Segment Information

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Segment Information

15. Segment Information

As a result of the Ecommerce Wind-Down during the three months ended March 31, 2024, the Company revised its reportable segments. The Company is now organized into two reportable segments: UACC and CarStory. Corporate activities are presented in "corporate" and do not constitute a reportable segment. These activities include costs not directly attributable to the segments and are primarily related to costs associated with corporate and governance functions, including executive functions, corporate finance, legal, human resources, information technology, cyber security and other shared costs. Certain shared costs, including corporate administration, are allocated to segments based upon specific allocation of expenses. Corporate activities also include the runoff of legacy Vroom third party vehicle service and GAP policies sold prior to the Ecommerce Wind-Down as well as certain Vroom contracts that have been renegotiated and right-sized to account for reduced headcount following the Ecommerce Wind-down. The Company retrospectively restated segment results for the comparative period to conform to the new 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 Adjusted EBITDA for each of the reportable segments. Adjusted EBITDA is defined as net loss before interest expense on corporate debt, interest income on cash and cash equivalents, income tax expense, depreciation and amortization expense, stock compensation expense, severance expense related to the continuing operations, gain on debt extinguishment and long-lived asset impairment charges, 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, 2024 and December 31, 2023, long-lived assets were predominantly located in the United States.

The UACC reportable segment represents UACC’s operations with its network of third-party dealership customers, including the purchases and servicing of vehicle installment contracts. The segment also includes the runoff portfolio of retail installment sale contracts originated for Vroom or purchased from Vroom prior to the Ecommerce Wind-Down.

The CarStory reportable segment represents sales of AI-powered analytics and digital services to automotive dealers, automotive financial services companies and others in the automotive industry.

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

	Three Months Ended September 30,
	2024												2023
	UACC			CarStory			Corporate			Total			UACC			CarStory		Corporate			Total
Interest income	$	50,801		$	—		$	(588	)	$	50,213		$	48,068		$	—	$	(489	)	$	47,579
Interest expense:
Warehouse credit facility		6,251			—			—			6,251			5,522			—		—			5,522
Securitization debt		9,096			—			—			9,096			6,116			—		—			6,116
Total interest expense		15,347			—			—			15,347			11,638			—		—			11,638
Net interest income		35,454			—			(588	)		34,866			36,430			—		(489	)		35,941
Realized and unrealized losses, net of recoveries		30,117			—			8,229			38,346			30,323			—		6,935			37,258
Net interest income after losses and recoveries		5,338			—			(8,818	)		(3,480	)		6,107			—		(7,424	)		(1,317	)
Noninterest income:
Servicing income		1,495			—			—			1,495			2,430			—		—			2,430
Warranties and GAP income (loss), net		2,074			—			1,843			3,917			1,487			—		(1,341	)		146
CarStory revenue		—			2,890			—			2,890			—			2,998		—			2,998
Gain on debt extinguishment		—			—			—			—			—			—		—			—
Other income		1,698			199			522			2,419			570			141		1,346			2,057
Total noninterest income		5,267			3,089			2,365			10,721			4,487			3,139		5			7,631
Expenses:
Compensation and benefits		19,819			3,127			2,419			25,365			14,976			2,328		2,547			19,851
Professional fees		875			(112	)		824			1,587			986			71		2,591			3,648
Software and IT costs		2,346			17			997			3,360			2,798			170		1,717			4,685
Depreciation and amortization		5,505			1,600			—			7,105			5,689			1,609		—			7,298
Interest expense on corporate debt		681			—			920			1,601			540			—		1,053			1,593
Impairment charges		2,407			—			—			2,407			—			—		—			—
Other expenses		1,991			127			1,318			3,436			1,666			161		2,034			3,861
Total expenses		33,624			4,759			6,478			44,861			26,656			4,339		9,941			40,936
Adjusted EBITDA	$	(14,119	)	$	(210	)	$	(11,205	)	$	(25,534	)	$	(9,780	)	$	536	$	(16,715	)	$	(25,959	)

	Nine Months Ended September 30,
	2024											2023
	UACC			CarStory		Corporate			Total			UACC			CarStory		Corporate			Total
Interest income	$	154,731		$	—	$	(1,579	)	$	153,152		$	130,897		$	—	$	(1,955	)	$	128,942
Interest expense:
Warehouse credit facility		22,708			—		—			22,708			12,279			—		—			12,279
Securitization debt		21,960			—		—			21,960			16,442			—		—			16,442
Total interest expense		44,668			—		—			44,668			28,721			—		—			28,721
Net interest income		110,063			—		(1,579	)		108,484			102,176			—		(1,955	)		100,221
Realized and unrealized losses, net of recoveries		77,460			—		10,434			87,894			62,980			—		13,192			76,173
Net interest income after losses and recoveries		32,604			—		(12,013	)		20,590			39,196			—		(15,148	)		24,048
Noninterest (loss) income:
Servicing income		5,101			—		—			5,101			7,835			—		—			7,835
Warranties and GAP income (loss), net		5,324			—		(9,671	)		(4,347	)		5,168			—		(1,436	)		3,732
CarStory revenue		—			8,782		—			8,782			—			9,392		—			9,392
Gain on debt extinguishment		—			—		—			—			—			—		19,640			19,640
Other income		6,266			562		1,516			8,344			2,601			282		5,277			8,160
Total noninterest (loss) income		16,691			9,344		(8,155	)		17,880			15,604			9,674		23,481			48,759
Expenses:
Compensation and benefits		59,146			7,802		9,703			76,651			49,904			7,149		7,360			64,413
Professional fees		2,326			90		4,002			6,418			4,555			361		6,149			11,065
Software and IT costs		8,048			205		3,765			12,018			8,478			515		5,742			14,735
Depreciation and amortization		17,156			4,807		—			21,963			16,898			4,822		—			21,720
Interest expense on corporate debt		1,781			—		2,760			4,541			1,173			—		3,287			4,460
Impairment charges		5,159			—		—			5,159			—			—		—			—
Other expenses		7,569			300		4,984			12,853			5,927			462		7,242			13,631
Total expenses		101,187			13,203		25,213			139,603			86,935			13,308		29,781			130,024
Adjusted EBITDA	$	(27,091	)	$	720	$	(38,858	)	$	(65,229	)	$	(13,956	)	$	1,738	$	(40,358	)	$	(52,576	)

The reconciliation between reportable segment Adjusted EBITDA to consolidated loss from continuing operations before provision for income taxes is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Adjusted EBITDA by Segment
UACC	$	(14,119	)	$	(9,780	)	$	(27,091	)	$	(13,956	)
CarStory		(210	)		536			720			1,738
Corporate		(11,205	)		(16,715	)		(38,858	)		(40,358	)
Total	$	(25,534	)	$	(25,959	)	$	(65,229	)	$	(52,576	)
Interest expense on corporate debt		(1,601	)		(1,593	)		(4,541	)		(4,460	)
Interest income on cash and cash equivalents		1,035			2,007			3,221			7,026
Depreciation and amortization		(7,105	)		(7,298	)		(21,963	)		(21,720	)
Stock compensation expense		(1,244	)		(1,779	)		(5,014	)		(5,126	)
Gain on debt extinguishment		—			—			—			19,640
Severance		(763	)		—			(2,448	)		—
Impairment charges		(2,407	)		—			(5,159	)		—
Loss from continuing operations before provision for income taxes	$	(37,620	)	$	(34,622	)	$	(101,133	)	$	(57,217	)