Q1 2022 RumbleOn Inc Earnings Call
Greetings and welcome to the Campbell on first quarter 2022 earnings call at.
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I would now like to turn the conference over Chill host well Neil She's Gonna hate.
Thank you operator.
Ladies and gentlemen, thank you for joining us on this conference call to discuss <unk> first quarter 2022 financial results.
Joining me on the call today are Marshall Chaz round, one belongs chairman and Chief Executive Officer, and Youre in you said high <unk> Chief Financial Officer.
Our Q1 results are detailed in the press release, we issued this morning and supplemental information will be available on our first quarter Form 10-Q will be filed later today before we start I'd like to remind you that the following discussion contains forward looking statements, including but not limited to rumble onto market opportunities and future financial results that involve risks and uncertainties.
Cause actual results to differ materially from those discussed here additional information that could cause actual results to differ from forward looking statements can be found in <unk> periodic and other SEC filings.
Forward looking statements and risks in this conference call, including responses to your questions are based on current expectations as of today and rumbling assumes no obligation to update or revise them, whether as a result of new developments or otherwise except as required by law also the following discussion contains non-GAAP financial measures.
Conciliation of non-GAAP financial measures. Please see our earnings release issued earlier this morning.
Now I will turn the call over to Marshall.
Sure.
Thank you will good morning, everyone and thank you for joining us today I'm very pleased to be reporting on our strong financial and operational results for the first quarter 2022.
We enhanced our omnichannel customer offering expanded our national footprint deepened our leadership position in power sports and delivered on our financial goals, while keeping our focus firmly on our north star, providing customers with unparalleled choice of products and services as well as an unmatched buying and selling experience.
Both online and in our retail locations.
We sold over 19000 total units in the quarter alone delivered nearly $460 million in revenue and generated over $105 million and gross profit.
We recorded over $9 million of net income and over $31 million and adjusted EBITDA, while making strategic investments to strengthen <unk> core and execute on our mission.
We are confident in our strategy and are reiterating our outlook for the entire year.
Creating a best in class customer experience and power sports begins with building a fantastic end to end ownership experience with focus on lifetime relationships with our customers and Rumble on we do not have a won and done transactional mentality as our goal to become a power sports destination.
Of choice for participants in the space throughout their buying future.
It starts with building trust not only through professionalism transparent pricing quality assurance and superior customer service, but also in our promise to provide the best selection of high quality inventory from all of our manufacturing partners and unparalleled selection of used products of all makes and models courteous and.
On time service and market leading financing options.
Our cash offer tool is a key differentiator for Rumble on since the beginning our proprietary technology and process has enabled us to acquire high quality used vehicles directly from consumers anywhere in the country.
We've rolled out our cash offer tool in all 55 Rumble on locations and continue to increase our capture rates dramatically.
In addition to this highly efficient acquisition channel for used units the significant expansion of our footprint has enabled us to funnel most of our used power sports inventory to our retail locations. This is reducing our previous dependence on the wholesale channel and increasing our market share in the higher margin retail channel.
The strong demand environment combined with our efficient inventory strategy helped us expand sales of used retail power sports again in Q1, we.
We sold 43% more used retail unit than in Q4 of 'twenty, one and delivered 80% growth in gross profit from that channel. Despite.
Despite this impressive growth the majority of our stores are still in need of additional used inventory and we're working hard to acquire more and accelerate days' supply and our highest performing locations.
We are continuing to work on the implementation of our new fulfillment system that will provide near real time inventory replenishment to ensure that the right vehicle is in the right place at the right time with the right price.
Our fulfillment system, we'll also prioritize ensuring we have consistent photos videos and descriptions of each vehicle further enhancing our omni channel customer experience.
We are on track to complete our digital inventory system and full integration of our retail location websites later this year, which will further support our retail growth strategy.
We also continue to see strong demand for new inventory and we sold more than 9600, new units in Q1, new inventory continues to be dependent upon manufacturers' production and distribution constraints for the foreseeable future.
