Financial Data and Key Metrics - Revenue for Q3 2024 was $171 million, a 44% year-over-year increase, driven by strong listings growth and conversion rates [8] - Adjusted EBITDA for Q3 was $11 million, $3 million above the high end of guidance, with a margin improvement of nearly 1,000 basis points year-over-year [26] - Non-GAAP net income was significantly above guidance, with margins increasing approximately 800 basis points year-over-year [26] - GMV increased 17% year-over-year, driven by strong unit growth, which offset a 12% decline in GMV per unit [8] Business Line Performance - Auction and assurance revenue grew 52% year-over-year, accounting for 59% of total revenue, with ARPU of $506, up 15% year-over-year [27] - Marketplace services revenue grew 39% year-over-year, driven by record performance in ACV Transport and Capital [28] - ACV Transport delivered record revenue with 108,000 deliveries in Q3, achieving 95% lane coverage and a 27% volume growth [13] - ACV Capital continued to grow, piloting a new financing offering for consumer-sourced vehicles and dealer trade-ins [15] Market Performance - New retail sales increased 1% year-over-year, while used retail sales were flat in Q3 [9] - Used vehicle inventory remains 25% below normal levels, creating a headwind for the dealer wholesale market [11] - Wholesale price depreciation returned to normalized patterns in Q3, with strong conversion rates driven by favorable market conditions [12] Strategy and Industry Competition - The company is focused on three strategic pillars: growth, innovation, and scale, with a goal to maximize long-term shareholder value [9] - Investments in marketplace engagement, including advanced search, AI-enabled pricing, and flexible auction formats, are driving strong conversion rates [17] - The company is expanding its TAM by integrating with AutoIMS and enhancing its commercial platform, targeting commercial consignors [18] - ACV MAX and ClearCar are gaining traction, creating cross-sell opportunities and driving new customer acquisition [18][21] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the recovery of new vehicle inventories and increasing OEM incentives, which should support retail sales returning to normalized levels [10] - The company expects the trade-to-wholesale mix to normalize over the next few years as used vehicle inventory recovers [11] - Full-year 2024 revenue guidance has been raised to $630-$634 million, with adjusted EBITDA expected to be $25-$27 million [35] - The company is committed to achieving midterm targets, including market share gains, TAM expansion, and margin improvement [36] Other Important Information - The company ended Q3 with $288 million in cash and cash equivalents and $115 million in debt [31] - Operating cash flow year-to-date was $69 million, reflecting strong margin expansion and the transition to positive adjusted EBITDA [33] - The company estimates a $2 million revenue and $1 million EBITDA impact from recent hurricanes in the Southeastern regions [34] Q&A Session Summary Question: Auction and Assurance ARPU Trends - The company clarified that auction and assurance revenue should be viewed as a combined metric, with no significant trend to read into the split between auction and assurance [41] Question: Impact of Larger Players Like Carvana - Management believes that the company's technology will empower dealers to compete against larger players like Carvana, which currently holds around 1% market share [43][44] Question: Pricing Strategy - The company has made progress in closing the gap on buy fees and expects to maintain pricing around $500 per vehicle, with potential for further adjustments [46][47] Question: Organic Growth Acceleration - Organic growth in Q3 was driven by share gains, better-than-expected conversion rates, and strong marketplace services performance [53] Question: Commercial Market Expansion - The company is learning from its commercial acquisitions and expects commercial volume to become a meaningful part of its business in the future [56][59] Question: Incremental EBITDA Margins - The company expects incremental EBITDA margins to improve but not reach the 40% target in 2024 due to ongoing investments in the commercial platform [63][64] Question: Conversion Rate Improvement - Conversion rate improvements in Q3 were driven by both favorable market conditions and technology enhancements [79][81] Question: Market Share vs Wallet Share - The company sees significant opportunities to grow both market share and wallet share, particularly in regions where it has lower