Good morning, and thank you for standing by. Welcome to Vroom's Third- Quarter 2021 Earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Joining us on the call today are Paul Hennessy, Chief Executive Officer; and Bob Krakowiak, Chief Financial Officer. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate website at ir.vroom.com. The third quarter earnings release and earnings presentation are also posted to the IR website. Before we begin, please note that the discussion today includes forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements about Vroom's operations and future financial performance. These and other forward-looking statements are subject to a number of risks, uncertainties and other important factors that may cause actual results to differ materially from those in such statements. We direct you to the company's most recent SEC filings, including the Risk Factors section of Vroom's most recent Form 10-K for the year ended December 31st, 2020, as updated by our quarterly report on Form 10-Q for the three months ended September 30, 2021 for additional discussion of factors that could cause actual results to differ materially from those in the forward-looking statements. Please note further that today's discussion, including the forward-looking statements, speaks only as of the date of this call, and Vroom assumes no obligation to update such statements based upon future developments or otherwise. The company may also discuss certain non-GAAP financial measures during today's call. You can find a presentation of the most directly comparable GAAP measures and a reconciliation of those measures in the third quarter earnings press release. I'll now hand the conference over to your first speaker today, Paul Hennessy, Chief Executive Officer. The floor is yours. Thank you, and welcome everyone to Vroom's third quarter earnings call. Today, Bob and I will walk you through a presentation reviewing our third quarter performance and provide an updated outlook on the balance of this year. Before I dive in, I'd like to thank our employees and board members for their incredible efforts this quarter as we build an outstanding customer-centric company. I'd also like to thank our investors for their ongoing support as we scale our business. Let's start on slide three. I wanted to take a minute to formally introduce our new Chief Financial Officer, Bob Krakowiak. While many of you have heard from Bob on our United Auto Credit Corporation or UACC acquisition call, this is his first time joining us for earnings. He's been with us for two months now, and his experience and guidance have already been a tremendous asset for Vroom. Bob joined us from Stoneridge Corporation, a designer and manufacturer of electronic systems for the automotive industry, where he served as CFO for over five years. Previously, he served in finance and investor relations leadership roles at Visteon, Owens Corning, and Kmart Corporation. I'm thrilled to have Bob on the team. His seasoned track record of results-driven leadership will help propel Vroom to the next level. Let's turn to slide four. We are proud of our performance during the third quarter. We drove triple-digit year-over-year e-commerce unit growth as we ramped output across the business to keep pace with record demand. While we are slightly light of our guidance on e-commerce units, we feel good about taking a disciplined approach to our acquisitions, pricing, and supply chain. Our e-commerce gross profit per unit or GPPU came in well ahead of our guidance as we preserved vehicle margins and expanded product margins. We delivered strong results on the expense side as well, coming in better than our initial expectations while still investing in our long-term objectives. We're making progress on our strategic initiatives. As we announced last month, we entered into an agreement to acquire UACC. With UACC in our corner, we'll be able to build out a captive finance business commencing in 2022, driving greater profitability and expanding our reach to consumers. We are on track to exceed our key 2021 supply chain targets. We completed our 2021 rollouts of last mile hubs ahead of our expectations, reaching over 40% of our customers during the third quarter. Additionally, we grew consumer sourcing to a record high of 81% of our vehicles sold during the quarter. Looking ahead, we are bullish about the fundamentals of the underlying business, and we'll continue to take a disciplined, sustainable approach to our unit targets. We'll talk more about our outlook later in the presentation. Now on slide five, I'm going to go through a few of our e-commerce highlights. E-commerce units grew 123% year-over-year to 19,683 units as we capitalize on marketing investments and increased our listed inventory levels in a high demand environment. Our e-commerce revenue growth outpaced our units as average selling prices accelerated through the quarter, which we attribute mainly to elevated vehicle prices in the broader market. E-commerce gross profit per unit increased 17% year-over-year to $2,560. We hit a record high in product gross profit through higher attachment rates while our vehicle GPPU slightly increased. We'll get further into GPPU puts and takes later in the presentation. Let's go deeper into unit trends on slide six. As we look across our business holistically, we like to think about total e-commerce transactions. This means units sold plus units sourced from consumers. We've experienced tremendous growth in total transactions year to date in excess of 200% as we execute our consumer sourcing initiatives and scale our selling and processing capabilities. As you can imagine, our consumer sourcing programs has been a key driver of growth for our