ACVA - Earnings call transcript Q2 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the ACV First Quarter 2021 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the call will be opened for questions. I'd now like to hand the conference over to, Tim Fox, ACV's Vice President of Investor Relations. ahead. go Please

Tim Fox

George Good ACV's operator. XXXX and you Officer. today thank results. Bill Officer; Thank Chief Zerella, call afternoon, to joining Financial are call the conference me quarter Chief discuss for Executive With and you, on everyone, Chamoun, our financial second

our differ comparable or the The materially cause to measures. XXXX this during and Before we by call. ago. the will factors discussion filed and available for and available guidance. the The a Relations results include June in statements included form implied These actual earnings short statements, of is we are note ended be that uncertainties, Reconciliations X-K related and months following the financial as statements including in subject to earnings Form non-GAAP time this on earnings comments our both XX, started, Also today's please business an those risks and page uncertainties forward-looking all of regarding could get is to XX-Q from that sec expressed furnished is forward-looking direct three the Investor exhibit such for in quarterly report the may on issued SEC. GAAP GAAP financial measures present are release which statements. release, risks future call, to our our the contained with most financial and of website we

me call to which IR And posted our be will website. the you presentation referencing over let can that, we our find today, Finally, earnings George. with on turn

George Chamoun

us. thank and Thanks, Tim. everyone, Good you for afternoon, joining

our superior network, to welcome team to deliver the growing the record forward results. dealer and resulted and our deliver I newest begin for excited to from in like me have digital value class by thanking also best quarter community. in data second ACV dealer would Let which continuing team together look you on Digital. we Max working technology to to members board We're as to

with second the automotive market. highlights perspectives to three, Turning of begin Then share some quarter. I'll our Slide on

As where we of records $X.X our of XXX,XXX which you second over vehicles GMV can in marketplace, the digital billion on for sold our were continued see, quarter both momentum transacted ACV. and

we QX during GMV growth. fact, more of In revenue $XX delivered we million and in representing did very transacted we all than of year-over-year XXX% XXXX strong

Our strong be topline to can three performance factors. attributed

First, network. within we by our grow continue dealers execute by dealership into market and to attracting our to ecosystem existing playbook share wallet additional our new on proven share capturing

customer high historically accelerated quarterly inventories elevated and offerings values and historically with conversion drove along our ACV of continued vehicle market financial ARPU, of was our results. well value-added expectations. retail favorable Simply services along by the with adoption Second, And quarter-over-quarter, of plus, used low suite resulted yielded GMV team, conditions and ACV execution above marketplace. strong record our on third adoption also in impressive truly and

side Turning over for both we of demand side dynamics contributed quarter operating ACV. the financial past market to the out the in have supply been to market. year the second on market clearly territory and in broader these the performance And automotive backdrop; record unchartered

of quarter normalized our vehicle earnings XXXX we As outlook provided values. particularly call, the for used assumed first in around an a reminder, balance environment, more a that

soften, continue the in timing in fair peaking after well-documented indeed off was Wholesale July months, vehicle I a is been industry think June, started has it's our to market but by by providers. turning. to and few to say the which that early decline prices data

year. in tips inventory in the could the automotive lack chain had XXXX we the quarter, and our franchise is headwinds support to retail In new of factor also other strong to due of of discussed supply equation performance. enough dealers QX the shortages The performance half car supply. other second generally supply how half Last

perhaps be quarter emerging third that fourth quarter the could view the an retail low there's However, or supply. watermark for

Of course, dynamics transient. are these market

new which trade share. participants and few market recovering market In the and plan volumes in the this would quarters more supply to in supply of see tailwind top fact, settle It dislocations allows benefit supply. early environment for is to continue converge, execute in turn on XXXX, out. take take news a we vehicle higher for feeds the for be our volumes market wholesale in the expectations pricing meantime, challenge drives our great normalized sellers ACV. most and coming A will our industry which these Ultimately, the and marketplace. buyers funnel, But into a more to

we more detail, the to As for outlook in expecting are and XX% discuss Bill revenue year. year approximately again for growth full deliver have increased our will the now

today, level top our we operating the For product than shareholder on of will higher focus frame to context, and of a this To three is at marketplace our elements strategy XX drive outlook long-term and the rest expansion points full scale. value; the discussion TAM XXXX. our of growth, beginning

QX very begin included comparison growth, to QX, XXX% financial you as QX the XX% which of results, XXX,XXX Due Slide year-over-year was quarter-over-quarter. strong XXXX, with the XXXX to marketplace in growth. was growth me see impact turning and at XX% to which units Let transacted we five, on can COVID-XX growth we our

of earlier, gains share existing and dealers. wallet mentioned transacting on unit share measured marketplace increased growth number the I our as was driven by from by our new market by dealers As continued

added all conversion by driven customer unit In we benefited strong marketplace, the about spoke also our to earlier. fact, very from our environment which I XXXX, then supply low was XXXX on platform in the of growth sellers more first of half

and new around of an per see was values record began marketplace. transacting reflects GMV GMV vehicle a to frontline which high. mix did reaching increased increased to higher begin in of July of conversion vehicles unit The year-over-year, ARPU expected, As XX,XXX on our our declining participants XX% in market both tailwind we adjust as wholesale for QX a transacted values. normalize to

long-term While elevated for tailwind of values transient, frontline sustained a vehicle our be ARPU. mix are on nice marketplace vehicles a could

