Good afternoon, and welcome to the Shift Technologies fourth quarter and fiscal year 2021 earnings call. Joining me on the call today is our co-founder and CEO, George Arison, our President, Jeff Clementz, and our CFO, Oded Shein. During our remarks, we will make some forward-looking statements which represent our current judgment on what the future may hold. While we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks, and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statement. Please refer to our filings with the SEC for a full description of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise after this conference call. During the course of the call, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials. With that said, I will now turn the call over to George. Thank you, Henry. Good afternoon, everyone, and thank you for joining us on our fourth quarter and full -year 2021 earnings conference call. We've a lot of exciting news to cover, including our Q4 and 2021 results, the pending acquisition of marketplace assets from FAIR Technologies, our 2022 objectives, and finally, some thoughts on our profitability model. Thank you for bearing with us as we walk you through these materials. Further details are available in our shareholder letter and new investor presentation on our IR website. I'll start with a quick reflection on 2021. We finished the year with $637 million in revenue, representing over 3x year-over-year growth. At $196 million, our Q4 was not only above our guidance range, but greater than the entirety of our 2020 revenue. We expanded into Texas and now have full service markets across the state. Our in-house reconditioning team has become a hallmark of operational excellence at Shift. All year, the output from this team was ever-growing, while concurrently they drove down costs as in Q4 we saw a 41% year-over-year decrease in average reconditioning costs per unit. We see this as further validation of our long-held thesis that in-house recon is essential to building a large profitable auto e-commerce platform. We currently have the staffing and facility capacity to recondition approximately 750 cars per week. We will continue to expand capacity as 2022 progresses, but current capacity is more than sufficient to meet the high end of our 2022 volume guidance. We made great progress in improving our unit economics, growing full -year adjusted GPU 57% year-over-year to $2,126. While reconditioning success was a key hallmark of H1, stable, consistent, and reliable improvements in our F&I per unit was the major highlight of H2. In Q4, we had other adjusted GPU per unit of $1,162. F&I per unit has grown nearly 2.5x since the end of 2019. We launched our first brand campaign in Q1 2021, which marked the beginning of our long-term strategy to build Shift as a trusted consumer brand. Over time, greater awareness will diminish our need for down-funnel marketing and ultimately drive CAC and price to market leverage. Our internal analysis shows Shift has about 15% aided brand awareness in the markets in which we have a physical footprint. Great progress from a year ago, but still plenty of opportunity to improve. Thanks to our regional operational approach, we believe we can achieve about 50% brand awareness over the next few years, significantly lower total investment than our peers. Finally, we invested in our people across the organization, including growing our leadership team. In Q4, we undertook a hiring initiative to prepare us for growth in 2022, and as a result, we are well-staffed to drive another banner year for Shift. I can't overemphasize how grateful and proud I am of our team for all that they were able to accomplish last year, despite it being one of the most complicated and dynamic used car markets perhaps ever, while continuing to navigate the pandemic. COVID has continued to present new challenges, most recently with a significant spike in Omicron variant cases, which had some impact on our operations in December, January, and February that are reflected in our Q1 guidance. Nevertheless, our performance in 2021 only increased my confidence in our team's ability to execute successfully as we scale this business towards profitability. Thank you, Shift team members for all your hard work over the past year, especially to those in the field and at our hubs. Turning now to 2022, which is off to a great start. We're excited to be announcing today our agreement to acquire the dealer listing marketplace assets from FAIR Technologies. This transaction will be fully funded by a $20 million senior unsecured debt facility with a 6% coupon from SoftBank. The acquisition and debt facility are expected to close in the second quarter of 2022. At Shift, we've long envisioned building a digital marketplace where both dealers and independent sellers can list their cars alongside Shift's owned inventory, offering customers access to a greater assortment of owned and third-party vehicles with all the transactions fulfilled through Shift's proprietary logistics network. For the last 18 months, FAIR's world-class engineering team has been developing a digital marketplace platform for third-party inventory, including a proprietary dealer-facing onboarding platform. Dealers can manage the entire transaction via this platform and easily schedule an at-home delivery. It is the ideal solution for dealers to participate strategically in e-commerce, grow market share, and develop long-term relationships with customers. This technology, along with FAIR's deeply established dealer relationships, will allow Shift to accelerate our vision of becoming the destination marketplace for car ownership. Enabling us to launch the very first alpha version of third-party listings on our platform at the end of Q2 2022, around a year from now, and then to scale it quickly from there. We see several immediate and long-term benefits to the marketplace, including expand our inventory assortment through access to third-party sources, accelerate e-commerce unit sales growth, and drive margin expansion, and provide further leverage on our marketing and brand investments. Turning next to our objectives for the core business in 2022. Today, we have released an investor presentation that provides a detailed view into how we envisioned achieving breakeven profitability over the next few years. Ever since our founding, we've consistently worked to be prudent stewards of capital that our investors trust us with. I'm proud that our team has shown our belief in doing more with less, achieving significantly better unit economics at a smaller scale and spending less to grow to our size than our peers. This year and in the years to come, we will continue to strive for an optimal balance between growth and driving