transactions. In the third quarter, we sourced 81% of retail units sold directly from consumers, nearly triple our rate in the third quarter of last year, and up significantly from 65% in the prior quarter. Our competitive algorithm-based pricing methods make us a compelling option for consumers wishing to sell their vehicles. Our Sell Us Your Car and other marketing efforts have also catalyzed seller demand for our model in a favorable market environment. We amplified marketing this quarter with increased investments in national campaigns. As a result, we achieved a record high in website visitation with over 2.2 million average monthly unique visitors in the third quarter, up 28% compared to the prior quarter. Turning to slide seven, as we announced previously, we entered into an agreement to acquire UACC, expecting to close late this year or early next year. We expect our business to reap several benefits from this acquisition. First and foremost, UACC, combined with Vroom, will allow us to build captive finance capabilities, increasing our product gross profit opportunity as we capture more economics of the transaction. We also expect scale benefits and an improved conversion rate. Currently, we have significant potential with lower credit score consumers who make up over half of the credit applications we receive. The acquisition of UACC will allow us to increase our reach across the entire consumer credit spectrum. Integration planning is well underway. Once the acquisition is complete, we expect to begin integrating our back-end systems and processes in the first half of 2022. In the second half of the year, we'll scale e-commerce loan originations as we begin to develop UACC into an integrated captive finance operation. We remain committed to an asset-light funding strategy for our direct-to-consumer lending business, and we'll provide more specifics on the combined opportunity of Vroom and UACC after the transaction closes. Back to our current operations on slide eight. I'm proud of our logistics accomplishments this year. Our rollout of our Last Mile program continues. We opened our 30th Last Mile hub in the third quarter, achieving our annual target for 2021 ahead of schedule. We also accelerated deliveries with our own Last Mile experience to 41% of e-commerce deliveries, meaningfully above our 26% last mile delivery rate achieved in the second quarter. As we head into the fourth quarter, we are already nearing our 2021 exit run rate target of 50%. Our Last Mile program allows us to deliver a superior customer experience and paves the way to better unit economics by improving delivery efficiency. In addition, we've also made further investments in our line haul program, adding new trucks and drivers to our network this quarter. I would like to point out that we are currently experiencing reconditioning constraints due to labor shortages and historically high demand levels at our third-party reconditioning centers. We view this as a transitory issue. While we continue to like the optionality of third-party sites and will continue to work with our partners to expand capacity as part of our hybrid approach, we acknowledge the increasingly competitive environment for reconditioning capacity. Growing interest in selling cars online will also require Vroom to invest in selective, dedicated reconditioning capacity. Our hybrid approach is the best strategy to scale for the future. On slide nine is an update on our sales support and technology. In the near term, we continue to invest in people to scale our business and improve our processes. Our ability to process higher volumes of transactions on the support side has improved significantly since the beginning of the year as we work towards providing a touchless experience for both buying and selling vehicles. Going forward, our investments today will move us towards a seamless end-to-end e-commerce experience as well as driving improved scale economics. Stepping back, I wanna recap the themes for this quarter on slide 10. We had strong year-over-year e-commerce unit growth. We achieved exceptional gross profit per unit results versus our guidance. We advanced our supply chain strategy and kick-started plans to build a captive finance arm for our business in 2022. In the near term, we continue to navigate through the current supply constrained environment to continue to grow our business. Now I'll hand it over to Bob to walk you through the financials of the quarter and our outlook. Bob? Thanks, Paul. It's great to be a member of the pit crew at Vroom and to join everyone for the third quarter earnings call. I would like to begin on slide 12 with our financial highlights. We had a strong quarter as we drove healthy year-over-year unit growth and outperformed our expectations for the quarter on revenue, e-commerce gross profit per unit, total gross profit, and adjusted EBITDA. Total revenues of $897 million increased nearly 180% year-over-year and 18% sequentially, coming in above the high end of our guidance. Our overall growth was principally driven by growth in retail units. Higher than expected average selling prices further drove the outperformance relative to our expectations. Third quarter e-commerce units of 19,683 grew 123% year-over-year and 8% quarter-over-quarter. We experienced healthy growth for the quarter as consumer demand remains high for used vehicles and as we delivered strong execution in a healthy demand environment. During the quarter, continued focus on our strategic objectives drove increased listed inventory and amplified marketing. Our e-commerce GPPU hit $2,560, up 17% year-over-year on meaningfully higher product GPPU and slightly increased vehicle GPPU. I'll go further into the drivers of e-commerce