we ended years. all goals. US. in our across perspective, some with We've talent on continue year pretty this Slide about the great goal the organization year in progress of be the of position will XX% footprint To will with two the doubling XXXX the territory coverage XXX towards beginning ambitious to size franchise Moving dealers ACV with attract great teammates our increase by we continued to since six, effectively make a nearly nearly past in XXXX our end. to This QX and to our us put engage over

operating dealer while Slide element at has highly is inspectors. is territory density the long-term of grown teams largest one supporting seven; our to our network of years, with over Turning vehicle services driving ACV's new a our scale hypergrowth in and threefold ACV along two differentiated our technology business, This delivering past with which beginning model. key to investments; increased we're this leverage to team

versus to can increased growth growth growth see XXX% on eight, XXX% ARPU revenue greater unit strong yielded that you and our and Moving XXXX. than Slide a auction QX nearly marketplace

grew offering. lot vehicles about to automotive. recent through on deliver and based highlight efficient real offer Slide to what dealers this these in their like nine, driveway a to this consumers compete to for our lately consumer's digit marketplace. consumer time In ACV consumer market-based mover to quarters. year-over-year consumer help willing and appraise our effective dealer expand dealers one direct locations than been offer significantly in early high appraisals Turning for volume ACV's sourced and at case in was an unit our and to inventory. vehicles We offerings hearing unit XXX% sourcing a strong offerings In or We volume pay. more contributing our our of enable accounted total you've QX to percentage our growth. Live to sourcing, in the grown plan sell we in dealers an way category with inspect single a are of has live I'd

our to and element pivot second strategy TAM expansion. long-term drive of me our product shareholder Let value, to

to like feature launch Slide programmatic another highlight sourcing through that ACV dealers I enables to for buying. efficient highly Moving XX, vehicle would

programmatic We buying. have in two flavors of invested

centralized buying to on wishlist, marketplace, all integrate bid to platform without dealers inventory Our their own human intervention. centers on enables their or our based API our API, who real-time technology on vehicles into have buying

enables nationwide these buying for Our better pricing trusted programmatic user ACV's second offering believe who don't their with offer our our team to automatically. our capabilities capabilities which their currently efficient parameters and have to both enables inventory within results dealers, will condition, deliver to own highly in we bidding automatic experience, us inspection matrix, vehicle which buying beta partners. Marrying dealer fill type, and location wishlist is inventory experience, create including needs

significant you remind to combined like I'd marketplace, XX, and power how Slide effects. technology to data to Turning about our network

platform, greater our liquidity we join data, collect improve provide and to new and for greater our a in more Max is and and enables us addition attractive data scale. participants efficiency, file This scale to exciting more Digital. our this technology efficiency liquidity, marketplace services our bringing turn which unit can and improve products. better of market digital to An vehicle greater and reinforcing greater These greater data marketplace effects Ultimately, more acquisition continuously is customers. our our economics. capabilities greater experience As leading demonstrated drives our in

ACV's Digital's marketplace retail insights resulting driving ACV's to automotive some a and key compete and software points with Digital is to the These by current inventory services is Moving that our platforms customer and dealers source to sell Digital to mission of and base growth to and create Max tools retail Slide shifting data wholesale that products digital. rapidly solutions to provides compliment into with Core merchandising dealers synergies. and in and that market automotive to sell exciting their unparalleled synergies provide like XX, additional Max capabilities Digital's inventory SaaS-based effectively. ACV's a dealers on about include guidance solutions management arming cross-selling with and I'd acquisition. is price products provider technology wholesale more touch pricing data in leading vehicles. Max data-driven volume Max ability to

our into For sharing we This example, be tied directly look dealers used exciting forward and forward. vehicles. will exploring, is to opportunities tools, more one Max's helping and are teams ACV's going buy sell engine of updates example effectively many just pricing

our on me and transportation an ACV update excellent with value let up quarter section both added XX, Slide to an ACV for had Moving capital. We services. this wrap

to year has been transport key of the has expanded business over Our buyers and enabler attracting significantly past new the platform. a

of QX, the Our run expanded network the cycle in approached attach than days in still in a of mid which single improving rates and QX ACV XX% to Attach XXXX. have more above rates number The is XX,XXX than volume around well thirties Capital, achieved gaining its digits of attach market. doubled fast transfers carrier in partner in resulted momentum quarter-over-quarter. in loan times QX. the lot greater early mid with has in XX% rates been year-over-year

how our and that growing over We saw strategy, new Bill our solutions. It our following I technology increase and in financial revenue offerings are leveraging per across to scale. launch loan, ACV let across our the through we it of should TAM long-term hand driving ACV With that, think and our have by take material you of tracking rates of ahead digital clear targets. some data a of June. suite created In long-term at our that capabilities, be to relates driving powerful results capital to noted early expanding in summary, platform new and in transport our growth expansion ACV, also avenues achieving it's features growth finance me we're milestones as exciting product our adoption

