Vroom(VRM) - 2025 Q2 - Quarterly Results

Executive Summary & Business Context Vroom reported reduced net loss in Q2 2025, applied fresh-start accounting post-Chapter 11, and now focuses on UACC and CarStory after discontinuing e-commerce Second Quarter 2025 Highlights Vroom reported a decrease in net loss and Adjusted net loss year-over-year for Q2 2025, driven by continued focus on operational execution, efficiency, and improved loan portfolio performance at UACC - CEO Tom Shortt stated that the decrease in net loss and Adjusted net loss year-over-year was driven by continued focus on operational execution, efficiency, and progress in loan portfolio performance at UACC[4] Consolidated Total Available Liquidity (as of June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Cash and cash equivalents | $14.3 | | UACC warehouse credit facilities availability | $16.6 | | Line of credit secured by residual certificates | $25.0 | | Total Available Liquidity | $55.9 | Key Financial Metrics (Three Months Ended June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Net loss from continuing operations | ($8.9) | | Adjusted net loss | ($6.7) | | Stockholders' equity | $151.9 | | Tangible book value | $138.6 | Fresh Start Accounting and Comparability Vroom emerged from a voluntary Chapter 11 proceeding on January 14, 2025, leading to the application of fresh-start accounting, which impacts comparability of financial statements - Vroom emerged from a voluntary Prepackaged Chapter 11 Case on January 14, 2025 (the "Effective Date"), qualifying for fresh-start accounting[4] - Due to fresh-start accounting, assets and liabilities were recorded at estimated fair values, making condensed consolidated financial statements after the Effective Date ("Successor") not comparable with those on or before that date ("Predecessor")[4] - Non-GAAP Combined results for the six months ended June 30, 2025, are presented as the sum of Predecessor (Jan 1-Jan 14, 2025) and Successor (Jan 15-June 30, 2025) periods to provide a more meaningful comparison to prior periods, though these are not GAAP compliant[5][20] Company Overview and Strategic Direction Vroom operates United Auto Credit Corporation (UACC), a leading indirect automotive lender, and CarStory, a provider of AI-powered analytics and digital services for automotive retail - Vroom owns and operates United Auto Credit Corporation (UACC), an indirect automotive lender, and CarStory, a leader in AI-powered analytics and digital services for automotive retail[24] - Pursuant to its Value Maximization Plan, Vroom discontinued its e-commerce operations and used vehicle dealership business prior to January 2024[24] Consolidated Financial Discussion Vroom significantly reduced its net loss in Q2 2025 and achieved net income in H1 2025 (Non-GAAP Combined), primarily due to expense reductions and reorganization items Three Months Ended June 30, 2025 (Successor vs. Predecessor) For Q2 2025, Vroom reported a significant reduction in net loss from continuing operations and total net loss compared to Q2 2024, driven by lower total expenses despite a decrease in net interest income Consolidated Net Loss (Three Months Ended June 30) | Metric | Q2 2025 (Successor) (Millions) | Q2 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net loss from continuing operations | ($8.9) | ($19.1) | $10.2 | 53.2% | | Net loss | ($8.5) | ($21.2) | $12.7 | 59.8% | - Total expenses decreased by $15.6 million (33.7%) from $46.4 million in Q2 2024 to $30.8 million in Q2 2025[8] - Key expense reductions included compensation and benefits (down $6.1 million), depreciation and amortization (down $6.5 million), and interest expense on corporate debt (down $0.9 million)[8] - Net interest income decreased by $4.3 million (11.6%) from $36.9 million in Q2 2024 to $32.6 million in Q2 2025[8] Six Months Ended June 30, 2025 (Non-GAAP Combined vs. Predecessor) For the first half of 2025 (Non-GAAP Combined), Vroom reported a significant shift from a net loss to a net income, primarily driven by a substantial decrease in total expenses and a positive impact from reorganization items Consolidated Net Income (Loss) (Six Months Ended June 30) | Metric | H1 2025 (Non-GAAP Combined) (Millions) | H1 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :---------------- | :-------------------------- | :-------------------- | :--------- | :--------- | | Net income (loss) | $30.2 | ($88.8) | $119.0 | 134.0% | - Total expenses decreased by $27.4 million (28.9%) from $94.7 million in H1 2024 to $67.4 million in H1 2025[10] - Reorganization items, net, contributed $51.0 million in H1 2025[10] - Net interest income decreased by $10.0 million (13.6%) from $73.6 million in H1 2024 to $63.6 million in H1 2025[10] Segment Results All segments demonstrated improved financial performance, with UACC and CarStory reducing losses or achieving income, driven by expense reductions UACC Segment The UACC segment showed a significant improvement in its adjusted net loss for both the three and six months ended June 30, 2025, primarily driven by substantial reductions in total expenses and a strong increase in warranties and GAP income UACC Three Months Ended June 30, 2025 UACC's adjusted net loss decreased significantly in Q2 2025 compared to Q2 2024, primarily due to a substantial reduction in total expenses, despite a decline in net interest income after losses and recoveries UACC Adjusted Net Loss (Three Months Ended June 30) | Metric | Q2 2025 (Successor) (Millions) | Q2 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :---------------- | :------------------ | :------------------ | :--------- | :--------- | | Adjusted net loss | ($5.3) | ($8.3) | $3.0 | 35.6% | - Net interest income after losses and recoveries decreased by $6.1 million (34.5%) from $17.8 million in Q2 2024 to $11.7 million in Q2 2025[11] - Total expenses decreased by $8.0 million (24.2%) from $33.0 million in Q2 2024 to $25.0 million in Q2 2025[11] - Warranties and GAP income, net, increased by $2.0 million (124.0%) from $1.6 million in Q2 2024 to $3.7 million in Q2 2025[11] UACC Six Months Ended June 30, 2025 (Non-GAAP Combined) UACC's adjusted net loss for the first half of 2025 (Non-GAAP Combined) improved significantly year-over-year, driven by a substantial reduction in total expenses and a strong increase in warranties and GAP income UACC Adjusted Net Loss (Six Months Ended June 30) | Metric | H1 2025 (Non-GAAP Combined) (Millions) | H1 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :---------------- | :-------------------------- | :-------------------- | :--------- | :--------- | | Adjusted net loss | ($12.1) | ($24.8) | $12.7 | 51.3% | - Total expenses decreased by $13.5 million (19.9%) from $67.6 million in H1 2024 to $54.1 million in H1 2025[12] - Warranties and GAP income, net, increased by $4.4 million (134.9%) from $3.3 million in H1 2024 to $7.6 million in H1 2025[12] - Net interest income decreased by $11.0 million (14.7%) from $74.6 million in H1 2024 to $63.7 million in H1 2025[12] CarStory Segment The CarStory segment achieved an adjusted net income for both the three and six months ended June 30, 2025, marking a significant turnaround from losses in the prior year CarStory Three Months Ended June 30, 2025 CarStory achieved an adjusted net income in Q2 2025, a significant turnaround from a net loss in Q2 2024, primarily due to a substantial reduction in total expenses, which offset a decline in CarStory revenue CarStory Adjusted Net Income (Loss) (Three Months Ended June 30) | Metric | Q2 2025 (Successor) (Millions) | Q2 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :---------------------- | :------------------ | :------------------ | :--------- | :--------- | | Adjusted net income (loss) | $0.1 | ($1.1) | $1.2 | 111.6% | - Total noninterest income decreased by $1.2 million (39.4%) from $3.1 million in Q2 2024 to $1.9 million in Q2 2025, mainly due to a drop in CarStory revenue[13] - Total expenses decreased by $2.5 million (58.1%) from $4.2 million in Q2 2024 to $1.8 million in Q2 2025[13] CarStory Six Months Ended June 30, 2025 (Non-GAAP Combined) CarStory's adjusted net income for the first half of 2025 (Non-GAAP Combined) showed a strong improvement, moving from a loss to a profit, driven by a significant reduction in total expenses despite a decrease in CarStory revenue CarStory Adjusted Net Income (Loss) (Six Months Ended June 30) | Metric | H1 2025 (Non-GAAP Combined) (Millions) | H1 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :---------------------- | :-------------------------- | :-------------------- | :--------- | :--------- | | Adjusted net income (loss) | $0.8 | ($2.0) | $2.8 | 140.9% | - Total noninterest income decreased by $1.5 million (23.6%) from $6.3 million in H1 2024 to $4.8 million in H1 2025[13] - Total expenses decreased by $4.5 million (53.1%) from $8.4 million in H1 2024 to $4.0 million in H1 2025[13] Corporate Segment The Corporate segment demonstrated significant financial improvement for both the three and six months ended June 30, 2025, primarily through substantial reductions in total expenses, including the elimination of corporate debt interest Corporate Three Months Ended June 30, 2025 The Corporate segment significantly reduced its total expenses in Q2 2025 compared to Q2 2024, primarily due to the elimination of interest expense on corporate debt and substantial cuts in compensation and other expenses - Total expenses decreased by $5.2 million (56.6%) from $9.2 million in Q2 2024 to $4.0 million in Q2 2025[14] - Interest expense on corporate debt decreased by $0.9 million (100.0%) to $0 in Q2 2025[14] - Compensation and benefits decreased by $2.1 million (50.5%) from $4.2 million in Q2 2024 to $2.1 million in Q2 2025[14] Corporate Six Months Ended June 30, 2025 (Non-GAAP Combined) The Corporate segment demonstrated a significant improvement in its financial performance for the first half of 2025 (Non-GAAP Combined), with a substantial reduction in total expenses and a positive shift in net interest income after losses and recoveries - Total expenses decreased by $9.4 million (50.3%) from $18.7 million in H1 2024 to $9.3 million in H1 2025[14] - Net interest income after losses and recoveries increased by $7.0 million (218.8%) from ($3.2) million in H1 2024 to $3.8 million in H1 2025[14] - Warranties and GAP income (loss), net, increased by $11.9 million (103.4%) from ($11.5) million in H1 2024 to $0.4 million in H1 2025[14] Non-GAAP Financial Measures Vroom uses non-GAAP measures like Adjusted net loss and total available liquidity to assess performance, providing reconciliations for Q2 and H1 2025 Non-GAAP Measures Definitions and Limitations Vroom utilizes non-GAAP measures such as Adjusted net income (loss), total available liquidity, and tangible book value to assess operating performance and for business planning - Vroom uses Adjusted net income (loss), total available liquidity, and tangible book value as non-GAAP financial measures to evaluate operating performance and for business planning[15][16] - These non-GAAP measures have limitations, as they do not reflect all amounts associated with GAAP results and may not be comparable to similarly titled measures of other companies[18] - Tangible book value is calculated as stockholders' equity minus intangible assets, while total available liquidity includes unrestricted cash, warehouse credit facility availability, and line of credit availability[17] Adjusted Net Loss Reconciliation (Three Months) For Q2 2025, Vroom's Adjusted net loss was ($6.7) million, an improvement from ($15.0) million in Q2 2024, after adjusting the GAAP net loss from continuing operations for stock compensation and severance expenses Adjusted Net Loss Reconciliation (Three Months Ended June 30) | Metric | Q2 2025 (Successor) (Millions) | Q2 2024 (Predecessor) (Millions) | | :----------------------------------- | :------------------ | :------------------ | | Net loss from continuing operations | ($8.9) | ($19.1) | | Stock compensation expense | $1.8 | $2.4 | | Severance expense | $0.4 | $1.7 | | Adjusted net loss | ($6.7) | ($15.0) | Adjusted Net Loss Reconciliation (Six Months) For the first half of 2025 (Non-GAAP Combined), Vroom's Adjusted net loss was ($13.4) million, a significant improvement from ($55.6) million in H1 2024, after adjusting for various items Adjusted Net Loss Reconciliation (Six Months Ended June 30) | Metric | H1 2025 (Non-GAAP Combined) (Millions) | H1 2024 (Predecessor) (Millions) | | :----------------------------------- | :-------------------------- | :-------------------- | | Net income (loss) from continuing operations | $29.7 | ($63.8) | | Stock compensation expense | $2.5 | $3.8 | | Severance expense | $0.4 | $1.7 | | Bankruptcy costs (post-emergence) | $0.9 | — | | Reorganization items, net | ($51.0) | — | | Impairment charges | $4.2 | $2.8 | | Adjusted net loss | ($13.4) | ($55.6) | Consolidated Financial Statements The consolidated financial statements reflect a stronger balance sheet, reduced net loss, and positive operating cash flow for H1 2025, influenced by fresh-start accounting Consolidated Balance Sheets As of June 30, 2025, Vroom's total assets decreased to $979.8 million from $1,066.7 million at December 31, 