VRM - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to Vroom's First Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there’ll be a question-and-answer session. [Operator Instructions] As a reminder, this call may be recorded. I would now like to turn the call over to Liam Harrington, Vice President of Investor Relations.

begin. may You

Liam Harrington

and call. everyone Vroom's quarter first Good welcome earnings XXXX morning, to

Joining Bob the Chief today Tom call Investor will us the on on webcast are website note this Executive the at and be simultaneously Please section Shortt, Officer; Mylod, corporate Bob Officer. Krakowiak, of Financial Relations that call company's Chief Chairman; Executive ir.vroom.com.

IR quarter presentation are to the earnings earnings also and website. release XXXX The first posted

those The no otherwise. including to or update call. only statements, of based financial may as assumes future from the actual meaning Before forward-looking XX-Q statements includes within to company's subject as that important you we that future results of measures begin, and speak forward-looking of including, December and Form report XX-K in and factors laws, on are certain Vroom's the the non-GAAP recent developments additional ended note the could about XXXX cause These most other a three our statements. statements. uncertainties months forward-looking Vroom obligation that year other risks, Form and Please cause today's recent quarterly We of to, filings, the forward-looking this such discussion, today discussion note for Factors to section XXXX, factors of updated the Risk but of March also please materially that operations direct ended the financial discussion limited including materially securities the performance. by differ number to statements most the the XX, call, XX, federal those during may date upon actual such SEC from to statements discuss not today's for in Vroom's statements for differ company results further

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Bob Mylod

thank and for analysts Liam, first mates investors, you, to us release. quarter joining who earnings you the today's all Vroom Thank and are

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Tom Shortt

for quarter Thank our call. Good everyone, you, introduction. to morning, Bob, warm welcome that and earnings first

also in, third-party to partners we for our Paul mates for Vroom. dive me for like used largest in to our I'd thank customers. to our like recruiting Before building in I'd of country their all of and support thank and the automotive Vroom serving dealers one the

another Now let's completed UACC like that acquisition Credit of UACC, of securitization Corporation, our February. Auto in or first four. at million of I'm to and expect Vroom. the our very gain. anticipate we complete start our slide sized all we've during excited associates I'd to welcome a United on XXXX in completed we UACC, to gain similar quarter At in already and securitization resulting a $XX

fiscal Our of total XXXX. in expectation is securitization $XX $XX generate that UACC will gains year million million to

our ahead level delivered first UACC forecasted. We in into is the in guidance. a our for of e-commerce Our coming higher is We UACC exceeded on Vroom integration loans track units already of customers. business and expectations quarter we of our than originating

GPPU, was $XXX profit ahead guidance rate. Our of quarter gross or fourth and per exit than e-commerce much more unit, more than our

full first We expect year versus the quarter. to further improve for e-commerce GPPU the

Our e-commerce results was by to our of securitization our our adjusted the and the million benefit expectations, gain EBITDA loss $XXX segment of from ahead first thanks of UACC.

of is locations reconditioning on of we from at sites. allocate the our network quarter. by the ADESA the Our transition out XX% a we and record high consumer track our e-commerce third in other throughput transition maintained remaining quarter announced as intend We We ADESA of to delivery to hubs realignment mile level logistics end first plan. of reached Yesterday, last sourcing.

plan growth, our forward, to prioritize look our economics costs we unit liquidity. As operating is reduce over maximize and

Our for plan. realignment this XXXX reflects outlook

range end less, focus our let's end foundation than our focus will GPPU, while our is realignment slide annualized, Announcing these three on and our we cash ecommerce at higher on business improving hand The operating As liquidity to improving estimated the on processes, Compared year-end back and experience. of we operating improving lower million year $XX plan, reducing our dramatically of scale with on realignment objectives, QX. we of customer the the to operating expect our approximately costs GPPU, we to QX costs go million. over $XXX liquidity $XXX plan of high-end X. million the

