RMBL - Earnings call transcript Q2 2022

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Operator

Thank you for standing by. This is the conference operator, and welcome to the RumbleOn Second Quarter 2022 Earnings Conference Call. I'd like now to turn the conference over to Will Newell, Investor Relations Officer. Please go ahead.

Will Newell

Thank you, operator. gentlemen, call you Quarter to Results. and on joining XXXX ladies conference this discuss morning, and for thank us Financial Good RumbleOn's Second

me Chief Financial Chesrown, are Executive Joining and Officer. call and Officer; RumbleOn's Chairman Chief Marshall Sahai, Narinder the on RumbleOn's today

and second later results morning quarter that be detailed filed Form issued are be will QX the press XX-Q information Our we available today. release in this supplemental in our will

contains you we future including, forward-looking differ start, here. risks discussed discussion I'd may the Before to RumbleOn's financial and actual from that cause involve statements, Remind not opportunities that to, to that limited and but uncertainties those materially results following like market results

found in periodic RumbleOn SEC could statements risks revise measures. The of questions, obligation other that and or Also, RumbleOn's forward-looking as actual current filings. based no information your this responses required differ by financial discussion to to cause including today, the result be a assumes conference from are as law. call, following or in to and contains and update new Additional can except whether as non-GAAP on results forward-looking of otherwise, expectations developments statements them,

our of For measures, a morning. earnings non-GAAP release this please reconciliation earlier see issued financial

Now call I will over turn Marshall? the to Marshall.

Marshall Chesrown

Good driving while cash in second growth quarter the expansion Will. you for another strong offering our of joining margin and profitable generation. you morning Thank thank and saw and everyone, for us today. demand We gross quarter robust delivered

to reporting of share. a are results. unparalleled we unique delivering offering, customer market an the experience It’s powersports continue our of be onmnichannel record another by to We through and pleasure quarter building future capture

backdrop in on market operational on us going are the to building I’m quality powersports themes: share primarily financial continue environment. our the offering, led share continue a high to uniquely used goals, challenging and call, of macroeconomic our main by which to we three against take inventory positions we today’s industry During focus First, as executing

powersports EBITDA of by are XX% quarter year in reiterating billion In financial growth buying, us are are providing long-term remain revenue we We of advantage $XXX executing; Second, and in grew we scale. in million provide over powersport XX,XXX servicing million. quarter-over-quarter, delivered EBITDA. than and an choice in a billion quarter market units, full XX% delivered and million in half XX%, and customers led a at and share. expanded gross in sustainable income core $XXX to XX% Star, profit retail locations. as marked over $XXX quarter and that will our least and and adjusted powersports adjusted well revenue are over first we RumbleOn’s over unparalleled as an we increased and areas products competitive both retail of and North experience, selling macroeconomic our time history, by our a to finally, online outlook prudently in services investing more true net used $X.X to over the business units quarterly gross sold unmatched for -$X.X uncertainty, we And margin the profit capturing We revenue we in a

our highly inventory used and -- powersport competitive strategy acquisition differentiated Our our strategic retail drives -- advantage online outperformance.

constraints Our growth not and important is is for used to continue RumbleOn. driven Used acquisition subject strategy an inventory be technology results. unmatched organic incredible driver to driving by will chain supply

flow retail XXX is And, of days days. QX inventory in even and the just QX. times This we parts grew in is giving we that to vehicle Looking and a GPU didn't inventory. used just in combined was sales quarter, factor powersports an XX well GPU We F&I, over economic down at quarter achieved in in from days a $X,XXX QX options to total QX, consumers first XX% from XX service by of in and processes compared so increased as Merchandise. backdrop. the Vehicle an our $XX the with million million improvement XX% leveraging by sales from $X,XXX Further also over QX. of which our affordability our company for increase XXXX, data, use in the used due exist The to used as $XXX from in the in unparallelled in in in of that improved regard, QX as nearly the uncertainty used past, days which as is supply increase to improvements ownership continuous went we the second to doubled more

our been business has evidenced by used rates household offering and in spending amid continued pressures. budgets, well received, higher our as discretionary growth interest tightening Our

While we these closely, our consumer monitoring proven are macro headwinds has resilient.

insulated. but are are We we immune, not

Our us reaction affords business model changes. flexibility rapidly move to to in market

fun directly our of our sourced and with inventory We breadth the financing provide are affordable quality consumer from to depth used options. positioned uniquely and captive high

thanks Additionally, control the our we versatility inventory nimble to Offer Cash in are and our levels Tool time real to ability of days supply.

largest the country. of in new retailer used and powersports the presently are We

be will Our objective is organic inventory in growth will the for hassle transact bring up no the format, together the RumbleOn’s to paperless next and boundaries powersports. of next launch free omnichannel to friction online, a the fully a leg and for experience consumer, without experience largest company.