improvements in profitability, with the ultimate goal of having a very profitable business that can self-fund continued rapid expansion. The operational efficiency actions we will be undertaking in 2022 are critical in this regard, and in a minute, Jeff will walk us through a few of these initiatives. I feel confident about our capital position to fund these efforts in 2022, and we will also look to strengthen our liquidity position this year as we continue to be prudent stewards of our cash. We believe our investments in excellence in reconditioning and strong growth in our GPU, both on the front end and in F&I, coupled with rapid scaling and a clear path to profitability, create the right combination and to attract additional capital as we work to capitalize on the market opportunity. With that, I'm excited to turn the call over to our President, Jeff Clementz, to talk in a bit more detail about what we have planned for the year ahead. Jeff? Thanks, George. When I came to Shift in the fall of 2021, I knew that I was joining a company that was both rapidly scaling units, achieving triple-digit year-over-year growth while also increasing the GPU. As George noted earlier, our GPU expansion was a blend of market conditions, significant reconditioning efficiencies, and improvements to our F&I product offering and sales capability. As we constructed our 2022 plan, we knew the next frontier of our path to profitability was to drive SG&A operational efficiency. Our 2022 plan blends rapid unit growth, improved GPU, and significant cost leverage improvement by focusing on four core strategies that I'll walk through today. First, we will continue to drive strong unit growth through market expansion and deepening our existing footprint, especially in California and Texas. Second, we will further expand GPU by continuing to invest in machine learning-driven pricing optimization on both sides of our marketplace, achieving additional reconditioning efficiencies, and further improving our F&I value proposition. Third, we are very excited by the technology-enabled efficiencies that we can deliver across the end-to-end customer life cycle. Beginning with the customer discovery and shopping by introducing new customer-empowered checkout flows and by streamlining our fulfillment and post-purchase experience. These platform improvements will be accelerated as we combine and integrate the great talent at Shift and FAIR into a unified team. Fourth, we are continuing to evolve and improve our personalized sales and fulfillment experience. We will combine technology and a personal touch to enhance the customer experience, leading to improved conversion and operational efficiencies. Executing this strategy in 2022 will set Shift on a trajectory to strengthen our brand as an innovative, customer-centric, modern used auto e-commerce retailer while achieving adjusted breakeven EBITDA at a much smaller scale than our peer set. I will now turn the call over to Oded to review our financial results and walk you through our path to profitability. Oded? Thank you, Jeff, and good afternoon, everyone. We have shared quite a bit of information with you today, so I'll try to be as efficient as possible and walk through our Q4 and fiscal year 2021 results, all of which either met or exceeded the guidance provided on our last earnings call, our 2022 guidance, and finally, the model we published today that illustrates our path to profitability. I'll start with some highlights from our Q4 and 2021 results. For full details, please reference the Q4 shareholder letter posted on our investor website. Financial results. Total revenue for the fourth quarter grew to $196 million, an increase of 167% versus prior year period. With e-commerce units sold growing to 6,441 units, up 95% year-over-year. Adjusted gross profit per unit reached $1,910 in the quarter, representing nearly a 4x year-over-year increase. Adjusted GPU for the full- year was $2,126. A key contributor was our other adjusted GPU or F&I of $1,162 per unit, representing a 47% increase year-over-year. Adjusted EBITDA loss for the quarter was $43.7 million or a loss of 22.3%, compared to 39.4% loss rate last year. For fiscal year 2021, our adjusted EBITDA loss was $137.6 million or 21.6% of revenue compared to a loss rate of 35% last year. Quick highlight on our cash position. We ended Q4 with cash and cash equivalents of $194.3 million, including $11.7 million in restricted cash. Additionally, on the liquidity front, in Q4, we entered into a $100 million floorplan facility provided by Ally, doubling our previous facility. At year-end, we utilized $83.3 million under the facility with additional $17 million untapped. Now to guidance. For the first quarter, we expect revenue to be in the range of $205 million-$215 million, roughly doubling our Q1 2021 revenue of $106 million. For the year, we expect revenue to be in the range of $1 billion-$1.1 billion. We also expect e-commerce retail units for the full year to be in the range of 34,000 units-38,000 units. Adjusted GPU for the quarter is expected to be in the range of $1,500-$1,600. For the year, we expect adjusted GPU to be ahead of our 2021 GPU of $2,126. A reminder that 2021 included approximately $150 of price appreciation tailwind in Q2, as we have previously discussed. Our adjusted EBITDA loss for the quarter is expected to be in the range of $46 million-$48 million. For the year, we expect adjusted EBITDA loss margin to be in the range of 12%-15%, inclusive of the investment in the marketplace business and the significant improvement to the 21.6% loss in 2021. For my final section, I'd like to walk you through the financial model that we share today. Following our success in rapidly growing our e-commerce unit sale, revenue and GPU in 2021 and our trend in continuing growth evident in 2022, we have better visibility into our path to achieve EBITDA at the break-even point and into profitability. Break-even EBITDA can be attained at 100,000 retail units, which equates to roughly $3 billion in revenue. Our volume growth is going to come from our legacy market in California and the Pacific Northwest, where our current share is significantly lower than some of our competitors. New markets, we launched Texas in 2021 and expect to launch more major markets and new lines of business, including the marketplace. Grow GPU to $3,800. We have previously shared that we believe we can get to 2,500 GPU with our existing line of products. The strength of our business over the past year has given us visibility and confidence that we can outperform that and increase GPU to approximately $3,000 with operational improvements, price algorithms, reconditioning efficiencies, F&I attach rates, wholesale business, et cetera. Additionally, the contribution