Due to this dynamic and ongoing supply chain challenges, we expect new power sports retail unit sales in 2022 to be consistent with last year. While we are still in the early innings and we will continue our work to bring our new to used ratio to one to one.
Long term, we are focused on both new and used however, our unique access to a broad array of high quality used retail power sports units presents the greatest near term opportunity. It provides some insulation from supply chain disruptions experienced across the industry today and is an important differentiator for us in <unk>.
Any market environment.
Used vehicles due primarily to affordability provide a great entry point into power sports for both newer and younger users, which builds the base of new riders into the sport by offering the best customer experience compelling price points of products and the ease of Rumble on finance, we believe these lifetime relationship.
<unk> will be significant.
Before I turn the call over to render I'd like to reiterate the three key investment areas that we outlined in our last earnings call.
First implementing our customer experience center for efficient inventory acquisition and distribution as well as fulfillment for new used parts and merchandise.
Our customer experience centers will enable us to become a destination for power sports enthusiasts to interact and engage with not only the products. They desire, but also with both the broader power sports community and with our brand.
Customer experience centers will also serve that dual purpose of fulfillment and inventory acquisition reconditioning and distribution.
We plan to open our first experience center in the Dallas Fort Worth market later, this year and over time, we look to replicate that playbook in other geographic areas that are important to our omnichannel growth strategies.
Second expanding and enhancing our technology stack.
As I, just discussed optimizing and integrating our inventory is critical to ensuring we're the leading destination for power sports consumers. The near term focus areas here are better leveraging the robust data, we collect from online and in store transactions and integrating our technology across our retail locations.
Our real time pricing and sales data from in store transactions will enable us to further optimize offers and pricing across the entire ecosystem.
We are also upgrading our technology infrastructure to enhance connectivity and collaboration across our retail locations and improve the customer shopping experience, we will continue to expand and enhance our technology stack throughout 2022 and beyond.
And third developing our people and processes to attract and retain the best talent and build a scalable organization.
As with our technology development, we are thoughtfully investing in people and process to strengthen our foundation and prepare us for our next stage of growth.
We implemented our regional management structure in Q1, and not only are our regional directors working more closely with one another they're also sharing ideas and developing best practices, but we are realizing important efficiencies that will enhance our integration efforts going forward.
We're also investing to build out our critical functional competencies as well as systems to support these functional areas.
Our omnichannel strategy combined with our unique ability to source and distribute high quality used inventory at affordable prices are the cornerstones of our model amid increasing affordability concerns inflation the absence of government stimulus packages negative consumer sentiment and some of the.
Highest fuel prices in history consumers are responding to our offering and we are delivering a superior product and experience to our customers while driving profitable growth.
We believe that there is significant pent up demand, which will continue to offset potential macro headwinds in the foreseeable future.
We are building the premier destination for power sports enthusiasts, and we will continue to optimize our business and unlock opportunities to gain market share.
With that I will turn the call over to our CFO renders the heart to provide you with further details on our recent financial performance and an update on our outlook Miranda.
Thank you Marshall and good morning, everyone.
Our first quarter results reflect strong momentum and demonstrate our commitment to executing on our plan.
Realizing integration benefits and delivering profitable growth.
Please refer to our earnings press release, and 10-Q to be filed later today for full details of the quarter.
Unless otherwise specified all of the first quarter growth figures cited in my remarks today.
Warner over quarter sequential comparisons.
Moving on to some key highlights we are pleased to report a quarter of strong growth in used retail power sports unit sales.
In the first quarter, we sold over 19300 total units up nearly 14% from the fourth quarter of last year led.
Led by over 43% growth in used retail power sports unit sales.
Our growth in used retail power sports unit sales was driven by continued strong execution and acquiring used power sports units from consumers and channeling this inventory to our retail locations.
Excluding the contribution in the first quarter of power Sports unit sales due to freedom power Sports acquisition, which closed on February 18th 2022, New detailed power sports unit sales increased 5%.
Use power sports unit sales increased 23% and total power sports unit sales increased 12% sequentially.
