ACV Announces Second Quarter 2022 Results

Gains Market Share, Delivers Solid Revenue Growth and Margin Improvement
Updates 2022 Guidance

• Second quarter income of $115 million, up 18% YoY
• Second quarter GAAP web lack of $25 million
• Second quarter Adjusted EBITDA lack of $14 million; Adjusted EBITDA margin expansion of ~500 foundation factors from first quarter 2022
• Expects 2022 income of $427 million to $432 million, progress of 19% to 21% YoY; expects 2022 Adjusted EBITDA lack of $57 million to $59 million

BUFFALO, N.Y., Aug. 10, 2022 (GLOBE NEWSWIRE) — ACV (Nasdaq: ACVA), the main on-line automotive market and knowledge companies associate for sellers, immediately reported outcomes for its second quarter ended June 30, 2022.

“We are very pleased with our second quarter results, which once again exceeded revenue expectations, despite continued headwinds impacting the automotive industry, while also delivering strong quarter-over-quarter margin expansion. Our growth is driven by market share gains, continued strong adoption of ACV’s value-added services, and traction in our growing suite of data and SaaS solutions,” mentioned George Chamoun, CEO of ACV.

“While we continue to experience strong adoption across our growing marketplace, we are updating our 2022 guidance to reflect weakening consumer demand and ongoing supply challenges in the automotive industry, with a corresponding reduction in operating expenses,” continued Chamoun.

“These macroeconomic factors are expected to constrain wholesale volumes in the near-term, but we believe ACV is in a strong position to deliver sustainable growth as end-markets recover, while also continuing to scale our asset-light business model,” concluded Chamoun.

Second Quarter 2022 Highlights

• Revenue of $115 million, a rise of 18% 12 months over 12 months.
• Marketplace and Service income of $98 million, a rise of 16% 12 months over 12 months.
• Marketplace GMV of $2.7 billion, a rise of roughly 27% 12 months over 12 months.
• Marketplace Units of 148,047, a lower of three% 12 months over a 12 months, a 6% improve in comparison with first quarter 2022
• Adjusted EBITDA lack of $14 million, in comparison with Adjusted EBITDA lack of $4 million within the second quarter 2021. Adjusted EBITDA margin elevated roughly 500 foundation factors in comparison with first quarter 2022.

Third Quarter and Full-Year 2022 Guidance

Based on info as of immediately, ACV is offering the next steering:

• Third quarter of 2022:
  • Total income of $104 to $107 million, a rise of 13% to 17% 12 months over 12 months
  • Adjusted EBITDA lack of $13 to $15 million
  • GAAP web lack of $29 to $31 million
  • Non-GAAP web lack of $15 to $16 million
• Full-Year 2022:
  • Total income of $427 to $432 million, a rise of 19% to 21% 12 months over 12 months
  • Adjusted EBITDA lack of $57 to $59 million; an approximate 14% loss on the midpoint of income steering
  • GAAP web lack of $113 to $115 million
  • Non-GAAP web lack of $65 to $67 million

Our monetary steering consists of the next assumptions:

• Wholesale volumes are anticipated to stay constrained because of the ongoing automotive OEM manufacturing challenges and softening retail demand for used automobiles.
• Marketplace conversion charges are anticipated to stay on the lower-end of our historic vary till vendor and purchaser value expectations converge to extra normalized ranges.
• Total non-GAAP working bills, excluding value of income, are anticipated to develop roughly 23% 12 months over 12 months in 2022, reflecting a discount in exit run charge by roughly $40 million versus preliminary 2022 steering, and exclude roughly $43 million of stock-based compensation and $4 million of intangible amortization.
• Third quarter non-GAAP web loss excludes roughly $13 million of stock-based compensation and roughly $1 million of intangible amortization.

ACV’s Second Quarter Results Conference Call

ACV will host a convention name and stay webcast immediately, August 10, 2022, at 5:00 p.m. ET to debate monetary outcomes. To entry the stay convention name, please pre-register utilizing this link. Registrants will obtain affirmation with dial-in particulars. A stay webcast of the decision will be accessed here. Participants are inspired to affix the webcast except asking a query. An archived webcast of the convention name will likely be out there on the investor relations web page of the Company’s web site at https://investors.acvauto.com.

About ACV Auctions

ACV offers a vibrant digital market for wholesale automobile transactions and knowledge companies that provides clear and correct automobile info to prospects. On a mission to construct and allow essentially the most trusted and environment friendly digital marketplaces for purchasing and promoting used automobiles, ACV’s platform leverages knowledge insights and know-how to energy its digital market and knowledge companies, enabling sellers and industrial companions to purchase, promote and worth automobiles with confidence and effectivity. ACV’s community of manufacturers consists of ACV Auctions, ACV Transportation and ACV Capital inside its Marketplace Products, in addition to True360, ACV Data Services and MAX Digital.