William Zerella

nearly today. on and above was relative our guidance flat review and Thanks, with X% the versus favorable QX the line our George our delivered our This EBITDA second was XX, I'll you range. QX to for us quarter model. We and significant results of generated the performance financial QX business strong key of or and quarter 'XX of metrics, our revenue with ACV longterm $X objectives. leverage end record also by quarter very results. our inherit made On million the across operating top which underscores and was was begin thank progress Adjusted revenue guidance. of well very for strong strategic a in many was $XX year-over-year revenue results loss driven XXX% of high growth in bottom joining everyone and Slide of we million,

percentage by expectations. operating business we in revenue, As driven expected XX cost of year-over-year, growing basis by this improved improvement revenue of with was a as the year-over-year operating of increased revenue ACV revenue transport costs, increase once percentage grew excluding cost our line percentage excluding of delivered our revenue And Total exceeded cost primarily and and the a of highlighting model. mix total expectations. costs, points year-over-year XXXX despite The as which by of leverage was our revenue points. again, approximately in XX% year-over-year

on Turning to some additional slide revenue. XX, I detail will cover

We have diverse services. a mix products of and

revenue up revenue. very marketplace portfolio our marketplace and about within across of business, rates noted business, the remained XX% revenue of QX, customer year-over-year, benefit auction has in with making shorts comprises auction high transport grew Our performance our had our and offerings services our We our that which strong value-added half strong. most from notably profitability services in today attach broad-based our other half

here. business I Slide to XX. like leverage to discuss Moving the our operating in would

XXXX. along adjusted EBITDA showing for we're Here outlook with our updated historical margin

significant quarter, our coverage expenses, throughout by our today, model. year excluding basis new over you've launching additional our of underlying increase territory to our is expansion for discussion down of we're despite XX% share and scale on discussed with last of cost These year revenue. services delivering you year translate is a year, in business year-over-year And And ACV. nationwide adoption XXX just a again, with a and in our investments our operations. increase, the margin in offerings we're end. market highlighting investing as operating As this value-added EBITDA technology leverage operating points adjusted into host of investment drive XXXX to seen We're expected

that cost on note excluding absorbed operating we leverage XXXX Max base impacting OpEx of without revenue. have Digital's guidance, expense Lastly,

$XX Now million, over an million in a loss $XX the of EBITDA XXXX $XX XX% year the in of XX, and rate Slide million revenue to range to year, I'll growth for on turn range guidance expecting million. third to XX% quarter the of of we're $XX adjusted the

revenue As business very 'XX quarter of of the growth QX as second a impacted a year-over-year reminder, XXX% was for year. our ACV from quarter strong COVID last with the recovered

approximately to the As XXX% yields growth QX included we've such two-year which comparison, growth 'XX. relative

For million. million million of from $XXX the an of to $XXX Adjusted and XX% full previous to million loss a of million of is now in improve guidance. a to growth approximately revenue are XX% expected million we expecting EBITDA to range rate $XX XXXX, year-over-year, our year the range $XX to increase by $XX $XX

my finally, already cash total to expenses, debt quarter earlier business. that $X in plans, XXXX. strong associated point float cost in flow for dealers and unit on million the assume trends during on million marketplace Slide earlier ACV discussed balance George equivalents, which our As back note me cash of with We of million comments prices with of float weeks with and and down quarter. to favorable increase generated market of to QX. the $XXX,XXX XXXX. our quarter, about XX, the we're operations can wrap our ended since continue driven loans highlight second last the the XX% We we capital due of an The quarter option March year of sheet the fluctuate each float amount $XXX revenue grow final consistent dynamics business of prudent full our from for in investment headwinds the QX $XX And $XXX guidance, reflects on the by two operating ended meaningfully our from on business believe my structure in we the To with let million excluding expecting of from in up comments, XXXX. capital approximately XX. elevated it's our that our to normalize from driving conversion in will higher our supply half marketplace,

our of the Given position, our reducing it facility me self-funded business, we cash strong revolving interest capital cost the that, by and And expense. George. credit optimize at to capital with turn paying levels down let back ACV current

George Chamoun

Thanks Bill.

questions, your take me summarize. let we Before

execution the our with we're our the digital seeing in pleased which platform. the extremely quarter, second leading for are We market in momentum illustrates

wallet market base. We existing dealers our new within And share by by to to our marketplace. growing share continue gain customer attracting

We differentiate And are our the launching Max plans. data Digital. executing services in acquisition we us and further offerings market. of territory that We're our digital platform with expansion new exciting strengthened the on

begin can scalable proven We that leverage business with economics With operating that, believe have unit operator value. structural a drive over the and model will deliver the the growth that attractive turn I'll we to significant to call Q&A. shareholder

Operator

line from of from question Our Guggenheim. [Operator first Faghri comes the Ali instructions]

Your is open. line now everyone. Hi

Ali Faghri

Hi my questions. everyone. Thanks for taking

wondering GMV can of assuming understand I'm your So type in XQ in help what better embedded outlook? me in unit second volume particular, about half the you're XQ? assumptions or In you per growth

William Zerella

Bill. Ali. Hey It's

I in XX% revenue guidance at a of growth kind Just right? couple mind reflects that's substantially keep first our guess XX%. and So, modeling up of of year first, from year full about that thoughts initial the

to So, due in seeing said, and pretty guidance. in into normalization That companies space that we're our taken a other pricing right, the big the in signaled, rates as upward to market have we've happening automotive that's account conversion there. contraction adjusts what similar

Okay.

So bit equilibrium. that the in in we're effectively on thoughts mind, guess here. growth leaning we half a see second also reach organic until with other market few a the I conservative more

first thought the that to in to to terms being and much on is half that to have of end tech the adding the investing go-to-market of execute second result footprint out, right against market a buyers market the adjustment, as other we're of of mind our expanding that the turbocharged right, stronger. seasonally this platform, going we're with quarter. weaker the course come sellers we continue half the playbook in said, was QX in the which of side, going also the strongest all and typically That the in keep than So year dynamics is the quarter,

drive, terms and So other conversion assume we in going rates of obviously metrics market's did, the of that it's ARPU. and adjusting the some to way these

Ali Faghri

That's it. Got helpful.

