ACV Announces Third Quarter 2022 Results

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

• Third quarter income of $105 million, up 15% YoY
• Third quarter GAAP internet lack of $24 million
• Third quarter Adjusted EBITDA lack of $12 million; Adjusted EBITDA margin expansion of ~200 foundation factors from third quarter 2021
• Expects 2022 income of $421 million to $424 million, progress of 17% to 18% YoY; expects 2022 Adjusted EBITDA lack of $59 million to $61 million

BUFFALO, N.Y., Nov. 09, 2022 (GLOBE NEWSWIRE) — ACV (Nasdaq: ACVA), the main on-line automotive market and information providers companion for sellers, immediately reported outcomes for its third quarter ended September 30, 2022.

“We are very pleased with our third quarter results, with revenue in line with our expectations, despite continued headwinds impacting the automotive industry, while also delivering strong year-over-year margin expansion. Our growth is driven by market share gains, 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 in the automotive industry and below normal auction conversion rates,” continued Chamoun.

“These macroeconomic factors are expected to continue 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.

Third Quarter 2022 Highlights

• Revenue of $105 million, a rise of 15% yr over yr.
• Marketplace and Service income of $91 million, a rise of 15% yr over yr.
• Marketplace GMV of $2.1 billion, a rise of roughly 6% yr over yr.
• Marketplace Units of 133,165, a lower of 5% yr over yr.
• Adjusted EBITDA lack of $12 million, in comparison with Adjusted EBITDA lack of $12 million within the third quarter 2021. Adjusted EBITDA margin elevated roughly 200 foundation factors in comparison with third quarter 2021.

Fourth Quarter and Full-Year 2022 Guidance

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

• Fourth quarter of 2022:
  • Total income of $97 to $100 million
  • Adjusted EBITDA lack of $15 to $17 million
  • GAAP internet lack of $31 to $33 million
  • Non-GAAP internet lack of $17 to $19 million
• Full-Year 2022:
  • Total income of $421 to $424 million, a rise of 17% to 18% yr over yr
  • Adjusted EBITDA lack of $59 to $61 million; an approximate 14% loss on the midpoint of income steerage
  • GAAP internet lack of $109 to $111 million
  • Non-GAAP internet lack of $64 to $67 million

Our monetary steerage contains the next assumptions:

• Wholesale volumes are anticipated to stay constrained as a result of ongoing automotive OEM manufacturing challenges and softening retail car demand.
• Marketplace conversion charges are anticipated to stay at or under the lower-end of our historic vary till vendor and purchaser worth expectations converge to extra normalized ranges.
• Total non-GAAP working bills, excluding value of income, are anticipated to develop roughly 24% yr over yr in 2022, and exclude roughly $40 million of stock-based compensation and $5 million of intangible amortization.
• Fourth quarter non-GAAP internet loss excludes roughly $13 million of stock-based compensation and roughly $1 million of intangible amortization.

ACV’s Third Quarter Results Conference Call

ACV will host a convention name and dwell webcast immediately, November 9, 2022, at 5:00 p.m. ET to debate monetary outcomes. To entry the dwell convention name, please pre-register utilizing this link. Registrants will obtain affirmation with dial-in particulars. A dwell webcast of the decision could be accessed here. Participants are inspired to hitch the webcast except asking a query. An archived webcast of the convention name will probably be obtainable on the investor relations web page of the Company’s web site at https://investors.acvauto.com.

About ACV Auctions

ACV gives a vibrant digital market for wholesale car transactions and information providers that provides clear and correct car info to prospects. On a mission to construct and allow probably the most trusted and environment friendly digital marketplaces for purchasing and promoting used automobiles, ACV’s platform leverages information insights and expertise to energy its digital market and information providers, enabling sellers and industrial companions to purchase, promote and worth automobiles with confidence and effectivity. ACV’s community of manufacturers contains 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 gives supplemental non-GAAP monetary measures to its monetary outcomes. We use these non-GAAP monetary measures, and we imagine that they help our buyers to make period-to-period comparisons of our working efficiency as a result of they supply a view of our working outcomes with out objects 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 objects excluded from the non-GAAP monetary measures typically have a cloth impression on our working outcomes, sure of these objects are recurring, and others typically recur. Management makes use of, and buyers ought to take into account, our non-GAAP monetary measures solely at the side of our GAAP outcomes.

Non-GAAP Financial Measures

Adjusted EBITDA is a monetary measure that’s not offered in accordance with GAAP. We imagine that Adjusted EBITDA, when taken along with our monetary outcomes offered in accordance with GAAP, gives significant supplemental info concerning our working efficiency and facilitates inner comparisons of our historic working efficiency on a extra constant foundation by excluding sure objects that will not be indicative of our business, outcomes of operations or outlook. In explicit, we imagine that the usage of Adjusted EBITDA is useful to our buyers 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 inner planning and forecasting functions.