In the first quarter, we delivered nearly $460 million of revenue and record.
Approximately 7% sequentially.
First quarter revenue growth was driven by strength across the power sports segment.
Which was up 22%, but offset by the declining revenue from the automotive segment.
Revenue from finance and insurance net grew 24% and parts and services accessory and merchandise increased seven 6% sequentially.
I'll note that we are reporting finance and insurance revenue net of costs in this quarter and we'll be reporting finance and insurance revenue on a net basis going forward.
For comparison purposes, we have calculated a prior quarter's finance and insurance revenue on a net basis and our earnings press release.
In the first quarter total gross profit was approximately $105 million.
A record.
17% from approximately $90 million in the prior quarter.
Total gross profit margin was 23% up from 21% in the fourth quarter of last year.
<unk> increases were driven by strength across the power sports segment, particularly across the used retail unit sales, which is the high margin sales channels.
The increase in retail sales also contributed to revenue and gross profit growth in finance and insurance net.
And parts services accessories and merchandise.
Operating expenses were $82 $6 million or nearly 18% of revenue compared to over $74 million or 17% of revenue in the prior quarter.
Our first quarter operating expenses include the early investments in technology facilities, and people and processes and making to scale around a lot.
Within operating expenses total stock based compensation was approximately $1 $9 million.
Down from $2 $1 million in the fourth quarter of last year.
Income from operations, our operating income was $22 7 million compared.
Compared to nearly $16 million in the prior quarter.
Net income was $9 1 million compared to $27 million in the prior quarter, which was helped by a tax benefit of approximately $11 million and a $2 million one time benefit from PPP loan forgiveness.
Adjusted EBITDA was $31 4 million.
Up 29% sequentially from $24 2 million in the prior quarter.
As of March 31st 2022, cash and cash equivalents, including restricted cash was approximately $69 million.
Total available liquidity, which is defined as cash and cash equivalents, including restricted cash plus availability under our inventory financing credit facilities.
It was over $201 million.
And we generated $31 $2 million in cash flow from operating activities.
Now turning to our outlook.
Encouraged by the positive trends, we saw over the last several quarters.
In regards to new power sports units, given the strong consumer demand and the ongoing supply constraints that manufacturers are broadly experiencing our new inventory levels are down from the end of the fourth quarter.
We expect new power sports supply to continue to be constrained throughout the year.
While new power sports unit sales may fluctuate quarter to quarter, we now expect full year 2022 levels.
We'll be flat to slightly down on a comparable basis with the prior year.
We expect that this dynamic in new power sports unit sales will be offset with used retail power sports unit sales as we continue to acquire used power sports unit directly from consumers on our online platform and channels that use power sports inventory through our retail locations.
We continue to expect in excess of 50% year over year growth in used retail power sports unit sales.
As a result, we are reiterating our full year 2022 outlook, which already reflects our visibility into the supply chain environment and the tough macro backdrop for consumers marked by higher inflation rising interest rates and consequently impacted affordability.
For 2022, we continue to expect to deliver total revenue in the range of one $9 billion to $2 billion and adjusted EBITDA of at least $145 million.
This includes up to $20 million of incremental operating and capital investments over the course of the year.
We remain on track with making these investments in a thoughtful manner.
Additionally, our guidance does not include any incremental contribution from future acquisitions now, let me turn it back to Marshall before we open up the call for questions.
Thanks to render I'd like to finish by reiterating we are laser focused on the execution of our strategy. We hope to have the opportunity to meet with you over the next several weeks as we attempt to several investor conferences.
We'll be at the B Riley conference in La on May 20, Seth Jefferies In New York on May 26, and the Baird Conference in New York in June .
Lastly, and certainly most important from my perspective, and creating shareholder value I want to thank our entire team of nearly 2400 members across the country.
For us to have tremendous success in following our north star of providing customer experience second to none.
Just first provide an opportunity for the ones responsible for the mission of team culture that is second to none with unparalleled opportunities for growth and professional development.