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our aligning Second, reducing over our are organization operating reducing and profitability on cost marketing channels, focusing to marketing drive the our costs resizing with expenses, on by focused highest-ROI volumes, we growth. and spend productivity. spend to technology reduced Refocusing efficiency on focus

business while cash. will sheet focus preserving items we into cash, major position for we intend the and We Third, convert to balance profitability. reduce maximizing liquidity our and unrestricted on

by customer are our focused up titling experience registration improving We while restricted improve liquidity dramatically on process, our and freeing we our including cash.

midpoint to range. expect liquidity the quarter $X.X with end approximately We billion of the at of the

future position to as believe then is focused Turning company growth. X, to for a goal very, accelerate business the build we initiatives our the model, a business model. slide and We look four profitable to will profitable

most and machine. First investing in titling we a importantly, in are the short-term, well-oiled registration building and

with processes, and to struggled As keep growth. systems Bob up the we've indicated our business scaled have earlier, the as infrastructure

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minimize improve steps process, improve to economics manual the importantly, and expect improve significant We unit customer to cycle our resources automation and experience. add time, our our most

to move, and price well-oiled metal intend recondition, a vehicles. sell, buy, we build we machine. Second, How deliver

our in-house intend partners reconditioning rationalizing capacity the line-haul pursuing are while unit near-term volume. opportunities our We and following reconditioning ADESA expected to exit maintain also and third-party mile. last We capital low and

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expect We times. while economics, and delivery to density build customer to regions drive improving in chain marketing supply

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Turning providing everyone I Slide event detail our on at forward outlook look investor May our to to more on XX. X. upcoming forward

detail our liquidity. objectives: more maximizing three operating key unit and growth, provide We economics reducing will expenses on prioritizing over

As more focused importantly financial well density, financing offering. our quarter our in a forward you the over through metal build a the I'll well-oiled drives build registration outlook. first as detail captive machine most on regional now machine, well-oiled give build a to Bob four go titling that and model operating build strategic a Bob? and initiatives, to turn it performance

Bob Krakowiak

quarter. we pleased all start you, our greater-than-anticipated for on delivered million X. e-commerce in following from contribution during key of the our to UACC. the by of Tom. the ahead beat financial guidance of Slide highlights first revenue higher of was came in by as X%. Total we performance guidance came quarter This of with financing I'll exceeded a that $XXX ahead revenue and I on retail am Thank acquisition report units revenue first driven financial the targets

to XX% and increased guidance. year-over-year of high end units our of the ahead quarter we're First XX,XXX

was Our driven by performance seasonal demand. stronger

growth. from driven profitability of quarter, was product coupled drove GPPU million. During on both securitization. this vehicle our improvement. stabilizing we the focused the GPPU and over first declines levels our of sequential $XXXX performance fourth loss by prioritize a guidance with on sale E-commerce across of quarter and first higher-than-anticipated of from was $XX expanding unit Approximately unit of turn our and by guidance e-commerce economics Adjusted XX% ahead half million favorable with gain $XXX ahead margins. better-than-anticipated was outperformance EBITDA In

performance business can expectations. our half be other e-commerce The our execution attributed core from benefited to versus and which Vroom improved better-than-expected

assessment would normalized I keep mind the to like Before mention further our during our share extraordinary earnings. charge items in of first noncash quarter. our a the in in price think onetime quantitative few full a into go guidance during a about for quarter, which This the as a $XXX we to conducted you goodwill. I million declines in impairment Due year, to resulted resulted

approximately total, The to to represents with in anticipate expected cost in to in As least improvements total basis. realignment company result on of savings versus million plan related fully XXXX year primarily cost we This rate. million a drive expects costs In annualized full we ahead, $XXX $X million million operating cash $XXX XXXX the is and first annualized of and look in to $XX associated million lease as achieve reductions a quarter these charges savings at $XXX plan. annualized severance realignment payments. XXXX $XXX to our approximately million adjusted to EBITDA the

address costs non-recurring rate. for of approximately the operational year $XX and anticipate XXXX we issues. costs million our These to should experience million to Finally, be part customer $XX in run not

share our annual the Now let guidance. of me components

economics For the levels growth. unit a year, to XX,XXX XX,XXX we represents units. ecommerce approximately over full as expect quarter prioritize first This we from reduction