Information About Non-GAAP Financial Measures

ACV offers supplemental non-GAAP monetary measures to its monetary outcomes. We use these non-GAAP monetary measures, and we consider that they help our traders to make period-to-period comparisons of our working efficiency as a result of they supply a view of our working outcomes with out gadgets that aren’t, in our view, indicative of our working outcomes. These non-GAAP monetary measures shouldn’t be construed as an alternative choice to GAAP outcomes because the gadgets excluded from the non-GAAP monetary measures typically have a fabric influence on our working outcomes, sure of these gadgets are recurring, and others typically recur. Management makes use of, and traders ought to think about, our non-GAAP monetary measures solely together with our GAAP outcomes.

Non-GAAP Financial Measures

Adjusted EBITDA is a monetary measure that isn’t introduced in accordance with GAAP. We consider that Adjusted EBITDA, when taken along with our monetary outcomes introduced in accordance with GAAP, offers significant supplemental info concerning our working efficiency and facilitates inside comparisons of our historic working efficiency on a extra constant foundation by excluding sure gadgets that is probably not indicative of our business, outcomes of operations or outlook. In explicit, we consider that the usage of Adjusted EBITDA is useful to our traders as it’s a measure utilized by administration in assessing the well being of our business, figuring out incentive compensation and evaluating our working efficiency, in addition to for inside planning and forecasting functions.

We outline Adjusted EBITDA as web loss, adjusted to exclude: depreciation and amortization; stock-based compensation expense; curiosity (revenue) expense; provision for revenue taxes; different (revenue) expense, web; and different one-time non-recurring gadgets of a fabric nature, when relevant, resembling acquisition-related and restructuring bills.

Adjusted EBITDA is introduced for supplemental informational functions solely, has limitations as an analytical device and shouldn’t be thought-about in isolation or as an alternative choice to monetary info introduced in accordance with GAAP. Some of the constraints embody that (1) it doesn’t correctly replicate capital commitments to be paid sooner or later; (2) though depreciation and amortization are non-cash fees, the underlying property could must be changed and Adjusted EBITDA doesn’t replicate these capital expenditures; (3) it doesn’t think about the influence of stock-based compensation expense, (4) it doesn’t replicate different non-operating bills, together with curiosity expense, (5) it doesn’t think about the influence of any contingent consideration legal responsibility valuation changes, (6) it doesn’t replicate tax funds which will symbolize a discount in money out there to us, and (7) it doesn’t replicate different one-time, non-recurring gadgets of a fabric nature, when relevant, resembling acquisition-related and restructuring bills. In addition, our use of Adjusted EBITDA is probably not akin to equally titled measures of different firms as a result of they might not calculate Adjusted EBITDA in the identical method, limiting its usefulness as a comparative measure.

Non-GAAP Net revenue (loss), a monetary measure that isn’t introduced in accordance with GAAP, offers traders with extra helpful info to measure working efficiency and present and future liquidity when taken along with our monetary outcomes introduced in accordance with GAAP. By offering this info, we consider administration and the customers of the monetary statements are higher in a position to perceive the monetary outcomes of what we think about to be our natural, persevering with operations.

We outline Non-GAAP Net revenue (loss) as web revenue (loss), adjusted to exclude: stock-based compensation expense, amortization of acquired intangible property, and different one-time, non-recurring gadgets of a fabric nature, when relevant, resembling acquisition-related and restructuring bills.

In the calculation of Non-GAAP Net revenue (loss), we exclude stock-based compensation expense due to various out there valuation methodologies, subjective assumptions and the number of fairness devices that may influence our non-cash expense. We consider that offering non-GAAP monetary measures that exclude stock-based compensation expense permits for extra significant comparisons between our working outcomes from interval to interval.

We exclude amortization of acquired intangible property from the calculation of Non-GAAP Net revenue (loss). We consider that excluding the influence of amortization of acquired intangible property permits for extra significant comparisons between working outcomes from interval to interval because the underlying intangible property are valued on the time of acquisition and are amortized over a number of years after the acquisition.

We exclude contingent consideration legal responsibility valuation changes related to the acquisition consideration of transactions accounted for as business mixtures. We additionally exclude sure different one-time, non-recurring gadgets of a fabric nature, when relevant, resembling acquisition-related and restructuring bills, as a result of we don’t think about such quantities to be a part of our ongoing operations nor are they akin to prior interval nor predictive of future outcomes.

Non-GAAP web revenue (loss) is introduced for supplemental informational functions solely, has limitations as an analytical device and shouldn’t be thought-about in isolation or as an alternative choice to monetary info introduced in accordance with GAAP. Some of those limitations embody that: (1) it doesn’t think about the influence of stock-based compensation expense; (2) though amortization is a non-cash cost, the underlying property could must be changed and Non-GAAP Net revenue (loss) doesn’t replicate these capital expenditures; (3) it doesn’t think about the influence of any contingent consideration legal responsibility valuation changes; and (4) it doesn’t think about the influence of different one-time fees, resembling acquisition-related and restructuring bills, which might be materials to the outcomes of our operations. In addition, our use of Non-GAAP Net revenue (loss) is probably not akin to equally titled measures of different firms as a result of they might not calculate Non-GAAP Net revenue (loss) in the identical method, limiting its usefulness as a comparative measure.

