Shift Technologies Inc at Oppenheimer Consumer Growth and E-Commerce Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : But again, just for context, now there are -- and we follow the sector quite closely now because there are other online sellers of used cars out there, some big or most bigger than Shift. I mean, maybe just from your perspective, how does -- not that necessarily you're competing head-to-head with these other companies, but how are you differentiated within that marketplace versus other maybe larger, more well-known, better-known players within the online used car space?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : So again, before we jump into some of the real specifics on Shift, I do want to just kind of pick your brain, sort of say, on what you're seeing in the overall consumer environment. So we've been hosting this conference for the last couple of days. And a key theme across all the different companies we're speaking with is just the health of the US consumer. Now you mentioned, we were -- it wasn't -- you report your Q1 results not that long ago; they've very strong. Some of your competitors actually talked about some weakness, so you used it as a strength there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : So do you think -- you talked a lot about this in your last conference call that moving to older cars. To what extent -- is that a challenge, though, to ensure or maintain the quality of those vehicles? Because you're dealing with a car that may have more miles, but it's definitely older in age.

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : I'm going to let my associate, Andrew [Chess]. He had a question just on used car pricing broadly. Andrew, do you want to chime in there? Unidentified Analyst Yeah, absolutely. So, yeah, as Brian was saying, with regard to used car pricing backdrop broadly, how do you view elevated prices and the potential for pricing moderation in terms of a headwind or tailwind to your business?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : Just one follow-up on Andrew's question, then I might jump into the unit economics of Shift. But so as we think about -- I guess we have started to see -- watching the data, we have started to see used car pricing moderating a bit. I mean, it depends how you look at the data, but a one-year basis is moderate. So if you think about your business, and assuming that is the beginning of a trend, that used car pricing should moderate over time, would that be more of a positive then, just from an affordability standpoint, in demand with very limited impact upon the underlying profitability of the company?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : Got it. And so that's a good segue, that introduced the unit economics, if you will, of the Shift model. So we talked a lot about GPU and it's been on a nice trajectory. So I'd love to just for you to outline how you think about GPU continue to unfold from here and the key components behind that.

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : So that's -- just remind us that those -- remind us the goals there. And I think you said $3,800 or $4,000, is that -- that what you would use as an intermediate term type goal?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : Then that's a perfect segue into -- so lately, you've been discussing on the SG&A front. More cost controls and cost cuts, if you will. So going to where -- I guess, where are we on that front? And the same type of discussion as you think about your GPU and the way you laid it out perfectly. GPU has got to be higher than -- ultimately higher than your SG&A per vehicle. That's going to drive your profitability. How should we think about that, the puts-and-takes there?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : So it's time to start to wind up. There's two more topics I want to touch. First is up on the growth. So you like -- I think you mentioned in the onset of this conversation that, at this point, you're still largely a regional player with a large focus on the West Coast and you've expanded to Texas. So I guess a few questions here. I mean, how is the move into Texas tracking for you? Then how should we think about over a length of time as the ultimate expansion of the Shift model across the country?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : Maybe Andrew you want to ask a question about Las Vegas or --? Unidentified Analyst Oh, yes. So yeah, you previously discussed on expanding into Las Vegas. But then you have recently mentioned the decision to stop the expansion. So would you be able to elaborate upon that a little bit?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : The final topic I want to address is just the underlying capital needs of the business. I mean, how do you view Shift's funding at this moment? Given the ongoing growth in investment, how do you think about additional capital going forward?

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : Oded, is there anything else? Is there anything we did not discuss that we should have? Before we sign off.

Question: Brian Nagel - Oppenheimer & Co. Inc. - Analyst : We appreciate your time. It's been a lot of fun watching the business develop, and we look forward to continue to do so.