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

Adjusted EBITDA is offered for supplemental informational functions solely, has limitations as an analytical software and shouldn’t be thought of in isolation or as an alternative choice to monetary info offered in accordance with GAAP. Some of the restrictions embrace that (1) it doesn’t correctly replicate capital commitments to be paid sooner or later; (2) though depreciation and amortization are non-cash costs, the underlying belongings could should be changed and Adjusted EBITDA doesn’t replicate these capital expenditures; (3) it doesn’t take into account the impression of stock-based compensation expense, (4) it doesn’t replicate different non-operating bills, together with curiosity expense, (5) it doesn’t take into account the impression of any contingent consideration legal responsibility valuation changes, (6) it doesn’t replicate tax funds which will signify a discount in money obtainable to us, and (7) it doesn’t replicate different one-time, non-recurring objects of a cloth nature, when relevant, comparable to acquisition-related and restructuring bills. In addition, our use of Adjusted EBITDA will not be similar 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’s not offered in accordance with GAAP, gives buyers with extra helpful info to measure working efficiency and present and future liquidity when taken along with our monetary outcomes offered in accordance with GAAP. By offering this info, we imagine administration and the customers of the monetary statements are higher capable of perceive the monetary outcomes of what we take into account to be our natural, persevering with operations.

We outline Non-GAAP Net revenue (loss) as internet revenue (loss), adjusted to exclude: stock-based compensation expense, amortization of acquired intangible belongings, and different one-time, non-recurring objects of a cloth nature, when relevant, comparable to acquisition-related and restructuring bills.

In the calculation of Non-GAAP Net revenue (loss), we exclude stock-based compensation expense due to various obtainable valuation methodologies, subjective assumptions and the number of fairness devices that may impression our non-cash expense. We imagine 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 belongings from the calculation of Non-GAAP Net revenue (loss). We imagine that excluding the impression of amortization of acquired intangible belongings permits for extra significant comparisons between working outcomes from interval to interval because the underlying intangible belongings 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 combos. We additionally exclude sure different one-time, non-recurring objects of a cloth nature, when relevant, comparable to acquisition-related and restructuring bills, as a result of we don’t take into account such quantities to be a part of our ongoing operations nor are they similar to prior interval nor predictive of future outcomes.

Non-GAAP internet revenue (loss) is offered for supplemental informational functions solely, has limitations as an analytical software and shouldn’t be thought of in isolation or as an alternative choice to monetary info offered in accordance with GAAP. Some of those limitations embrace that: (1) it doesn’t take into account the impression of stock-based compensation expense; (2) though amortization is a non-cash cost, the underlying belongings could should be changed and Non-GAAP Net revenue (loss) doesn’t replicate these capital expenditures; (3) it doesn’t take into account the impression of any contingent consideration legal responsibility valuation changes; and (4) it doesn’t take into account the impression of different one-time costs, comparable to 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) will not be similar 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 repeatedly 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 fashion totally 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 imagine 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 whole greenback worth of automobiles transacted via our digital market throughout 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 throughout the relevant interval. Marketplace Units transacted contains any car that efficiently reaches offered standing, even when the public sale is subsequently unwound, which means the customer or vendor doesn’t full the transaction. These cases have been immaterial to this point. Marketplace Units excludes automobiles that have been inspected by ACV, however not offered on our digital market. Marketplace Units have elevated over time as we now have expanded our territory protection, added new vendor companions and elevated our share of wholesale transactions from present prospects.

Forward-Looking Statements

This presentation comprises “forward-looking statements” throughout 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 steerage for the second quarter of 2022 and the total yr of 2022. In some instances, you may establish forward-looking statements as a result of they include phrases comparable to “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the damaging of those phrases or different related phrases or expressions. You mustn’t depend on forward-looking statements as predictions of future occasions.

The forward-looking statements contained on this presentation are based mostly on ACV’s present assumptions, expectations and beliefs and are topic to substantial dangers, uncertainties and adjustments 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 embrace, however aren’t 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 contributors on our platform; (5) common market, political, financial, and business situations; (6) our skill to accumulate new prospects and efficiently retain present prospects; (7) our skill to successfully develop and develop our gross sales and advertising capabilities; (8) breaches in our safety measures, unauthorized entry to our platform, our information, or our prospects’ or different customers’ private information; (9) danger of interruptions or efficiency issues related to our merchandise and platform capabilities; (10) our skill to adapt and reply to quickly altering expertise or buyer wants; (11) our skill to compete successfully with present opponents and new market entrants; (12) our skill to conform or stay in compliance with legal guidelines and laws that at the moment apply or develop into relevant to our business within the United States and different jurisdictions the place we elect to do business; and (13) the impression that financial situations and the continuing COVID-19 pandemic might 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 September 30, 2022 , filed with the SEC on November 9, 2022. Additional info will probably be made obtainable in different filings and studies that we could file once in a while with the SEC. New dangers emerge once in a while. It is just not attainable for our administration to foretell all dangers, nor can we assess the impression 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 not 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]

ACV AUCTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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ACV AUCTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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The following desk presents a reconciliation of Non-GAAP Net loss to internet loss, probably the most immediately comparable monetary measure said in accordance with GAAP, for the durations offered:

The following desk presents a reconciliation of Adjusted EBITDA to internet loss, probably the most immediately comparable monetary measure said in accordance with GAAP, for the durations offered.