Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

18. Segment Information

As part of the Realignment Plan, initiated in the second quarter of 2022, the Company streamlined TDA's operations and closed its service center. The Company also reevaluated its reporting segments based on relative revenue and gross profit and significance in the Company's long term strategy. As a result of the quantitative analysis, the Company determined to no longer report TDA as a separate segment. The Company now presents three reportable segments: Ecommerce, Wholesale, and Retail Financing. The Company reclassified TDA revenue and TDA gross profit for the comparative period from the TDA reportable segment to the “All Other” category to conform to current year presentation. No operating segments have been aggregated to form the reportable segments.

The Company determined its operating segments based on how the chief operating decision maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews revenue and gross profit for each of the reportable segments. Gross profit is defined as revenue less cost of sales incurred by the segment. The CODM does not evaluate operating segments using asset information as these are managed on an enterprise-wide group basis. Accordingly, the Company does not report segment asset information. As of September 30, 2022 and December 31, 2021, long-lived assets were predominantly located in the United States.

The Ecommerce reportable segment represents retail sales of used vehicles through the Company’s ecommerce platform, fees earned on vehicle financing originated by UACC or our third-party financing sources and sales of value-added products associated with those vehicles sales. The Wholesale reportable segment represents sales of used vehicles through wholesale channels. The Retail Financing reportable segment represents UACC’s operations with its network of third-party dealership customers, including the purchases and servicing of vehicle installment contracts. Revenues within the "All Other" category consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business.

Information about the Company’s reportable segments are as follows (in thousands):

	Three Months Ended September 30, 2022
	Ecommerce		Wholesale			Retail Financing		All Other		Total
Revenues from external customers	$	225,441	$	47,604		$	40,654	$	27,098	$	340,797
Gross profit	$	27,034	$	(1,574	)	$	35,954	$	5,917	$	67,331
	Three Months Ended September 30, 2021
	Ecommerce		Wholesale			Retail Financing		All Other(1)		Total
Revenues from external customers	$	701,678	$	131,306		$	—	$	63,772	$	896,756
Gross profit	$	50,383	$	2,103		$	—	$	5,603	$	58,089

	Nine Months Ended September 30, 2022
	Ecommerce		Wholesale			Retail Financing		All Other		Total
Revenues from external customers	$	1,222,436	$	270,489		$	120,005	$	126,622	$	1,739,552
Gross profit	$	94,862	$	(6,260	)	$	109,637	$	17,089	$	215,328
	Nine Months Ended September 30, 2021
	Ecommerce		Wholesale			Retail Financing		All Other(1)		Total
Revenues from external customers	$	1,703,649	$	377,438		$	—	$	168,677	$	2,249,764
Gross profit	$	131,859	$	10,337		$	—	$	15,197	$	157,393

(1)The Company reclassified TDA revenue and TDA gross profit from the TDA reportable segment to the “All Other” category to conform to current year presentation.

The reconciliation between reportable segment gross profit to consolidated loss before provision for income taxes is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Reconciliation to consolidated total revenue
Total reportable segment revenue	$	313,699		$	832,984		$	1,612,930		$	2,081,087
All Other revenues		27,098			63,772			126,622			168,677
Consolidated total revenue	$	340,797		$	896,756		$	1,739,552		$	2,249,764
Reconciliation to consolidated loss before provision for income taxes
Total reportable segment gross profit	$	61,414		$	52,486		$	198,239		$	142,196
All Other gross profit		5,917			5,603			17,089			15,197
Selling, general and administrative expenses		134,643			148,718			475,627			381,482
Depreciation and amortization		9,833			3,376			27,728			9,276
Impairment charges		1,017			—			206,127			—
Gain on debt extinguishment		(37,917	)		—			(37,917	)		—
Interest expense		9,704			7,028			28,617			14,720
Interest Income		(5,104	)		(2,930	)		(12,991	)		(7,288	)
Other loss (income), net		5,383			(10	)		26,897			(58	)
Consolidated loss before provision for income taxes	$	(50,228	)	$	(98,093	)	$	(498,760	)	$	(240,739	)