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shortly from these immediate go quarter, more the I as will detail. SG&A QX quarterly QX versus lighter realized in We in benefits realignment savings the through also we first spend anticipate plan. through

position. We $XXX of at is over which We our liquidity are liquidity three billion end approximately year-end on in year, guidance $X.X quarters. anticipate reduction also of next the million the providing the liquidity only a

Now a Slide on XX. at in look closer our performance the first let's take ecommerce quarter

driven results XX% XX,XXX quarter revenues Ecommerce units XX% unit levels driven expectations. increased quarter Ecommerce a to improved decreased yet slightly Average a increased first prices increased Units $XXX ahead year-over-year improved in and focus selling vehicles. XX% economics. meaningful improvement yet as increase year-over-year ongoing demonstrated increased elevated to and contracted demand by Our used units year-over-year million we came quarter XX% basis. growth our year-over-year fourth from ecommerce Ecommerce by GPPU sequentially as in from fourth in the sequentially inventory remained XX% sequentially units expected and our declined on selling of for prices. of on vehicle levels. $XXX average

increased attachment We product year-over-year do The fully $X,XXX expect due our and and vehicle higher work higher move year-over-year prices. balances improvement. restore have more of increase higher to GPPU sequentially. to average to by selling Ecommerce rates was we the GPPU year loan and as driven through average

to turn Next XX. please Slide

through more I be the to on how acquisition in UACC. XXXX financial I of guidance Before some will provide our impacted wanted by statements commentary our go detail,

segment. statement. loans segment, vehicle Over and to new financing. will to insignificant can the profit revenue impact added first for we dealership finance with which independent cost for historical completed product let's balance also are we see expense finance remain in sales. to UACC includes captive related securitization segment interest quarter, the UACC to in of originated Financing UACC for Retail the results First, quarter scale within loans for includes income begin customers. we servicing sheet. This Since the on segment acquired Revenue sales, the income expenses In February, balance a on as of UACC of this income first has acquisition gross that This you Ecommerce time securitization captive as ecommerce impact originations originations segment segment well that our the and sheet. the to related gains was as

first Now new a sheet. approximately quarter, originations originated of $XXX in highlights balance few the the around loan In loans. million we

on $XXX the We first unused as of warehouse capacity available end of million the lines also of have quarter. credit

We the Since UACC contrast over UACC's marked prior will loans to a run this adjustment the eventually to continue are quarter. $X.X in legacy next details sheet portion filed into loans EBITDA. loan securitization fair and portfolio that months model the to model value encourage securitization will related dealership off value off-balance the of are on-balance so. our unwind on XX-Q will These acquired million from represents consolidated fair or current of to reflecting recently securitization incorporation sheet debt and at I more and have XX for each we review a you adjusted financials Vroom's results. debt

The realignment in, million these position achieve more to reducing $XXX rate expenses to would operating profitable those savings, liquidity. Turning impact. All unit full economics prioritizing slide I for its in To to approximately operating deliver designed the provide be quarter and and over annualized improvements to growth expect cost plan executing some XX, are business by is approximately a $XXX we like $XXX The financial number to plan XXXX. million provide context million. on details would million for growth, of versus on long-term maximizing run savings our company our rate of realignment first reductions to we $XXX actions. into

We equates which by XXX are workforce. approximately reducing to XX% our positions, our of headcount

and We GPPU. will unit disciplined vehicle more product a economics, expanding through improve approach pricing also

expectations to throughput lighter our align ROI marketing acquisition dollars are towards and our focusing we with and highest channels. pivoting Next,

node reduce to As over time distances shorter to we look drive at logistics which our as we customer. core operating from model, the approach, we more will costs build regional speed and node will and a

explains into the excluding incorporates year process customers' quarter realignment improvement first rate drive will which full sales forecast an began rate. our by adding manual plan. Vroom, transactions number EBITDA further savings. our automation comparing our SG&A guidance, Slide for improve significant experience Finally, XX our of UACC. and for run We reduce the more run EBITDA annualized We quarter from first