units and e-commerce performance on the next slide. Total gross profit for the quarter of $58 million increased 128% year-over-year and came in ahead of our expectations. This was driven primarily by the expansion of e-commerce GPPU and higher unit volumes. As expected, our per unit profitability contracted versus the second quarter as we experienced transient macro headwinds to sales margins. Despite the headwinds, we surpassed our gross profit guidance for the quarter, thanks to better than anticipated performance across all three lines of our business. EBITDA, which was adjusted for acquisition costs related to our announced UACC transaction, came in at a $87 million loss versus a $36 million loss in the prior year. This was also ahead of our expectations for the quarter. Third quarter adjusted loss per share of $0.70 was better than our guidance due to improved revenues, gross profit, and expense levels. At the bottom of page 12, you can see the primary highlights of our fourth quarter outlook. For more details regarding our fourth quarter guidance, please see our earnings press release. We're expecting 20,000-20,500 e-commerce units in the fourth quarter. This implies 84% year-over-year growth at the midpoint. As Paul mentioned, we are experiencing transitory events that are reducing throughput in our supply chain. As a result of these temporary issues, we anticipate total revenues of $865 million-$900 million, a year-over-year midpoint increase of 117%, primarily driven by unit growth and current elevated average selling prices. We expect e-commerce gross profit per unit in the range of $2,100-$2,300. This implies 21% year-over-year growth at the midpoint. We are guiding to a total gross profit of $50 million-$58 million, primarily driven by our annual growth in e-commerce units and GPPU. We remain focused on achieving over 200% gross profit growth for 2021. Slide 13 provides a summary of our third quarter e-commerce performance. As we've discussed previously on today's call, our e-commerce units grew 123% year-over-year, but came in slightly below our expectations. E-commerce revenues hit $702 million, an increase of 216% year-over-year, driven by strong unit growth and higher average selling prices. Our third quarter e-commerce average selling price of approximately $34,400 expanded significantly year-over-year and was higher than our guided range as we continue to improve our pricing algorithm in a historically strong vehicle pricing market. E-commerce vehicle GPPU of $1,315 increased slightly from $1,302 in the prior year. During the quarter, we continued to deliver improved productivity on reconditioning costs, which was partially offset by lower sales margins as the cost to acquire vehicles in the current environment were higher than the prior year. E-commerce product GPPU of $1,245 increased $359 or 41% from $886 a year ago and also showed quarter-over-quarter gains. Our higher product profitability was primarily driven by higher attachment rates as well as higher average loan sizes due to higher e-commerce average selling prices. Moving to the other segments on slide 14. Wholesale units of 9,760 grew 58% year-over-year. Wholesale gross profit per unit of $215 contracted year-over-year as expected and came in ahead of our guidance of $50-$100. As our pricing strategies kept pace with increasing prices in the used vehicle market through the quarter, we were able to book higher gross profit on wholesale units than we originally anticipated. We sold 1,749 TDA units in the third quarter, growing 20% year-over-year and surpassing our expectations. We saw positive customer response to our inventory selection improvements for TDA. TDA GPPU also increased to $2,175 for the quarter, up $347 over the prior year and well ahead of our guidance range of $1,650-$1,750. TDA GPPU benefited from lower per unit sourcing costs year-over-year, as well as higher product profit due to higher average loan balances. Turning to slide 15. I would like to provide some additional color on our SG&A performance. On an absolute spend basis, our SG&A increased as we continued to make key strategic investments in staffing and new technology to keep pace with demand, as Paul discussed earlier in his comments. The chart on slide 15 shows our SG&A spend per total e-commerce transaction year-to-date for 2021 versus 2020. For 2020, our total SG&A spend per total e-commerce transaction was $5,401. Year-over-year increases in logistics rate inflation and expenses related to the announcement of the acquisition of UACC added $169 per unit on a year-to-date basis. Our total e-commerce transactions, which we define as e-commerce vehicle purchases plus e-commerce units sold, has more than tripled year to date versus 2020. Purchases include trade-ins and straight buys and exclude auction-sourced units. Despite the increase in logistics and transaction expenses, we are seeing the benefit of leveraging our scale by reducing per unit costs by $1,617 year over year. On a net basis, this benefit resulted in a 27% reduction to our year-to-date SG&A per total e-commerce transaction versus 2020. In closing on slide 16, I am pleased with our performance during the third quarter. We are working tirelessly to continue executing our growth strategy. Our fourth quarter guidance continues our track record of strong year-over-year growth, and we are looking forward to closing the UACC acquisition and welcoming their team as partners in the future growth of our company. We are excited to share with you the transformational aspect of the UACC acquisition, and will do so after the transaction closes late this year or early in 2022. Thank you for your time, everyone. It is great to be at Vroom. With that, Paul and I are ready for