Shift Technologies, Inc.

Thank you for standing by, and welcome to Shift Technology's third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your host, Vice President of Strategy and Finance, Henry Bird.

Good afternoon and welcome to the Shift Technologies third quarter 2021 earnings call. Joining me on the call today are co-CEOs Toby Russell and George Harrison and CFO Oded Shine. During our remarks, we will make some forward-looking statements. which represent our current judgment on what the future may hold. And while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks, and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statement. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise after this conference call. During the course of the call, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials. With that said, I will now turn the call over to Toby.

Thanks, Henry. I thank you all for joining the call today. Over the years at SHIFT, we've had many team members, who have served in the armed forces before choosing a civilian career at SHIFT, and I'd like to first take a moment on this Veterans Day to thank all members of our armed services, past and present, for your sacrifice, courage, and the example of service you set for us all. Thank you. Turning to our quarterly results, the third quarter was another great quarter for SHIFT. Once again, our team performed exceptionally well across all components of our business. We continue to aggressively take market share, all while continuing to improve operating leverage toward our long-term financial goals. A quick summary of our Q3 results. Revenue of $180 million, representing three times year-over-year growth. 6,487 e-commerce units sold, representing 10% sequential growth over Q2, and reporting our fifth consecutive quarter of exceeding unit sales expectations. Adjusted GPU of $2,021, more than 50% year-over-year growth. With this, we exceeded the guidance we provided on our second quarter earnings call in August for all of our metrics. We are happy to once again be raising our full year 2021 revenue expectation now to over $620 million, which represents more than three times year-over-year growth and nearly 50% more revenue than we had signaled at the beginning of the year. Our top-line unit and revenue growth is driven by our rapidly scalable business model, coupled with the accelerating shift in the used car market from offline to online. Our focus on operational excellence has enabled our team to navigate the current and unique and challenging market conditions very effectively. Throughout Q3, we continued to observe complex dynamics in the consumer automotive industry, the first being a volatile pricing environment. Early in Q3, prices started to drop from Q2 peaks, only to quickly rebound and remain elevated throughout the rest of the period. This was significantly different from the normal seasonality patterns the industry usually experiences. Secondly, competition for used inventory has been at all-time highs. Throughout this, our team has continued to work with extraordinary dedication, exceeding targets, and delivering on SHIFT's industry-leading customer experience. I want to extend a huge thank you to every member of the SHIFT team for delivering yet another exceptional quarter. Our continued success can be largely attributed to our unwavering focus on providing a world-class e-commerce experience for our customers and our firm commitment to our long-term strategic business objectives of, first, deepening penetration within our existing markets where we continue to see significant opportunity. We've just entered into an agreement for a new Bay Area facility over two and a half times the size of our current hub in San Francisco that will expand service capacity for our Northern California market. Second, growing our geographic footprint. We are excited to announce that we have begun to expand into Houston, Texas, and expect to have that offering fully operational as a two-sided market in the near term. We shift buying cars from Houston customers in addition to selling them to them. Third, building lasting brand awareness, which has been a successful strategy in its first several quarters and will continue to be a major area of investment for us. And finally, driving efficiencies in our full-stack operations while improving unit economics, as demonstrated by our Q3 F&I dollars per unit, reaching the highest point in SHIFT's history. Looking forward, we expect to continue delivering on our growth objectives and, as such, are focused on investing in and building our teams. Hiring across all industries has been challenging over the last 18 months, especially so in retail, and we've had to manage our way through that. While our hiring throughout 2021 has kept pace with our goals and delivered outperformance on key metrics, we see opportunity in Q4 to set ourselves up for success in 2022 and continue building on our momentum. Accordingly, we have launched a major hiring program across the board, from our customer-facing concierge teams to our inside sales and support teams to our reconditioning technicians. Finally, on the topic of investing in our team, I would like to take a moment to welcome Jeff Clements to Shift. Jeff has been serving as Shift's president since the beginning of October. He brings over 20 years of experience leading e-commerce and marketplace businesses, including in senior leadership roles at Walmart and PayPal. He has an exceptional track record of leadership in operating efficiently, delivering customer value, and doing it with heart. We are excited to welcome Jeff to the team and believe he will lead sustainable growth at SHIP for years to come. And I wanted to take a moment to acknowledge that for me personally, this will be my last earnings call as co-CEO at SHIP. As you know from our announcement last week, as of February 1, I will transition to a role as a board member and advisor. I would like to take this time to extend my heartfelt and deep appreciation to everyone on the shift team today, everyone who has worked at shift over the years, to our investors who have put their trust in us, and to our board members for their unwavering support during our journey from an idea to a public company and industry leader. I would also like to reiterate my confidence in what this incredible group can and will accomplish in continuing to transform the industry over the quarters and years to come. At this point, I'll turn the call over to Oded, our CFO, to run through the quarter's financial results. Oded?