facilities, for mission our we in RumbleOn laid unparalleled future XXXX and customers. continue our beginning invest building our processes. the year, to out of the value invest strategic for in are We prudently to deliver technology, and people, the priorities At to to

of We in network we believe and network and areas. new, and a opened North fulfillment for week. Orlando, fulfillment streamlined operation efficient Concord, advantage, location to of as in be Florida Carolina provides locations plan inventory in last center more typically is into expand QX, We the which progress QX and in the fulfillment are and across On scale. seasonally do the our the majority the July the a will for these are second August. merchandise. located we used, stores is region, significant continue in winter months, sunbelt temperatures the acquisition, to fulfillment measurable quarter Facilities, seasonality a opened Further, in QX parts in strategic our distribution in strongest see we building softness hottest We minimal the our attributable weakest, to to markets make our whereas months. summer continue year, some seasonal just however

As of continue we to evaluate strengthen opportunities outside national will the presence, continue we to sunbelt. our

making are designing customer market. experience big Fort first ever Worth strides in We Dallas, our the center

the desire, but for community interact they and also to a destination enthusiasts not broader with Powersports and the are creating We Powersports only brand. -- engage our with products

We are forward the into the to phase execution design the in now in months. look phase coming and moving

our We be this location the and country. leverage changer RumbleOn believe we fulfillment and end look network will testing by add around powersports advantage. year for We Technology, center the data are to this and the forward in largest new of to ways On our expect to a of technology XXXX. the grand to both - opening enthusiasts game powersports our

this continue CRMs innovative is locations integration on our for which year. retail to later centralized integrated and of full march We all digital inventory, websites, via track new inventory toward

XX rolled continues Cash out our all Our locations differentiator and RumbleOn has a Offer us, increase capture been tool, in to key for rates.

for for our deepening improved growth. paperless, building customer regardless enshrining our in competencies functions. might critical experience with management At the processes, the for into vision we in-house acquisition structure QX, expanded regional broadening the still our building in. that solid they and will and of assistance in And the adding stand RumbleOn. and growth stable extraordinary are our their organic be in and support lead resources we status which implemented management We’re will the processes reaped unit creating and People and never a location we also the interested friction-free deeper and and for On continued in across or of strategies, of RumbleOn, customers we North ensuring By are footing culture of our Star. satisfied system quo, benefits a future a what we pursuit QX, foundation already we’ve efficiencies from SG&A never organization core location unique

the and on experience I’ll now servicing remaining culture down choice and to experience. this we services, From pass selling, in some excel. and customer we management. focused testing to an service that, hard pricing online. unparalleled to and customer Narinder and We locations our and will the an With products and our rejoin closing call and commitment: for the have retail buying, over operations strategies, then hours unmatched desire techniques you improve are I worked online innovation on both ways comments. providing customers can of to lead we’ve heads based been create countless and learning of And a engagement all constant of Through

Narinder Sahai

second everyone. and Thank quarter with strong the you, morning, momentum. Marshall, good entered We

has the earnings macro a market powersports, May, see we and While and leader consumer we changed used new environment established in reported since to last continue meaningfully have resilient ourselves we demand. in as

specified, quarter to growth, in our details all full are Unless growth quarter-over-quarter remarks quarter. XX-Q second my progress focused we release investing exceptional demonstrate figures our today second otherwise all are results cited or in later be filed driving We refer of made, the sequential on while of Please profitable the comparisons. the have to press for and and our business. today earnings quarter

XX.X% the offset second sequentially sold a units retail XX,XXX grew quarter, increase decline locations. total through sales some Powersports used powersports in units, to continue In we as more Moving XX.X% XX.X%. and were wholesale by to on a unit used our in total retail up units channel key unit we driven by sales highlights. units,

up sequentially. Powersports February which was unit New on a acquisition, XXXX, from growth. units to approximately tailwind contribution were Freedom the closed XX, The XX.X%

sales. in XX.X%, first compared from to expenses over revenue are quarter. revenue the gross environments. correlated accessories XXX us XX.X% of strong finance us quarter. million million from from net react grew up approximately was quarter. second second used revenue $XXX.X in parts, and profit and margin up vehicle of the and million for Total XX.X% first highly Total or insurance, delivered quarter. to XX.X% with have first $XXX million, Total model retail or seasonally $XX $XXX.X changing XX.X% first quickly of quarter grew These We over were acquisition in bps the control was enabling to the unit XX.X% to profit SG&A Revenue demand XX.X% gross approximately the quarter. Our inventory, increases service significant record from enables the our revenue

near-term and basis and As processes. quarter. year: we profit, gross facilities, technology, XXX the beginning by sequentially percent SG&A second the of to in make in the outlined priorities of people a continued improved investments prudent points the at We’ve

and on RumbleOn. infrastructure, pursuing a efforts are which area focus inventory We will for integration strategic projects be management, technology focused continued

continue general we $X.X long-term this acquisition, to SG&A, compensation lease expenses inventory SG&A administrative with however leverage growth the investments our Powersports and will and was expect Additionally, from our on marketing we up incremental we $X.X in activities focused SG&A organization, expenses. do facility foundation quarter. not scaled from costs provide sustainable reflects total million RumbleOn, the The as making approximately stock-based associated used a for year. scale first Within million, are