of new business opportunities, including a captive finance business we believe can add at least $700 per unit, and a service and repairs business can contribute an additional $300 per unit, brings us to our estimated break-even GPU of $3,800-$4,000. Finally, improve SG&A efficiencies by rightsizing marketing CAC to $1,000 per unit, sufficient level to maintain continuing growth, redesigning the sales and fulfillment processes to drive higher conversions and leverage corporate overhead. We plan to achieve these benchmarks over the next three, four years, but we will not stop there. We see the opportunity to grow further into the future and build scale and profitability for years to come. Thank you, Oded and Jeff. Again, I want to congratulate and thank all of Shift team members for a great 2021 and for all their hard work as we strive to deliver another fantastic year of performance in 2022. We're excited about the opportunities that are ahead of us in bringing Shift closer to being a long-term growth business that is self-funding its growth through strong profitability. With that, we are looking forward to your questions. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question- We have a lot of exciting news to cover, including our Q4 and 2021 results, our 2022 objectives, and finally some thoughts on our profitability model. Thank you for bearing with us as we walk you through these materials. Further details are available in our shareholder letter and new investor presentation on our IR website. Again, reminder, our first question. To ask a question, please press star one. Our first question comes from Zach Fadem with Wells Fargo. You may proceed with your question. Hi, this is Eric on for Zach. I was wondering if you can comment. You mentioned that Omicron was a headwind in January and February. If you can sort of quantify what that impact has been, and just how you're thinking about the cadence of unit growth over the course of the year, and so what are the drivers to get to there? Thank you. We don't have a kind of quantified number we can share today. We definitely can point to areas where it was a challenge. First, when Omicron started, we definitely felt that there was some concern among customers in terms of buying. There was some slowdown in sales when that was first announced. That was not significant, but somewhat, you know, impactful nonetheless. Then secondly, which was probably a bit a bigger topic, had to do with the fact that as Omicron cases grew, we were obviously suffering from that, as was everybody else. We had people out in reconditioning, we had people out in field operations, at the executive level as well across the entire org. The fact that we did not have everybody be able to work as they needed to impacted our ability to fulfill customer needs at times, as well as impacted our reconditioning kinda capabilities for a specific period of time, and also increased our cost a little bit because we had to go rely on more overtime. That was a definite kinda impact in January and early February. That's reflected in the guidance that we gave for the quarter. Thank you. Our next question comes from Brian Nagel with Oppenheimer. You may proceed with your question. Hi, good afternoon. Hi, Brian. My first question, you know, probably lump two together, just with respect to the acquisition that was announced today. I guess two parts. You know, one is maybe discuss the, you know, given your technology backgrounds, I mean, the kind of the build versus buy decision. Then secondly, just as far as this course of your business will ramp, you know, in following the acquisition. How should we think about, you know, that, you know, I guess essentially the size, you know, the size of this marketplace business versus the core used car business, and just the underlying economics of the business versus, you know, the business today. Great. I'll start and then I'll defer to Oded on the economics portion of the answer. To start with kind of build versus buy. You know, we've talked about wanting to do a marketplace for years. I think, Brian, you and I probably talked about that, you know, for the first time. Mm-hmm. We met in Florida a few years ago. It's always an issue of how do we get the capabilities in terms of people to do that work, in addition to all the core work that we have to do. We are fundamentally builders. You know, I've founded companies for 15 years of my life, but, and we like to build our own things, but, you know, we also have a lot of core work to do in our core business, and so devoting time to this has been a challenge. When we looked at our kinda roadmap for the long- term, it felt like it would be at least two years before we could build this ourselves, just given the totality of the work that we need to do across the entire business. Given the long-term model that we shared recently, I mean today, you can see kinda how much stuff we have to do on that front as well. This was very opportunistic in terms of how this all developed. I've known the CEO of FAIR for a little while now, and he came to us telling me what work they had done, and it was extremely impressive. They had spent 18 months building really great technology, which was very, very complementary to what we do and how we build things, without any disruption in having to run their day-to-day business because of just kind of how FAIR has developed. That was a really appealing proposition. You don't often have a situation where a bunch of great engineers and a bunch of great product people get to work on a product without having disruption and can build everything end-to-end in a really great way. So as we learn more about the technology, we became really excited about it and found the opportunity to be super interesting for us. The benefit of it is gonna allow us to accelerate the marketplace business by at least, you know, two years, right? We're gonna launch it in a kinda beta way this Q2, towards the end of the quarter, whereas alternatively this probably would have been a 2024 proposition in terms of when we could do it. The leverage on the business is extremely significant. We will expect to see over time leverage in marketing, right? Because we'll have more inventory, so conversions should improve. We will also be able to be more selective in what inventory we sell that we own because we'll be able to supplement that with inventory from the outside. The customer experience will improve, our GPU should improve, and our marketing costs should come down and conversion should improve. Overall, that's a really big plus. We've seen marketplaces work really well in other verticals, and you know, it's a serendipitous situation for us that Jeff, who joined Shift in October, had actually spent, you