not later the $XXX will a quarter we quarter add Annualizing in securitization first issuing of EBITDA be quarter because of this, doing securitization I the loss impact XXXX. million. the bridge. first are results in in will We every a adjusted

referenced, $XXX I million the result the the plan. realignment business we underlying a million of of for remainder Vroom savings the to $XXX approximately from expect as As and year of operating cost improvements

anticipate experience and based full the offset next we with from first realized occur already $XX in UACC million These by partly on the financing fourth $XX benefits the to conditions. are market anticipate quarter. Vroom third Next, in million $XX quarter for We adjusted to to million for to expect the year $XX equivalents $XX this securitization non-recurring approximately of year, $XXX million million Taking costs EBITDA more year end to contains information expected with at the year-end. million cash operational customer year regarding $XXX and Page account, the cash to loss. XX the we these adjustments into issues. and address million a of

I at forecasting the mentioned, liquidity year-end $XXX we following based As are of to million $XXX million approximately on bridge.

of March on loss be slide, gain of of we I the million have QX is UACC which million to to to $XXX includes the half EBITDA an covered second between equivalents. in $XXX cash cash in total we guidance on to most As $XX expected for of from expect $XX $XXX year. be expected XX, in on Based million prior and million approximately and adjusted This the cash. million, the QX securitization

reconditioning of million year, the the improving CapEx to as processes finance a we capital invest facility. expect in our anticipate and continue million captive to rest $XX Vroom dedicated for for to we be approximately Next, $XX

to million, partially of those and as will of a We equivalents, to transfer $XXX $XXX processes. improve our cash cash of cash million transactional we with offset cash restricted uses

see in improvements financing of billion and position us cash we realignment cash net XXXX costs. addition, year-end cash for will Vroom working and flow $X.X of expect capital at Approximately UACC, equivalents initiatives to and from well beyond. In

Turning to slide XX.

have the In our of the quarter, cash addition million end facility. capacity we equivalents plan floor and to million at $XXX the $XXX cash under first of of

borrowing of we on incremental capital balance forward forward, ABS Going liquidity future from expect sheet. sources and transactions flow incremental and working continued availability efficiencies, UACC's

profitability. first quarter financial our first We on position exceeded quarter, guidance to and Finally on expectations summary, unit began our focus metrics. economics improved during to XX. slide the the we business on In

Our operational by XXXX underpinned plan. and guidance is improvements the from realignment cost

UACC optimize we business capital will of provide finally And and and your questions. us our are the the for of ready year. source Operator, usage improvements Thank today. our for additional our of will for cash acquisition position processes attention will and Our be balance cash. to for time transformational working an you in

Operator

Our Gupta Instructions] Rajat first from with question [Operator JPMorgan. comes

Your open. line is

Rajat Gupta

the slides. the thanks all in and answering questions Great for detail the

to per to on loss a car Just The on a year unit In XQ EBITDA excluding XQ your of one or of roughly EBITDA of first full for was $XXX or $X,XXX roughly loss the implies million roughly remainder the non-recurring the UACC, a guidance of maybe XQ excluding costs units $X,XXX. million like economics. roughly so question $X,XXX car. year. XX,XXX a on $XXX the loss That's

like something we assume you still get as $X,XXX well car would rate layering to of degree and also next per cost realignment year. XX% cost workforce, captive near-term. cash after as EBITDA to be UACC significant Even seems my for per calcs imply just but XX% after XX,XXX in roughly burn XX,XXX maybe fixed loss the roughly million down as $X,XXX year finance units accounting on units which reduction from of a in a $X,XXX with of savings integration, CapEx next the plan to $XXX the roughly The probably

sorry profitable follow-up. a the to take? you're will a new comfortable interim? to with -- the And here do the And I volume Thanks. the what you the So but that business fund question long level is in for level. how progression question, have expect get economics to trying And of

long the question. for Sorry

Tom Shortt

for This question. you is Thank the Rajat. Tom. Hi,

X. answer the question to clarify I I quarter on want I meant to said of end $X.X billion the slide something we the believe your to just I said have end say of at I liquidity at the Before Yes. I of year. expect