As $XX.X other generated and or of Adjusted respectively in and related and over XX.X% purchase XXXX. sequential date, X.X% provides the Net operations. million, second press quarter, for costs, per share up was Adjusted normalized and revenues. ended Adjusted you the believe half the We in quarter, six $X.XX. $XX.X first $X.XX release, that earnings $XX.X accounting, Year XX, $XX.X was expenses, Net introduced which primarily clarity June we million year-over-year Income Income, EBITDA transaction million excludes months and credits in per saw flow first from Net $XX.X Adjusted to power comparisons. the enables and Diluted charges million share business, our Adjusted million Diluted Income this Earnings and Earnings Adjusted the associated which and we’ve were year-to-date, cash into quarter, of approximately greater was to

cash including of June cash XXth, equivalents, $XX.X restricted million. was As cash,

totaled approximately as plus under and short-term defined million. revolving including equivalents, credit cash liquidity, $XXX.X total facilities our cash, restricted cash Our availability

have which provide liquidity could $XX.X inventory. this used equity a we inventory, if over owned finance Powersports As million we reminder, in of chose additional to

drive will stakeholders. will prioritize value we most all for continue our We our to long-term believe to investments areas that the

both will Our inorganic top organic These priority business. remains capital in invest and our take allocation investments forms. to

set, We to on opportunity investment execute both. are talent, an have and fortunate incredible capital to

continuing a generation. As balance and I margin will focus before, with said have profitability, improvement, investments we our on cash

monitoring the macroenvironment We trends and industry are closely.

and we to we While understand consumers, are and continuing seeing inventory. trading two inflation, immune evidence not are so segment important the are and Powersports demand that One, are rates, rising indicators things. available new acknowledge to currently any measurable to demand not reduction down, customers economic impact having with is interest fulfill we it this for on any in our uncertainty of or used

are Second, to we our remain any prepared changes quickly ability confident and respond and to prudently. in

several levers Powersports locations, at either our used that are Tool demand, Because acquire through or enable have time. retail from agility. we us real to used matches consumers, we to positioned We online near ensure Offer in our inventory move our uniquely Cash inventory with acquisition trades directly

sales price pace acquisition. of data - make, informs our used only used Our - and not inventory but our inventory also model

as For constrained by we distribution are inventory, new be manufacturer’s or continues availability really to production constraints, resilient. only quite due demand to

flexibility offer us provides to the Finance to customers. financing solutions RumbleOn our Finally,

to during outlook full growth in of Adjusted range the reiterate pleased at strongest Now, turning billion quarter Revenue are the to for million. and delivered seasonally $X.X EBITDA to exceptional and of XXXX least $XXX our second year Outlook. We $X.X

there second being noted the seasonally the year, strongest do between and of While with experience weakest. being of the as is we quarter and quarter earlier, the basis first year, second quarter seasonality a half half quarterly Marshall third minimal the seasonality the the on the some

sequentially, such, quarter. fourth with anticipate third As decline the quarter the we growth revenue return sequential to to revenue in a

on year units to you’ll time, year-over-year full New our mid-March due fourth we chain our down flat in full slightly At outlook As supply constraints, ongoing reported manufacturer basis. we quarter year guidance a gave be XXXX to recall, Powersports our assumed would earnings. that when

then and digits of Powersports year-over-year year volumes mid-single normalized in New Freedom, since have in the a this the unit first However, for half declined on basis.

outlook Powersports Used year. to units full XX% growth units assumes digits in of the reaffirmed year-over-year, excess decline for year-over-year a be decline our Powersports basis. the year-over-year Powersports our anticipate will for we in year with mid-single the the expectations, New now prior So, that New Consistent offsetting Retail units in on in

For Used that a We RumbleOn locations. opportunity to retail this inventory supply Powersports, to our share. gain align we used inventory market adjusting demand, will our significant represent channeling with levels, and continue Powersports through for believe Used

now revenue the the from performance accelerating are the with as acquisitions half. in and we segments Used make For first well second levers year half of consistent in we through our Freedom to making non-Powersports segments, integration with the we as our Powersports The the these expect important RideNow are prudent approximately investments while platform progress be of Units omnichannel business.

million our reminder, a discussed. enabling a key incremental in capital advantages unique outlook growth before the cash we EBITDA previously has areas As business with questions. Adjusted with includes economics up call operating for RumbleOn I continue to strategic robust $XX to profitability, back call and the revenue us model of pass open to investments and generation. durable remarks to deliver closing unit strong will we now Marshall and to