know, years building a marketplace at Walmart. While we hadn't planned on building a marketplace, his experience is obviously also super valuable here. With that, I'll turn to Oded to kind of walk through the unit economics part of your question. Thank you. The impact, financial impact on 2022 is immaterial. It's included in our guidance, but it had very little or no impact on it. When we think longer term, it is not included in the break-even model at this point. We need to have a little bit more experience with this business and see the ramp up in order to be able to assess how it impacts the longer term picture. In any case, we think it's gonna be a very good business for us, and probably the break-even point will be earlier than the core business. When you think about unit economics, you get benefit and revenue from F&I. also have a much lower cost structure in selling and marketing than the core business. Again, overall, we think that's a very good opportunity for us. That's great. Thank you very much. If I could just one follow-up question. Of course. I have for you. Just with respect to, you know, thanks for laying out the, you know, the breakeven, you know, the path towards, you know, breakeven today in today's call. How should we think about the funding needs of the business, you know, to get to that breakeven point? We feel very comfortable our liquidity position at this point. You know, we ended the year with nearly $200 million in the bank. When you think about the growth of the business, we primarily gonna fund inventory growth through our floor plan. As you've heard, we just signed a new floor plan facility in Q4 that doubled our capacity than before, and we think that can be scaled even higher as we move forward to satisfy inventory growth needs. That being said, we have to think about the future as well. We feel very good that 2022 we have enough sufficient liquidity to cover all of our needs. Going forward, we'll want to further strengthen our liquidity this year. It can take many different forms. We just issued debt. We can issue additional debt. It could be equity or whatever form that is acceptable to the company and to the market. Then finally, in the meantime, we're taking steps to be prudent stewards of cash, and we identified means to enhance our cash spend efficiency. Obviously, cash flow is a big focus for us. Brian, I'll just add to that, you know, when you look at last year and the excellence in the condition that we saw, coupled with the growth in GPU, both on the front end and the back end, as well as the rapid scaling that we saw last year and we'll continue to see this year, plus now a very clear path to profitability. We believe all those factors together are the right factors to attract new investors to Shift. We just attracted a new investor to Shift with SoftBank coming on, both as a debt and an equity investor, and we believe that others will come in the coming quarters as well. I appreciate it. Thank you. Congrats. Thank you. Thank you. Our next question comes from Rajat Gupta with JP Morgan. You may proceed with your question. Great. Thanks for taking the question. You know, just to follow up on the funding question. You know, I appreciate the fact that, you know, you will look at, you know, all these options, you know, further down the road. I mean, given we are in a still somewhat uncertain macro environment, you know, persistent inflation, you know, FAIRly high gas prices, you know, we could be in a pretty, you know, volatile market, you know, for a while, where, you know, the market might not be that accommodating. Why not consider an equity raise today? I mean, even though the stock has de-rated quite a bit, but why not consider something like that today in order to de-risk and allow you to, you know, focus even more on, you know, growing your competitive advantage? I have a follow-up. Thanks. Hi, Rajat. Thank you for the question. Like I said, we are always paying attention to opportunities on capital, and we'll continue to do that. We can't control what the market does. What we can control is our own behavior, and ensure that we execute really well. Obviously additional capital is something we will consider, and we will aim to add to our liquidity position this year. I don't think I can say when we will do that. That probably would not be appropriate. Got it. FAIR enough. On the full -year guidance, you know, for adjusted GPU, can you give us a sense of, you know, what you're assuming in terms of, you know, used car pricing environment? Clearly, the mix of your business has also changed in terms of the vehicles, but your guidance implies a pretty significant uptick in ASP versus last year and seemingly more consistent with where it is in the first quarter. Just curious, like what's your view on used car pricing? You know, what informs that adjusted GPU guidance? Thanks. Okay. Two parts. Let's start in pricing. At the end of the year and beginning of this year, we have seen our ASP at a very high level. Car prices have appreciated for the majority of 2021. At this point, we see some stability. Going forward, we expect pricing to be normalized as we've seen in the previous years, I don't know, 2018, 2019, where there was moderate depreciation throughout the market. Our ASP for 2022 is gonna be higher than 2021, but will probably peaked at the beginning of the year. As for GPU guidance, what we are saying is that for the year, we expect GPU to come in above last year's GPU, which was 21.6%. We believe that the strong performance is gonna come from two key areas. One is continuing improvement in F&I. Last year, in the second half of the year especially, we've seen dramatic improvement in F&I, and we think we can build on that. Reconditioning, which was the big story of the first half of last year, all the improvements we've seen, and George spoke about it as well. That is the basis for our guidance. Understood. Great. Thanks for the color. I'll jump back in queue. Thank you. Our next question comes from Seth Basham with Wedbush. You may proceed with your question. Thanks a lot, and good afternoon. My first question is related to the longer-term model, inclusive of the $700 you expect per GPU that you expect to capture from the captive finance opportunity. That's gonna take a FAIR amount of capital to build out, I assume. Now, when are you thinking about moving in that direction? Do you expect to build it or buy it? What kind of unit volume do you need to have to support it? Thanks for the question. At this point, we don't have all the factors to answer your question in detail, but I would say the following. Captive was always in our plan for the future. The question about captive is usually of scale because in order to finance the captive you have to be