E-comm company makes $2,200 gross profit per powersports vehicle sold in Q3

Dallas-based RumbleOn, Inc., an e-commerce company that aggregates and distributes pre-owned vehicles to and from both consumers and dealers, today announced financial results for the three months ended Sept. 30, 2020.

“Q3 was another record-breaking quarter for RumbleOn,” said Marshall Chesrown, RumbleOn’s CEO. “We generated positive adjusted EBITDA for the first time in the Company’s history and grew total gross profit per vehicle more than 260% year-over-year.”

“In Q3, we reported $117.3 million in revenue, a 39% increase from Q2, on 4,263 units. Additionally, we grew overall gross margin to 14.3% and gross margin on vehicles sold to 13.6%, both of which are records for RumbleOn, demonstrating continued progress towards long term sustainable profitability. RumbleOn has had an incredible year thus far operationally and financially, and I’m very pleased to report that despite the unique challenges presented to the company and the economy during 2020, our strategy is working.”

Third Quarter 2020 Financial Highlights

A year ago, in Q3 2019, the Company set a goal of achieving an adjusted EBITDA positive quarter in 2020, a goal that was reached in the third quarter. Despite the impact of COVID-19, which has resulted in significantly reduced commercial activity and total inventory in the market, the Company’s third quarter results are the strongest in its short history.

Unless otherwise noted, all comparisons are on a year-over-year basis for the three months ended September 30, 2020.

• Total vehicle unit sales of 4,263, down from 10,894
• Total revenue was $117.3 million, down from $220.3 million

Powersports revenue was $7.3 million

Automotive revenue was $99.3 million

Transportation and Vehicle Logistics revenue was $10.4 million

Other revenue was $0.3 million

• Gross profit was $16.8 million or 14.3% of revenue, as compared to $12.0 million or 5.5% of revenue

Gross margin on vehicles sold was 13.6%, the highest in the Company’s history, and up from 4.8%. Gross profit per vehicle was $3,411 per vehicle, up 260.7% compared to 2019.

Powersports gross profit per powersport vehicle sold was $2,271

Automotive gross profit per automotive vehicle sold was $3,652

Transportation and Vehicle Logistics gross profit per vehicle delivered was $97

• Sales, general and administrative expenses were $13.3 million, or 11.3% of revenue, a decrease of 30.1% from $19.0 million
• Operating income was $3.0 million, or 2.5% of total revenue, up from operating loss of $(7.5) million or (3.4)% of revenue
• Net Income was $1.5 million, or $0.67 per basic and fully diluted share, as compared to net loss of $8.9 million or a loss of $(7.66) per share. Weighted average basic and fully diluted shares outstanding in Q3 were 2,234,838 shares of common stock outstanding and 1,158,915 shares in Q3 2019
• Adjusted EBITDA was $4.7 million in Q3, compared to a loss of $(4.8) million

Business Highlights

RumbleOn launched the newest generation of its platform, RumbleOn 3.0 in August. As of today, there are more than 37,000 total listings available on RumbleOn.com from powersports dealers in over 200 locations, across 36 states.

Late in Q3 RumbleOn began adding Boats and personal watercraft listings. There are already nearly 500 listings available today with many more in the pipeline as boat-specific dealers are brought onto the platform. RV listings began being tested in Q3 as a further potential opportunity for expansion in 2021.

RumbleOn began business to business dealer-only weekly auctions in Q3. This method of redistribution is beneficial for both RumbleOn and the dealers and decreases vehicle time to sale.

Fourth Quarter 2020 Commentary and Outlook

“In 2019 we demonstrated our ability to scale revenue, in 2020 we are demonstrating we can achieve profitability, and we look forward to demonstrating our ability to scale with sustainable profitability in 2021 and beyond,” Chesrown said. “Another objective we outlined in 2019 was to reach EBITDA profitability on a full year basis in 2021, and we believe we have the right strategy in place to reach that goal.”

Chesrown continued, “During the three-months ended September 30, 2020, average selling prices increased as market prices remained high industry-wide. The effect of these higher market prices resulted in lower levels of inventory available to purchase for resale, causing a decline in unit sales beginning in September as compared to July and August. We believe this supply and demand imbalance will continue to impact seasonally adjusted fourth quarter volume, particularly given the worldwide rise in COVID-19 cases.”

Given the uncertainty of the ongoing impact and unprecedented conditions surrounding the COVID-19 pandemic, we cannot predict the overall effect to RumbleOn, our customers, regional business partners, and others that we work with. As a result, we believe it is prudent to continue to withhold guidance until we can better gauge market conditions and have a clearer understanding of the lasting impact from the COVID-19 pandemic.