your questions. Our first question comes from the line of Zach Fadem of Wells Fargo. Your line is open. Hey, good morning. If I take your current output of about 1,500 e-com units per week, it suggests you're running at about 52% of your reconditioning capacity. I realize there are some near-term labor constraints that are bogging you down today. Can you talk about what needs to happen to unlock that full capacity and whether it's reasonable for us to expect you to break through that 60% utilization level in the upcoming quarters? Yeah, thanks, Zach. I'll take that one. Yeah, what's required to unlock that capacity is doing what we've been doing, which is, you know, we've been adding additional facilities. We've been adding additional headcount to those facilities, and we've been adding additional headcount to our own facilities. Then when you think about that's the near-term outlook. We continue to work with our third-party partners to scale our reconditioning capacity. We've been absolutely successful in doing that throughout the year, even quarter to quarter, growing that express capacity from 2,800 units to 3,200 units. So it's, Zach, it's really doing what we've been doing. Where we see a challenge in our business, we lean in on that challenge, you know, and we fix the problem. We see this again as a transitory short-term issue, not a long-term issue. Yeah, Zach, one thing I just want to add to that is to Paul's comment. You know, what we're seeing is there's a significant piece of this that is just it's a labor issue with our partners at the third-party locations. You know, to the extent that we're working hard, as Paul mentioned, in our own facilities and partnering with our third-party partners to do everything that we can to get the staffing levels correct. So that's one key driver. Paul had mentioned in his comments as well, just the current high demand situation that we're facing nationally is driving a very competitive situation in the reconditioning centers at this point in time as well. Got it. You know, I like the way that you guys framed the total e-com units, both buys and sells. I'm curious if you could talk about, you know, with 80% of cars now sourced from customers in Q3, how you're managing through the constraints on resources and your infrastructure, just given that sharp rise in customer sourcing. How you think about the trade-offs between the GPPU benefits of higher customer sourcing versus the added SG&A and capacity constraints? You know, to what extent do you think this pivot is accretive versus dilutive? Absolutely, Zach. Thanks for the question. The way that we look at it is it's basically a dial for us. Right now, with you know, with the current situation in the auction market, you have a lot of people showing up for auctions, lots of bids on vehicles, extremely price competitive. Really the trade-off that you do when you do a transaction like this, when you buy from a consumer, generally speaking, you incur a higher inbound logistics into the recon centers, you get a better vehicle, but you also spend some additional SG&A as well. Really the trade-off is better vehicle versus the additional cost from an SG&A perspective and from an inbound logistics perspective. We're constantly looking at that and making the determination in terms of what's the right trade-off. Right now, with the current auction market, you know, the trade-off is definitely to our benefit to, you know, to move the dial towards the consumer sourcing. We'll continue to tweak that and adjust that based on current market conditions as they, you know, develop over time. Got it. Thanks for the time, guys. Yep. Thank you, Zach. Thanks for the questions. Thank you. Our next question comes from Rajat Gupta of JP Morgan. Please go ahead. Great. Thanks for taking the question. Just trying to follow up, you know, on the reconditioning question. You know, the dedicated centers that you're adding, could you give us a sense of, you know, the timing, the capacity, and just the cash needs for those dedicated centers, you know, how those ramp? I have a follow-up. Thanks. Yep. Thank you, Rajat. Yeah, I'll take that one. You know, first and foremost, you know, I signaled in our second quarter earnings that we would start to contemplate this. Look, we're going to be incredibly thoughtful about where we're putting these reconditioning centers. We'll obviously be matching supply opportunity and demand opportunity so that they are super strategic in our location, in the size and scale, in their ability to coordinate with our logistics requirements. We're going to be thoughtful on that. When I think about the investment thesis, you know, the language that we've been using is, you know, think six of 60 locations. Our hybrid approach, our asset-light approach still rules the day here so that we're aligning the needs of the business and being judicious in our capital deployment. We think of these as $100 million, maybe as much as $150 million in total CapEx, not $2 billion. We don't see this to be 60 Vroom reconditioning centers. Again, we think, call it half a dozen or so in all of the places that you might expect would be strategic areas that have high demand and high supply. Yeah, Raj, I just want to add to that. Just to Paul's comments. We really view this as just responsible capacity planning for the company. Where we have you know, in our high-demand areas, you know, it's going to make a lot of sense for us to make you know, to make some reasonable investments to support the company. Because what we'll have is we'll be able to have very stable operations in the reconditioning centers. What stable operations mean, it means higher throughput and it means lower cost. It basically addresses more volume to