active in the ABS market and a repeat issuer. You need to have some kind of scale. You know, before we talked about a scale of at least a billion dollar in revenue. As you've seen from our guidance, we'll be able to get there by the end of this year. Which means that we can start planning and see the timing of when we're gonna launch it. We don't have specific plans of when and what form it's gonna take, but I can tell you one thing, that when we talk about the $3,800 GPU, it includes only $700 in GPU coming from the captive. If you look at our competitors and other possibilities, you know that you can basically double that F&I contribution. The premise here that we're gonna start slow and build it up from there. The good news is that it gives us opportunity to grow the GPU even above the $3,800 to $4,000 with additional captive money. Got it. FAIR enough. My second question is related to the acquisition of FAIR. First of all, can you disclose what you paid for it and how long you expect to recover the cost of that acquisition? And then relatedly, the economics that you referenced there, the third-party units, just to confirm, you expect only to be making revenue on the F&I portion of marketplace units, not on any other portions of the transaction? Thanks, Seth. This is George. Kind of a couple of things here. The total acquisition price is $15 million in cash and 2.5% equity. This is fully funded through a $20 million debt facility from SoftBank. The details about that debt facility are available in our shareholder letter, as far as the interest rate and so forth. The transaction is fully funded for Shift from that perspective. As far as kind of how we think about the unit economics of the business and what is possible here. You know, our approach to generally developing products is a test and learn approach, meaning we try various things. There's hypothesis that we go in with towards that particular point, and then we learn what works the best. We have, you know, I think a few approaches we're gonna experiment with, and then depending on what lands the best, we will be able to then pursue that as far as how we charge dealers for this. I think the critical thing to remember for us is that we're not looking to list every single dealer's car on our platform, right? If you think of, for example, Northern California today, we have something like 2,500 cars listed on our platform. So if we wanted marketplace to be 20% of that, you know, of those sales, we'd be adding about 500 dealer listings to our platform. Now, that would be a pretty significant increase in the total inventory in Northern California, but you only need about 10 dealers-20 dealers to get to 500 cars. This is an opportunity where we think dealers will have an exclusive opportunity to work with us, meaning it'll be hard to get in to be a partner, and we'll be able to get really good cars as a result, because I think demand will be higher than the amount of room that we can offer in the early days to dealers to list. We will probably, you know, experiment with charging a certain fee, and also potentially, you know, taking on the lion's share of F&I, as you and Oded have both mentioned. There'll be different experiments that we'll try out and see what lands the best. Thank you. Thank you. Our next question comes from Marvin Fong with BTIG. You may proceed with your question. Great. Good afternoon. Thanks for taking my questions. First one, thought maybe we'd talk about the customer acquisition cost in your model and your view on getting CAC down to $1,000. You know, I see the slide on your presentation about how some of your peers have you know spent more on their brand spends. Just curious on you know your confidence in getting to that $1,000. I mean, I think one of the peers you cited is still in the high almost at $2,000, even though they've spent you know triple-digit millions on brand marketing. Maybe just elaborate a little further on your confidence in getting CAC down to about $1,000 per unit. We think that there's a few things to kind of be focused on here. Number one is that we are a regional kind of play, right? We are approaching things from a regional perspective. We might buy ads nationally at times, but that's for the purposes of reaching customers in the regions where we have operations. We're not trying to build our brand awareness everywhere. What we care about is places where we have operations. That allows us, I think, to have a significant advantage over our peers who are doing something more on a national level, because you can capture a lot more market share in the regions where you operate, and through that then have greater word of mouth, which really drives down your pure CAC. That's number one. Secondly, we, you know, also are heavily focused on SEO, which helps in this regard as well, and we're really happy with how those efforts are going, and we think that'll really support driving CAC down as well. Then thirdly, a really crucial component of driving down CAC is conversion. The better your conversion, the lower your CAC, because today, you know, people who come to Shift might not convert, and then we're spending money marketing to them but not selling to them. That is why, as Jeff spoke in prepared remarks, driving conversion up, both in on the site and with our sales team, is a critical initiative for us this year and frankly will continue to be for a long time. While this is not in the model, we believe that the marketplace business will actually really help us in that regard by increasing conversion across the entire funnel. Lastly, you know, we do know that one of our peers is at about $1,200 in CAC even though they're going full on national in that regard. We don't think that $1,000 is, you know, that much lower than where that peer already is. We think it's a very reasonable number. I think frankly, you know, internally a lot of folks believe that ultimately it can be a lot better than $1,000, but we want it to be very realistic in the numbers that we put forward for the next few years. That's kind of, I believe, the full answer. If Oded wants to add anything, I'll defer to him. No. We think that in the long- term, the CAC can be significantly lower than $1000, but we kept it $1000 in the break-even model because we wanted to emphasize that we are a growth company. We're gonna continue to grow, and in order to grow aggressively, you need to invest in marketing. That's the reason. Great. Thanks. Thanks for that. Maybe a follow-up question. Just, I imagine you're still working out some details on the acquisition, but just, you know, in terms of sort of you know, the inventory you'll be bringing on from the dealers and then curating that. I mean, will there be a conscious effort to sort of, you know, keep