And expectation over is so that in half? I'm just digging the the back grow further, quarter quarter volumes can in still

George Chamoun

right? don't, unit to what growth, terms we we will and So, Ali mean, So, be. output of ARPU, and right? we everybody really revenue in focus always units I don't try to guide there's the between put takes

end of to of market So we keep level we it's typically, that by day, to the conditions. get again, going right. much the And At don't market gaining be very share. fidelity driven

QX, the of platform in that kind buyers. to and reflected terms adding think really of sellers strongly I

day, the keep the same at So end it's going this thing of the plays out to part the going quarter. we're be market by this adjust then, doing and dictated in how however to

Ali Faghri

Bill. helpful more just conversion, on to normalize, That's And here start just to shouldn't great. trade more used quickly Great, car also then comments to one in its normalize making also as about way your that supply auction. drive starting prices

is about So, new thing lot them. sell had were heard at these one with versus keeping lot a supply retail wholesaling just potentially car a we of of constraint, to dealers trade-ins

moderating cars on of the while so a help are that rates. overall used supply have could impact to just car it prices, conversion Couldn't wholesale auction? And negative being sent

George Chamoun

George. we're going that that stay from Right being is we're thanks dealers, are to short now prudent question. that assuming and Hey, on based Ali well, you're inventory what it's for QX. very I for hope we hearing

going toughest, QX, be assuming right assuming right I into still right this perspective going We and we're is these now now all this and lack inventory. could from call, would mentioned even be we'll our I we it said, And, summary, this say might QX the in QX out. think also, same -- of the in actually be think I leveling predicament in XXXX, of you for and so earlier noise, to the dealers phase in are will

least I thinking think, inventory. wholesaled? And how right keeping about historically your now Ali point, So really think maybe that's the they yes. that we're does I the mean forecast and would dealers at of cars have to lack that

think already that's happening. I

have Fast is start cars, our new factories or as constraints, that now. car assume will issues that a the they'll selling. go that also. they be the as come And cars correct for the cars other or forward to whatever their come Is helpful wholesaling, be back these to color? to selling just more have that to of dealers We have give to new back that vehicles chips to little historically you back brand they more they'll the aims of really types

Ali Faghri

And It helpful. George. Thank Bill questions. taking you, for is very my thanks

Operator

Thank you.

from of Our the line comes America. of next Nat Bank question from Schindler

line now Your is open.

Nat Schindler

Thank guys. you Hi Yes. for this.

associated revenue with Max in So half one, is there second Digital? any the

William Zerella

it's Hey, Bill.

it's not broken out. but we Nat, It's small, it's for yeah, is, relatively to us material break haven't a enough material but there it So not just so, out.

Nat Schindler

understand. Totally

what's So supply, and market side. the I get in on there in the market Wouldn't the last the lack question equation used on demand because is the driving on for answer your from conservative was which going up the price being a to is the a change that about pricing problem of as cars.

that So you wouldn't it, taking starts supply, we to is which come conservative? that overly the indication any going case get back normalize, more are supply pricing in to is

George Chamoun

Hey thank values quarter, Overly But the look into know. is prices decline of see when right? happening to well thirds conservative, correction used two the declined. you. you to We, sort at the started don't really started car that's I again,

trend one So that's happening.

started happen. we're to right. It being something that's conservative, So

also So therefore will factors GMV. lower imply, and GMV other

Okay.

that is So a fact.

really getting quickly more didn't going in The can automotive than change, to of inventory. anything is the lows you're we lot are now folks sort to want historical other fact in to a How right predict predict. of that's seeing We dealers control. market

trades. to car remodeling is point new we're low going to supply are amount from which a and low predicting of comes of where amount So, our as supply therefore of majority the dealers, have your a that our

predicting from predicting yeah, that of what sort or we're are dealers. sort are is of our that we for looking going you on. so are Is hearing There car both. new So, factors to… helpful But ability what that is we're many the

William Zerella

one of add puzzle here. me piece Hey Nat, more let the

Just be clear. to

they that rates on buyers right? the because lower the commit, declining, these prices more are by okay, So hesitant with takes time the when are be marketplace, is conversion sellers there exposure what the the time So new worth right in to basically prices car, saw and reality right terms for price the it right. to adjust lower their even might inventory to is of

probably does, when up opposite happened in effect Because what it prices effect, go to so When a what QX sell it more a know in of buyers kind normal of that than this prices thought, for of very it normalization and and are going of and they're high So because going more down right? car of what's even or the are there's to equilibrium up. prices they has it's happened lot get because going opposite kind you have right flip QX a where marketplace. the conversion you

while what hear players with adjusting conversion from consistent would down, think your you the I industry. it's go rates but other So that's in

Nat Schindler

was not sense. of perfect think I would pricing or because the crazy, if two, the was car north was. longer on lot, going the Manheim also makes other it and car That simply that But I two the the they just the keep sell wondering dealers was the auction side, approaching going on valuable their when would index more into

George Chamoun

had lot sellers. of quarter. Yeah. great a gaining Nat, We're we a

had last all net than new of year also the of sellers more we year. mentioned first We this did added half we that this year

on interest important. These the quarter all gaining So we're say, to we're looking I other at would trends are trends. these platform.

style, know, you always our as prudent. just are trying we're We to

have believe inventory is going lack be, do dealers going quarter. this are to of we to a there Here,

what we how do how we is so -- see. do you obviously forecast And

Operator

Thank you.

of question next the Colantuoni Our John from from comes Jefferies. line

Your line now is open.