Marshall Chesrown

possible work provide and without personalized, Thanks to from wouldn't be a Narinder. customer our to seamless team tirelessly to made progress and experience. incredible the the dedication by point want this working saying – I multi-touch we’ve omnichannel close hard

will capture We transform processes. the value share, initiatives to experience, we’re the technology questions. our enhance develop deliver improve on ready unparalleled are pursuing for making market and our stay to and including people for stack, our investments Operator, and further and we focused customers customer

Operator

you. Thank

question first ahead. comes begin Instructions] now with from [Operators the B question-and-answer The Securities, will please Riley go Wold We session. Eric

Eric Wold

comments anything morning may that from your, A on that or like and economic QX? be by different I your opening anything around going what one focused you've these decline, in in seasonal that trends could good regional is course exacerbated be weather of more changes recent the in taking how to years, normal if just QX versus dive on my little Thanks, in for bit to in comments thanks is a seasonality in large going questions. see then this really you for seen questions, guess few Narinder And the prior Marshall, you. the

Marshall Chesrown

to Thanks, it. happy on Eric. question, expand and Good

was fruitful the that for in clear As the first about that pretty numbers on XX% instance the pro and in right was we and talked about in now second half. the pre-COVID XX% basis, have the forma our it we've Group a past, for that -- reported half

So channel a drives think not almost Sun focus the couple channel. I typically, swing the locations RumbleON get and Because effect. if and nationwide of is at would detail from and little of XX We dealer country the Belt. look our we over expect dealer bit of just had all what reverse you buy-in seasonality. the significant have in And in a our originally XX that the redistributed I'll that I'll was things into overall more weather-driven but second, with primarily a has it a obviously.

drilled heavy saturated with business we this since really teams clear that about year It have to As August. I of of far don't by of the May. for heat. a the were in areas and it, And doing which for in me Dallas, been management primarily long, surprising months we open if think where are very time. they it, those Arizona. really Texas Arizona the met XXX, and our the into the July down long under numbers the off-road, think haven't we see locations you time majority pretty our are vehicle because was they had even and this In utilize do and

is then Florida you're isn't market a the course, of So or comfortable exist. same be an rider personal next a point the really things would even it too of and watercraft our and if very motorcycle opportunity ATVier, hot,

look it because more we you all if channel our presently seasonality. as but the again of dealer channel feeding at expecting numbers So a dealer have we the were seasonality, significant whole and again recorded does was are into fairly a shows a amount significant that seasonality and previous

So a hopefully, that explains little better.

Eric Wold

And that reaffirm consumers updated going to seeing demand Thank any outlook guidance Narinder going then to down. helpful. vehicles not powersports mean the I is trading you the when -- measurable talking you about that amused. some know in in Yeah, declines you're for not evidence you. you're I said also

sense about, concerned it seeing truly in price get robust the all more whether the margin credit changes about As at parts any or remaining you anything you board? points, seeing across anything talked you're demand, pressure, that you specific business, would could regional is of the that is still just availability, on

Narinder Sahai

of things mentioned. you really it's, nothing any in those Yeah, it's

I think to you really look units. you full the year powersports think look down new standpoint, that's it if at it's a look going I in be the for a digits. to And the volume -- it's mid-single standpoint, if going from at think where from we at be

side, don't because measurable the On the are people they that again continue are about really not flow through that seeing we used see sales measurable to on side, then directly, say anymore, when not trading any from where source And inventory either. they and we our consumers new to change afford looking can't down think it any change for obviously, there. it use

been really and consistent, fairly factor So mentioned. it's -- that except the Marshall, seasonal seasonality

note So Eric. nothing, really nothing of there,

Marshall Chesrown

have in difference automotive point. to I isn't actually I group, I mind, buy. with lot the to -- some average another out will, comp if and it happens higher selling a side. in that. on group We're see there ability there APU, of pressures on to in the surprisingly, but get in I significantly constraint, customer's there don't add think you mean by would Yeah, any because And powersports automotive going ASP thrown the times thus keep of a public would causes the that what the price I

margin are see gross we not can you as and makeup. our from dependent So,

better. in and not we the and continuing well pre-owned we and dependent are that finance march. We We we same the finance data on do although see that can feel gets continue feel on to certainly better improve solely and extremely we

continues Our improve. to customer experience

volume that we that are increase in for does things that other margins in improve can the clearly by piece is seeing the business. on the then used regards regard. We And to used with last

that parts, side, significant driven our availability of If you way vehicles look Harley-Davidson, sold merchandise an as being the availability we and obviously example, less on have with the primarily service downturn by a at and growth regard. in availability of in by new lack because the

We or to bigger of of the that or are be players, some others, starting others. Polaris some whether and some relief the see it'd BRP whether be

vehicle of light And lot do get obviously the so tunnel, items service. sales do with parts we new the added at of end but think that to and that affects of with your which them, additional that less a

from perspective, that a management's really that link. over I in time missing dynamic an think up this, of The I after-sale reconditioning. it first-time then and making perspective, on actually the total time. on see that it's industry spent for on a factor We our side huge a vehicle to market message we'll Because are we think affordability been than that been used side, because and the buyers ability buyers. the the think has has used because the my today lot certainly more that quit that our future change pre-owned opportunity parts And addressable of and industry. This I riders, the lot grow such are the of on the of really our feel that's of

Eric Wold

That’s Fantastic.

