Vroom reports $66 million net loss in Q2, aims for faster car turn in second half of 2023

Vroom Inc. said Wednesday it recorded a narrower net loss in its second quarter but saw additional year-over-year declines in revenue and sales volume that have occurred since the company moved to scale back the business last year.

The online used-vehicle retailer reported a net loss of $66.3 million for the quarter ended June 30, slimmer than both the $115.1 million loss it reported for the same period in 2022 and the $75 million loss it reported for first-quarter 2023. Total revenue fell 53 percent to $225.2 million. Vroom sold 4,127 vehicles via e-commerce, down 55 percent from the year-ago period but up 5 percent quarter over quarter.

The company — which announced last year it would halt growth and restructure in light of a more volatile macroeconomic environment — continues to target improving gross profit per vehicle sold, Vroom CEO Tom Shortt said on a Wednesday earnings call with analysts and investors.

"We are at the turn where we are beginning to resume responsible growth while we continue down the road of improving our operations and reducing our fixed and variable costs," Shortt said.

Aged inventory partially hindered Vroom's margins in the second quarter. Eighty percent of the vehicles it sold were held for more than 180 days, according to a news release. Vroom expects that to drop below 40 percent in the third quarter. Normalization of aged inventory levels in the second half of 2023 should lead to higher overall gross profit per vehicle, Shortt said.

Vroom did not provide an estimate on how many vehicles it aims to sell in future quarters. Shortt indicated such growth will not be excessive.

"We're at the risk of burning additional cash or hurting unit economics," he said. "We're working through right now, 'What's the right level of marketing investment? What's the right unit growth rate and the right [gross profit per unit]?' and ... as we work through those and our cash burn, which is our primary driver, that's going to yield the growth."

Vroom shares plunged 29 percent to $1.39 in afternoon trading on Wednesday.

Earnings highlights:

Q2 total revenue: $225.2 million, down 53 percent from the year-earlier period.

Q2 e-commerce vehicle revenue: $138.2 million, down 57 percent from the year-earlier period.

Q2 net income: Loss of $66.3 million, smaller than the loss of $115.1 million in the year-earlier period.

Q2 e-commerce vehicles sold: 4,127, down 55 percent from the 9,233 sold in the year-earlier period.

Q2 e-commerce gross profit per vehicle: $2,954, down 19 percent from the year-earlier period.