our customers and more lower cost volume, and that's better for our shareholders as well. Understood. Thanks for the color there. Yeah, I just had a question on GPU or e-commerce GPU in particular. For the fourth quarter, you're guiding to a roughly, you know, $350 drop at midpoint. Presumably that's all on the retail side. Is that primarily baking in some seasonality or maybe even higher reconditioning and inbound logistics? Or, you know, is there some conservatism around, you know, the direction of used vehicle pricing for the remainder of the quarter? You know, just trying to get a better sense of that bridge from 3Q to 4Q GPU, particularly given, like, used vehicle pricing still remains pretty elevated here into October and November. Thanks. Yeah, Raj, thanks for the question. Most of the delta that we're seeing between the third quarter and the fourth quarter with respect to the GPU is really being driven by additional costs as a result of reconditioning and logistics. That's really what you're seeing in 3Q-4Q. Got it. Great. Thanks for the color. I'll jump back. Well, just let me be very clear about it. Reconditioning and then actually shipping the vehicles as well. Inbound and outbound, just, you know, inflation and what we're seeing in terms of rate inflation and, you know, just on a year-over-year basis and what the trend looks like. Understood. That's clear. Thanks. I'll jump back in queue. Thank you. Thank you. Thank you. Our next question comes from Sharon Zackfia of William Blair. Your question, please. Hi. Good morning. A couple of questions. I guess first it would be helpful to get an update on kind of how the recon cost is trending at your third-party partners versus your owned facility, particularly as you contemplate opening more owned facilities. Secondarily, I guess, you know, it's obviously difficult to control what's going on with your third-party partners, but, you know, where is the staffing level now versus where you would ideally want it to be? How confident are you in kind of those parties getting the staffing up to the levels you need in order to prepare for tax refund season? Great. I'll take that one. Thanks, Sharon. In terms of the cost structure, we continue to, you know, deploy the hybrid approach because we see attractive cost structures both within our own and with our third parties. We're managing that well and are comfortable with the reconditioning costs. In terms of trends, the overarching trend for reconditioning in terms of efficiency will start to decline as we scale. In the near term, as you've heard from our prepared remarks and from the deck, in the near term, there's pressure, which leads to your second question, how confident are we in our third parties? We're working with them directly to make sure that we've got, you know, the mechanics that we need, the staff that we need to get our output to where we need it to be. To dimensionalize that we're modestly off of where we wanted to be in Q3, and again, modestly off from where we wanted to be in Q4, think in the 200 units, maybe to 1,000 units. When you spread that across 30 reconditioning locations, it's handfuls of units by location. We don't. Again, we see this as a transitory issue that our teams are working to solve rather than something that's structural in nature and long term. Yeah, Sharon, just to add on what Paul said. I mean, if you really kind of look at the units in context, you know, we were about 400 units below the low end of our range for the quarter. Then if you spread that across 30 reconditioning centers, you know, over a 90-day period, you're basically talking about one vehicle every nine days in terms of the overall impact that would drive that kind of shortfall. It's well within. Really when you look at it that way, you look at the data, the labor constraint, it has impacted our unit volume. As Paul mentioned earlier, we're working hard to continue to expand our capacity with other third-party partners, with our existing third-party partners, and then making those strategic, responsible strategic investments with our own dedicated capacity as well. That's really helpful. I guess one other question. Are your agreements structured such that if the third parties are having labor pressure that that's passed on to you? Is it like a cost plus arrangement or, you know, how does that kind of work? Yeah. I mean, we don't share the particulars, Sharon, of any of our agreements. We're confident we're working through the problem without it impacting costs in a material way for the long term. I think we're in good shape there with our agreements. Thank you. Thank you. Thank you, Sharon. Our next question comes from the line of Seth Basham of Wedbush. Your line is open. Thanks a lot, and good morning. I have a question around GPU, e-commerce GPU in the third quarter start. Just thinking about that huge increase in mix of vehicles that you sold that were sourced from consumers. Those usually come with much higher GPUs, but that didn't seem to be reflected on a year-over-year basis improvement or even sequential improvement in your e-commerce vehicle GPU. Can you help us understand why? Sure, Seth. I mean, it's really along the same lines what we talked about in the third and fourth quarter. You know, what's baked into our guidance in the fourth quarter is just the, you know, the incremental costs we're seeing on the logistics side and on the reconditioning side as well is really driving the difference. Okay. Just to follow up on that, if we look at your e-commerce GPU guidance for the fourth quarter, 2,200 at the midpoint relative to 2,560 that you reported for the third quarter, that's a $360 decline. You're attributing that primarily to the higher reconditioning logistics