Just question, a final if I may.

where and a just new. up know for was Harley they waiting the you were constrained hit they of that really Narinder, because on I in to new issue affordability, how vehicle you main availability, and it how guys you vehicle I they to sense Marshall, guess leverage are it a new used to of that said use seeing QX. want get now constrained aren't get use trading nicely then then, little You vehicle are sequentially to I and you around going people much from go vehicles, Any for the can't or being just on obviously want just new were because people platform

Narinder Sahai

buyer. remains buyer vehicle new the think the new I vehicle Yeah,

of are sidelines. sitting people on lot I the a think

yesterday from single some in long-time haven't and not fast-moving to able nothing unit them I have been stock inbound I demand friend unavailable. a the did watercrafts had mean, a we out all amount of high XX stores, have gross is and we margin four is sell unmeasured to high demand I for pent-up XXXX. fulfill. the product, in that a mean of product that personal think we all virtually in request I

So we But -- now so convert pretty I buyers we into think to just XXXX think example. have widespread. that's one I and that's

am is cost Another the thing it customer. because is, visible where fairly particular effect from about isn't small comfortable it this need. increases cost to and increases. And are to to able is issue comes and so what my it But we really minimal. The at a toys with is to much, fill -- that ASP regards the manufacturers down have on on again been that's the how monthly right really our that spending fill is the payments I basis

Eric Wold

Thank both. you, Awesome.

Narinder Sahai

Eric. Thanks,

Operator

Davidson. Please comes question ahead. with DA next Mike go Baker from The

Michael Baker

the follow-up used. thanks. have I new question, that actually on inventory Hi, both and

sounds Marshall, better new said that told checks. you still hog, very new But inventory inventory vehicle from other getting it's had like channel you what we're hearing then it's that's besides So area. and that the it -- in tight

because little people a are make concerns if seeing to sell the you're you And demand, bit then just that is and of billable playing not stuff better? acquire out inventory, trying but terms is how easier to Thanks. money? to inventory economic any zero -- you used could garage the of side, are that So getting clarify Watercraft, in it on

Marshall Chesrown

the with finding brand the with Obviously inventory liquidity used. situation is a really for now has We'll creating cash consumers. of start used well-known the very, where and the very synonymous become

been extremely the acquire inventory to consistent. ability Our has

continue that We to opportunity. ramp

our is a on of a which From percent -- it a unit at per significant majority you basis, what the margin as extremely as spend, look it before, gross interest. our do look you generating is perspective, low. of of is said As marketing percent

the but capture vehicles the have As think for in it example far pre-owned rates, the sale masked lot interest just of honestly seeing I we on of traffic, the in offered competition, the because website. traffic bit -- demonstrated of is side we're really not seen a as it's because on about is the economy, the execution our of again talked additional what a in quite lack little on floor the being and of showroom I

much have seen regard. just have. We maybe demand again, that how question And in pent-up that really not is we the any downturn

asked example you as about of inventory, be probably an but it hits It's an right a like seeing look increase our spots we turning fast low it be just in used personal off-road are you the On in as watercraft, I Arizona. Phoenix, a mainstream product, -- production the it if floor.

higher. So if but to significantly that churn see ridenow.com, inventory, our you'll continues at you that, our say, is look on new inventory shrink,

extremely industry on the any normal months. last really in been And the pressure been ending fluctuated the XX% a three it in the see doubled month they history not probably The remarks On X% either. this don't the to downturn to side. powersports. at the But We done. non-retail days six that the be we're than we're the my have robust have preowned more the number. about the sell side don't auctions. with only the We and auction We on automobile the on unit year and preowned at very strategically automotive inventory in used month. that really of certainly the That's seen buy end We sales over inventory we've We used hasn't business, pre-owned thing it has the not tried we I last the years, we're that like XX fourth more it explain they watching not of in valuations my reasonable did was powersports auction. of inventory is that quarter is watch through that continue and has auction. think anticipating values factors a under and depreciation have we

Michael Baker

also Okay, If of or that where one of cetera, trends? watercraft vehicles, types are I in you versus provide ATVs more better seeing by terms any color and motorcycles thanks color. brand color personal you're any of terms to willing or for in worse different ask could question. And et