John Colantuoni

to we taking have environment about follow-up. good there normalize Talk was once ACV penetration that and for capital. you'd to for from in see progress saw, unique in Hi, It's the begins half if and the sticky my be a thanks increased rates engagement second questions. the the if to than inventory benefit transportation any I inventory cycle faster expected consider the to adoption

George Chamoun

Okay.

-- Let getting adoption me the better. reasons of first? think transportation increased I transportation is to the are why one we go

of you not just a allows when we of it have about transport lanes, at needing, carriers, lanes in stronger your pricing, we're able choose think where to if get, in right we to point example, the So kind in programmatically us transportation, pricing, of pricing more for to a XX% from our right going transportation. entrance ACV one get have And invest moves carrier needing network certain not both the means dealer price our us, and allows in our that mean? That optimize really and our we've, us invest our a technology starting because for we've they're we're ACV board a in to what investor that load does network, we to now technology invest have our got ultimately lane transport, to predictability. the appropriately, partners, price for the service the and to the transportation for

So I would say very transportation. proud of what ACV we've done with

obviously carriers. pricing And scale say from in density, So and better from recently. also our some product helps capital, did we right? announce would more ACV had getting density I we addition, just additions there's mix In also that our,

starting dealer listening just our also partners. the are It's we're to in market app. our starting to now -- We product and time it's our first

year. absolutely with progress cases, we're our we're an we the technology, set initiatives, was IPO who were additional IPO. the to this what do about mentioned at exceeding, in time. We're early We this is mentioned excited words It investing great think process. staff. the to nascent we product. investing really in in starting add the just the both during and starting at So We're product progress to out was just But market people in both the

John Colantuoni

you've in become dealerships Thanks helpful. prepared an could platform the online leverage now the point marketplace Great. dealerships you now for consumers. That's you to to And consumers retail selling some consumer begin to remarks connection that and which you've cars sourcing, behind developed at start to ready made capabilities between or mentioned

George Chamoun

helping not sell now, right dealers to our tools. cars of we're to or yet As broadcasting beyond consumers planning

these example the are Max use groups has Digital helps, Ford of car all $XX,XXX the for be largest merchandise and And this So Max exactly one this XXX some within have why data really way the value. and industry-leading XXX, car Ford specific country the the platform. to this products, dealer by at in It this and should market tools. we priced

that got enrich dealers now their we've their tools experience. unbelievable So these help data, enrich

and be digital As e-commerce of relates strategy. for that's this to would from today of our are us least consumers us lean we world, it as a buying broadcasting and at bit our I would seeing our this and Is dealers you say, in all that, open IPO going right see in that mentioned now trades and helping and up on in dealers in on then little this where competing to more dealers sort and coming take this cars taking are you're start to help of of do cars, and lean going more shrink cars here whether they're take we're dealers wholesale dealers years. or and think to from turn of trade to and in to help positioned whether we're them there. peer-to-peer in will well digital here consumers to they're world these them buy dealers. over a we're as to it, these helping think going around coming very to starting the We compete We

John Colantuoni

Thank the you. Appreciate questions.

Operator

you. Thank

the line from Our of from securities. JMP question comes Ron next Josey

is line open. Your now

Ron Josey

lots and question the taking for here. of Thanks Great. unpack

just this now plan ramp did awareness probably Can the I a low to rates app you quarter, the just about Talk can really follow-up mentioned attach just time from awareness digit capital's capital wanted Another how mid to attach think single and you mid-single say and question Do putting to from talk in in the digit you bit to and capital call and rates. a talk gets on on mid over strategy digits ramp to I prior? where you this follow more app in and to the awareness that little more that What getting maybe drivers digits? here single you think available that up that. little about ACV besides the we quick but a single great about now drove have get us with George,

George Chamoun

Certainly.

think to comfortable them increase teams and -- team. sales that ACV these specific the sales It teams, currently from the ready. doubling team to the all let's the when account call sales the We, size are product time other model, sales right leverage relationship and We about now, now the It's product leads felt of have right? was, and managers. the in starts

and and size with, thousands it really teams these relationships, of specialized month, product sales now Capital ACV that. be or Max doubling we leveraging the team. ACV We're Digital dealers excited these have dedicated on a of we are about we're the whether the already So, teams, phone fact thousands etcetera, these that but the are

years. question, our capital second on with of handful bit Our line in more be road what next have the in of outlined ACV give what expectations a to expectations while are expectations Bill, are we we're our, for where with your in you the we in little our line show want should

William Zerella

Yeah. Hey Ron.

kind milestones year. of if years, by lot road yeah, We'll to progress getting most making about would we're there We're and the remember investors that show, So on a with side. well. over just transport the we're faster. way, we're really likely update sales. path longer And on the I Right. a five in getting capital. So certainly But kind we're quicker happy a in good the you on not side the to we rate we're also tech update return on not really this of investing XX% and right? our progress as whether getting talked or really you attach making that investing say We're

dedicating more we're resources. So

in and more compelling to offering just make marketplace. So, our continue the to competitive

business certainly meaningful. yeah, We're would this last the progress point. small will most a for it years become when but was more that you faster point get progress. and is next the capital, from just looking making is we're at I be years, this And making at, I I whether XX year, professors just the us. few five would say revenue there very would we'll owner granted really say comment over of going at likely, obviously want this it to high margin other great prior know, and year So as just, great we're don't to I than