The response to these critical days of integration has been very encouraging and the fact that we have had virtually no attrition speaks volumes to the opportunities. We have ahead of us.
As I have said many times many can dream with great vision, great teams determined whether vision becomes reality to.
Two the Rumble on team your support has been unbelievable, we're performing at all time record levels and we are thankful for everyone's incredible efforts and the passion you show for our business.
Thanks, again to everyone tuning in today and operator, we're ready for questions.
Thank you at this time, they won't be conducting a question and answer session.
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Please while we poll for questions.
Our first question is from Eric Wold of B Riley. Please go ahead.
Thank you and good morning, Marshall went under.
I guess first the two questions I guess first question.
I sort of connect the dots between.
The reaffirmed 2022 guidance and the comments at the end maybe on your into around that guidance, reflecting kind of inflationary risks and potential pressure on consumer is one of the one of the more consistent concerns. We've heard recently around the kind of use the automotive than leisure vehicle space and that consumers are.
These these headwinds of <unk> and.
Essentially reduced affordability.
Are you seeing anything that would indicate that those same pressures are you seeing consumers.
Consumer shifts towards more towards you versus new or trading down in price.
Looking to finance more than paying cash anything that would indicate this pressure is starting to resonate with consumers.
This is Marshall I'll take that one.
Yeah, let's start with the headwinds I mean, we were.
We're reading the same reports you are from various different vehicle segments, whether that'd be boats rvs cars and trucks whatever.
I can tell you from a.
Traffic perspective.
We have that.
Ernest.
However, when we break it down into the headwinds and tailwind. So I think obviously the headwinds are the economic pressures be it interest rates.
Inflation.
Obviously, you guys spendable income.
And supply chain challenges.
We certainly have built that into our thought process and our modeling because it's not realistic to think that we arent going to experience those or the or the other.
The outcome of those.
But I think some things from a tailwind perspective.
10, but from our perspective tend to be offsetting it and in some ways number one we still have a significant supply and demand issue, we have much higher supply.
Just be that much higher demand than we have supply and that's continuing and we don't really see but again, we haven't seen a reduction in traffic into the stores at this point.
I think our focus on used and basically.
The accretive Miss of what we're bringing to the table with trio, we started with a business that was really not in the business. So we brought kind of a whole new segment to them also potential growth at having those additional units online is creating significant traffic.
Momentum in the stores, obviously theres a lots of competition on the used side and Theres also.
Affordability I wanted to just.
One thing to focus I think on or what might be helping our business is two things number one the demographics of who we sell we sell we sell everything from a mini bike to a nine year old for $499. All the way to a trite to a 75 already tried to a 75 year old it could be 50 or $60000.
I think that's what we really represent with a lower ASP is what I would call affordable fun.
And I don't think that necessarily all the other segments are participated in that affordability piece.
Two more things on the on the tailwind side, obviously, we're just at the very beginning of the Rumble on finance, but is growing significantly and we clearly can see that the.
Rumble on finance it was bringing incremental transactions primarily on the pre owned side the new vehicle side had aggressive financing, but the pre owned side was certainly short from our perspective, and we've been able to backfill that and we think we can continue to grow that dramatically and then I would say also that as well.
Again my experience in the car business would say, that's when new vehicle slowdown because of supply or demand or whatever it might be.
Typically your service business increases and we're certainly seeing that and the concept. There is if I don't trade. It in today, because I don't want to spend additional monthly payment or whatever.
Other than likely going to need to service. It. So we have all those levers to pull which is I think unique to our space and that we have new use biomass parts service merchandize and.
When you match this to autos boats rvs or whatever.
Few match up to have that many high gross margin opportunity levers to pull.
So I think the next piece would be positive seasonality as far as a tailwind.
January and February is always a little suspect in power sports.
In March obviously made up a significant amount of the quarter.
But as we go into Q2 and Q3.
We are we have the tailwind of seasonality for sure, which again if you take all of these different items I think that it just all adds up to.
To a position that we can continue to grow the company. Despite some of these economic pressures.
