Vroom, Inc.

Good day, and thank you for standing by. Welcome to Vroom's second quarter 2021 earnings call. At this time, all participants lying are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask questions during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the call over to your speaker today, Mr. Alan Miller, Head of Investor Relations. Please go ahead.

Thank you, Buena. And welcome to Vroom's second quarter 2021 earnings conference call. Joining us on the call today are Paul Hennessy, Chief Executive Officer, and Dave Jones, Chief Financial Officer. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate website at ir.vroom.com. The second quarter earnings release is also posted to the IR website. Before we begin, Please note that the discussion today includes forward-looking statements within the meaning of the federal securities laws, including but not limited to statements about Groom's operations and future financial performance. These and other forward-looking statements are subject to a number of risks, uncertainties, and other important factors that may cause actual results to differ materially from those in such statements. We direct you to the company's most recent SEC filings, including the risk factor section of Groom's most recent form 10-K, for the year ended December 31, 2020, as updated by our quarterly report on Form 10-Q for the three months ended June 30, 2021, for additional discussion of factors that could cause actual results to differ materially from those in the forward-looking statements. Please note further that today's discussion, including the forward-looking statements, speak only as of the date of this call, and Vroom assumes no obligation to update such statements based upon future developments or otherwise. The company may also discuss certain non-GAAP financial measures during today's call. You can find a presentation of the most directly comparable GAAP measures and a reconciliation of those measures in today's press release. And with that, I'll turn it over to Paul. Paul?

Thanks, Alan, and thanks, everyone, for joining Vroom's second quarter 2021 earnings call. I'd like to start by thanking all of our employees, investors, and board members for all of their hard work and support in building a great customer-centric public company. Vroom had an outstanding second quarter. We executed well and delivered on a strategic goal and against our guidance. Our e-commerce units once again exceeded our expectations and were up 172% year over year. Our e-commerce gross profit per unit was up 153% year-over-year and up 32% quarter-over-quarter to $2,718. Also in the second quarter, Vroom completed a $625 million convertible note offering, further strengthening our balance sheet and bringing our cash balance to almost $1.5 billion at the end of the second quarter. enables us to accelerate investment in our four key pillars of demand, supply and reconditioning, logistics, and sales and sales support operations, while also continuing to invest in advancing the end-to-end Vroom platform. Demand for the Vroom model remains strong. We continue to invest heavily in our brand and are seeing encouraging results in demand generation, conversion, purchases, and sales in the immediate term, as evidenced by our performance in our second quarter and third quarter guidance, as well as improvements in brand awareness for longer term, evidencing sustainable demand generation. We are well on our way towards building Broom into a national brand and a household name. I can't say enough about our communication on the supply side of our business. We've gone from 11,280 units listed at the end of Q1 – the 13,676 units listed at the end of Q2. We grew those units in a very constrained market, improved our inventory turns, and grew our unit economics. All of that was enhanced by Vroom's integration of CarStory. Our now combined data-driven team is buying the right cars at the right price and moving them quickly. Importantly, Vroom continues to excel in its ability to buy cars from consumers. Retail vehicles sold that were sourced from consumers was at 50 percent in the second quarter, up from 54 percent in the first quarter. We have demonstrated we know how to buy from consumers, in addition to marketing and selling to consumers, and the benefits of purchasing from consumers is enhancing our unit economics. Buying cars from consumers nationwide and at scale will be both a continued focus of investment and a continuing area of expertise. Our reconditioning capacity continues to scale. As we leverage our hybrid asset light approach, we are both expanding our geographic and our total capacity. We opened another five third party reconditioning facilities in the second quarter and now have 29 total VRCs across the country. We are tracking well ahead of our annual plan for up to 30 locations by the end of 2021. Our reconditioning capacity in the second quarter was 2,800 units per week, up from 2,300 units per week in Q1. As we continue our network capacity plan and leverage our reconditioning capabilities, we intend to also be both optimistic and geographically strategic about adding additional Broom-owned reconditioning centers into our integrated hybrid network. We feel confident in having enough planned capacity not only for 2021, but 2022 as well. Our logistics team continues to execute well. Our last mile team added an additional seven last mile locations and delivered 26% of e-commerce units via our last mile service this quarter. We are tracking well towards our annual goal to exit the year, covering 50% of total deliveries on a run rate basis, with our proprietary last mile service. We remain enthusiastic in our rollout as our overall customer experience is enhanced when one of our team members personally delivers the vehicle to our customers. We are in the initial phase of rolling out our line haul capabilities and are confident that when we combine line haul with our last mile services and continue to expand our in both logistics move miles from the network. When we remove miles from the network, costs go down, unit economics go up, and the customer experience is elevated. Logistics fleet expansion will continue to be an area of increased and accelerated investment as we drive long-term operational efficiencies and leverage. With regard to our sales and sales support operations, as discussed last quarter, we have continued to invest in people, process, and tech And I'm pleased with the work that's been done. Our teams are processing record-breaking transactions, both in purchasing vehicles from and to consumers. An e-commerce platform. to remove friction from the transaction, and at scale, remove costs. We are committed to investing in our end-to-end e-commerce transaction processing to provide a world-class, touchless transaction for both buying and selling vehicles and are well on our way towards that goal. Financing and value-added products are fundamental components of our consumer value proposition. Our teams have done an outstanding job in lining up world-class lenders, and service providers to offer vehicle financing across the credit spectrum and address the diverse value-added product needs of our customers. Consistent with our hybrid asset life approach, we intend to be strategic and opportunistic as we evaluate strategies for providing proprietary finance products. I'm proud of the strong execution that our team delivered in the second quarter and equally proud of the strong financial results. it's clear that consumer demand model and the Broom platform is high for both buying and selling vehicles. I'm pleased at the way in which our hybrid model is scaling across all four of our key pillars of demand and marketing, supply and reconditioning, logistics, and sales. And I'm encouraged as our e-commerce and data science platforms are increasing automation and reducing friction to deliver an improving end-to-end experience for our customers. We've navigated some tough markets since we went public a year ago. First, the shutdown and difficulties caused by COVID-19, then the several phases of resurgence of COVID-19 throughout the pandemic, then an incredibly hot used car demand and pricing market. Looking ahead, we believe the pricing market has crested and is starting to normalize. The implications of that movement from a high pricing to a more normalized pace is that it puts pressure on our retail and wholesale gross profit per unit in the immediate term, which is reflected in our Q3 guidance. We are well positioned to navigate a more normalized market and remain confident we will deliver triple-digit year-over-year growth in our e-commerce units and 200% year-over-year growth in aggregate gross profit this year. We will continue to invest aggressively for the foreseeable future in brand building in our people, in our e-commerce platform, in our supply chain, and in our products and services as we seek to continue to scale our business, serve our customers well, deliver ascending aggregate gross profit, and deliver long-term operating leverage. And with that, I'll hand over to Dave for further remarks on our financials and our guidance.