penetration [86][88] Question: Autonomous Vehicles Impact - Management views autonomous vehicles as part of the commercial fleet category, with potential for these vehicles to be sold through auctions once they enter the used market [90] Question: Commercial Business Focus - The company is currently focused on repos and rental vehicles in the commercial market, with plans to expand into off-lease vehicles in the future [92][93] Question: International Expansion - The company is exploring international markets, particularly in Europe, with a focus on asset-light, technology-driven models [110][112] Question: Trade-to-Wholesale Mix - The trade-to-wholesale mix improved marginally in Q3, but significant improvement is expected only as used vehicle inventory recovers [101][103] Question: Market Expansion Progress - The company is seeing strong growth in newer markets like Texas and is being pulled into international markets by OEMs and other partners [107][110]

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 significant improvement from a loss of $0.02 per share a year ago, indicating a 100% earnings surprise [1] Financial Performance - The company achieved revenues of $171.33 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 6.42%, compared to $119.01 million in the same quarter last year [2] - Over the last four quarters, ACV Auctions has exceeded consensus revenue estimates four times [2] Stock Performance - ACV Auctions shares have increased approximately 26.3% since the beginning of the year, outperforming the S&P 500's gain of 24.3% [3] Future Outlook - The company's earnings outlook will be crucial for determining the stock's future performance, with current consensus EPS estimates indicating breakeven on $156.21 million in revenues for the upcoming quarter and $0.05 on $623.65 million in revenues for the current fiscal year [7] - The estimate revisions trend for ACV Auctions is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Internet - Commerce industry, to which ACV Auctions belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Marketplace GMV for the three months ended September 30, 2024, was $198.354 billion, an increase from $150.057 billion for the same period in 2023, representing a growth of 32.3%[88] - Adjusted EBITDA for the three months ended September 30, 2024, was $11.2 million, compared to a loss of $3.7 million for the same period in 2023, indicating a significant improvement in operational performance[88] - Total revenue for the three months ended September 30, 2024, was $171.3 million, a significant increase from $119.0 million in the same period of 2023[116] - Marketplace and service revenue increased to $155.9 million for the three months ended September 30, 2024, up 49% from $104.5 million in the same period last year[122] - The company’s net income for the three months ended September 30, 2024, was $7.6 million, compared to a net loss of $(3.1) million for the same period in 2023[164] Revenue Sources - The company generated the majority of its revenue from its digital marketplace, earning auction and ancillary fees only upon successful auctions, emphasizing the importance of transaction volume for revenue growth[107] - Auction marketplace revenue rose to $84.9 million from $51.5 million year-over-year, driven by increased buyer and seller activity[123] - Other marketplace revenue increased to $62.7 million from $45.0 million, primarily due to higher transportation revenue from an increased number of units transported[123] - Customer assurance revenue was $15.4 million, representing 9% of total revenue, compared to $14.5 million or 12% of total revenue in the prior year[116] Operating Expenses - Operating expenses totaled $188.5 million, up from $141.3 million year-over-year, with marketplace and service cost of revenue increasing to $67.1 million[116] - The company expects operating expenses to continue to rise in absolute dollars as it scales its business and introduces new products and services[110] - Selling, general, and administrative expenses increased to $55.0 million, a 35% increase from $40.8 million in the same period of 2023[128] - Operations and technology expenses rose to $42.5 million, up 21% from $35.1 million in the prior year, primarily due to higher personnel-related costs[127] Customer Assurance - Customer assurance revenue for the three months ended September 30, 2024, increased to $15.4 million, up 7% from $14.5 million in the same period of 2023[124] - Customer assurance cost of revenue was $14.2 million, representing 8% of total revenue, compared to $12.5 million or 10% in the prior year[116] - Go Green assurance revenue rose to $13.5 million for the three months ended September 30, 2024, compared to $12.8 million for the same period in 2023, reflecting increased customer adoption[124] Cash Flow and Investments - For the nine months ended September 30, 2024, net cash provided by operating activities was $68.6 million, a significant increase from $8.6 million in the same period of 2023[166] - The company reported cash and cash equivalents of $252.5 million and investments in marketable securities totaling $35.2 million[155] - The company reported net cash provided by investing activities of $12.3 million for the nine months ended September 30, 2024, compared to net cash used of $(86.2) million in the same period of 2023[167] Acquisitions - The company completed four business acquisitions during the nine months ended September 30, 2024, with a total estimated cash consideration of $113.4 million[169] - The acquisition of Alliance Auto Auctions on January 30, 2024, involved an estimated cash consideration of $66.9 million and 639,976 common shares, with $40.4 million allocated to goodwill[171] - The company completed the acquisition of a business for an estimated cash consideration of $51.6 million, with $11.4 million allocated to goodwill, $18.7 million to intangibles, and $21.4 million to net assets assumed[174] Market Trends and Risks - Used vehicle demand remains strong, with the company benefiting from rising consumer interest in used vehicles, although economic factors such as interest rates may impact affordability[105] - The company experiences seasonality in vehicle auction volume, typically seeing lower volume in the fourth quarter and winter months[175] - The company is exposed to market risk primarily due to fluctuations in interest rates, which may impact its financial position[178] Future Outlook - The company aims to grow its share of wholesale transactions from existing customers, which is critical for increasing revenue and overall marketplace health[97] - The introduction of new value-added services, such as ACV Transportation and ACV Capital, is expected to drive revenue growth and enhance customer adoption[103] - The company anticipates continued investment in technology development and sales and marketing efforts, which may increase operating expenses in the near term but is expected to support long-term growth[104]

Financial Performance - Third quarter revenue reached $171 million, representing a 44% year-over-year increase[4] - Adjusted EBITDA for the third quarter was $11 million, compared to a loss of $4 million in the same quarter of 2023[4] - Non-GAAP net income for the third quarter was $8 million, a significant improvement from a loss of $3 million in the prior year[4] - Total revenue for the three months ended September 30, 2024, was $171,329,000, representing a 43.9% increase from $119,014,000 in the same period of 2023[25] - Marketplace and service revenue increased to $155,908,000 for the three months ended September 30, 2024, up 49.2% from $104,537,000 year-over-year[25] - Net loss for the nine months ended September 30, 2024, was $53,563,000, compared to a net loss of $52,020,000 for the same period in 2023[28] - Adjusted EBITDA for Q3 2024 was $11,170, compared to a loss of $3,693 in Q3 2023, showing a significant improvement[30] - Net income for Q3 2024 was a loss of $16,029, while the loss for Q3 2023 was $18,238, indicating a reduction in losses[30] - Non-GAAP net income guidance for Q4 2024 is projected to be between a loss of $27 million and a loss of $25 million[32] - Non-GAAP net income for FY24 is expected to range from $8 million to $10 million, indicating a potential turnaround[32] Revenue Guidance - The company expects full-year 2024 revenue to be between $630 million and $634 million, indicating a growth of 31% to 32% year-over-year[1] - Fourth quarter revenue guidance is projected to be between $152 million and $156 million, an increase of 28% to 32% year-over-year[5] Market Performance - The marketplace GMV was $2.5 billion, reflecting a 17% year-over-year growth[4] - The dealer wholesale market is anticipated to remain approximately flat year-over-year in 2024[5] - The company is experiencing continued margin expansion and gaining market share[2] Expenses and Assets - Total operating expenses for the three months ended September 30, 2024, were $188,468,000, a 33.4% increase from $141,301,000 in the same period of 2023[25] - Cash and cash equivalents increased to $252,524,000 as of September 30, 2024, up from $182,571,000 at the end of 2023[27] - Total assets grew to $1,034,353,000 as of September 30, 2024, compared to $922,924,000 at the end of 2023, reflecting a 12.1% increase[27] - The company’s long-term debt remained stable at $115,000,000 as of September 30, 2024[27] Costs and Expenses - Stock-based compensation increased to $18,260 in Q3 2024 from $12,855 in Q3 2023, reflecting higher employee compensation costs[30] - Acquisition-related costs for Q3 2024 were $214, up from $88 in Q3 2023, suggesting increased investment in acquisitions[30] - Depreciation and amortization expenses for Q3 2024 were $9,769, compared to $5,087 in Q3 2023, indicating higher asset depreciation[30] - Interest expense decreased to $(973) in Q3 2024 from $(4,050) in Q3 2023, reflecting improved interest management[30] - Provision for income taxes was $(137) in Q3 2024, compared to $1 in Q3 2023, indicating a shift in tax liabilities[30] - Litigation-related costs were not included in adjusted EBITDA, with $1,553 incurred in the nine months ended September 30, 2023, suggesting ongoing legal challenges[30] Impact of External Factors - Recent hurricanes are estimated to negatively impact revenue by approximately $2 million in the fourth quarter[5] - The weighted-average shares outstanding increased to 165,723,168 for the three months ended September 30, 2024, compared to 160,427,987 in the same period of 2023[25]

Group 1 - ACV Auctions Inc. (ACVA) has gained approximately 23.7% year-to-date, outperforming the average gain of 19.4% in the Retail-Wholesale sector [2][3] - The Zacks Consensus Estimate for ACVA's full-year earnings has increased by 4.3% over the past 90 days, indicating improved analyst sentiment [2] - ACV Auctions Inc. is ranked 2 (Buy) in the Zacks Rank, suggesting a positive outlook for the stock [2][3] Group 2 - ACV Auctions Inc. belongs to the Internet - Commerce industry, which has an average gain of 23.4% year-to-date, indicating that ACVA is performing better than its industry peers [3] - Build-A-Bear (BBW) is another stock in the Retail-Wholesale sector that has significantly outperformed, with a year-to-date increase of 53.2% [2][3] - The Retail - Miscellaneous industry, which includes Build-A-Bear, has seen a decline of 3.2% since the beginning of the year, contrasting with the performance of ACV Auctions Inc. [3]

Core Viewpoint - The Federal Reserve Chairman Jerome Powell indicated that an interest rate cut is imminent, with a 100% probability of a 25-basis point cut in September and a 65.3% chance of a full 1% cut in 2024, which is expected to benefit growth stocks, particularly in the technology sector [1][2]. Group 1: Impact of Interest Rate Cut on Growth Stocks - A lower market interest rate is anticipated to boost growth stocks, particularly in technology, by decreasing the discount rate and increasing the net present value of investments [2]. - The Internet Software and Services sector is experiencing growth due to increased IT spending and the rise of connected consumer devices, which facilitate online business [2]. Group 2: Industry Trends - The Internet-Commerce industry is thriving in 2024, especially among Gen-Z consumers who are accustomed to online shopping and high levels of digitization [3]. Group 3: Top Stock Picks - Three Internet-centric stocks identified for investment are Datadog Inc. (DDOG), Uber Technologies Inc. (UBER), and ACV Auctions Inc. (ACVA), all showing strong upside potential for the remainder of 2024 [4]. Group 4: Datadog Inc. (DDOG) - Datadog is experiencing growth due to new customer acquisitions and increased adoption of its cloud-based monitoring platform, with expected net sales growth of 22% in 2024 [5]. - The company has a projected revenue growth rate of 23.3% and earnings growth rate of 22.7% for the current year, with positive earnings estimate revisions noted [6]. Group 5: Uber Technologies Inc. (UBER) - Uber's Delivery business is benefiting from rising online order volumes, with gross bookings expected to be between $40.25 billion and $41.75 billion for Q3 2024 [9]. - The company has an expected revenue growth rate of 16.5% and earnings growth rate of 19.5% for the current year, with positive earnings estimate revisions [11]. Group 6: ACV Auctions Inc. (ACVA) - ACV Auctions operates a digital marketplace for wholesale vehicle auctions, providing various services that enhance buyer and seller interactions [14]. - The company has an expected revenue growth rate of 29.4% and earnings growth rate exceeding 100% for the current year, with positive earnings estimate revisions [15].