I So Rajat. your question appreciate

about really Here's need how as can initiatives systems you processes tell we the think and to from model. business building profitable core about it. a year create it's we This infrastructure our

are to customer are we've significantly we're variable marketing, operating we less focused the very logistics. margin, actions experience costs So contribution taken defining and as like so within improve that -- GPPU which intended variable

be absolute cost dollars. our reduced fixed in We expect to

strategic the And that as fixed However, increase our our in per point we'll you we have those need we short-term. fixed we're costs in fixed unit assets will accelerate out cost maintaining as because growth. costs

Rajat Gupta

it. Got

color anticipating So look Day? probably of anticipate get you volume do something that new the level with profitable at on any we to are Investor -- this what you or you when to be realignment plan, will is

Tom Shortt

Yes.

And continued not ahead significant we today long-term the for lay in four that our plan we've make XXXX, economic the that the believe we really laid Day that model. in share only Investor initiatives years out to foundation and the progress but improvement. On

metal when economic overnight. things happen you we'll regional building you machine, well-oiled operating the title as XXXX. registration So implement expect continued about momentum a those well-oiled don't unit strategies, machine those And and and model positive beyond think

Bob Krakowiak

I you only the add I the have talked is on to we are thing essentially actions just Rajat look taken. all Yeah. that mean want if at that about call, to The been today those actions

all about and the we're -- we just the path that all on the we're in we're and the announced have referenced. reductions those the thinking terms cost items of things, well those -- have already we're on about been So reductions -- that thinking headcount actions down taking how

Tom Shortt

given And the then balance the macroeconomic the of market conservative guidance lastly, in unknown for year. our

Rajat Gupta

get just Thanks. And in way or might you Just environment quarter. point? the the So GPPU? operational Got or asking that to the Omicron the on GPPU in exiting first just of vehicle at a moderate got pressure e-commerce manage pricing order a curious quarter on Is mix used-car comfort some issues quantify year of sense it, the the of that how expectations there do transition? it. in around higher one price in first to more

Bob Krakowiak

mentioned I've couple So a Rajat of things.

So this the incur we talked be nonrecurring $XX to that costs we've to we're million going the nonrecurring $XX in that about year. million nonrecurring incurring costs going -- we're to

respect -- want of don't an haven't disruptions a has has Omicron been which reconditioning it in to With we the the the facilities, that at first had that? of really result was any some quarters all. issues not result some prior February-March we us January in -- recon and in for in and impact to quarter. us So had been an for issue a if virus had -- has but for add know us as Tom as issues there's you I, anything to Omicron

Tom Shortt

add that through I The are And issues. titling of And and but focus can and doing we additional work our it in thing have as customers. QX and our resources we only Yeah. dramatically in take improve would can't we to is registration QX. for you, we been everything our brought size in I care and that's

investing can't be those. And at you size for we'll I moment. so But the that in

Rajat Gupta

coming been color from? And it Is trying have GPPU it from higher to fourth GPPU? Just run then the these the get what's it is you're of you a is at like the like once say addressed? the primarily sense exiting what versus rate vehicle the or portion a X,XXX, here looking substantial hurdles get any on GPPU product magnitude maybe to operational anyway of a sense or quarter there, where when like

Tom Shortt

and the we changes about to today can share in we think the significant with Yeah. Rajat is we've made way market. pricing What I way go you pretty

previously, really think get in to the sentiment about we if that's were market were to we growth levers market So all where you because our the triple-digit of pushing was.

ended and months to that as announce of expect share north from of results overall how and those couple expect QX. cars, we dramatic But changes how several of favorable the cars seeing changes over price those couple the we QX. be last sale changes of are and very we we of them to have some Over economics, been the the we made implemented about unit we we'll how in we we've early price acquisition we months where implemented last think

Operator

question next from Fargo. with Wells Fadem comes Our Zach

line is Your open.

