Services, to serve customers across the credit spectrum and improve unit economics[50](index=50&type=chunk) Employee Distribution as of December 31, 2022 | Company | Total Employees | Full-Time Employees | Notes | | :--- | :--- | :--- | :--- | | Vroom | 1,323 | 1,322 | 1,157 in the US, 166 in Serbia. Excludes UACC. | | UACC | 683 | 671 | Acquired on Feb 1, 2022. | - The company is subject to extensive U.S. federal, state, and local regulations governing vehicle sales, financing, transportation, titling, and e-commerce operations UACC's financing operations are also regulated by agencies like the CFPB[77](index=77&type=chunk)[82](index=82&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks, including a history of significant net losses (**$451.9 million** in 2022) and the potential need for additional capital, alongside operational challenges from UACC integration, supply chain reliance, and extensive regulation - The company has a history of losses, with an accumulated deficit of approximately **$1.6 billion** as of December 31, 2022, and may not achieve profitability in the future[95](index=95&type=chunk) - Vroom may need to raise additional capital to achieve its business objectives, and there is no assurance that financing will be available on acceptable terms, if at all[94](index=94&type=chunk) - The integration of the UACC business and its development into a captive lending operation presents significant challenges and may not yield the anticipated benefits[154](index=154&type=chunk)[155](index=155&type=chunk) - Operational challenges from prior rapid growth have led to backlogs and delays in titling and registering vehicles, adversely affecting customer experience and brand reputation[118](index=118&type=chunk)[152](index=152&type=chunk) - The business is highly dependent on access to desirable vehicle inventory and its ability to correctly appraise and price vehicles Obstacles to acquiring inventory could materially harm operations[182](index=182&type=chunk)[221](index=221&type=chunk) - The company operates in a highly competitive and regulated industry Failure to comply with the wide range of federal, state, and local laws could result in material adverse effects[188](index=188&type=chunk)[203](index=203&type=chunk) - A goodwill impairment charge of **$201.7 million** was recorded in 2022 due to a decline in the company's stock price and other factors[100](index=100&type=chunk) [Unresolved Staff Comments](index=56&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) Not applicable The company reports no unresolved staff comments - Not Applicable[307](index=307&type=chunk) [Properties](index=57&type=section&id=Item%202.%20Properties) The company leases all its primary facilities, including its corporate headquarters and TDA dealership near Houston, Texas, as well as UACC's headquarters in Newport Beach, California, and its servicing center in Fort Worth, Texas Key Leased Properties | Facility | Location | Size (sq. ft.) | Lease Expiration | | :--- | :--- | :--- | :--- | | Vroom HQ | Houston, TX | ~102,492 | Nov 2024 | | TDA Dealership / Vroom VRC | Houston, TX | ~58,000 | Sep 2024 | | UACC HQ | Newport Beach, CA | ~20,058 | Mar 2024 | | UACC Servicing Center | Fort Worth, TX | ~106,500 | Sep 2031 | [Legal Proceedings](index=57&type=section&id=Item%203.%20Legal%20Proceedings) Vroom is involved in several significant legal matters, including a consolidated securities class action lawsuit, multiple shareholder derivative lawsuits, and a lawsuit filed by the Attorney General of Texas regarding vehicle marketing, titling, and registration - A consolidated securities class action lawsuit alleges violations of the Exchange Act and Securities Act against the company, certain officers, directors, and underwriters The company has filed a motion to dismiss[314](index=314&type=chunk) - Multiple shareholder derivative lawsuits have been filed based on similar allegations as the securities class action These cases are currently stayed pending the resolution of the main securities litigation[315](index=315&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk) - In April 2022, the Attorney General of Texas filed a lawsuit alleging violations of the Texas Deceptive Trade Practices Act, citing deficiencies in marketing, titling, and registration of vehicles Vroom is working cooperatively towards a resolution[318](index=318&type=chunk) [Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable The company has no mine safety disclosures - Not applicable[320](index=320&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Vroom's common stock has been trading on the Nasdaq Global Select Market under the ticker symbol "VRM" since its IPO on June 9, 2020, with no cash dividends paid or anticipated as earnings are retained for business growth - The company's common stock began trading on the Nasdaq Global Select Market under the ticker "VRM" on June 9, 2020[338](index=338&type=chunk) - The company has not declared or paid any cash dividends and does not anticipate paying any in the foreseeable future[340](index=340&type=chunk) [Reserved](index=63&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Vroom's total revenue decreased by **38.8%** to **$1.95 billion** from **$3.18 billion** in 2021, driven by a **47.4%** decline in e-commerce units sold, while total gross profit increased by **21.1%** to **$244.8 million** and total gross profit per e-commerce unit rose **15.4%** to **$2,545**, resulting in a net loss of **$451.9 million** including a **$201.7 million** goodwill impairment charge Key Financial Results (2022 vs. 2021) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,948.9 million | $3,184.3 million | (38.8)% | | Total Gross Profit | $244.8 million | $202.1 million | 21.1% | | Net Loss | ($451.9 million) | ($370.9 million) | 21.8% | | Ecommerce Units Sold | 39,278 | 74,698 | (47.4)% | | Total GPPU | **$2,545** | $2,206 | 15.4% | - The company implemented a Business Realignment Plan in May 2022, resulting in approximately **$8.5 million** in severance costs and **$6.5 million** in lease impairment charges for the year[355](index=355&type=chunk)[356](index=356&type=chunk) - In 2022, the company repurchased **$254.3 million** of its convertible notes for **$90.2 million**, recognizing a gain on debt extinguishment of **$164.7 million**[365](index=365&type=chunk)[481](index=481&type=chunk) - The acquisition of UACC on February 1, 2022, established a new Retail Financing segment, which generated **$152.5 million** in revenue and **$138.4 million** in gross profit in 2022[368](index=368&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk) - As of December 31, 2022, the company had **$398.9 million** in cash and cash equivalents and believes it has sufficient liquidity to support operations for at least the next twelve months[490](index=490&type=chunk)[491](index=491&type=chunk) [Results of Operations](index=80&type=section&id=Results%20of%20Operations) Ecommerce Segment Performance (2022 vs. 2021) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Units Sold | 39,278 | 74,698 | (47.4)% | | Total Revenue | $1,364.2 million | $2,442.4 million | (44.1)% | | Total Gross Profit | $99.97 million | $164.75 million | (39.3)% | | Vehicle GPPU | **$1,033** | $1,108 | (6.8)% | | Product GPPU | **$1,512** | $1,098 | 37.7% | | Total GPPU | **$2,545** | $2,206 | 15.4% | Wholesale Segment Performance (2022 vs. 2021) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Units Sold | 20,876 | 37,163 | (43.8)% | | Revenue | $293.5 million | $499.0 million | (41.2)% | | Gross (Loss) Profit | ($10.6 million) | $18.1 million | (158.6)% | | Gross (Loss) Profit per Unit | **($509)** | $488 | (204.3)% | Retail Financing Segment Performance (2022) | Metric | 2022 (in millions) | | :--- | :--- | | Revenue | $152.5 million | | Gross Profit | $138.4 million | - Selling, general and administrative (SG&A) expenses increased by **3.4%** to **$566.4 million** in 2022, primarily due to the inclusion of UACC's SG&A, higher compensation and benefits, and increased legal and IT costs, partially offset by significant reductions in marketing and outbound logistics[476](index=476&type=chunk)[477](index=477&type=chunk)[486](index=486&type=chunk) - The company recorded impairment charges of **$211.9 million** in 2022, consisting of a **$201.7 million** goodwill write-down, **$6.5 million** in lease impairments, and **$3.7 million** for long-lived assets[480](index=480&type=chunk) [Liquidity and Capital Resources](index=87&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2022, the company had **$398.9 million** in cash and cash equivalents and **$73.1 million** in restricted cash[490](index=490&type=chunk) - Net cash used in operating activities decreased significantly to **$109.1 million** in 2022 from **$568.7 million** in 2021, mainly due to proceeds from the sale of finance receivables and a decrease in working capital from lower inventory levels[510](index=510&type=chunk)[511](index=511&type=chunk) - The company's vehicle inventory is financed through a 2022 Vehicle Floorplan Facility with a credit line of up to **$500.0 million**, maturing in March 2024 As of year-end 2022, **$277.0 million** was outstanding[499](index=499&type=chunk)[707](index=707&type=chunk) - UACC has four senior secured warehouse credit facilities with an aggregate borrowing limit of **$850.0 million** to fund finance receivables As of year-end 2022, **$229.5 million** was outstanding[507](index=507&type=chunk) [Critical Accounting Policies and Estimates](index=91&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Key estimates include those related to income taxes, inventory realizability, stock-based compensation, revenue reserves, and impairment of goodwill and long-lived assets[516](index=516&type=chunk) - Business combinations are accounted for using the acquisition method, requiring significant estimates for the fair value of assets acquired and liabilities assumed, particularly for intangible assets like technology and customer relationships[519](index=519&type=chunk) - Goodwill is tested for impairment annually or when triggering events occur A quantitative interim test as of March 31, 2022, resulted in a goodwill impairment charge of **$201.7 million** due to a sustained decline in the company's stock price[524](index=524&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=93&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk is interest rate risk associated with its variable-rate debt, including the 2020 Vehicle Floorplan Facility and the UACC Warehouse Credit Facilities, where a hypothetical **10%** change in interest rates during 2022 would have resulted in a **$2.7 million** change in interest expense - The company's primary market risk is interest rate risk from its variable-rate debt facilities used to finance vehicle inventory and finance receivables[527](index=527&type=chunk) - A hypothetical **10%** change in interest rates in 2022 would have changed interest expense by **$2.7 million**[528](index=528&type=chunk) [Financial Statements and Supplementary Data](index=94&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for the year ended December 31, 2022, show total assets of **$1.62 billion**, a decrease from **$2.37 billion** in 2021, and a net loss of **$451.9 million**, with PricewaterhouseCoopers LLP providing an unqualified opinion on the financial statements and internal controls, excluding the newly acquired UACC from the internal control assessment Consolidated Balance Sheet Summary (As of Dec 31) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $398,915 | $1,132,325 | | Inventory | $320,648 | $726,384 | | Total Assets | $1,619,027 | $2,366,750 | | **Liabilities & Equity** | | | | Vehicle floorplan | $276,988 | $512,801 | | Long term debt, net | $402,154 | $610,618 | | Total Liabilities | $1,143,786 | $1,451,556 | | Total Stockholders' Equity | $475,241 | $915,194 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total Revenue | $1,948,901 | $3,184,255 | | Total Gross Profit | $244,787 | $202,099 | | Loss from Operations | ($571,763) | ($358,615) | | Net Loss | ($451,910) | ($370,911) | - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the financial statements and internal controls over financial reporting as of December 31, 2022[536](index=536&type=chunk) - The auditor's report identified the valuation of purchased technology and customer relationships intangible assets from the UACC acquisition as a critical audit matter due to the significant management judgment involved[544](index=544&type=chunk)[545](index=545&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=145&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Not applicable The company reports no changes in or disagreements with its accountants - Not applicable[838](index=838&type=chunk) [Controls and Procedures](index=145&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2022, with the assessment excluding the newly acquired UACC business - Management concluded that disclosure controls and procedures were effective as of December 31, 2022[841](index=841&type=chunk) - Management's assessment of internal control over financial reporting concluded that controls were effective as of December 31, 2022[842](index=842&type=chunk) - The assessment of internal controls excluded the newly acquired UACC business, which will be included in the assessment for the year ending December 31, 2023[843](index=843&type=chunk) [Other Information](index=145&type=section&id=Item%209B.%20Other%20Information) Not applicable The company reports no other information - Not applicable[846](index=846&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=145&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) Not applicable - Not applicable[847](index=847&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=146&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section provides information about the company's directors and executive officers, incorporating by reference detailed disclosures from the forthcoming 2023 Proxy Statement, and notes the adoption of a Code of Business Conduct and Ethics - Information regarding directors, executive officers, and corporate governance is primarily incorporated by reference from the company's definitive proxy statement for the 2023 annual meeting of stockholders[850](index=850&type=chunk) - The company has adopted a "Code of Business Conduct and Ethics" that applies to all directors, officers, and employees, which is available on its investor relations website[849](index=849&type=chunk) [Executive Compensation](index=146&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item concerning executive compensation is incorporated by reference from Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders - The information required by this item is incorporated by reference to Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders[851](index=851&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=146&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item concerning security ownership is incorporated by reference from Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders - The information required by this item is incorporated by reference to Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders[852](index=852&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=146&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item concerning related party transactions and director independence is incorporated by reference from Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders - The information required by this item is incorporated by reference to Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders[853](index=853&type=chunk) [Principal Accounting Fees and Services](index=146&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required for this item concerning principal accounting fees and services is incorporated by reference from Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders - The information required by this item is incorporated by reference to Vroom's Proxy Statement for its 2023 Annual Meeting of Stockholders[854](index=854&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=147&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including consolidated financial statements and an index of exhibits, noting the omission of all financial statement schedules as not applicable - This item includes the Consolidated Financial Statements of Vroom, Inc. as set forth in Part II, Item 8[858](index=858&type=chunk) - All financial statement schedules have been omitted because they are not applicable, not material, or the required information is included elsewhere in the report[858](index=858&type=chunk) - An index of exhibits is provided, listing documents such as the merger agreement for UACC, corporate governance documents, debt indentures, and various material contracts[857](index=857&type=chunk) [Form 10-K Summary](index=155&type=section&id=Item%2016.%20Form%2010-K%20Summary) None The company has not provided a summary for its Form 10-K - None[867](index=867&type=chunk)

Financial Performance & Objectives - The company aims to prioritize unit economics and growth, improve costs per unit, and maximize liquidity[5] - Q4 2022 Adjusted EBITDA was -$709 million, within the prior outlook range[6] - Q4 2022 saw a $65 million / 48% improvement in Adjusted EBITDA (excluding securitization gain and non-recurring costs) compared to Q1 2022[6] - Ecommerce Gross Profit Per Unit (GPPU) was $1,233 in Q4 2022[6,9] Cost Reduction & Efficiency - Adjusted SG&A expenses decreased by $31 million sequentially, driven by lower variable and fixed costs[6] - The company unlocked approximately $70 million of cash in inventory and restricted cash[6] - The company expects ~$27 million of annualized variable and fixed cost reductions implemented in January 2023[9] - Logistics costs saw a reduction of approximately $6 million[9] Inventory & Sales - 36% of units sold in Q4 were aged units (>270 days) due to earlier titling delays[6,9] - 87% of units were available for sale or pending sale at the end of Q4 2022, compared to 52% at the end of Q3 2022[6,9] Strategic Initiatives & Outlook - The company repurchased $198 million of convertible notes for $72 million[6] - FY2023 Adjusted EBITDA guidance is between -$250 million and -$200 million[10,23]

Third Quarter 2022 Earnings November 2022 Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding the expected timeline, our execution of and the expected benefits from our business Realignment Plan and cost-saving i ...