cost. That's a pretty substantial increase on a three-month basis. That's correct. It is a substantial increase. That's, if you look at the trends, that's what we're seeing, especially in this, you know, more so on the reconditioning side than the logistics side, but that's, those are the primary drivers. Okay. Lastly, if you look at the guidance for the full year around gross profit increase from over 200%, it'd imply that gross profit dollars for the fourth quarter need to be at the high end of that guided range unless I'm doing the math wrong. Nope, you're doing the math correct. That's the way to look at it. Correct. Thank you. Thank you. Thank you. Our next question comes from Edward Yruma of KeyBanc Capital Markets. Your line is open. Hey, good morning, guys. Thanks for taking the question. I guess first, good progress on the consumer-sourced vehicles. That 81%, though, is that kind of ahead of where you would plan longer term? Are there some downsides to having a high consumer-sourced percentage? I guess second, you know, given you guys talked through these reconditioning issues, are you slowing the buys or are you expecting that inventory levels of vehicles in progress should increase in the interim? Then as a final one, you know, you guys have really transformed the business this year. How should we think about the longer-term algorithm around profitability, given all the services you brought in-house? Thanks. Okay, great. I'll start with that and Bob can add comments at the end. In terms of consumer sourcing, and Bob articulated this earlier, we're gonna be good stewards of the business. We're gonna dial that in as appropriate based on what we're seeing on demand. We're using all of our data scientists and algorithms to be good buyers. Whether that number remains at, you know, 80% or 81% or drops down to 70% or 75% or actually creeps up, that's something that we'll be evaluating over time, and we're gonna be opportunistic on the market. If it turns out that there are cars that we want that are good deals, and they happen to be at auction, we'll do that. If we continue on our kind of consumer tear, we'll do that as well if it makes sense for our business. In terms of are we ahead of schedule, we've been good at, it's been in our DNA, buying cars from consumers. We think that's super strategic for us, not only because of the unit economics associated with those cars, but also because that becomes a great target audience for us to sell cars to. We think it's strategic. We've got the marketing right, we've got the algorithms, and we've got the people and process now working right that allows us to get to 81% of our mix. We're really proud of that. Again, you know, we'll be thoughtful on what the perfect mix is by quarter based on the market environment. Regarding the slowing buys, again, we're buying inventory based on our forecast and what we see not only in the fourth quarter, but what has been, you know, historically, Q1 typically is a strong quarter for us. Again, we're buying supply to match what we forecast the demand to be. As we scale that business, we ultimately know that more cars drive a better conversion. Again, we'll be thoughtful quarter- to- quarter on what that right number is so that we don't get, you know, into an oversupply situation or a missed opportunity situation in terms of undersupplying the business. In terms of long-term profitability, again, I'll let Bob comment on that, but I think we'll be in a much better position as we complete the year and complete our potential, you know, our acquisition and our transaction with UACC to give you a better view on, you know, not only 2022 in the aggregate, but also what this business looks like going forward multiple years out. Yes. The only thing I would add to what Paul said is, you know, on the SG&A side, I referenced it in my comments and on a slide today, that we are starting to see leverage on total e-commerce transactions. You know, we continue to look at it on a per transaction basis and expect to continue to see that leverage as we continue to ramp up volume next year. I will have more to say with respect to a longer term outlook after the UACC transaction closes. Thanks so much. Thank you. Thank you. Thank you. Our next question comes from Alex Potter of Piper Sandler. Your line is open. Hey, guys. One more question on the implied GPU guide in Q4. You know, it's clear the labor, the reconditioning costs and logistics costs are a headwind. What are you, I guess, expecting for F&I attach rates of the ancillary products, things like that? Do you expect that to be flattish versus Q3 or ticking down also? Thanks for the question, Alex. I mean, we don't guide specifically on what attachment rates are gonna be for you know, for our you know, for our product revenue. You know, I do wanna say just a little bit more on the logistics aspect of the cost increase from the third quarter to the fourth quarter. Part of the additional expense as well, the reason this is transitory, is we are doing some things you know shipping vehicles some additional distances between some of the reconditioning centers because of just because of capacity constraints. We are incurring you know some additional mileage on an average transaction, and that's driving up costs as well. You have some rate inflation. On top of the rate inflation, as we go into the holiday season, you know, we generally see rates get move up a little bit around the Thanksgiving and the Christmas holiday. In addition to that, we are doing some things in terms of shipping some vehicles some additional distances to make sure that we have enough vehicles as possible to satisfy the you know, the great demand that we have from our customers. Okay, good. That's