So margins time. to it will be accretive over

Ron Josey

Perfect. then That's follow-up. quick one super helpful. And

think same going in that XX up if the sellers of you than the the just network think in to inspectors terms easier as year, about adding maybe think be quarter, then three is half year of years. environment I in dealers of half will you that it inspections added whenever I -- be first add to last the more is we normalization think the talk or on I the the you all in to or you first And sellers? mentioned in get said are George, first last market, the next also vehicle

the progress of So streets. you're seeing on feet

normalize just get easier So to as us you. adding Thank not. might it whether or sellers about talk and things more

George Chamoun

Yeah, certainly.

into all sellers would could seems, right say is it branding, going out be successful it these public, I the a field, way. the territory very out there. in and increasing, our So, factors, brand growing our ACV between managers, getting networks, also We're in creasing,

also question Maybe excited. faster instead will it even mix to next very our answer we're So changing. year grow way your is a is, of,

So we platform. think about selection of assets on ACV the

gone our You're is is right has of some yes, mix selection this part increased. vehicle of that also and really but higher, are the and noticing is part GMV now up costs

we think, as So we selection get, we think vehicles broader a grow. of will

that'd So next into the of we going think year. trend be can happen part

growing. is Our product mix

on as we're products. from So successful, product it's growing we're of one and multiple from adding dealers sort from new

week been group example. heard this You've a prior example in call marketplace, dealer which on about private to of adding up has talk an me marketplace, exciting. one about been We've as a private as an coming

but more what's more So predict don't sellers. want that even going here. on and we'll think, about really faster excited this at yes, I keep growing point adding to

scale and helping. far, the I the, helping is product the momentum believe so also is the And mix and

outlined of sort vision just on you you're this had both few us story And is it's And them we company. do tremendous sides, and at look marketplace partners. ago a We broad and to didn't a data add not dealer with data. on Hopefully you marketplace, and you're we're dealer a that's We to only vision, very when say they're value this to retention, helpful. become strategy, both helps you back ACV. months tremendous going what grow So we're focused see this right? executing to we're your marketplace and we've to seeing to true, partners back executing add more, helps I but considering mix, think it's our in that that

Ron Josey

Thank you, you, George. It Bill. Thank does.

Operator

Thank you.

Our next question comes from the line of Bob Securities. Levine from CJS

Good line Your open. is now

Unidentified Analyst

crest Afternoon. calling Stefanos This Bob quarter. the in on for is congrats

George Chamoun

Thanks.

Unidentified Analyst

fill discussed XXX impacting your how, you and ability labor all, to of the those your So expansion territories. market if goal discuss you tight Can at to to

George Chamoun

Sure.

territory and we schedule. manager are side, slightly ahead of the I'll First

So we are unplanned.

of full We back know, will, very sort confident full, come the few sort we'll to quarters we'll, you next reach coast over of say to coast. coverage and I'm have

out the So the all, managers in dealers and from field all reach to to, there perspective supply the a we products. these have out territory to franchise other

a some that's and teammate they trained time would posting conditions, earlier to your And a The to lower, at right other inspector part looking a in, it's maybe share to days, of, sector obviously vehicle I'd was were from to start from teammate. is meaning condition teammate VCI data average date, be some vehicle but XX this now, me. some related in say being average. to when riding in also on start average one is love average, selecting labor is about month question this I posting factors. this, the our We from higher, is just an this, helpful

about companies so now. and a And days. say going our know, it's So well. this under are world at would Thank great when for, executing you That's those underestimate I would roles a or But pretty know, challenges going the field lot for labor that's two that, asset you you, there's out want all I we're Like, it's, to challenge, right signally now on color. don't right and, you. say right? the think you strong, in these I when in goals and, think

Operator

Thank you.

next Gupta line comes Our of question the Rajat from from JPMorgan.

now is open line Your

Rajat Gupta

evening. Good Thanks for questions. taking afternoon. Good the

You of time just at your if into second and bit Do on maybe those you or, market the allow of conversion And to know, quarter know, penetrate that that Did half, more taught customers you that expect you previously a the sticky the IPO? lot have imply value customers did offering this you but, second dynamics a or versus was now, the accelerate, the questions March, to than today? a longer-term the that of question. then of is have would yes, it would be case.

George Chamoun

say XXXX dynamics No, we're moving XXXX. near the or away from market, term like on the

Rajat Gupta

would more your imply, accelerate able second because you units automatically base any customer be to color quarter? that helpful. that Does in around Just weren't the just know, you

George Chamoun

question thank try I'll, me And can go that. again, you Not clear, sure it my I but if answer was super over let questions. the for to

I there's a within, that. within questions think few

accomplish goals So I would first we for say our the half.

in half XXXX. in in the less would say now year, model have sellers inventory very say say part we this most we've were than you on little five a that's in is And prior, generally would As execute you we out go w know, a different been at let's sellers that I bringing we've let's over for years, we successful. there, first got the say know, last model. I our

Okay.

