Financial Performance - Fourth quarter revenue reached $160 million, a 35% increase year over year, while full-year revenue totaled $637 million, up 32% year over year[6] - Fourth quarter Adjusted EBITDA was $6 million, compared to a loss of $5 million in the same quarter of 2023, with full-year Adjusted EBITDA at $28 million, improving from a loss of $18 million in 2023[7] - Marketplace and service revenue for the full year was $573 million, a 36% increase year over year, with marketplace units sold totaling 743,008, a 24% increase year over year[8] - Total revenue for the year ended December 31, 2024, was $637,156 thousand, a 32.5% increase from $481,234 thousand in 2023[32] - Marketplace and service revenue for Q4 2024 reached $143,123 thousand, up 37.8% from $103,767 thousand in Q4 2023[32] - Adjusted EBITDA for the year ended December 31, 2024, was $28,136 thousand, compared to a loss of $18,209 thousand in 2023[37] Future Projections - For 2025, the company expects revenue between $765 million and $785 million, representing a growth of 20% to 23% year over year, and Adjusted EBITDA is projected to be between $65 million and $75 million, indicating approximately 150% growth at the midpoint of guidance[6] - The first quarter of 2025 is expected to generate total revenue of $180 million to $185 million, an increase of 24% to 27% year over year, with Adjusted EBITDA projected to rise by 110% to 158% year over year[8] Market Insights - The marketplace GMV for the fourth quarter was $2.3 billion, reflecting a 22% year-over-year increase, with marketplace units sold reaching 183,497, a 27% increase year over year[7] - The dealer wholesale market is anticipated to remain flat year over year in 2025, but the company believes it is well-positioned for sustainable market share gains[4] Net Income and Loss - Non-GAAP net income for the full year 2025 is expected to be between $32 million and $42 million, while GAAP net loss is projected to be between $62 million and $52 million[8] - The company reported a fourth quarter GAAP net loss of $26 million, compared to a loss of $23 million in the fourth quarter of 2023[7] - Net loss for the year ended December 31, 2024, was $79,700 thousand, compared to a net loss of $75,261 thousand in 2023, reflecting a 5.1% increase in losses[32] Cash and Expenses - Cash and cash equivalents increased to $224,065 thousand as of December 31, 2024, from $182,571 thousand at the end of 2023, marking a 22.8% increase[34] - Total operating expenses for the year ended December 31, 2024, were $721,261 thousand, a 26.4% increase from $570,911 thousand in 2023[32] - The company reported a stock-based compensation expense of $68,010 thousand for the year ended December 31, 2024, up from $49,648 thousand in 2023[37] - Total liabilities increased to $544,145 thousand as of December 31, 2024, from $466,396 thousand in 2023, representing a 16.6% increase[34] Acquisitions and Shares - The company acquired businesses for a net cash outflow of $156,475 thousand in 2024, compared to $29,623 thousand in 2023[36] - The weighted-average shares outstanding for the year ended December 31, 2024, were 164,850,699, an increase from 159,952,813 in 2023[32] Upcoming Events - The company plans to host an analyst meeting on March 11, 2025, to discuss further insights and strategies[10]

Core Insights - ACV reported strong fourth quarter results with revenue and Adjusted EBITDA exceeding the high-end of guidance, indicating continued margin expansion and market share gains [3][4] - The company anticipates sustainable market share gains and strong revenue growth in 2025 despite a flat dealer wholesale market [4] Financial Performance - Fourth quarter revenue reached $160 million, a 35% increase year-over-year, with marketplace and service revenue at $143 million, up 38% year-over-year [8] - Full-year revenue for 2024 was $637 million, a 32% increase year-over-year, with marketplace GMV of $9.5 billion, up 7% year-over-year [8] - Adjusted EBITDA for the fourth quarter was $6 million, compared to a loss of $5 million in the same quarter of 2023, while full-year Adjusted EBITDA was $28 million, improving from a loss of $18 million in 2023 [8] Guidance and Outlook - For the first quarter of 2025, ACV expects total revenue between $180 million and $185 million, representing a year-over-year increase of 24% to 27% [7] - Full-year 2025 revenue is projected to be between $765 million and $785 million, reflecting a growth of 20% to 23% year-over-year, with Adjusted EBITDA expected to grow approximately 150% year-over-year at the midpoint of guidance [7][14] Market Metrics - Marketplace GMV for the fourth quarter was $2.3 billion, a 22% increase year-over-year, with marketplace units transacted reaching 183,497, up 27% year-over-year [8] - The company’s expanding suite of dealer solutions is gaining traction, contributing to strong revenue growth [3] Operational Highlights - The company reported a GAAP net loss of $26 million for the fourth quarter, compared to a loss of $23 million in the fourth quarter of 2023 [8] - Non-GAAP net income for the full year 2024 was $11 million, contrasting with a loss of $16 million in 2023 [8][37]