helpful. Maybe one last one on marketing. Looks like if I'm doing my math correctly, it looks like your marketing expense per e-commerce unit is maybe $1,600 or a little bit above that in Q3. It looks like guidance implies similar level of spending, maybe a little higher again in Q4. Just wondering if you can comment maybe, A, qualitatively, what are you working on? You referenced a couple of national campaigns, things like that. Also looking forward, is this a run rate level of spending? Is this something that you're sort of choosing in the near term, and then we'll come back down? Any qualitative and quantitative comments would be helpful. Thanks. Yeah, great. I'll take that one. Look, we're, you know, we're building a super brand, and so we will be good marketers, both in, you know, in building our brand and telling our story in the various media channels where that worked well, as well as being, you know, very strong digital marketers to drive transactions in our business. We mentioned that we're, you know, we're working on a national campaign, that led to some of the increase in the spend in the third quarter. I'll tell you this, we're very pleased with the way that the marketing is not only building brand awareness. The trend in our brand awareness is exactly where we want it to be. Also, as you can see in the total transactions of our business, we are both buying a lot of cars and selling a lot of cars. We're feeling very, very positive about the job that the marketing is doing for us. We'll continue to use that as a lever in our business to scale our business in the future. I'm very pleased with the outcome of our marketing initiatives. Great. Thanks, guys. Thank you. Thank you. Thank you. Our next question comes from John Colantuoni of Jefferies. Your line is open. Thanks for taking my questions. Just a quick one on CapEx, the $100 million-$150 million that you mentioned. Can we think about that as a 2022 investment or multiple years? Maybe you could just give us a little bit more sense of the timing there. Related to that, based on the results from the last mile build-out, which seems to be going well, is the expectation that you'll continue to build the percentage of units delivered by Vroom trucks over time? I have a quick follow-up. Thanks. Sure. John, thanks so much for the question. With respect to the CapEx, the first thing, you know, we talked about it in the Q that if you look at our capacity in a normal situation where we were fully staffed with our third-party locations, we've got capacity for about 3,200 units a week. You take that, and you basically annualize it. That's why we're really focused right now on responsible capacity additions. You know, the primary focus right now is helping our partners staff up the current locations that we have and making sure that our dedicated Vroom facility is fully staffed and productive as possible. That's always the lowest capital alternative, and that's the first thing that we look at. In terms of the investments that Paul referenced, you know, this would be over a few years. We're not saying that we're gonna spend it all. We are not gonna spend it all next year. This is over the next three to four years. You know, with the addition of probably, you know, one maybe two facilities. But you know, one to two next year, but not fully operational, and not, and probably not firing on all cylinders. We're looking at, you know, this over a few-year period. I'll have Paul take the second part of your question. Yeah. On the last mile, we couldn't be happier with the progress that we've made. We're running ahead of schedule. We're delivering customers a great experience, and you know, we feel great about our run rate of hitting our 50% target at year-end. We're gonna keep going because the customers love it. At scale, you get efficiencies in your logistics. We can schedule, you know, not only the day of the delivery but the time of the delivery, and it's just a fundamentally better experience. As a result, our business gets much more predictable, and with predictability comes efficiency. We're gonna keep going on last mile, and we're really pleased with how it's going so far. Great. Just had one more on the wholesale. Looks like mid-point of guidance for the wholesale segment is implying roughly a 30% sequential decrease in the number of units sold. Could you just talk about the key kind of the puts and takes here? Is this a reflection of a need to sell down a bit of an inventory build-up from the ramp in consumer purchases during Q3? Maybe some elasticity headwinds to conversion from increased retail prices, particularly given Vroom's inventory mix already skews to vehicles that are close to new vehicle prices. Thanks. Yeah. I'll take that one. The answer is no. That's not how we think about wholesale. We didn't have an inventory build-up that then we ended up jettisoning, you know, into the wholesale market. When we put a price on every car that comes to us, right? We're seeing massive demand for our product, again, because we've got this marketing mix and the machine cranking in terms of buying cars from consumers. We are an outstanding place to go. We get a disproportionate amount of wholesale cars that come into us. When we buy those cars, we sell them into the wholesale market. That, you know, and then we're obviously looking to buy for retail because that's what fuels our growth business. We're not doing anything adverse to the retail business to move it into the wholesale market. What you see in terms of the return, you know, the gross profit per unit associated with the wholesale market, that's because of the broader market. That effectively moves with the, you know, with this unprecedented all-time high market that we're