Sam Reid

how This think about little Zach units maybe on quarter you to you guidance talked that rate run stepping but from talk level once you number that and before guidance think forward. a rate a units long here. balance to in aggressively? detail, pinch-hitting to this for the specifically? growth is Can Reid touch going And already is can your know this do about XX,XXX to Wanted to I you why we'll run this profitability? XX,XXX What you're upon roughly implies back pivot at stay your unit growing drove Sam you down again need bit. this right

Tom Shortt

we're and quarter we and Hi, to as that the what we titling structures it's do new where we Sam Tom. we Thank handle registration better really metrics caught started we the get a at When for Yeah. implemented you challenges up. on get to question. the during and to data had, realizing around -- needed

to And it had we take to to sell issues. begin when so at improve the to a we experience, decide really we didn't how as high would long know those us we that want customer continue rate

So that was one factor.

that enable the the And made cars things us right our The time the and the in to of improve was economics. is that at structure we cars units those buy and price four around to the we we this sell improve of to us led price level initiatives of unit second year for balance same our believe the dramatic factor way we all combined the at. changes two the

Sam Reid

maybe a to be for that working parties to the going third forward taking is in-house just detail split appreciate I color what your talk for Yeah. with balance from looking you super quick the ADESA? additional one follow-up. really what you're you helpful. and versus there. Can in here sense then we're That's is transition between plans a going as as be away Specifically, reconditioning more going there, about to bit what

Tom Shortt

about network up we're economic with And that. the at look economic have potentially it the a VRC in and that to take year, reconditioning Yeah. very to I would are a year, partners. going we you sense. will makes stand our look And careful most at makes second always what it if way think early later we sense. same next this party sense, makes third we if own our at really tell opportunities is while we're going continue our time, in own still The improve Houston, network looking we to we'll that to

we center. the ahead to on opportunities down the reconditioning our the have come implement think return to investment we and going really we it's in So, that go after own

Sam Reid

helpful. I’ll That’s on. it I super pass really appreciate.

Tom Shortt

you. Thank

Bob Krakowiak

Sam. Thanks,

Operator

Colin question Baird. Our comes next from Sebastian with

line Your is open.

Colin Sebastian

from guess please. curious the perspective where for me of rationalizing good and reconcile of focusing the customer improving a Thanks And potentially on liquidity the regional few quarters everyone. morning, ahead with that call, right. as beyond A issues the we some XXXX. transition. first footprint how effort. I as you're ADESA delivery on All follow-up a to national maybe sales question I'm couple times and follow-ups into we these then look first and the given a extending the

when need in expect to more of curious working out? raise potentially plan context the Thank realignment you. to capital you'd on Just

Tom Shortt

question, the you Thank Colin. for

at first the part, On we we are actively where be looking to want regionally.

way the supply that built, If scaled reduces business a hub, We nationally, buying nationally. we reconditioning but you which our regional meant think we we a had was chain logistics synchronized cars and the didn't way vehicles network have miles our our selling -- about and built regional were in dramatically reconditioning travel.

So, may you in United car come from States the Southeast of of northwest the for example, the United that buy could a States.

if those by potential to us. we each still for we we what to And sell really But the Bob, customers states regions we're the that in that they we assortment car you want...? obviously Seattle, largest population the California, through you we're have, three density makes push continue that really more want desire do upon the and be and customer but work have the to Texas, offer going country based is key Florida, going region. regionally. want the base have buy sense that assets towards in if in to cars forward going intent trying think to our so, about more And and

Bob Krakowiak

color add on your to Yes, question. second

given call I line the of to means is annualized within of the about business But point living $X.X sight our really I million way. think just executing out. on managing $XXX the billion and today, year. to important this that of liquidity we're know us, the we mentioned the it's cost end of really reductions in at on for

within vehicle what obviously as now to adjustments moving at to cash appropriate then, there's a the in of where and of we is lots of the our right company continue team a means of used to around the rates the leadership resources we're with things market, So, get interest that correct as that to the the and is live of amount and we'll billion given market we'll year make $X.X have. see and end course, committed