Group 1 - ACV Auctions Inc. (ACVA) is outperforming the Retail-Wholesale sector with a year-to-date return of 22.6%, compared to the sector's average return of 12.5% [2][3] - The Zacks Rank for ACV Auctions Inc. is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [2] - The Zacks Consensus Estimate for ACVA's full-year earnings has increased by 4.1% over the past quarter, reflecting improving analyst sentiment [2] Group 2 - ACV Auctions Inc. belongs to the Internet - Commerce industry, which has an average year-to-date return of 14.7%, indicating that ACVA is performing better than its industry peers [3] - Abercrombie & Fitch (ANF) is another strong performer in the Retail-Wholesale sector, with a year-to-date return of 87.1% [2] - The consensus EPS estimate for Abercrombie & Fitch has increased by 23.3% over the past three months, also holding a Zacks Rank of 2 (Buy) [3]

Financial Data and Key Metrics Changes - Revenue for Q2 2024 grew 29% year-over-year to $161 million, exceeding the high-end of guidance [8][21] - Adjusted EBITDA increased 65% sequentially, resulting in a 700 basis point year-over-year improvement in adjusted EBITDA margin [7][21] - Non-GAAP net income was at the midpoint of guidance with a margin increase of approximately 300 basis points year-over-year [22] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 57% of total revenue, growing 33% year-over-year, with unit growth of 22% [23] - Marketplace services revenue represented 38% of total revenue, increasing by 30% year-over-year, driven by strong ACV Transport performance [23] - SaaS and data services products comprised 5% of total revenue, returning to positive growth [24] Market Data and Key Metrics Changes - New retail sales were flat year-over-year due to the CDK outage, while used retail sales declined approximately 5% year-over-year [9][10] - Used vehicle inventory levels have recovered from historical lows but remain about 20% below normal [10] - The trade to wholesale mix showed a slight uptick, indicating dealers are beginning to wholesale more vehicles [11] Company Strategy and Development Direction - The company focuses on three pillars for long-term shareholder value: growth, innovation, and scale [9] - The strategy includes expanding the addressable market and enhancing product offerings, particularly in the commercial sector [39][41] - The company aims to achieve adjusted EBITDA profitability in 2024 while maintaining a disciplined approach to expenses [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the automotive market's recovery, citing normalization of new vehicle inventories and increased OEM incentives [10][11] - The company anticipates modest recovery in the dealer wholesale market in the second half of 2024 [28] - Management remains cautious about macroeconomic factors but is encouraged by strong performance in July and early August [27][63] Other Important Information - The company ended Q2 with $273 million in cash and cash equivalents, with $110 million of debt on its revolver [26] - The company is piloting a new offering for financing consumer source vehicles and dealer trade-ins [13][57] Q&A Session Summary Question: What signs of progress are seen in the market? - Management noted that new vehicle inventory is normalizing and OEMs are increasing incentives, which are positive signals for the market recovery [34] Question: Can you discuss the commercial opportunity and acquisition landscape? - Management highlighted progress in integrating with AutoIMS and expanding locations for commercial operations, aiming for at least 40 locations [39][41] Question: What was the impact of the CDK outage on revenue or EBITDA? - The estimated impact was over $600,000 of EBITDA and over $1 million of revenue, but the company still had a strong quarter [46][47] Question: How does the company view competitive intensity? - Management stated that while there are strong competitors, the competitive nature has not changed significantly, and the company continues to perform well [60] Question: What investments are needed to reach targets? - Management indicated that investments in commercial strategy and M&A will impact incremental EBITDA margins, but they expect to deliver about 40% of every incremental dollar of revenue down to EBITDA [66]

ACV Auctions Inc. (ACVA) came out with quarterly earnings of $0.02 per share, in line with the Zacks Consensus Estimate. This compares to loss of $0.01 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced break-even earnings, delivering a surprise of -100%.Over the last four quarters, the company has surpassed consensus EPS estimates just once.ACV Auctions, which belongs to t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-40256 ACV Auctions Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 47-2415221 (State or ...