That's perfect. Thanks, Marshall I guess last question.
As you think about the $20 million.
Up to $20 million you may spend on technology investments. This year, how much has been spent or committed to date.
How much flexibility is there in potentially pushing some of that in the next year if necessary and then.
Of that 20, what is one time this year versus what could be considered recurring that you would spend kind of in.
'twenty three and beyond every year.
Yeah, Hi, thanks for the question.
First I would say the $20 million of investments, we outlined not just on technology alone.
And then the TK key areas Nacho mentioned.
One is us facilities upgrades and experience center.
Clearly technology is a key part.
And then finally.
Our organization and people and processes.
So if you look at these buckets they are still kind of very early stage.
So let's take maybe one by one if I look at <unk>.
Facility <unk> been experiencing.
The lease on the.
The Dallas fulfillment center in the quarter, and we're kind of in the process of getting that up and going.
And as you know, it's going to be a combination of lease expense flowing through the income statement, but then be able to have some capitalized improvements there's going to be a combination of that but most of that will be capitalized.
And if you move to technology.
You already see in the statement of cash flows $1 $7 million on capitalized in the quarter for technology investments.
And we continue to move forward thoughtfully on those investments is that let's say, it's going to be a combination of expense that goes through the income statement, then and majority of that would be capitalized as well.
And then finally you know.
People and processes that obviously flows through the P&L as we scale our systems scale our organization, especially.
In key functional areas of finance and accounting and compliance so.
So that obviously and it goes through the P&L.
And.
So.
If you look at all of that I would say early on I would say.
Majority of that would be on the balance sheet, but again, a significant portion of their social through the income statement.
In terms of one time items.
Clearly there.
The investments, we're going to make in the in the fulfillment center. This year would be one time or less.
And we obviously want to do more and see how that goes so that that can continue.
Have a technology roadmap that we are going to continue to invest in.
And then.
On the people and processes side once we get over the hump on that and we in sourced a lot of work that has certainly been outsourced and then I would expect that to create them.
And the leverage on the SG&A side.
Helpful. Thanks, Andrew Thanks Marshall.
Thanks Terry.
Our next question is from say suppression of Wedbush Securities. Please go ahead.
Yes, Hi, there this is Nathan Friedman on for Seth Thanks for taking my questions.
My first is regarding your initiatives you shared several steps you are taking to build the company.
You have the Dallas facility coming later this year, but can you share any other updates in regards to these initiatives and updated timetables to these if any.
Yeah.
I think that.
Whereas the design phases right now with.
Dallas, So we will learn a lot as we go through that that is.
Happy to.
In Q1, and obviously stretching into cod.
We are anticipating to be fully operational this year.
And we are identifying other market opportunities I think in our last quarter. We mentioned that I think if you look at the saturation of physical locations that could benefit from fulfillment, especially.
You would identify the Arizona market.
Certainly the Texas market, where we're starting.
And for sure the Florida market, but if you stretch it out past, then obviously theres some organic opportunities and market big population markets that we aren't represented at presently one be it the northeast.
We are investigating opportunities there as well.
And we are working with multiple manufacturers on some opportunities on the organic side.
Because when you look at this from a market consolidation perspective, this isn't just about <unk>.
Consolidated and existing dealers. This is really about creating a model that is.
Organic.
Opportunity.
Dominate the space if you will.
So we will continue on the consolidation side, we will continue on the.
On the <unk>.
Experience Center.
We think the experience center is really about what does the retailing or power sports vehicles look like five years from now and that's really what we are addressing.
Current address it also is going to take care of a short term nature right, we have significant need of fulfillment, but.
But we have a great opportunity of these experience centers.
Yeah.
It makes sense and appreciate the color there my second my second question is regarding the supply chain can.
Can you share the current message you're hearing from your OEM partners on inventory and how you're navigating both new and used environments is supply chain risks potentially re intensifies and do you feel like you may have some priority over other smaller <unk>.
Competitors.
We never expect that we're going to be treated any different than anybody.
We do we do.
We are considering presently about our days supply.