Marshall Chesrown

I the would they whatever on sell literally. just Well, them or new it. spend

about in the as know, remains trend So being and a XX% as our Harley-Davidson we're that the on-road and up more as Watercraft. primarily but. available talking don't I'm you XX% and about is mix the ends the heavy new, too said, get we the on-road that's about But free over towards side, XX% and onside. off-road that on inventory seeing than business not of that significantly company XX% leaning up on side caught our because is Personal what With on pre-owned remains, is stated of we've vehicles that's before, and

to vehicle you Many If percentage off-road, and Harley-Davidson, don't little people debt, on margins. used heavy branded with the higher bit One them are with price to drives to know why And to which and that using Harley Davidson title. beat we the do in the increase those on their being a is type it free of thing it that, I a mix last the that very, is points drives to well people thing has tests different that of because simply, been non-Harley much working harder several that very vehicles. of volume. great about think have that that we and then debt ends acquire of initiatives have Harley the able are make put they vehicle improvement. on We're fairly and try improve it's large just and really

from are is Davidson a to demand the and robust $XXX month be people under sell toy expect get Harley to demand now continue we the to when their that need because payment. there that out So

Michael Baker

sense. Yeah, Sure. makes

appreciate you. Thank I Okay. color. the

Narinder Sahai

Mike. Thanks, Yeah.

Operator

Please Kennison Craig The from ahead. next Baird. go comes with question

Craig Kennison

Hey, questions well. morning. taking my for as good Thanks

remain what the prices wondering in Marshall, think you I I'm as on used just a is. -- well. prices especially mentioned of robust. that period impact interest affordability rising rates

Marshall Chesrown

We just -- seen we the have not effect.

is and you through but said, forward we see and demonstrated that we've you talk growth to obviously can we continue As current numbers current seasonality, about march now. see the --

asset, on penetration interest transaction. not that again in finance cash think vehicles those the highlight have selling to has financed. that be $X,XXX or obviously because will an on you're rates used is new the of that on a will $X,XXX I that finance point equal when are some it ASP a impact is penetration But at a

earlier, and So -- is side this and under been the dependent I pressure mentioned rates different really we've it as business -- our not never dynamics rate just on is financing. model interest has on

-- you rates models messiness models you're really, that think business those from I those And seeing some as financing revolves the of around dependent now right that gross margin become the really challenging. on interest go are used in really activities. up car

we used quick about -- So you that to touch but much, just talked have obviously I real you didn't on cars we we up wholesale might that want We have seen sell pricing our used. purely as part reliance to sell of absolutely dealers, of mind our a financing consumer on used zero strategy. is Keep distribution. we lot in so brought have

profitability volume, of and part makeup. from is very, very a we it in decision a degrees continue that, numbers not can do seeing we from but that. It chase used is As XXX conscious you powersports as our we're there to margin in now made out right business chase what that will very see world but the to the our business. And messy with a car do

Craig Kennison

as another be you by difficult people to discovered might opportunity be then enter make there And selling that. who for out is markets, Thanks to trying for units. you to figure I'm new acquisitions their ask. an and question,

discovery vehicles adoption as bought curve sell you about guess that do the share Just evolves shed that can a any your any just shows on that light RumbleON I time? example, how in you vehicles metrics there to like can and you for Freedom, platform sell is how consumer how and you when place encourage

Marshall Chesrown

control the the that he one fixed and to walks to value launch pre-approved, negotiate. opportunity given his just showroom that a transaction on These the us of But we've in centralized But that's shared launch not And vehicle metrics. are now, with think are well. haven't common have are share will only it armed any will added of on opportunity thing Right more omnichannel a to trade true he tool XXX% all they on transactions evaluation I done to of online. what I plan that previous on the proven Keep even successful, with as a websites the but come fair what majority we ability perception online to been really that think online. is cash industry trade, importantly, see our our per using and no you RumbleON being is integrated much we floor and regards concepts. some in one huge trade use from mind, to does the our websites be one stores, a now beginnings school and third-party the conversations. get completely trade change he but third building offer the of significant before we that websites will a omnichannel for buy we date, very, very now to that's can has a like their way strategies transacted the price In is They to showroom first been we has for acquire, for comes and our we're is -- rebuilt party old once with and we we mover floor. internally a he's no piece and they pricing done our somewhat some the different that testing has feel this the very fact It transaction. and our the the in when inventory executed the right. are people There into stores CarMax to of Well, get you which infrastructure of are website, customer not integrated some CRM have like they providers. functional feels

South in but underneath no you so and and dealer such a CRM opportunity that leg because up websites If and to the standardize we do the is is what as infrastructure to it you growth. have have Florida, exciting live inorganic doing in an now that there and have see has big we full that be is Ocala process today. future were all to can another we forth so very before, we that the see have asset Dakota already RumbleON obviously, we transaction technology to that facilitating

was acquisitions, -- was third to We can You was on cover me continues quarter tell phone I'll real a touched ring quiet obviously, our just quarter intentional. second off quarter quick, that excuse the hook.

an dealers. number to tell We number our business very that that to stores are know bike we drive additional we even accretive one. in extremely think to going be what discussions into in would these not acquire excited having with that model, are and business the do the is in the already business opportunity do really well-run you what that used many are adding these that I to inventory to be can two, existing store But and continue we we because will that by we many, business.

purse continue So We're we disciplined to both acquisitions making current and his has we're the think around got and the probably prudent the with make will that Narinder moves great them. strings. situation and economic more sure making hands

to release negotiate to those. diligently have I So

Craig Kennison

Marshall. much, Thanks That's so great.