Tom Shortt

Yes.

based thing so you more go already Code, question, of on might I you, When which is -- we've cars to add page. to the with upon closest your which So first search one ZIP today, example we our the see to sorted an added cars last site implemented. being something are you recently, your at you're search criteria that going farthest in away from your

So multi-year small things that this. effort implement as like see that a we as are things this just and do I we're beginning to

past, supply the believe that you achieve that the out then can been So implementing. if path a think implementing, And executed. the is analytics I've of strategy other and when you begin but data lay we've we ahead I begun in is build part the fully and large significant transformation initiative of this you the you chain

Colin Sebastian

That’s right. all All Thank helpful. you.

Tom Shortt

Colin. Thanks,

Operator

with Wedbush. Seth from Basham question Our comes next

line Your open. is

Seth Basham

issues registration normalization those and time lot good the perspective morning. firstly, on My a and question titling some you Can on please? the on Thanks line us issues. for give

Tom Shortt

long-term drive all building our improving ultimately on there we focused that couple you implemented with competitive ensuring mentioned the And that be Right are our every significant And failed that processes. remarks, What a we're think, making working that dramatically us. I making tell in towards on our systems can a of where improving Bob they improving is and his daily a in place are have we for process. already share I'll progress progress call you we are we as strategy we're them. could is in vehicles process. can customers day that on now, a we began that, having QX advantage We've

to you to is our share other prepared number exact one tell timing it than So truly we're priority. not an

it. a on there tremendous amount focus So of is

Seth Basham

it. Got

Okay. experienced? impact your Thank or with brand you. the And you from you've don't think issues relationships that to there are DMVs any long-lasting

Tom Shortt

actively on titles existing and that. that is happening that repairs ensure there we take our do are believe all first certainly purchases deliver and working some and we're in of we to But and care We our registrations that step customers customers that. we to all ensure now, have

Seth Basham

Got it.

question management. follow-up my pricing on And inventory Okay. is

are focusing And thinking the up shifting the You standpoint about some a tools relative of from of your pricing certain on your like a But areas goal from are then, environment. terms based market downstream? a inventory moving market? consumer changing you pricing or on and bit seems also your what's secondly, income in it the first you're pricing of market standpoint little to

Tom Shortt

more our -- on couple We analytics Yes. in pricing and more are definitely those the last market the competitive at, especially, months. to of that be holistically looking over is we're goal and

We to listed It have begun be that for and sale, registration two title. takes we really because begin work, to chain to the supply the purchase tapering supply need and our we right-size units our takes number it And title things. to of for to inventory. the metal chain cars the get

in to process. initiatives place have we the speed entire So up

works, faster. inventory So speed want we put then in pick if how can to fast up it the we we about up car, how because think you

have we up pick So faster. to it

We pay have to the loan faster. off

you can have would turns. do that same And faster. inventory traditional We just improve sale to make title thing it chain for with we elements the And faster. then supply get the available to

improve those initiatives inventories So in we're both focused -- have over time. that process we processes on of to

Seth Basham

you. Thank

Tom Shortt

you. Thank

Operator

next from comes with Colantuoni Our Jefferies. question John

is open. line Your

John Colantuoni

to my wanted cost for program. the questions. Thanks taking start savings with I

on a said, user some if of of you experience the savings parties And curious the you presumably need could savings reductions? how improved amount give delivery, business pure key kind along also cost sense with help to I technology, our which Given customer in buckets fair opportunities. cost buckets realignment GPU cost for reconditioning for requires you the of third a unit that are through cost was relies much economics improve the or from of investments and maybe walk your or of service us versus coming fact

Tom Shortt

Tom. The is this really all levers is the P&L. about productivity it think we John, of driving question. that for Thanks way sure. on Yeah,

very by our efficiency. margin largely across have we on our and the example think to gross driven is our really profit our spend improving So already -- seeing improving realignment have for only well marketing opportunities what changes And as focused made we per costs improvements, board. on by plan across unit the you're marketing channels. ROI the several as We're contribution in highest

the And so share we long-term our those profitable levers we'll making believe and to Investor that the will we in beginning later the change business. just of month, think at a with we're you in in those Day build how