the inventory that you're listing from dealers kind of distinctive from the type of vehicles you guys offer? Or will we expect to kind of like find, you know, the same make and model and years? How are you planning to manage that? For sure we're still gonna, we're still kind of working on this, right? We've done a lot of thinking about how to approach the marketplace, but as I said in an earlier question, we will test and learn our way into what is the best way to do that. One of the things we're excited about with FAIR is that that team actually has really strong relationships with the dealer community. They had hundreds of dealers selling through FAIR in the first incarnation of FAIR, which is not the marketplace business. It was a different business. Nonetheless, those relationships are really helpful, and have a team internally that you know has worked with these dealers for a long time. That's really valuable to us, 'cause we don't have to build that ourselves. Now we can rely on that team to help us, you know, bring that forward. They've already actually signed up a lot of customers on the dealer side to be in the alpha test. That'll be super helpful to us as well. Generally, if you look at other marketplace businesses, you wanna start slow and then expand, right? Today something like 70% of what Amazon sells is from the marketplace, even though in the listings total it's actually much higher than 70%. That was not the case 10 or 15 years ago. Walmart as well, you know, has a significant marketplace business today, but had virtually no marketplace business, you know, five or six years ago. You wanna start slow and then over time grow it. I think that in a reasonable way, you know, 10%-20% over the next few years of marketplace listings will be a significant value add to Shift and will really help with conversion and customer experience. You know, if we can do more, great, but for now we'll kind of start in a reasonable place where we can manage things well. Great. Thanks so much. Let me just. Oh. Just add something about inventory. You know, that being a marketplace business, we would not be purchasing the inventory, so from a capital demand or need to finance it, this is very light. Right. Understood. Thanks, Oded and George. Thank you. Thank you. Our next question comes from Naved Khan with Truist Securities. You may proceed with your question. Yeah. Thanks a lot. Two questions. One on the guidance for the Q1 GPU. If I just look at that, compare that with where we were in fourth quarter, does the GPU number reflect impact from Omicron, or are there other factors at play that's gonna lead to a sequential decline? Then on your marketing spend, how are you thinking about spending on brand versus performance channels through the course of this year? Thanks for the question. Let me start talking about GPU and then George can talk about the marketing question. We're very excited about what's going on in Q1 as we are seeing and guided to double our revenue over last year. We're also very excited about the GPU guidance we provided for the year. We're gonna be higher than last year, and when you think of it, last year was aided to some degree by the very strong market dynamics. Going above that is an accomplishment. We're gonna do that with improving F&I and reconditioning, as we said before. Well, specifically with Q1 guidance, there are a couple of important factors to mention. One is that GPU is seasonal. It has seasonal variances, where historically Q2 and Q3 are the highest quarter for us, while Q4, with all the competition for the customer's dollar, with everything going on in the holiday season, is lower, and then usually there is some hangover into Q1. Historically, Q4 and Q1 were the lowest GPU quarters. Specifically again to Q1, as you mentioned, there was an impact of the Omicron breakout on the reconditioning and that clearly is gonna hurt us in Q1. However, that was resolved by the February timeframe, end of February. Our capacity is strong, and it's not gonna have any impact on future quarters. We actually look forward to strong performance in future quarters. Finally, in Q4, we made a great effort to replenish the inventory due to our strong sales in the quarter. Now, at times, we bought some of these cars during a period where pricing was still going up and then selling them in Q1, a time where price is flat or maybe even a little bit lower. So that put additional pressure on Q1, but again, we feel very strong about our guidance for the year. With regard to marketing and kind of mix of digital and brand, I don't think we can speak to specifically what we might do in coming quarters, but we can speak in a more general way that we will continue to invest in brand. We might at times slow that down and then accelerate it other times. There are a lot of factors at play in how you make those decisions. It's sometimes good to give it a rest for a little bit. The creative that you're using could get old, and you might wanna introduce new creative, in which case you might wanna take some time between the two creatives, while in doing a heavy brand. We're trying to take the best practices we can in that regard and ensure that to have success. Obviously we'll continue to use digital marketing, you know, as we have in the past, in order to do the things that we need to do. The brand investment, as we've talked in the past, is more for the long -term. We feel really good about our ability to, over the next several years, drive towards 50% aided brand awareness with the type of spend that we estimated in the investor presentation, which is obviously significantly lower than our peers that have done so far. We think that's a really powerful kind of tool that we have for the medium term to both drive aided awareness up, which then will improve our conversions across the funnel in terms of driving customers to Shift and then converting those customers and what we sell cars for in terms of price to market. I've spoken, you know, in the past about how even 1% increase in price to market is a $250 additional gross profit improvement on the front end. You know, our price to market today is okay, but we know that we can do a lot better. We've seen others increase their price to market significantly with having a better awareness, and so we think we'll accomplish that as well. We think the investment is very much worthwhile, but we'll probably manage it in a careful way, both not only this year but in the years to come. Got it. Thank you, George. Thank you, Oded. Thank you. Thank you. Our next question comes from Tania Anderson with William Blair. You may proceed with your question. Hi. Good afternoon. I just have a follow-up on the FAIR Technologies acquisition. What will be the key draw for dealers