they we're all, we to of right there single every them us. going with and whether what's of they're it's X,XXX, it have cars. wholesale them those might've overall about, be into it or they that reinforce, been XXX in it would There about partner only read it's some I on, They less you is because retail, already. who broadcasting wholesale read in, less a getting have been or to really my don't this a XXX you're the have a be, really And whether less really just part say signal. of We lot hear every had but we're dealers now. are dealer will enough, is I'm keeping whatever there reasons going cause all giving day, mix signaling about supply. And, term So, their they to going keeping of cars. more I these seeing all are vehicles, They this and we're, dynamics the that's that as short would might day. this relates and more dealers have more

to not which I our but to on lots, less investing I of in believe we extremely services being offering have well, but as is stickiness, we, partnerships, these you it idea more retail these on working think likely a investing say this great believe to less wholesale of data know, will or dealer going cars team have marketplace, end-to-end it of platform dealers any partners As means more also and really We We having their capabilities, well. our believe attention, is that this only is going you less strategy extremely well. but going conversions sickness well. relates is give and don't sort we

of So no any going I of these are on to belief dynamics how change really no our retention. market say would change

to it part think other growth how that. I be, I the know if don't more? a would even third you made you could don't I our we answer know accelerated question all want obviously accelerate the of part speak your to these could, growth, could end of day, dynamics to extremely answer it, I but at think the mean And that. growing well. we're And can't but could,

William Zerella

in as as you a has of And chance platform. and Yeah. well. we've marketplace. changed that, obviously said, we've know, how lot adding, perform on the the a add look, a really been, to George had sellers been as And is they've would we mix see successful I then Right what

you'll we should out Right. feel gains. we're you about, now, share prior in penetration come all right know, more the is you market. it's it's really And to say whether benefit. been we from good more, those what it's, least ACV, feel the market then good our, of our those kind So of say, than and hard at we had Whether accelerated can the value the other sellers and this, extent, we to know, broad-based about adjustment add end

Rajat Gupta

it. Got

Okay, queue. great. Thanks in helpful I'll That's back John. jump color. that's

Operator

Thank you.

Alex Our next question the comes Sandler. line from from of Piper Potter

now open. is Your line

Alex Potter

question. the for guys. Thanks Great quarter Thanks. Great.

been And about wide, back response is sell quarter, that wholesale, just right? guys limited that can, you there's go to that your put not a the equal all I there's, to have dealers. and If and question are they And was great which market. a high, indisputable to with just wanted implies obviously I at push generally the don't point, to I retail I away was wholesale. inventory, which think dynamic mean, the but should think I is are anymore. asked So, this a to else so supply earlier how, go prices a disincentive obviously accurate, running just up vehicles that's There's to market secret basically we

of question That's So digital these to you a change yourself against my yourself pitch talking out you in dealers, yourself find the other is some the when do competitive you trying that I You response question. pitching as have more know, a of experience than platforms? often you're partner, to platforms know, to? you used do Thanks. only

George Chamoun

auction Yeah. the Thanks names, know, Alex. one We're, I had away. and these company, digital but right you hate if a you companies had of large we remember,

already, there you digital we was journey, this when started know, competitor. So

there's So I this would been physical digital and been say competitors competitors. there's time entire

of competitors think compel, still be digital I we're percentage of look of, look, we when our at the that just fraction you a look proud let's basis. to growing. of added We're, eight sold at small, were other we're from cars I at it number you sold year, still But If fairness you physical I majority we up collectively auction cars they, most which X we're it the the if the very digital you call and a think size. you believe know, million know, last in

auction we're leader let's grow cause think yes, companies say of should And, the room majority category. the still some the will paint again, grow competition digital going there we've, of got of and believe whole it. reign been But are to I where the physical to physical and leader this this going, the is category really the have trying in but I'm lanes we other through, the a we've still And, up. category. these to cars auction, are grow So vehicles majority the and

types now a the in, to the know, with miles different a of you three to that started the of, dealer never mix, and $X,XXX broadening broader the services the you XXX,XXX it our car, just journey think lower seeing I know, retail want you're would dealer vehicles, priced with typical you're that we of on vehicles, franchise.

want we So of We're units. still those lot never getting to a recap.

you type believe mix fantastic partners. in data becoming really, the is we more we I'm seeing add because marketplace grow, we're become buyers dominant dealer but services ACV broader becoming which time, the offer are becoming value to a really We these and of that it's can buyers, in not only Sellers then other our know, are are marketplace. inventory sellers that

Alex Potter

Very lot. Thank a good. quarter. Thanks. you. Thanks Nice

Operator

you. Thank

comes James. next from Our of the Bacchus from line Nick Raymond question

line is open. now Your

Nick Bacchus

congrats for thanks quarter. the guys, Hey great taking question a and on

newer Just cohorts in could the maybe transacted cohort metrics dealer, earlier in number about behavior, look newer any talk learnings on dealer territories in you terms just per changes stages? important of you behavior vehicles, cohorts a of in any your at versus other or past

George Chamoun

something I starting were has, Yeah, just Nick, share you some and now has looking I'll we're going we're markets at, at one the the where Northwest within we're know, right on markets the to we Howard broaden first wait or well, you really aren't first of different. sharing we just We group cohort, looking but buyer, had getting any there, there is part that seller of they being at, just opening up have first these markets west our so with of through can into had because share looking the into the we're that themes would new coast. that introduced dealers for We'd got marketplace How makes ACV sense. because be ever going that until time wouldn't dealer in, for private if was example, entry. that to we're a

be So our product selection will helpful. broader

sort time about day market. into our manager, know, hearing may go territory you're not they and the of we go hire we the through be, first training the You know, you ACV

say was theme. just would start would the different. say so. to that I XX I But or new So thing. over last newest that That's the part a be will be days like

Hopefully cohort there's we that's think share bill I because we've something can helpful. not really basis else okay. from a

Nick Bacchus

launch and incremental the on or very just Promatic about driver Got this this, quarter, know, buying much. maybe complimentary in just, you feature? a view a this new just And the is a of it more bit do kind you offering real little quick then of as Thanks meaningful type more it. fourth