operating in, and that's what's reflected there. Thanks so much. Sure. Thank you. Our next question comes from Nick Bacchus of Raymond James. Your line is open. Hey, guys. Thanks for taking my question. Just a couple of quick ones. Sure. On UACC, can you just talk about the timeline, give us some more detail around timing for integration and you know, when you would expect to start to see some benefits in terms of market share gains and increased conversion in the subprime market? Secondly, just on used car inventory, you know, as that potentially starts to normalize, perhaps next year, obviously you've seen a significant ASP growth this year. You know, how do you think about that dynamic, kind of if pricing starts to normalize, is that a headwind in 2022? Thanks a lot. Sure, Nick. Thanks for the question. On UACC, you know, we talked about it a little bit. From the timing of the transaction closing late this year or early next year, in terms of, you know, we've talked about it. It is our goal, and we will set up a captive finance structure to support our company. You know, we'll do some things initially that allow us to go after some low-hanging fruit. The teams are working together, but we're not gonna comment on what the long-term outlook's gonna look like until after the transaction closes. Paul. Yeah. I'll kick to used cars. Yeah. Nick, as far as the used car inventory returning to some normalcy, we welcome that. I think, you know, when we think about the inflated average selling price that we're seeing now, that's really market driven. That market, as you know, is on the wholesale side up, you know, in excess of 45% since the beginning of the year. And on the retail side, up approaching 40% since the beginning of the year. It's been frothy. We've been good executors in some crazy markets. You know, we've done an outstanding job navigating the tough waters of COVID. We've done an outstanding job navigating the tough markets of, you know, COVID resurgence and variants. It was microchips and new cars. We'll again continue to navigate that supply and pricing environment by leveraging our data science and our e-commerce platform and the smart folks we've got in our business. What we expect in the longer term is that ASPs will start to come down again. We know that the bigger, broader market, you know, is ultimately in the $20,000-$25,000 range, and we expect that at scale, that's exactly where Vroom will be operating. We'll be taking advantage of the highest chunks of the demand of that market. You also asked the UACC question. As we're better able to serve the subprime market, that will also move us down in average selling price as well because as you can imagine, subprime customers are buying cars that are closer to the $20,000 range. We expect to move with the market and move with the acquisition. Thanks a lot. Thank you. Thank you, Nick. Thank you. Our next question comes from Naved Khan of Truist Securities. Your line is open. Yeah. Thanks a lot. Maybe turning to the GPU and e-commerce. Can you just maybe talk about the different percentages there? It seems like you have been able to realize some efficiencies that are lasting price fluctuations. One could argue that this is a very favorable environment for pricing and therefore should be a tailwind to GP. Maybe just call out the different factors. How should we think about the sustainable GPU excluding all this noise from ASP fluctuations? How should we think about that in a more normalized? Yeah. I'll start and Bob will chime in. Again, there's a bit of a broken record here. You know, when there's capacity constraints in the supply chain, it adds delays in time and cost. Whether that's in our logistics or in our reconditioning, or as Bob said, even our logistics costs are up, even if we're moving inventory to make sure that we're balancing our work in progress and capacity so we can drive throughput, those are all drivers of expense. We're also operating in a very high price market. Just because we're paying a high price, as you can imagine, that means you have to sell those cars for high prices too. There are not absolute clear gains when you're paying a premium for inventory. I just would make one more point about the challenge of our used car prices, average selling price, is now at or above new car pricing. You can imagine that just puts a chilling effect on how much you can ultimately charge. That's created some pressure in our sales margin. Look, I think the data science org, our ability to buy cars from consumers, our ability to manage our business, these are all structural fundamental improvements we've made to the business. These incremental costs that we're seeing in logistics and recon are transitory. That's really the way to think about it. Great. Maybe another question on consumer sourcing. Can you maybe just touch on how much are you relying on third party for the pickups, scope of efficiencies, in doing this? Yeah. We've got a hybrid approach as you know. We use third parties, and we pick up cars ourselves. You can imagine with a growing fleet of last mile that drops off cars, that's a logical time to pick up cars. That drives efficiency in our network as well. It's a mix. We don't articulate exactly what that mix is, but what I can tell you is if we're leaning in on last mile and building that out, that mix will shift to our own fleet to gain those efficiencies at scale. Thank you. At this time, I'd like to turn the call over to Paul Hennessy for closing remarks. Sir? Great. Thanks everyone for joining the call, and a special thanks to all the Vroom employees and Vroom partners that helped us deliver a great Q3 and are going to deliver a great Q4. Thanks, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect.