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Core Insights - ACV has launched a free digital roundtable series aimed at helping dealers source inventory more effectively and sell vehicles quickly, responding to the increasing demand for expert guidance and actionable data from dealers [1][2] Group 1: Digital Roundtable Series - The series is designed to assist dealers in acquiring more vehicles, including consumer-sourced inventory, and to accelerate vehicle turn times to enhance profitability [1] - The next session, scheduled for May 15, will focus on strategies for effectively acquiring cars from consumers, led by ACV's experts [3] - The roundtable will provide actionable steps and proven tactics for dealers to improve their sourcing strategies, whether they are starting from scratch or optimizing existing processes [5] Group 2: Expert Insights and Solutions - ACV's leadership emphasizes the importance of data-backed solutions powered by AI to help dealers navigate inventory constraints [2] - The sessions will cover high-level strategies and operational solutions, including financing options through ACV Capital, to help dealers scale their consumer vehicle buying [4] - The first session of the series highlighted the use of high fidelity, structured data and AI to enhance dealership performance and profitability [7][9] Group 3: Future Developments - The roundtable series aims to provide insights into pricing intelligence breakthroughs, merchandising solutions, and appraisal standardization [9] - Future sessions will explore on-demand recommendations and the use of AI for inventory decision-making, including pricing and disposition strategies [9] Group 4: Company Mission - ACV is committed to transforming the automotive industry by creating trusted and efficient digital marketplaces and data solutions for sourcing, selling, and managing used vehicles [10]

Summary of ACV Auctions (ACVA) FY Conference Call - May 13, 2025 Company Overview - **Company**: ACV Auctions (ACVA) - **Industry**: Automotive auction and technology services Key Points and Arguments Financial Performance - **Record Revenues**: The company reported a 25% year-on-year revenue growth for the quarter, with adjusted EBITDA growing over 200% year-on-year, indicating strong leverage in the business model [6][7][8] - **Guidance Maintenance**: The company maintained its full-year guidance, indicating confidence in its operational performance despite market noise [7][15] Market Share and Growth - **Consistent Market Share Gains**: ACV Auctions has been consistently gaining market share, attributed to a strong core marketplace and growing interest in value-added services [6][10] - **Annual Perspective on Share Gains**: The management emphasized that evaluating share gains on an annual basis is more meaningful than quarterly fluctuations [10][12] Industry Context - **Wholesale Market Outlook**: The company expects the wholesale market to remain flat or slightly up/down, which is reflected in their guidance [14][15] - **Impact of Tariffs**: Management expressed comfort with their guidance range despite potential tariff impacts, citing flexibility in their business model [13][15] Network Effects and Data Utilization - **Network Effects**: The company highlighted the importance of network effects, where increased supply and demand lead to better data, which in turn enhances product offerings [16][18] - **Data-Driven Products**: ACV Auctions is leveraging data from over a million inspections annually to predict vehicle values, which is a significant competitive advantage [17][32] Product Development and Innovations - **Key Product Offerings**: The company is excited about its ability to predict vehicle prices, which is central to several product offerings like ClearCar and ACV Max [28][30] - **Guaranteed Sales Model**: The introduction of guaranteed sales is expected to enhance revenue and margins, with a significant percentage of cars sold through this model [35][39] Commercial Strategy - **Expansion into Commercial Sector**: The company is working on expanding its commercial business, with plans to open new locations and enhance reconditioning capabilities [58][60] - **Partnerships with OEMs**: ACV Auctions is exploring partnerships with OEMs for trade-in platforms, indicating potential growth in off-lease vehicle transactions [47][50] Challenges and Future Outlook - **Trust Building**: The management identified building trust with dealers as a key challenge for growth, emphasizing the need for a reliable supply and demand balance [19][20] - **Adoption of New Models**: The company is focused on changing dealer perceptions regarding auction processes to drive adoption of their new models [65][66] Conclusion - **Long-Term Vision**: ACV Auctions is positioned to leverage its data and technology to enhance its marketplace, with a focus on delivering superior experiences for both buyers and sellers [71][72]

Summary of ACV Auctions (ACVA) FY Conference Call Company Overview - ACV Auctions operates as an online marketplace primarily facilitating dealer-to-dealer wholesale transactions, disrupting the traditional physical auction market [4][5] - The company went public four years ago and has achieved a market share of approximately 10% in a market where 85% remains physical [5][6] - Revenue has grown from approximately $200 million at IPO to an expected $765 million to $785 million for the current year, with a first year of profitability last year [7][8] Market Dynamics - The wholesale dealer-to-dealer market has contracted from 10-11 million units pre-COVID to about 7.5 million units currently due to supply chain issues and reduced new car sales [13][14] - The company anticipates a recovery in the market as new car sales and off-lease vehicles return, which will increase the supply of used cars available for wholesale [21][24] Competitive Landscape - Major competitors include Manheim, which holds an estimated 20% market share, and several hundred independent physical auctions [15][16] - ACV is positioned as a technology-driven player with a significant data advantage, having inspected millions of cars to create a robust dataset [18][66] Growth Strategy - ACV plans to expand its market share by engaging with a larger number of franchise dealerships, currently working with about one-third of the 17,000 franchise rooftops in the U.S. [9][10] - The company is also targeting the commercial vehicle market, which consists of repossessed cars, fleet vehicles, and rental cars, representing a total addressable market (TAM) of 6 million units [10][29] Financial Performance - The company aims for a midterm target of $1 billion in revenue and $350 million in adjusted EBITDA, with a projected 50% increase in adjusted EBITDA on 22% revenue growth for the current year [8][9] - Gross margin has improved significantly, with a target of reaching 60% in the near future [51] Technology and Data Utilization - ACV leverages technology to provide accurate valuations of used cars, enhancing the buying and selling process for dealers [35][66] - The company has developed additional services such as ACV Max for inventory management and ACV Capital for financing, which contribute to overall revenue [37][47] Operational Efficiency - The company has about 800 vehicle condition inspectors, averaging 6.5 inspections per day, with more mature territories achieving 10-12 inspections per day [60][62] - Efforts are underway to improve inspection efficiency and reduce time spent per vehicle, which will enhance productivity [63] Conclusion - ACV Auctions is positioned for continued growth in the dealer-to-dealer wholesale market, leveraging technology and data to enhance its value proposition and expand its market share [67] - The company is focused on building strategic partnerships with dealers and enhancing operational efficiencies to drive profitability [39][58]

Core Viewpoint - ACV Auctions Inc. reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, marking a 100% earnings surprise compared to break-even earnings per share a year ago [1] Financial Performance - The company achieved revenues of $182.7 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.16% and showing an increase from $145.69 million in the same quarter last year [2] - Over the last four quarters, ACV Auctions has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - ACV Auctions shares have declined approximately 28.5% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $196.65 million, and for the current fiscal year, it is $0.25 on revenues of $776.65 million [7] Industry Outlook - The Internet - Commerce industry, to which ACV Auctions belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact ACV Auctions' stock performance [5]

Financial Data and Key Metrics Changes - Q1 revenue reached $183 million, representing a 25% year-over-year growth, with adjusted EBITDA of $14 million exceeding the high end of guidance [7][22][28] - Organic revenue growth was approximately 20% year-over-year, with adjusted EBITDA margin improving by 500 basis points [22][23] - Non-GAAP net income was above the high end of guidance, with margin increasing approximately 300 basis points year-over-year [23] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 58% of total revenue, growing 28% year-over-year, driven by 19% unit growth and an average revenue per unit (ARPU) of $500, which grew 8% [24] - Marketplace services revenue comprised 37% of total revenue, growing 24% year-over-year, reflecting record revenue for ACV Transport and ACV Capital [24] - SaaS and data services products made up 5% of total revenue, with a growth of 5% year-over-year [24] Market Data and Key Metrics Changes - The dealer wholesale market grew in the low single digits, with ACV selling 208,000 vehicles, a 19% year-over-year increase despite soft market conditions in February [7][22] - The overall dealer wholesale market is expected to be approximately flat year-over-year for 2025, with expectations for conversion rates and wholesale price depreciation to follow normal seasonal patterns [29][107] Company Strategy and Development Direction - The company focuses on three pillars for long-term shareholder value: growth, innovation, and scale, with a strong emphasis on expanding its dealer partner network and enhancing product offerings [6][8] - The strategy includes leveraging AI across product offerings to provide accurate pricing guidance and improve operational efficiencies [9][15] - The company aims to continue executing its profitable growth strategy while investing in long-term growth objectives [6][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong top-line growth and increased adjusted EBITDA despite evolving macroeconomic conditions [6][31] - The company anticipates continued market share gains and is focused on expanding its addressable market as market conditions improve [31] - Management noted that while there are uncertainties in the broader market, the company is well-positioned to navigate these challenges [31][84] Other Important Information - The company ended Q1 with $342 million in cash and cash equivalents and marketable securities, alongside $167 million of debt [26] - For Q2, the company expects revenue in the range of $193 million to $198 million, reflecting a year-over-year growth of 20% to 23% [28] Q&A Session Summary Question: Is there any customer pushback regarding recent fee increases? - Management reported very little pushback from customers regarding price increases, emphasizing a fair pricing strategy and strong value proposition [34][36] Question: What growth avenues does ACV see under a tariff backdrop? - Management highlighted that ACV continues to grow and take market share, with value-added solutions helping to differentiate the company [39][42] Question: Have dealers' needs shifted due to tariffs? - Management noted that dealers are primarily focused on acquiring more inventory, with increased interest in new products [50][52] Question: What is the penetration and potential impact of the price guarantee tool and Project Viper? - Management indicated that the guarantee offering is growing, with significant interest, and Project Viper is in early beta stages with high demand [57][66] Question: How is ACV managing risk in ACV Capital? - Management explained that risk is minimized through regular dealer visits and improved risk management capabilities, resulting in reduced bad debt expense [75][76] Question: How does the company view the impact of tariffs on wholesale listings? - Management stated that while tariffs may affect pricing, the company primarily sources supply from dealers, which mitigates potential impacts [80][82] Question: What are the competitive dynamics in the market? - Management noted that competition remains strong, but ACV continues to execute well and take market share, positioning itself as a neutral partner for dealers [92][95] Question: How are dealers leveraging real-time data provided by ACV? - Management shared examples of dealers using ACV tools to buy cars from service drives and automate pricing, enhancing their operational efficiency [98][100]

Financial Data and Key Metrics Changes - Q1 revenue reached $183 million, representing a 25% year-over-year growth, with adjusted EBITDA of $14 million exceeding the high end of guidance [6][22][27] - Organic revenue growth was approximately 20% year-over-year, with adjusted EBITDA margin improving by 500 basis points [22][24] - Non-GAAP net income was above the high end of guidance, with margin increasing approximately 300 basis points year-over-year [22][24] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 58% of total revenue, growing 28% year-over-year, driven by 19% unit growth and an average revenue per unit (ARPU) of $500, which grew 8% [24] - Marketplace services revenue comprised 37% of total revenue, growing 24% year-over-year, reflecting record revenue for ACV Transport and ACV Capital [24] - SaaS and data services products made up 5% of total revenue, with a growth of 5% year-over-year [24] Market Data and Key Metrics Changes - The dealer wholesale market grew in the low single digits, with ACV selling 208,000 vehicles, a 19% year-over-year increase despite soft market conditions in February [6][22] - The overall used car supply is expected to be at a trough year, impacting market dynamics [42] Company Strategy and Development Direction - The company focuses on three pillars for long-term shareholder value: growth, innovation, and scale [7][31] - ACV is leveraging AI across its product offerings to enhance pricing guidance and improve dealer experiences [8][16] - The company aims to expand its total addressable market (TAM) and competitive moat through innovative product roadmaps and value-added services [5][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing a profitable growth strategy to create significant long-term shareholder value, despite evolving macroeconomic conditions [5][31] - The company anticipates revenue growth to exceed non-GAAP operating expense growth by approximately 500 basis points [28] Other Important Information - The company ended Q1 with $342 million in cash and cash equivalents and marketable securities, alongside $167 million of debt [26] - For Q2, the company expects revenue in the range of $193 million to $198 million, reflecting a year-over-year growth of 20% to 23% [27] Q&A Session Summary Question: Customer pushback on fee increases due to tariffs - Management reported very little pushback from customers regarding recent fee increases, emphasizing a fair pricing strategy [34][36] Question: Growth avenues under tariff conditions - Management highlighted ongoing growth and market share gains, with value-added solutions helping to differentiate ACV from competitors [38][41] Question: Dealers' needs and focus shifts due to tariffs - Management noted that franchise dealers are increasingly seeking more inventory and showing interest in new products, rather than being significantly impacted by tariffs [49][50] Question: Penetration and impact of new tools like price guarantee and Viper - The price guarantee tool is seeing strong interest, with an average of 10 bidders per car, while Viper is in beta testing with high demand anticipated [55][64] Question: ACV Capital's growth and risk management - ACV Capital grew revenue by 33% year-over-year, with improved risk management capabilities leading to a 50% reduction in bad debt expense [74][75] Question: Impact of tariffs on fleet owners and wholesale listings - Management indicated that while tariffs may affect new vehicle pricing, the current supply primarily comes from dealers, minimizing potential impacts on ACV's business model [78][80] Question: Competitive dynamics in the market - Management noted no significant changes in competitive dynamics, asserting that ACV continues to execute well and take market share [90][92] Question: Leveraging data for dealer decision-making - Management described how dealers are increasingly using ACV's tools to make informed decisions on pricing and inventory management, enhancing operational efficiency [95][100] Question: Year-to-date performance of the dealer wholesale market - Management reported that the dealer wholesale market is up low single digits year-to-date, with expectations for a flattish performance throughout the year [104][106]

Marketplace Performance - Marketplace Units increased to 208,025 in Q1 2025 from 174,631 in Q1 2024, representing a growth of 19.1%[81] - Marketplace GMV reached $2.6 billion in Q1 2025, up from $2.3 billion in Q1 2024, indicating a year-over-year increase of 13.0%[81] - Marketplace and service revenue increased by 28% to $165.9 million for the three months ended March 31, 2025, compared to $129.8 million in the same period of 2024[118] - The volume of Marketplace Units sold increased to 208,025 in Q1 2025 from 174,631 in Q1 2024, indicating higher customer engagement[120] - The average total revenue per Marketplace Unit increased due to higher buyer rates and additional ancillary services[120] Financial Performance - Adjusted EBITDA improved to $13.9 million in Q1 2025 compared to $4.3 million in Q1 2024, reflecting a significant increase of 223.3%[81] - Adjusted EBITDA for Q1 2025 was $13.908 million, compared to $4.272 million in Q1 2024, reflecting improved operating performance[137] - Non-GAAP Net income for Q1 2025 was $7.496 million, up from $1.218 million in Q1 2024, indicating a significant improvement in operational efficiency[142] - Net loss for the three months ended March 31, 2025, was $14.8 million, compared to a net loss of $20.5 million in the same period of 2024[115] Revenue Streams - The company generates revenue primarily from its digital marketplace through auction and ancillary fees, with additional revenue from data services and customer assurance products[103] - Customer assurance revenue rose by 6% to $16.8 million for the three months ended March 31, 2025, up from $15.9 million in the prior year[121] Operating Expenses - Total operating expenses increased to $197.1 million for the three months ended March 31, 2025, compared to $168.2 million in 2024[115] - Marketplace and service cost of revenue (excluding depreciation & amortization) increased by 25% to $69.4 million for the three months ended March 31, 2025[122] - Operations and technology expenses rose by 16% to $44.2 million for the three months ended March 31, 2025, compared to $38.1 million in 2024[125] - Selling, general, and administrative expenses accounted for 32% of total revenue in Q1 2025, down from 37% in Q1 2024[115] - Selling, general, and administrative expenses increased by $5.165 million (10%) from $53.853 million in Q1 2024 to $59.018 million in Q1 2025, primarily due to higher personnel-related costs[126] - Personnel-related costs rose to $47.2 million in Q1 2025 from $42.9 million in Q1 2024, attributed to headcount increases from prior year acquisitions and increased stock-based compensation[126] - Depreciation and amortization expenses increased by $2.754 million (35%) from $7.787 million in Q1 2024 to $10.541 million in Q1 2025, mainly due to increased amortization of internal-use software costs[127] Cash Flow and Liquidity - As of March 31, 2025, the company had cash and cash equivalents totaling $291.9 million and investments in marketable securities totaling $49.9 million, indicating strong liquidity[145] - Net cash provided by operating activities for the three months ended March 31, 2025, was $66.6 million, compared to $43.0 million for the same period in 2024[158] - Net cash used in investing activities increased to $30.9 million in the three months ended March 31, 2025, from $20.9 million in 2024, primarily due to an increase in finance receivables[159] - Net cash provided by financing activities rose to $32.0 million in the three months ended March 31, 2025, from $5.3 million in 2024, driven by higher proceeds from long-term debt[161] - The company had cash and cash equivalents of $291.9 million and marketable securities of $49.9 million as of March 31, 2025[169] Debt and Financing - The company may require additional equity or debt financing in the future to support operations and expansion, depending on sales volume and capital expenditure needs[145] - The 2021 Revolver provides a revolving line of credit of up to $160.0 million, with $100.0 million drawn as of March 31, 2025, at an interest rate of 9.25%[151] - The Warehouse Facility has a maximum principal amount of $125.0 million, established to fund new auto floorplan loans, maturing on June 20, 2027[152] - As of March 31, 2025, borrowings under the Warehouse Facility were $66.5 million with an interest rate of 7.49%[153] Tax and Interest - Interest income decreased by $1.142 million (38%) from $3.031 million in Q1 2024 to $1.889 million in Q1 2025, driven by a lower balance in marketable securities and lower average interest rates[129] - Interest expense increased by $1.375 million (257%) from $535,000 in Q1 2024 to $1.910 million in Q1 2025, primarily due to interest and fees related to a new Warehouse facility[130] - The provision for income taxes decreased by $75,000 (17%) from $440,000 in Q1 2024 to $365,000 in Q1 2025, with an effective tax rate of approximately (3%) in Q1 2025[131] Future Outlook - The company aims to grow its share of wholesale transactions from existing customers, which is critical for revenue growth[92] - There is a significant opportunity to add new Marketplace Buyers and Sellers as the company expands its presence in existing territories[93] - The company continues to invest in technology development and sales and marketing efforts, anticipating increased operating expenses in the near term[98] - Demand for used vehicles remains strong, with the company benefiting from rising consumer demand since early 2020[99] - The company expects to drive customer adoption of value-added and data services, enhancing revenue growth opportunities[97] - Seasonal fluctuations in used vehicle sales are anticipated, with sales typically peaking in late Q1 and early Q2[100] Compliance and Accounting - The company is in compliance with all applicable covenants as of March 31, 2025[154] - A hypothetical 100 basis point change in interest rates would not result in a material impact on the company's financial statements[169] - The company’s financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that could differ from actual results[166]

Financial Performance - First quarter 2025 revenue reached $183 million, representing a 25% year-over-year increase[7] - Total revenue for Q1 2025 was $182.7 million, a 25.4% increase from $145.7 million in Q1 2024[31] - Marketplace and Service Revenue was $166 million, an increase of 28% year-over-year[8] - Marketplace and service revenue reached $165.9 million, up 28% from $129.8 million year-over-year[31] - First quarter GAAP net loss was $15 million, an improvement from a loss of $20 million in Q1 2024[8] - Net loss for Q1 2025 was $14.8 million, compared to a net loss of $20.5 million in Q1 2024, representing a 27.5% improvement[31] - Non-GAAP net income for the first quarter was $7 million, compared to a loss of $1 million in Q1 2024[8] - The company reported a non-GAAP net income of $7.5 million for Q1 2025, compared to $1.2 million in Q1 2024[36] Growth Expectations - The company expects full-year 2025 revenue to be between $765 million and $785 million, reflecting a growth of 20% to 23% year-over-year[12] - The dealer wholesale market is expected to remain approximately flat year-over-year in 2025[12] Marketplace Metrics - Marketplace GMV for the first quarter was $2.6 billion, an increase of 13% year-over-year[8] - The number of Marketplace Units transacted was 208,025, up 19% year-over-year[8] Adjusted EBITDA - Adjusted EBITDA for the first quarter was $14 million, compared to $4 million in the same quarter of 2024[8] - Adjusted EBITDA for Q1 2025 was $13.9 million, significantly higher than $4.3 million in Q1 2024[36] - The company anticipates Adjusted EBITDA for the full year to be between $65 million and $75 million[12] Cash and Assets - Cash and cash equivalents increased to $291.9 million as of March 31, 2025, from $224.1 million at the end of 2024, a 30.3% rise[33] - Total assets grew to $1.15 billion, up from $984.1 million at the end of 2024, reflecting a 16.9% increase[33] Operating Expenses - Total operating expenses for Q1 2025 were $197.1 million, up from $168.2 million in Q1 2024, a 17.2% increase[31] - Stock-based compensation expense for Q1 2025 was $16.6 million, compared to $14.8 million in Q1 2024, indicating a 12.1% increase[36] Debt - Long-term debt increased to $166.5 million as of March 31, 2025, from $123 million at the end of 2024, a 35.3% increase[33]

HIGHLIGHTS Q1-25 EARNINGS PRESENTATION MAY 7, 2025 © 2025 ACV Auctions, Inc. FORWARD LOOKING STATEMENTS Statements in this presentation regarding future performance and future expectations, beliefs, goals, plans or prospects include forward looking statements for purposes of federal and state securities laws, including statements regarding ACV's avenues for long term growth and total addressable market expansion, our financial guidance for the second quarter and full year of 2025, and operational and produc ...