to list with Shift versus other platforms? Again, our model envisions us fully closing the transaction, right? We're not just a listing site, we're actually a full purchase transaction, and then we offer fulfillment through our unique logistics network that we maintain ourselves in each region where we operate, which is obviously a huge differentiator from anybody else because no one else has this kind of regional local network in logistics that we offer. The dealers I think are gonna see a ton of different benefits. Number one, they'll have exposure to new customers, especially within regions. For example, think of a dealer in, say, San Jose, California. Today, that dealer is attracting customers within 10-15 miles of their location. People who live in Marin County, for example, are not going to want to commute that far. With our model with local logistics, you can actually expose a customer in Marin County to that vehicle and enable fulfillment for the customer in, you know, at their home, and that's a huge advantage of new customers coming through. With new customer exposure, then you hopefully see an increase in time to sell, which is probably the single most valuable thing for the dealer because they have cost of parking and they have cost of forefront capital, which limits their ability to, you know, kinda grow and grow as a business and have more gross profit. That's like this one big bucket of benefit. The second bucket of benefit is the fact that they don't have to have a finance manager do that transaction, and they don't have to have a salesperson do that transaction as well, which saves on costs. Again, to go back to the point I made earlier, we're not looking to list every single dealer's inventory on Shift. We're looking to have select dealers working with us who will increase our inventory, but will be kinda getting something very special in their exposure to Shift. Okay. Just to follow up, I appreciate that you really aren't ready to talk about the captive finance, but what we are wondering is if this acquisition versus your internal planning accelerates your movement to doing that in-house at all direct lending platform, like some capability it has or no? Yeah. Look, I'll speak to it a little bit more since Oded spoke to about captive before. I've been looking forward to doing captive ever since I started Shift, right? Like, I got into this business for the purpose of building a captive finance business. We learned along the way that you have to have a lot more scale before you can build a captive business for all the reasons Oded described related to the ABS market that scaled roughly at $1 billion in revenue. We're kind of getting to that level, and I'm super excited about it. We have in the past done a lot of the internal work to be able to enable a captive business. You know, we feel really confident, I believe, to be able to restart that process and kind of build out a captive business in-house. Obviously, if we are able to sell more cars with the help of a marketplace model than we had anticipated selling with the core Shift on inventory, that will only help the captive business. Because captive really does require frequency of issuance in the ABS market. If we, you know, we're envisioning 100,000 units in a few years, and now with the marketplace, we end up doing 20,000 unit or 30,000 units more, that'll just be a greater opportunity for captive. We certainly, you know, are thinking about that benefit. We have not provided kind of any mid-term or long-term guidance for the marketplace to be very clear. We need to launch it first and have a few quarters of time with the marketplace to be able to do that. That is a good hypothesis to have that with, you know, more volume from the marketplace, captive will be an easier model to build out 'cause we will be able to be more selective in what cars we sell for the captive. Okay. Thank you. Thank you. Our next question comes from Mike Grondahl with Northland Securities. You may proceed with your question. Hi, guys. This is Owen on for Mike. Just two quick ones. What percentage of vehicles are sourced directly from customers during the quarter? What was the customer acquisition cost for the quarter? I might have missed that on the shareholder letter. 94% of all vehicles purchased came from our customers, which is consistent with our, you know, the past few quarters. I'm sorry, what was the second question? Just overall customer acquisition costs for the quarter. I don't have it. There we go. It was just under $2,000. It was actually $1,988 to be precise. Great. Thank you. Thank you. Our next question comes from Dan Ives with Cantor Fitzgerald. You may proceed with your question. Hey, guys. Thanks for taking my questions, and I appreciate a bit more color around your path to profitability. Looking at the model, total SG&A expense per e-commerce unit has increased every year since 2017, which I would assume is largely attributable to new market expansion. Can you give us any color, quantitative color around this market cohorts from an SG&A perspective? As a follow-up, you know, you're in three of the top five markets in The U.S., and you mentioned you have a significant opportunity to scale in California, your own market in the Pacific Northwest. If you were to cut market expansion entirely, what would this do to your operating expense per unit profile, time to reach scale to expand into captive finance or your timeline to profitability? I guess really what I'm trying to get at here is, you know, the market looks like it's pricing in higher odds of slipping into a recession. If you needed to achieve break-even cash flow quickly, how would you do it, and what investment would this take? Thanks. Thanks for the question. When we talked about the path to break even, we always note that whatever we present to you is a fully growth model where we wanna end up at break even and then some and enable us to continue to grow for years to come. However, there is always an alternative to focus more on cash preservation and maybe even get closer to the break-even level. You do that by, as you mentioned, you can moderate the growth rate into new markets because new markets, not necessarily capital investment, but you know, between staffing and marketing can be expensive. Also focus on SG&A efficiencies and improvement. I have to say that for 2022, SG&A is top of mind for us. If you think about 2021 and before, I mean, scale was important, and we really grew our GPU in quite a significant way. This year, we are focusing on how to improve SG&A through product technology, not just reliant on people. We think that's gonna have implications on our model for this year and also for the future. That's an important part in our path to profitability. When