Vroom, Inc.

Good day and thank you for standing by. Welcome to the Vroom third quarter 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, John Sandison, VP of Investor Relations. John, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Vroom's third quarter 2023 earnings call. Joining us on the call today are Tom Short, Chief Executive Officer, and Bob Kerkoreak, Chief Financial Officer. Please note this call will be simultaneously webcast on the investor relations section of the company's corporate website at ir.vroom.com. The third quarter 2023 earnings release and earnings presentation are also posted to the investor relations 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 Vroom's operations and future financial performance. These and other forward-looking statements are based on management's current assumptions and are neither promises nor guarantees and are subject to a number of risks, uncertainties, and other important factors that may cause actual results to differ materially. We direct you to the company's most recent SEC filings, including the risk factors section of Vroom's most recent form 10-K for the year ended December 31, 2022, As updated by our quarterly report of form 10 Q for the three months ended September 30th, 2023 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 on 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 the third quarter 2023 earnings release and earnings presentation. I'd like to now hand the conference over to Tom Short, Chief Executive Officer. Tom?

Thank you, John, and thank you to all of our investors, analysts, roommates, UACC colleagues, and partners who are joining us today. Starting on slide three, During the third quarter, we continued to work towards our goal of resuming growth, selling through aged inventory, and improving variable and fixed costs per unit in alignment with our three key objectives and four strategic initiatives. On slide four, our third quarter highlights. During the third quarter, we recognized an adjusted EBITDA loss of $64.5 million an $8.2 million sequential increased loss. Our results were negatively impacted by higher realized net losses and a negative mark-to-market of finance receivables originated in late 2022 and early 2023 at UACC due to unfavorable portfolio performance. We made changes in underwriting criteria earlier this year that we expect to lead to improved delinquency trends. E-commerce units grew approximately 11% sequentially. As we pivot the business towards growth, we remain focused on reducing variable and fixed costs per unit while driving the right mix of marketing spend, unit growth rate, and GPP use. E-commerce GPPU increased from $2,954 to $3,144 sequentially, benefiting from an increase in mix of unaged units sold within the quarter. We are making progress on our long-term roadmap and our four strategic initiatives. We reduced our adjusted SG&A $3.1 million sequentially on an 11% increase in unit volume. We are updating the range of our full year 2023 guidance to an adjusted EBITDA loss of $225 million to $245 million, primarily driven by the higher realized losses and negative mark to market at UACC as previously discussed. Additionally, we are updating our year-end cash and cash equivalence guidance to a range of $137 million to $162 million. Moving to slide five. During Investor Day in May of 22, we outlined the unit economic drivers behind our four strategic initiatives that we believe are key to building a profitable business. We have been providing quarterly updates on the progress on each driver. For Q3, GDPU was $3,144, a $190 sequential improvement primarily driven by an improved mix of unaged and aged units. During the third quarter, as a result of legacy title issues, 34% of our units sold were held greater than 180 days compared to 80% in the second quarter, 77% in the first quarter, 75% in the fourth quarter of 22, and 49% in the third quarter of 22. We expect sequential reduction in our mix of age units and expect improved GPPU as a result. We expect our fourth quarter mix to be less than 20% from age units. Our GPPU of unage units or units we've owned less than 180 days was comparable to our third quarter of 2022 GPPU of $4,206. We continue to see strong products in GPPU as we develop and grow our captive financing capabilities. We reduced our all-in logistics costs per unit by 7% sequentially. We recovered $48 million of cash and inventory in the third quarter by selling through aged units and financing a higher percentage of our inventory under our floor plan facility. Our selling costs per unit increased by 1% as we completed the full insourcing of our sales function. We reduced our titling, registration, and support costs per unit by 15% sequentially. We reduced our marketing costs per unit by 13% sequentially. We reduced our fixed costs per unit by 15% sequentially. Lastly, our advanced analytics team, functional business teams, and tech team continue to build data assets, analytical assets, and tech assets that we believe in the long term will provide a competitive advantage across titling and registration, pricing, conversion, unit and product margin, and supply chain costs. Turning to slide six, I'm very pleased with what our roommates and UACC colleagues have delivered over the past year. As mentioned previously, we expect the headwinds experienced in this quarter related to UACC portfolio performance to ease as the tightening and underwriting criteria made earlier this year is expected to lead to improved delinquency trends. We have improved e-commerce TPPU the last four quarters as we sail through our age inventory. We continue to make progress on our long-term roadmap. We are resuming growth while we continue improving our operations and reducing fixed and variable costs. We expect GPPU to normalize when we sell through the remainder of our aged inventory. Now I will turn it over to Bob to discuss third quarter results in greater detail. Bob?