Our inventory has come down to surrender pointed out but our sales are up we.
We didn't want to continue that because we do believe supplies will come back and if in fact, we're on a even allocation basis.
My experience is that the retailers that do the best job of taking care of the customer.
Yes.
It's accelerated market share, we'll get the we'll get the lion's share of the opportunity.
As far as the supply chain itself.
It's a little bit of a mixed message. So I was kind of just keep my comments to kind of the major players because as you know we represent by the time you get done with all the manufacturers probably well over 20 manufacturers, there's probably a handful that are the lion's share and it really is a mixed message. We have some that are signaling 20 <unk>.
Improvement in 2023, and even potential improvement in 2022, and then you can read obviously of the public manufacturers. Some of them are representing deductions of probably up to 25%. So it really is a mixed message I think ours is about.
You look at the thousands of units we have in inventory continuing to accelerate that that turn rate if you will making.
Making sure that I think our objective is to right now is to have a N P showrooms.
We also think that there's an interesting move in consumer behavior and employee behavior from the standpoint that these.
Our sports dealers are now becoming very very good at taking offers which really plays into our hand as we move forward with.
Virtual selling on the pre owned side all of a sudden they become very astute at selling a product that doesn't have to be sitting right in front of him on the show floor. So we're taking many more offers.
Offers but deposits than we used to product that is that's coming in there is some new products that are out there with a couple of other manufacturers I don't want to name names.
But there are new products that are coming to the market that are sold out.
So pretty much indefinitely right now so.
<unk>.
It looks like supply is going to continue to be under constraint, but we really believe we can we can maintain at the levels. We are in we are seeing some that are improving.
Got it thank you for that color as well and one more if I may it seems like you experienced favorable gross margin improvement sequentially. This quarter, you mentioned that it was primarily due to stronger used retail sales can you maybe go into deeper color behind the improvement in weather gross margin expectation.
Have changed.
Given it seems youre used retail unit sales guidance.
Little bit better than previously.
Right.
Like to give you a real scientific answer, but let me give you a real simple one.
Inventory availability.
This is a business and our stores are still.
Not across the board, but the majority of our stores are still.
Very very short on inventory.
To to fill that demand.
And so we continue if you look at our marketing spend as an example, it is really focused on acquisition to drive more traffic in and show them to spend marketing dollars. As an example to drive more traffic into the showroom floor right now would be fairly futile.
Not a lot of ROI R. O R. O Y right now from marketing purely comes from driving more into our cash offer tool of buying more vehicles.
We are continuing to ramp that dramatically.
We are we've had nearly a billion.
People put all of that information and with their vehicle, we are re marketing to those people.
Whether that be email or remarketing to Google.
And that's that's really our focus right now because we believe that we.
We aren't even close to the opportunity and we believe there are millions and millions of these assets sitting in People's garages barns and sheds that are not being utilized and now now they have an opportunity.
I would say similar to <unk> in the early days right when they when they made their whole focus on we'll buy your car, whether you buy from us or not.
We're really really attacking that marketplace and we think we can get a real strong hold because we are really the only one that offers that you'll see several on the.
The web let's say.
We'll pay cash where your unit, but every one of them that we're aware of is lead generation for a horrible customer experience.
Grab that leave we're going to send it to a traditional dealer and the consumer is going to go through the normal process ours is not that ours is a true cash offer it's not an opinion of value and it's a very very friction free process to get the money ACTH into your bank account.
Thanks, so much for the time, congrats on a nice quarter and best of luck.
Thank you thanks Nathan.
Ladies and gentlemen, just a reminder, if anyone else in that Cascade question Youre Welcome Space Star then one.
Our next question is from Mike Baker.
Please go ahead.
Thanks, I'll have a couple first one I'll ask you about the.
It was a change of strategy mid quarter in terms of how you're listing third party.
Product on your website I think your the number of vehicles on the website. It was down about a third somewhere mid quarter can you talk about that change in strategy and then of the roughly 60000 units listed on your site how much of that is third party versus a product that you own.