Marshall Chesrown

You bet.

Operator

with Instructions] Securities. ahead. The from comes go [Operators Basham next Wedbush question Seth Please

Nathan Friedman

Nathan Yeah. for questions. Friedman Basham. Seth Thanks on for taking Hi, is this my

be improvement seem one-time margin gross quarter. which nice see. in doesn't sequential this strong It to to is nature, another experienced You

expectations the gross quarter one And if of half other? a cause significant the year. curious that versus margins the for and your key a Thanks. could Just may back drivers in given share you any GPUs for change

Marshall Chesrown

with start new. let's Okay,

constrained from presently given And not if as them that We think OEMs change we I the the continues new see. pressure. the going don't inventory are we to really see mix dramatically. anything does that's of to be

we and do and forward. going think of the a have We're opportunity have over control anticipate centralized because are per lot going will pricing, time. the huge, it's of at difference not With huge if But what data and insurance the march there strategy forward. and around is complete we to inventory board regards the that's that of store pre-owned, that there We we continue what can we enthusiasm we is to technology over see being control over going to and a diligently. over once increases basis, and have that all pricing finance really a driving lot look GPU a we think happen and on we

acquiring think through I and we we probably acquisition So can looked when the gets that I march we all the getting left channel we continue -- right now. think at one departments. into think the really And out to retail

together departments and These as right, of processing example there's the if estimation more to have as much than my of and much. these to paying work twice box, with do This profit only that work we as to flat, fulfillment of think XX% can we significantly see vehicles customer by our of service, continue growth work in I We flag, do dealerships rather with twice can we that XX% in outside profits can service build from on one and I half high opportunity poor back was that the a the getting on to bolting in The vehicle intend service service extremely regard is overwhelmed. lot gross of business that gross as gross those much number, that if that of on is a think suggesting. intend margins, we the all and don't customer even just level capable expect of as those to our XX% realized to functions, GPU I'm better and opportunity is realize, to but percentage think these twice service. not new we stays XX% well. growth. are in doing a allow march one have missed dealerships types would that. we only more stores much we I've estimation amount And concentrate would numbers. though, with much is we margin, regards used the of think very as technicians new a tremendous are in you We just service of the service and come

And just opportunity give on GPU time. tons us the side so of

done. Let us get some organization of this

in as reflected should been on be had of the GPU least opportunity experience that experience wealth businesses. and always at in Let work us a my has that continue other customer just in to

Narinder Sahai

just of points to to add And Yeah. couple that.

be continue areas two think focused. I to

I continue focus, Marshall of continue to on think the the of look have And used think the opportunity data on side house. mentioned. service to the that. definitely I I second mean, that's the as where pricing business. discipline maintaining at on continue on to the thing, we side we will the drive and is

So that's focused where we well. as are

the nothing model year I some is anything can we but half what a in significantly the wouldn't seasonality, about margin different that standpoint versus year. talked mean seen you So from we see. noticeable the back really like small first of I the of There than have half

Nathan Friedman

shift puts for the thinking to It and maybe with seems it, you over free How your wanted should would cash we pent-up elevated for period forward operating the still just to as is color this demand be do thank starts I flow. there you're that view and flow. moving be there. you your about Got appreciated? cash demand business down, in you takes Do to a normalize like any the -- run right rate business. environment comes

Narinder Sahai

Yeah.

from the in you think numbers. to that's out the haven't I free flowing cash you quarter probably flow other how we about at but number or cash operations we that change operations. we what cash about in primarily I you is a going from cash look that if free kind expect in see flow volumes put think gyrations operations, flow doing wouldn't of drivers seasonality over a how and we how investing coming talked haven't cash the cash at given there And by specifically the look from are and are will be haven't see through how significant see net, we of is if So key and main two we the some -- driven one components the quarter. we

inventory. monitor to continue We

at significantly and to wouldn't operations receivables, anything cash that of continue the the down we continue to makeup sure capital, and from seeing there make things So different GAAP profitability, working obviously are we model to of we'll components those I that the net payables, line. look drive all all flow-through income

are know, the key far thinking as the and if look how that, working I components goes. as at look you you are just about you you think you the I thinking volumes So at know how about would capital

goes, side on first of be As half the the on continuing should a good investment the the think I house far indication fairly the investment will side. are focused of technology give we where year as you there

the back that about for spent included half months, definitely guide we in more there is first our six in our on For will There and do some the property and all some you technology, coming investments facilities full will the see for million year. $X.X we of the are year. that's

impact, So those should think discrete in free pretty good if pieces that you cash you a spot. about flow that get to