you look at our slides, you see that there is continuing improvement on the SG&A side as we go forward. The same with marketing. You know, again, this is a growth plan. If we wanted to sacrifice some of the growth for the purpose of breaking even earlier, we can do that by moderating our marketing expense, no question about that. Okay. You know, I know Carvana has broken out kind of their market cohorts, which is similar to. I mean, let's just take marketing expense similar, you know, I think they were original cohorts in their 2018 analyst day deck were at, you know, $440 per e-commerce unit on CAC. In 2017, yours were $580. Should we kinda be thinking about, you know, your CAC from your older cohorts in that kind of mid hundred dollar range, you know, $500 around there? I can't speak to specific numbers in marketing, and I think it is important to note that, you know, our brand marketing is much newer in its time, meaning Carvana started doing brand marketing much earlier, and by the time they shared cohort data, it had been a few years of them doing it. We haven't done that yet. I think it's an important kind of point there. We're probably, you know, in grand total spending more right now than, you know, because we're catching up versus kind of had we started a long time ago. You know, we definitely do see better unit economics in our most mature markets, and there's no question about that, and that's true across the entire business. I also do wanna say, like, we've not been in the business of launching many markets at once, which is something you noted as well. The sharing cohort data is a little bit harder for us to do because we only have these kind of few regions that we've launched. I think, you know, in the future, as Texas markets start to mature, we'll be in a better position to be able to share the kind of cohort analysis that you're asking for. Okay. Thank you. It'd be super helpful. I appreciate the color. Thanks, guys. Thank you. Our next question comes from Michael Baker with D.A. Davidson. You may proceed with your question. Okay, thanks. Two questions. Just following up on, you know, why dealers would wanna list on your marketplace because there are, you know, a lot of other marketplaces out there and more growing. We're actually even hearing it's pretty competitive in the sense that a lot of dealers are actually selling cars directly to some of your competitors. For instance, we think CarMax is out there buying cars directly from dealers. How competitive. Just to follow up on that question, how competitive do you think it's going to get to get dealers to list to you? Then, second question, you've talked about now a path to profitability of three to four years. Has that been moved forward because of this acquisition, or is it gonna take longer to get there 'cause this acquisition might be dilutive in the short term? Just, you know, how does that 3-4 years compare to what you may have been thinking, you know, six months ago? Let me take the first question. Again, to say what I said earlier, we don't need every single dealer or anywhere close to every single dealer listing with us. Since we're gonna be a full transaction marketplace, and we want marketplace cars to be a reasonable 10%, 20%, 30% of our total cars listed in a given region, we're not talking about that many dealers that have to be on our marketplace. Right now, we have about 2,500 cars listed in Northern California. If we wanted to add 500 dealer cars to that'll be about 20% growth in our inventory, which is very significant. We would need probably, you know, 10 dealers-20 dealers at most to list with us when there are hundreds of dealers in this region that we could work with. One of the kind of things I always tell, like one of the very famous German brands has 11 stores in the Bay Area. We probably only want one or two of those stores on our platform, not everybody. Because we want to be able to increase the footprint of that store in a significant way across the entirety of the Bay Area. If you had all of them, that would not be beneficial. Secondly, kinda on that point, we are unique of the e-commerce sites in that we sell a much fuller range of cars in terms of age than our peers do. There is a whole segment of kind of independent dealers out there that mostly sell cars that are 6+ years old. Other online platforms don't really touch 8+ year old cars. For that cohort of dealerships, Shift is one of the few places where they can list with. The reason being that that's much more of a local regional approach versus shipping nationally. It doesn't make sense to ship a $10,000 or $12,000 or even a $15,000 car internationally given the cost. Our model is very unique in that regard, and I think that'll be an advantage for that more independent dealership cohort to be listing with Shift. I'm sure there'll, you know, in all these things there's competition. As we've seen, for example, with Amazon and Walmart, right? Like everyone is listing with Amazon, and then a lot of the same folks are also listing with Walmart, but there's plenty of room for more than one successful marketplace, and I think the same thing will be true with automotive as well. I will turn to Oded for the second question. We talked a little bit about the economics of the marketplace. No financial impact on 2022. Then, going forward, it depends how fast we ramp it up. Small initially and then bigger with starting to contribute to our bottom line before the core business, as we mentioned. I think your other question had to do with, you know, why are we sharing it now and not six months ago? We just ended our first full- year as a public company. We wanted to see the results for 2021 and have some visibility into 2022. We liked what we saw so far, so we thought this was a good time to share with you how we feel about the future, both, you know, the path to break even and then beyond. Last point to kinda emphasize again, the model that we've put forward does not include the marketplace at all in the outer years. You know, as we launch the marketplace and kinda see how it's scaling, then we would need to update that kind of with the marketplace as well. We think there'll be a lot of synergies, as I discussed earlier, in marketing, et cetera. The model you have out there is a standalone Shift core business model only. Okay. Okay. Just a quick correction. I think I used the word no impact on 2022. It's the impact is in the P&L. I can't be sure that it's gonna be exactly zero. Okay. Thank you. Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to George Arison for any closing remarks. Well, thank you, everybody, for joining the call, and we look forward to talking to you in the coming days further. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.