Vroom’s e-commerce vehicle sales increased 93% in the fourth quarter
Online used-vehicle retailer Vroom’s net loss widened to nearly $130 million in the fourth quarter, but the company posted big revenue gains and said it sold a record number of vehicles via e-commerce.
Vroom reported total revenue of $934.5 million in the quarter, more than double the figure for the prior year period. Much of that revenue came from e-commerce, which more than doubled to nearly $739 million.
Wholesale revenue increased 62% to $121.5 million. The company attributed this to the growth in the average selling price of the vehicles, which rose from $10,733 to $13,903, mainly due to market appreciation.
Vroom said it sold 21,243 e-commerce vehicles in the fourth quarter, up 93% from the year-ago period. It sold 74,698 e-commerce vehicles in 2021, up from 34,488 the previous year.
The improvement was fueled in part by growing brand awareness in an environment of “exceptional” demand, Vroom CEO Paul Henessy told investors and analysts on an earnings call Tuesday.
Revenue and vehicles sold in the quarter exceeded expectations, but Vroom felt pressure on gross profit per vehicle, Chief Financial Officer Robert Krakowiak said. Constraints included higher price depreciation for high-end vehicles, higher reconditioning costs, and year-end adjustments related to “warranty program and inventory reserve buildup.”
The company’s adjusted earnings before income taxes, interest, depreciation and amortization widened to a loss of $120 million in the quarter, nearly double the year-ago period.
Implications of the sale of ADESA in the United States
Vroom said he was assessing how his recent acquisition of United Auto Credit Corp. — an auto lender it adds as a captive financial arm — will affect it in coming quarters.
The company is also considering the implications of Carvana’s planned $2.2 billion purchase of KAR Global’s auction giant ADESA US.
“We really want to think about how we characterize the impact of ADESA, what that means to us overall, and of course we think deeply about that,” Hennessy said. “Roughly between 20 and 24% of our [reconditioning] The capability is currently owned by ADESA. »
Vroom understands that Carvana will reuse ADESA’s reconditioning depth for its own use. Hennessy said his company is working with ADESA to see what the short-term impacts will be.
“We are confident that there is a solution in our third-party channel, with Manheim and others, and we are confident, as we run our own plant, that we have the opportunity to expand our own capacity,” Hennessy said. . noted.
Vroom announced these fourth quarter and full year financial results:
Total turnover for the 4th quarter: $934.5 million, more than double the $405.8 million recorded in the prior year period
Net loss in Q4: $129.8 million, more than Vroom’s $60.7 million loss a year earlier
E-commerce vehicles sold in the 4th quarter: 21,243, compared to 11,022 a year earlier
Total turnover 2021: $3.18 billion, more than double 2020’s $1.35 billion
Net loss 2021: $371 million, more than Vroom’s $202.8 million loss in 2020
E-commerce vehicles sold in 2021: 74,698, compared to 34,488 in 2020