2024, while stockholders' equity shifted from a deficit to a positive balance Consolidated Balance Sheet Highlights (as of June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 (Successor) (Millions) | Dec 31, 2024 (Predecessor) (Millions) | Change ($ Millions) | Change (%) | | :-------------------------------- | :-------------------------- | :------------------------- | :--------- | :--------- | | Total assets | $979.8 | $1,066.7 | ($86.9) | (8.2%) | | Total liabilities | $827.8 | $1,097.6 | ($269.8) | (24.6%) | | Total stockholders' equity (deficit) | $151.9 | ($30.9) | $182.9 | 591.0% | - Finance receivables at fair value increased to $849.0 million from $503.8 million, while finance receivables held for sale, net, decreased to $0 from $318.2 million[28] - Intangible assets, net, decreased significantly to $13.3 million from $104.9 million[28] - Liabilities subject to compromise decreased to $0 from $291.6 million[28] Consolidated Statements of Operations The consolidated statements of operations show a significant reduction in net loss for both the three and six months ended June 30, 2025, compared to the prior year periods Consolidated Net Loss (Three Months Ended June 30) | Metric | Q2 2025 (Successor) (Millions) | Q2 2024 (Predecessor) (Millions) | | :----------------------------------- | :------------------ | :------------------ | | Net loss from continuing operations | ($8.9) | ($19.1) | | Total net loss | ($8.5) | ($21.2) | | Total expenses | $30.8 | $46.4 | Consolidated Net Income (Loss) (Six Months Ended June 30) | Metric | H1 2025 (Combined) (Millions) | H1 2024 (Predecessor) (Millions) | | :----------------------------------- | :----------------- | :-------------------- | | Net income (loss) from continuing operations | $29.7 | ($63.8) | | Total net income (loss) | $30.2 | ($88.8) | | Reorganization items, net | $51.0 | — | Net (Loss) Income Per Share (Six Months Ended June 30) | Metric | H1 2025 (Successor) | H1 2025 (Predecessor) | H1 2024 (Predecessor) | | :------------------------------------------------------------------------------------------------ | :------------------ | :-------------------- | :-------------------- | | Continuing operations (basic) | ($2.98) | $24.74 | ($35.49) | | Discontinued operations (basic) | $0.10 | ($0.00) | ($13.92) | | Total basic | ($2.88) | $24.74 | ($49.41) | Consolidated Statements of Cash Flows For the first half of 2025 (Successor/Predecessor Combined), Vroom generated positive net cash from operating activities, a significant improvement from a net cash outflow in the prior year Net Cash Flow Summary (Six Months Ended June 30) | Activity | H1 2025 (Successor) (Millions) | H1 2025 (Predecessor) (Millions) | H1 2024 (Predecessor) (Millions) | | :------------------------------------------ | :------------------ | :-------------------- | :-------------------- | | Net cash provided by (used in) operating activities | $34.5 | ($6.0) | ($43.2) | | Net cash (used in) provided by investing activities | ($66.3) | $3.0 | $76.9 | | Net cash provided by (used in) financing activities | $37.5 | ($13.9) | ($130.9) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $5.7 | ($16.9) | ($97.2) | - Cash paid for interest for the combined H1 2025 period was $26.6 million ($22.1 million Successor + $4.5 million Predecessor), compared to $29.3 million in H1 2024[38] Additional Information The report includes forward-looking statements subject to risks and provides contact information for investor relations Forward-Looking Statements The press release contains forward-looking statements regarding future guidance, restructuring impacts, strategic initiatives, cost-savings, UACC's business, liquidity, and financial results - Statements in the press release regarding full year 2025 guidance, restructuring impact, strategic initiatives, cost-savings, UACC's business, available liquidity, and future financial results are considered forward-looking[25] - These statements are based on management's current assumptions and involve known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially[25] - Readers are advised to refer to the "Risk Factors" section in Vroom's Annual Report on Form 10-K for the year ended December 31, 2024, for factors that could cause actual results to differ[25] Investor Relations Contact information for investor relations inquiries is provided - For investor relations, contact Jon Sandison at investors@vroom.com[26]