John Colantuoni

control? maybe like you're to and of the that your in parts unit to approach to realizing a least are cost bit sounds headwinds fuel you're light of economics the and per macro and high this of higher bit wage Day. at in saving improvements be like about just of it headwinds inflation, levels a just level, for But talk And talk out quite -- depreciation Great. Investor a other going how going about from

Tom Shortt

seeing have Yeah. are and We believe relative we're the improving like to Thanks other we business things just that. our items. operations likely opportunities the particularly that for in economic basic surcharges dual transitory significant

unit goal -- our is So highest for channels. cost ROI example, improve to marketing on marketing focusing per where our by our

is by to per our miles. unit fewer our improve travel cost goal Our vehicles transportation having

is pricing also cost competitive, profitability, to our automate run And that we registration. optimize goal and but is unit go and to have. elements improve and sure down, levers processes and our longer per the the account into in GPPU in customer experience we have titling the make taking as goal we our Our the all while being

what all the to out the and P&L, have we cost really build that's per mean we start true think to line GPPU. in well we infrastructure unit drive where So the as items I improvement on basis opportunities as foundation productivity as across

John Colantuoni

color. Thanks. Appreciate the

Tom Shortt

Thank you.

Operator

Our comes with Truist. next Naved from Khan question

Your line is open.

Naved Khan

Thanks lot. couple of a questions. Okay. A

year, volatile, are to are thinking right? this what in going So, cash on we we're the throughout sort think wondering and the the And or see at cash maybe progress Should of end the kind in strategies back year terms evenly? exit we model in middle and up as sort also year-end And other we how of kind then these expect curve? think we the more sort here for the implement in we so of sort the and dynamics just the environment end from of we continues gives rate the your burn should about confidence trough where you in the out should position, should on terms it the guide the -- to the pricing to somewhere how EBITDA? we So, cash be curious of pretty what a just of on, position full you coming laid unit bridge of about versus of the you for I'm GPPU wondering year?

Tom Shortt

then the question. over to take Thank Yes. the one. the Bob I'll you it for for and two first last turn

that on that make we QX three that to I or change able business driven consistent We and are in growth than changes to the next in implemented GPPU, possibly pricing QX. shift And focus to quarters as back in significant about change will seasonality -- the we QX that pressure of -- had just earlier, triple-digit better better over several with entire are mentioned expect GPPU to really units made some the the be we're unit that way downward I the seeing relatively think positive the year. will we relatively that believe rates. levels the -- significant. units, are from items we two there's that towards is rest trajectory we've than changes already profitability, the we and And those some the And look the look the seeing GPPU already from that in that momentum QX implemented and we more

Bob Krakowiak

$XX I one run to really as for that cash at those our of things the understand the just adjust taken. actions important to there And also exit terms the exit began we've it think run that's is securitization second rate, existing the third taking, -- conditions perspective is then that with -- actions in way million when UACC, think execute. and an from another But really upon I another the mentioned quarter. rate But improvement to to our as the through an actions improve to year. respect rate of terms we the during to million a rate overall burn, fourth are we continue quarter in productivity, can you With well improve about run we look in we're on from the -- of market is EBITDA improving overall overall -- continuing transactional of, and the $XX which about productivity and processes expect to kind go depending optimal exit we as we talked and

Tom Shortt

And add Yes. just to thing. one last

taken, recognized could operating not vacuum built that we're in impact We our there well we is are is that our in point a which and a Your forward large GPPU. why range macroeconomic guidance. forces

Naved Khan

thank you.

Operator

[Operator Instructions] no to questions. There like over Tom any to are the remarks. back further turn I'd call Shortt closing for

Tom Shortt

day. this have and and later our a today Thank additional time look your great you forward sharing for month. more we everyone details at meeting to you Thank

Liam Harrington

you. Thank

Operator

today's concludes This call.

disconnect. now may You

Vroom (VRM) 10 May 222022 Q1 Earnings call transcript