Nathan Friedman

sneak share like any but at in more its latest for seems you can point this stages, should sneak still RumbleON and finance you it your It could if I be thank that. time considering? we in. key early in the metrics platform that it, One it it's regarding Got

Narinder Sahai

terms Finance to the I growth we obviously today that over in key a have for small in show RumbleON would differentiator that is business continue metrics month to that maintain and week, what over the consistency to key business. that continue we say week follow and in continues month of business. Nothing is so shared those Yeah, publicly on us, is we business metrics that scale fairly and

modeling So in out anything be you there I XXXX. that wouldn't should you point for to

Marshall Chesrown

well. we're to any what Services before. as I use we We about others. retail that not provider to consumer contract captives. finance Yamaha largest Financial would Financial, are and our really opportunity it's as all is for backstop have to available Polaris we've ability Repeat talked the that The the still, and RumbleON add Harley-Davidson Financial to just

system -- our what work. So how

being our current captive success on building when is the that to it portfolio needed to that have focused something in about our makeup on fit important -- becomes never that are We because our nor in platform finance. have is side financing the they been doesn't based for on they and really the really This provide third-party really there our captives used be.

one thing. that's So

instance, the thousands of The a bolted vehicles step of so other thousands of that, of second of time higher getting don't end and in dollars some them dabble thing these as really of and able accessories to kinds significantly payment, requires parts situations lot and we're traditional those for finance to on down opportunities, is there off-road a sale in companies at it is up the well.

opportunities. we I that is portfolio we team being The where in have a and a success just portfolio management thing, And would the about that of with is I really track the we regard where anticipated. think last see the say it's of company growth that So on backstop several on that us gets. as position as already I for times, have so Nevada like don't they the as on sheet. to with we're of very risk And season our there. we take seen you And movie it comfortable know balance as out of the are runs a say lot

finance forward. stay we go at we'll So that's XXXX program where we're least talk and going to with other as maybe about the through opportunities

Nathan Friedman

so congrats for of time. And much Thanks the luck. on and Understood. this best quarter,

Marshall Chesrown

much. so you Thank

Operator

comes from ahead. question Capital. Dionisio go Please Aegis next The with Rommel

Rommel Dionisio

all Thanks. present to see wonder just could just, expand you for that a still today, for give you for just are Good the they you specific obviously feel interest wonder through pipeline US the us rates, characterize opportunities in what if prices could the I parts rest. just look without transactions, you morning. inflation, seeing geographically moving a I here acquisition perhaps you're of asking you if multiple with acquisition? oil maybe lot Thanks. as

Marshall Chesrown

Yeah.

to daily, tool Our monthly so cash weekly, grow continues offer forth.

through this our minus not economic or really rates. have Our We changed. period capture in X.X% plus here rates typically are capture

about funnel. it's driving more the really into So

more $X.XX. dealer see visitors the able or goes if is at it our a low. he puts to hits from $XX,XXX perspective that too doesn't time to way want and capture the to thinks capital than and gets sees it he offer, more he already because continue is and drives And the hasn't a a either visitors whatever repeat him he in then higher he of We dealer trade been some and and first what extremely Rommel, rate and on repeat guy

pre-owned a out see they we -- seeing, number unique build we we so business. our on offers And to don't drive cash measure that. better and believe events that any on to there repeat higher data continue we as the there's We're

we that So to need people opportunity be thing to be real-time on seasonality out if sell under down, more is tool, time primarily so we'll units cash driven, see a adjustments. debt, up. that in bit are keep fluctuations, is and system driven, making that offer both that in the capturing of get this our there little there real back from be whether because mind, them all up that higher-cost expecting continues economically the to are and we'll data it is the Last whether

to with even press to supply as several little hardly have and the supplying long these started we haven't we add that to now example fast. going so days We're an we as side. guys, So our manage to depreciation it continue We having very as first, We're the in miles those so. right came because have stores on Freedom risk to to are stores. still hard the of key first which turning continue

Rommel Dionisio

helpful. very Marshall. Great, that's Thanks,

Operator

like to Marshall question-and-answer for This the now the over remarks. CEO, to session. closing would concludes I back turn conference any Chesrown,

Marshall Chesrown

out of time. basically We're

Also, we business. the everybody calls to just our But you thank Again, your in reach support -- Will or out in and into we're for accessible. free to all to feel future. look as very more we're everybody quarter thanks forward dive we're to of any us us. for I'll So all, joining the and know, happy some great

a look road weeks. to on Thank you. few we'll So seeing day. great in here you the I many the have show And of next forward

Operator

This conference call. today's concludes

have you day. and for participating You disconnect your a may lines. pleasant Thank

RumbleON (RMBL) 12 Aug 222022 Q2 Earnings call transcript