ACV Auctions(US:ACVA)2021-05-12 16:00Financial Performance - For the three months ended March 31, 2021, 128,386 Marketplace Units were sold, resulting in a total Marketplace GMV of $1.3 billion, representing increases of 55% and 107% respectively from the same period in 2020[85]. - Total revenue for the same period was $69.1 million, a 64% increase from the prior year, with a net loss of $17.4 million and Adjusted EBITDA of $(12.4) million compared to a net loss of $27.5 million and Adjusted EBITDA of $(24.4) million in Q1 2020[85]. - Marketplace Units and total revenue achieved year-over-year growth of 55% and 64% respectively in Q1 2021, driven by increased demand for used vehicles amid tightening supply[89]. - Marketplace and service revenue for Q1 2021 was $58.4 million, a 69% increase from $34.6 million in Q1 2020, driven by higher auction marketplace revenue and transportation services[128]. - Customer assurance revenue reached $10.7 million in Q1 2021, up 40% from $7.6 million in Q1 2020, primarily due to increased sales of Go Green assurance offerings[130]. - Total revenue for Q1 2021 was $69.1 million, compared to $42.2 million in Q1 2020, reflecting strong growth in both marketplace and customer assurance segments[124]. - The net loss for Q1 2021 was $17.4 million, compared to a net loss of $27.5 million in Q1 2020, showing a trend towards improved financial performance[125]. Operating Expenses - Operating expenses for Q1 2021 totaled $86.2 million, an increase from $70.1 million in Q1 2020, with significant contributions from marketplace service costs and selling, general, and administrative expenses[124]. - Loss from operations for Q1 2021 was $17.1 million, an improvement from a loss of $27.9 million in Q1 2020, indicating better operational efficiency[124]. - The company expects marketplace and service cost of revenue to continue increasing as it scales its business and introduces new offerings[115]. - Marketplace and service cost of revenue was $29.5 million for the three months ended March 31, 2021, an increase of $7.9 million, or 37%, from $21.6 million for the same period in 2020[131]. - Customer assurance cost of revenue increased to $9.4 million for the three months ended March 31, 2021, up by $2.1 million, or 29%, compared to $7.3 million in the prior year[132]. - Operations and technology expenses rose to $21.6 million for the three months ended March 31, 2021, reflecting an increase of $4.6 million, or 27%, from $16.9 million in the same period last year[134]. - Selling, general, and administrative expenses were $24.0 million for the three months ended March 31, 2021, an increase of $0.9 million, or 4%, compared to $23.1 million for the same period in 2020[135]. - Depreciation and amortization costs increased to $1.8 million for the three months ended March 31, 2021, up by $0.6 million, or 46%, from $1.2 million in the prior year[136]. Cash Flow and Liquidity - As of March 31, 2021, the company had cash and cash equivalents totaling $659.7 million, which is expected to support working capital and capital expenditure requirements for at least the next 12 months[147]. - In the three months ended March 31, 2021, net cash provided by operating activities was $45.9 million, compared to a net cash used of $31.9 million in the same period of 2020[157][158]. - Net cash used in investing activities was $10.6 million for the three months ended March 31, 2021, compared to $5.0 million in the same period of 2020[159]. - Net cash provided by financing activities was $390.7 million in the three months ended March 31, 2021, primarily from the issuance of common stock during the IPO[160]. - The company had cash and cash equivalents of $659.7 million as of March 31, 2021, consisting of interest-bearing investments with maturities of three months or less[170]. - The company experienced a $85.1 million increase in accounts receivable during the three months ended March 31, 2021[157]. - The company is in compliance with all applicable covenants under the 2019 Revolver as of March 31, 2021[153]. Strategic Initiatives - The company plans to continue investing in growth, anticipating increased operating expenses as it builds sales and marketing efforts and expands its employee base[107]. - The company aims to grow its share of wholesale transactions from existing customers and attract new Marketplace Participants to enhance revenue growth[100][101]. - The company launched its financing arm, ACV Capital, in 2019 and plans to drive customer adoption of existing value-added and data services[104]. - The company is focused on developing new products and services, including data-powered offerings, to enhance its platform and drive customer adoption[106]. - The company is focused on expanding its marketplace platform across the U.S. and enhancing its inspection product quality to reduce customer assurance costs over time[114]. Market Trends - The average sales price per unit declined by over 31% from February 29, 2020, to April 30, 2020, due to excess supply during the initial COVID-19 disruptions[88]. - Seasonal fluctuations in used vehicle sales are anticipated to normalize as the business matures, impacting quarterly results and pricing strategies[109]. - Marketplace GMV is expected to grow as Marketplace Units increase, indicating the health and growth of the business[95]. - Adjusted EBITDA is monitored as a non-GAAP financial measure to assess operating performance, with expectations of fluctuation in the near term due to ongoing investments[96]. Interest and Tax - Interest income for Q1 2021 was $26, down from $509 in Q1 2020, reflecting changes in cash management strategies[127]. - Interest income decreased to $0.026 million for the three months ended March 31, 2021, a decline of $0.483 million, or 95%, from $0.509 million in the same period in 2020[138]. - Interest expense on revolving lines of credit was $0.2 million for the three months ended March 31, 2021, compared to $0.1 million for the same period in 2020, an increase of 89%[139]. - Provision for income taxes was approximately $0.058 million for the three months ended March 31, 2021, up from $0.047 million in the prior year, representing a 23% increase[140]. IPO and Financing - The company completed its IPO in March 2021, resulting in aggregate net proceeds of $388.9 million after deducting underwriting discounts and commissions[146]. - As of March 31, 2021, the company had $6.6 million drawn down under the 2019 Revolver, which has a total credit limit of $50.0 million[153]. - The interest rate on outstanding borrowings under the 2019 Revolver is LIBOR plus 5.00%, with a LIBOR floor of 1.00%[150]. - The company does not have any off-balance sheet financing arrangements or relationships with unconsolidated entities[164].