Industry Overview - The e-commerce industry is expected to perform well in 2024, with e-commerce sales in Q3 2024 growing by 7.4% compared to Q3 2023, while total retail sales increased by 2.1% [1] - E-commerce accounted for approximately 16.2% of total U.S. retail sales, with Q4 typically being the strongest quarter for the industry [2] - The convenience of online shopping is a primary driver of e-commerce growth, particularly among Gen-Z consumers who are accustomed to high levels of digitization [3][4] Current Trends - The 2024 holiday sales season has shown strong performance, with consumers spending 8.4% more than the previous year, driven by steep discounts and increased mobile shopping [5] - Mobile shopping accounted for 54.5% of total shopping, with AI influencing 19% of orders during the holiday season [6] - The total retail experience is increasingly blending online and offline activities, with consumers preferring faster delivery and pickup options [10] Market Performance - The Zacks Internet - Commerce industry ranks 70, placing it in the top 28% of 250 Zacks industries, indicating positive near-term prospects [11] - The industry has collectively gained 43.5% over the past year, outperforming the broader Zacks Retail and Wholesale Sector and the S&P 500 [16] Valuation Insights - The industry currently trades at a price-to-earnings (P/E) ratio of 26.6X, representing a premium to both the S&P 500 and the broader retail sector [18] - Despite the positive growth trends, the industry is considered overvalued compared to its historical median P/E level [18] Stock Recommendations - **ACV Auctions Inc. (ACVA)**: Expected to see significant growth with analyst estimates projecting 160% growth in 2024 and 517% in 2025, driven by a 32% revenue growth in 2024 [22][23][24] - **Amazon, Inc. (AMZN)**: Anticipated to achieve 10.9% revenue growth and 82.4% earnings growth in 2024, supported by its Prime loyalty program and AWS [26][28] - **JD.com, Inc. (JD)**: Projected earnings growth of 31.7% in 2024, benefiting from improved consumer sentiment and strong performance in general merchandise [30][32]

Core Viewpoint - ACV, a leading digital automotive marketplace, is set to report its fourth quarter 2024 financial results and will host an analyst meeting in March 2025 to discuss its business strategies and performance [1][3]. Financial Reporting - ACV will announce its fourth quarter 2024 financial results after market close on February 19, 2025, followed by a conference call at 5:00 p.m. ET [1]. - Investors and analysts can participate in the call by dialing the provided numbers approximately 10 minutes before the start [2]. Analyst Day - ACV will host an Analyst Day on March 11, 2025, at Convene in Midtown Manhattan, starting at 1:00 p.m. ET and concluding at 4:00 p.m. ET, followed by a reception with management [3]. - Registration for the event can be completed via email [3]. Webcast Availability - Live webcasts of the financial results and Analyst Day will be available on ACV's investor relations website, with archived replays accessible afterward [4]. Company Overview - ACV aims to transform the automotive industry by providing a trusted digital marketplace and data solutions for used vehicle transactions, emphasizing transparency and comprehensive insights [5]. - The company's offerings include ACV Auctions, ACV Transportation, ACV Capital, MAX Digital, True360, and ClearCar [5].

Core Insights - ACV is leveraging its extensive data and AI capabilities to enhance vehicle pricing and dealership operations, aiming to improve efficiency and profitability for dealers [1][3][8] - The company is set to showcase its innovative solutions at the 2025 NADA Show, focusing on inventory acquisition, management, and appraisals [1][3][8] Group 1: Product Offerings and Innovations - ACV's data, derived from millions of used vehicle inspections and transactions, is transforming dealer operations by providing real-time pricing and inventory insights [2][5] - The introduction of ClearCar's QuickQuote enhances flexibility in sourcing consumer leads and inventory acquisition, utilizing real-time marketplace data [5] - ACV MAX now includes an appraisal-only option, delivering precision in vehicle appraisals based on market data, responding to dealer feedback for a more streamlined solution [5] Group 2: Educational Initiatives and Engagement - ACV will host an educational workshop at the NADA Show, focusing on strategies to enhance profitability in service centers and improve vehicle inspections [4] - The TEC Talks series will feature industry experts discussing data insights and strategies for dealers, covering topics like precision pricing and AI-powered appraisals [7] Group 3: Strategic Vision and Market Position - ACV's CEO emphasizes the importance of AI in the automotive industry, highlighting the company's commitment to helping partners thrive amidst evolving market conditions [8] - The company aims to build a trusted digital marketplace for used vehicles, providing comprehensive insights and transparency [10]

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]