Shift Technologies, Inc.

further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Henry Bird, Vice President of Strategy. Please go ahead.

Good afternoon and welcome to the Shift Technologies first quarter 2022 earnings call. Joining me on the call today is our CEO, George Arison, and our CFO, Odette Chyne. 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 this call, we will be referring to non-GAAP measures defined and reconciled in our earnings materials. With that said, I will now turn the call over to George.

Thank you, Henry, and good afternoon, everyone. Thank you all for joining us today. The first quarter represents solid execution by our team in challenging operating environment. With revenue of $220 million and adjusted GPU of $16.81, we beat our first quarter guidance ranges while our adjusted EBITDA loss of $46.6 million came within our guidance range. We are pleased with the progress we made on each of the three strategic priorities we detailed in our March earnings call, which were expanding adjusted GPU through operational efficiencies and improving F&I. In Q1, adjusted other gross profit per unit was 13.22, up 41% from Q1 2021. This is a fantastic result, and I want to give a huge shout out to all SHIB team members working on F&I for their efforts. Second, optimizing our personalized sales and fulfillment experience to drive higher conversion rates. In a moment, I'll get into some more details around improvements we're making there. Third, driving unit sales through increasing our in-market penetration and expanding into new markets. Our e-commerce unit sales grew 51% year-over-year in Q1, and we saw a nice balance of growth from our legacy West Coast markets and our newer Texas markets, which accounted for about 70% and 30% of the 51% growth, respectively. You can find further details on our strategic priorities in our Q1 shareholder letter posted on our investor website. I'll spend the rest of my prepared remarks talking about the MacWay environment and actions we're taking today to maintain strong business performance with this challenging industry backdrop. As we discussed in our March earnings call, 2022 for SHIB is going to be a year of balanced growth and profitability with a keen focus on driving operational efficiencies, cost savings, and ultimately improving our liquidity position. While this has always been our plan for 2022 since we began planning for this year back in 2021, The evolution of the macro environment over the first several months of the year has made these initiatives all the more important. There are four meaningful actions on this theme that I want to highlight. First, we have executed on a comprehensive performance management and cost reduction initiative that led to a leaner, more efficient corporate and sales organization. There were two components. Firstly, a transition in our sales and fulfillment teams to return to an in-person sales team from the remote team format that we've been operating in over the past two years because of COVID, which we expect to meaningfully improve conversions. Concurrently, in order to maintain operational excellence, we eliminated a number of corporate positions in April, about 10% of the corporate team, mostly through a normal course of performance management. These actions, coupled with hiring initiatives we completed in Q4, primarily to staff up our logistics and reconditioning teams, give us confidence that we are appropriately staffed to meet customer demand while maintaining a cost-effective lean organization. Second, we are prioritizing focus on our existing markets. There is still meaningful opportunity to capture share in our core West Coast markets, and notably a massive opportunity in Texas. We're further encouraged by our strong performance in Texas, as I spoke to earlier. In the near term, we have positive expansion into Las Vegas. While we still think this will be an attractive market over the long term, we found the regulatory environment to be more challenging than anticipated. We also did not deem this market to be essential to meet our 2022 goals. Third, in response to the well-documented microeconomic factors impacting vehicle affordability that have impacted both the customer and the auto market as a whole, we are increasing the number of value cars in our inventory. Vehicles eight years or older or over 100,000 miles. These vehicles are significantly more affordable. While we are certainly not immune from challenges posed by the pricing environment, our ability to leverage our full-spectrum inventory to cater to changing consumer needs gives us a greater advantage relative to peers' more concentrated inventory sets. We do not expect the increase in percentage of value costs to create any reconditioning challenges, but it's possible that selling more value costs will result in an F&I decline quarter over quarter. which we view as a worthwhile tradeoff given the higher funding margin we typically see on value vehicles. Fourth, as you saw via an AT last week, we put in place an ATM or at-the-market facility for up to $150 million in new equity capital that we can draw upon over the next three years. This facility gives us flexibility as we continually evaluate all potential financing options. We're highly focused on balancing capitalizing on the massive market opportunity, improving profitability, and prudently investing our capital. Our team's focus on sustainable growth while marching forward on our path to profitability has enabled SHIFT to achieve strong results despite market challenges. Today, we are reaffirming our full-year guidance across revenue, units, GPU, and EBITDA. While we are very cognizant of the significant macroeconomic factors that are impacting consumer behavior and our industry, We feel confident about our strong execution for the year and our ability to adjust to the changing environment to ensure that we continue to execute successfully. A quick comment on our pending acquisition affair. The closing process has proceeded nicely, and we expect to close in May, in line with our original timeline. We're really excited about the next phase here, and we expect to pilot the marketplace product in Q2. As we worked towards the close, we've continued to ensure that this acquisition will be cashed in shortly shift. I want to congratulate the shift and their teams for their effective execution on the close in preparation for the pilot. Now I'll turn the call over to Oded to review our first quarter financial results and review second quarter and full year 2022 guidance. Oded.