Information About Operating and Financial Metrics

We often monitor the next working and monetary metrics with a view to measure our present efficiency and estimate our future efficiency. Our key working and monetary metrics could also be calculated in a way completely different than related business metrics utilized by different firms.

Operating and Financial Metrics

Marketplace GMV – Marketplace GMV is primarily pushed by the amount and greenback worth of Marketplace Units transacted on our digital market. We consider that Marketplace GMV acts as an indicator of the success of our market, signaling satisfaction of sellers and consumers on our market, and the well being, scale, and progress of our business. We outline Marketplace GMV as the full greenback worth of automobiles transacted by way of our digital market inside the relevant interval, excluding any public sale and ancillary charges.

Marketplace Units – Marketplace Units is a key indicator of our potential for progress in Marketplace GMV and income. It demonstrates the general engagement of our prospects on the ACV platform, the vibrancy of our digital market and our market share of wholesale transactions within the United States. We outline Marketplace Units because the variety of automobiles transacted on our digital market inside the relevant interval. Marketplace Units transacted consists of any automobile that efficiently reaches bought standing, even when the public sale is subsequently unwound, which means the client or vendor doesn’t full the transaction. These cases have been immaterial so far. Marketplace Units excludes automobiles that have been inspected by ACV, however not bought on our digital market. Marketplace Units have elevated over time as now we have expanded our territory protection, added new seller companions and elevated our share of wholesale transactions from present prospects.

Forward-Looking Statements

This presentation incorporates “forward-looking statements” inside the which means of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, together with statements regarding ACV’s skill to ship long-term progress and whole addressable market growth, our monetary steering for the second quarter of 2022 and the total 12 months of 2022. In some circumstances, you’ll be able to determine forward-looking statements as a result of they include phrases resembling “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the unfavorable of those phrases or different related phrases or expressions. You shouldn’t depend on forward-looking statements as predictions of future occasions.

The forward-looking statements contained on this presentation are primarily based on ACV’s present assumptions, expectations and beliefs and are topic to substantial dangers, uncertainties and modifications in circumstances which will trigger ACV’s precise outcomes, efficiency or achievements to vary materially from these expressed or implied in any forward-looking assertion. These dangers and uncertainties embody, however will not be restricted to: (1) our historical past of working losses; (2) our restricted working historical past; (3) our skill to successfully handle our progress; (4) our skill to develop the variety of members on our platform; (5) normal market, political, financial, and business circumstances; (6) our skill to amass new prospects and efficiently retain present prospects; (7) our skill to successfully develop and increase our gross sales and advertising and marketing capabilities; (8) breaches in our safety measures, unauthorized entry to our platform, our knowledge, or our prospects’ or different customers’ private knowledge; (9) danger of interruptions or efficiency issues related to our merchandise and platform capabilities; (10) our skill to adapt and reply to quickly altering know-how or buyer wants; (11) our skill to compete successfully with present rivals and new market entrants; (12) our skill to conform or stay in compliance with legal guidelines and laws that presently apply or turn out to be relevant to our business within the United States and different jurisdictions the place we elect to do business; and (13) the influence that financial circumstances and the continued COVID-19 pandemic may have on our or our prospects’ companies, monetary situation and outcomes of operations. These and different dangers and uncertainties are extra totally described in our filings with the Securities and Exchange Commission (“SEC”), together with within the part entitled “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 10, 2022. Additional info will likely be made out there in different filings and experiences that we could file sometimes with the SEC. New dangers emerge sometimes. It will not be doable for our administration to foretell all dangers, nor can we assess the influence of all components on our business or the extent to which any issue, or mixture of things, could trigger precise outcomes to vary materially from these contained in any forward-looking statements we could make. In gentle of those dangers, uncertainties and assumptions, we can’t assure future outcomes, ranges of exercise, efficiency, achievements, or occasions and circumstances mirrored within the forward-looking statements will happen. The forward-looking statements made on this presentation relate solely to occasions as of the date on which the statements are made. We undertake no obligation to replace any forward-looking statements made on this presentation to replicate occasions or circumstances after the date of this presentation or to replicate new info or the prevalence of unanticipated occasions, besides as required by regulation.

Investor Contact:
Tim Fox
[email protected]

Media Contact:
Maura Duggan
[email protected]

The following desk presents a reconciliation of Non-GAAP Net loss to web loss, essentially the most instantly comparable monetary measure said in accordance with GAAP, for the intervals introduced:

The following desk presents a reconciliation of Adjusted EBITDA to web loss, essentially the most instantly comparable monetary measure said in accordance with GAAP, for the intervals introduced.