<unk>.
Yeah.
Okay.
First part of the question is we made a strategic decision.
To eliminate.
Several dealers.
For a plethora of reasons that we probably don't want to detail here, but it was it was not a cancellation of dealers. It was our choice to basically get away from that.
I would say as Youre well aware that is not a profit center for us, but it is a great opportunity to connect with dealers to.
To gather data.
Which really really helps our cash offer business knowing what is for sale in the marketplace without having to scrape websites and do all those kinds of things. So that's the.
That's the primary move there and I'm sorry, what was the second piece of it.
I'm sorry, it was just not repeating.
The mix of product.
Now there's not looking right now at 62000 roughly vehicles on the web side, how much of that is as you.
Inventories that you own versus still some of that third party just.
Listings gives us give you exact you can see the exact numbers on our balance sheet, but.
Just to give you a.
A wag I would say, it's probably in the range of 14000 total belong to.
To our retail outlets.
Yeah.
Okay.
Thanks, that's helpful.
A couple of other questions one I just wanted to ask about.
This is the last time reported it and you gave your guidance. It's great that you guys are reiterating it really different than a lot of others, but the world has changed quite a bit in the last two months or so since you gave that guidance could you just characterize since you don't want to give annual numbers not quarterly numbers. How was the first quarter relative to your expectations was it was in line was better was it worse.
And you know understanding that the guidance hasn't really changed some tweaking new versus used but are.
Are you more confident less confident equally confident than you were a few months ago with all the changes in the macro economy.
Well first first off Mike as you know I'm a half full guy so.
Always on the positive side of the equation, but we are being we are cautiously optimistic as they say you know we certainly recognize the challenges that are out there.
As that we mentioned earlier.
Thankfully, we are not seeing the effects of those in any kind of meaningful way.
And if we do we think that it will probably fall on the new vehicle side.
And with what we see coming through the pipeline from a pre owned perspective.
We are confident that we can more than.
More than offset it so I would say for Q1.
It was a little bit.
Messi, if you will from the standpoint that we had.
A fair amount of drama during the quarter.
We were we closed the freedom deal on the 18th above the same period of time, we launched our.
Our regional management structure, which by the way has gone off extremely well.
And so I think March was kind of our first full month. It's also kind of the first full month of spring.
So if we were sharing the entire quarter you would probably see that March was a big part of it.
We are heading into the two quarters of the year that from a seasonality perspective.
Our always strong and you know we're.
We are highly confident we didn't this wasn't a debate of whether we reiterate guidance are not internally, we are very very comfortable with it but because of what everybody else is signaling out there we do want to be cautiously optimistic, but we are extremely optimistic internally yes.
And if I might get back on after that you know we are focused on delivering.
<unk> growth, so we're going to be very thoughtful about it.
You saw we delivered.
$9 million of GAAP net income of $31 million.
Adjusted EBITDA and over $31 million of cash from operations. So that's where we are focused on what can be to what's in our control and we continue to drive that I think one other thing that I'll add is it does appear that making money is back in Vogue.
And I think that plays well into our business plan because we are.
We like to say, we're laser focused on that.
But we just the opportunities are clear right, you've got market consolidation of existing inorganic opportunities you've got improving an antiquated customer service that I don't believe anybody can debate.
And you have a industry. This void of technology that we're bringing in not just from a customer.
Perspective, the customer.
Facing piece, but also operationally to streamline our operations and become significantly more scalable and we think all three of those are competitive advantages.
Yes makes perfect sense I appreciate the color. Thank you.
We have no further questions from the lines, ladies and gentlemen, we have reached the end of the question and answer session I would like to turn the call back to Marshall Tishman for closing remarks.
Well again I'd like to thank everybody for joining us today, we look forward to our next quarter call. We're excited about the quarter already and we will look forward to hearing from you and hopefully we get to see a lot of you at the conferences coming up shortly so thank.
Thank you again for your time and have a great day.
This concludes today's conference. Thank you for joining US you may now disconnect your lines.
[music].
Okay.