George Chamoun

Sure.

of our product parts two buying programmatic there's strategy. So

we've integrated type who and, is, to with with part technology and what's some for They can the be is groups. first ACV, the already got our integrate tend buying to larger have our and who and called API The live API. integrate a dealers have technical department dealers are internal with dealer us resources

groups. So we're is What intervention will automatically picking that only addition the condition with integrate vehicles, any technical human who the it's not a factors. bids product that vehicles, starting of but putting and dealer to capacity without dealer of large allows types and product on has in live to is and ACD additional types other

the help can our a so that machines would them buying do. into think In their we're machines you condition at our of report the the So process what basically and vehicle. inventory, human buy the know, picking end ingesting day, their,

intervention, seeing, any get excited So been platform that's were awhile we're it. now on know, we're, lower and live we're of our for It's to to averages just live. which for this has early And dealers buying, get rates our tremendous. we're, human that some the working for We and feedback awesome. still is partners days, you but so example, using happy dealer having very being without part we're than arbitration for, actually

we're condition. one, the to via sure, they'd a dealers well far like via the and to product vehicles started API as buying At buying buying that's first is not second the select buy where that's believe So types programmatic I in matrix as an API. I'm I the do believe as the I can industry know interface, to we've approach of build as least

our so it's And API does, interface. an emulating basically what it but

engineering to have So us, the going both we, with have team the So right? dealers, options. don't we're to integrate they

end using ability announce that are why is whether lie. day, same I usually think do the team, We going it? that far. feedback. the one's have few products our of experience a not the use user the integrate, product's at dealers I'm So live. only today for feedback beta such not they have getting tremendous getting we're because But felt in to if they they thing or fully the wait are an so to it I positive engineering

into part whether for to one looking have that question? the, this segments and ACV helpful extremely do or demand the that persistent persistent launch where, our an be the it of our to your really one it about The platform unique buyer your you some and is two buyers together a it we demand. second what of have preferences the we persistent think API Is demands because demand we'll the does want vehicle vehicle So really for the and adds of auction on types, marketplace format. Plus matrix, persistent demand. be for

that want It separate a competitive buying thing. auction. delivers You minute XX actually, not result our matrix, API these, and it's a and actually really the into just our bids

I this we're as we're, this. wait can't about you tell, further. to yeah, even excited very roll So probably out could

Nick Bacchus

for Thanks. Thanks a exciting. central Sounds time. Thanks. the Yeah.

Operator

Thank you.

line Our next Inc. [indiscernible] from the Daniel question of Stephens from comes

line Your open. now is

Unidentified Analyst

me in for here your end. squeezing Good afternoon, And the guys. at questions. Thanks

change begin partnerships that seeing right Obviously you help Of you rates ask to are about course, men that conversion their so, vehicle. the service or and on bill, it lots through have should maybe the talk industry to takes to to, their sell you start to of if your or the land Does you just buying up, to we're ability law? as your so but capacity, share? you inventory flex first, to as can having of now more take And normalizes capacity dealers fill hurt off longer capability when dealers a to, down demand? moving to plenty supply land land excess begin

George Chamoun

certainly. Yes,

I'll those of we'll, go So phrase. through both

dealers. land at this seem be problem doesn't it a much for of like So will year franchise least

in you've aren't Now, by any cars these but driven there if lines. lately many

to can So because I sell is believe can between an advantage digital, wholesale try opinion is wholesale your this still And it you I on least retails. at say would you debate my it's lot. while

for the XX% whatever in dealers historically detriment digital beneficial. right a XX% say, is So of XX% of land a historically now XX%, percentage. maybe upstream if not it's don't environment an had I guess let's can and this Not, lesser wholesale, dealers right believe to you I relates to challenges, but even it or as land have XX% challenge land percentages, it's, believe

out there's of lot we land in question part land is a needed of second there The this your country. if

we about worried ever land. if not we're need So

there's, it's know, noise. You

We Land with just by it's even three top point. not rent generally and far from small need on have it, Land need days somebody going with a it, even not or in in just who we are of it usually cheaper lots can we usually up don't is for. this not few, just is these that up. we go not the go that very a us. we it few right broadcast top the loops stand it's come three really us go we if of But problem parts really country we they if at now would is things in it like would why and need the that

Unidentified Analyst

how just Great. you from just consumers. up, directly do that source outside directly them maybe long Can you auctions ways from stores I term And how Thanks. that to of channel, more buy term your balance you of the help some and differentiated auction following and longer-term mentioned helpful. risk as that your to outside then then you from inventory, impact. digital finding maybe you talk dealers, longer balance, consumers offer maybe service, how other helping little dealers, earlier think That's maybe one a it bit is about peers

George Chamoun

Yeah, certainly.

products. live right now is products partners our dealer called So it at our our appraisal. look current for One, current

to will means our markets So others what more using that they That than, their pay live that consumers, our than for appraisal. know, mean? cars who aren't dealer does the you others

marketing. might Some use their brand a in CVS

this. brand, national dealer, Some or know can you across give but may use you when have say where is really a you they're to your to going what car, local your you worth, dealers or know, and get not that. in like them on a largest brand. transparency, digital have, Why, dealer but your our a use the car car price of have the our something can not having would up marketing It's one whether of country, auction the things like why

are you like minute actually going And coffee. like event, So and be might to minute driveway or inspection to our the and imagine a ACP. tent XX it's there marketing with a us lot auction. and now to it like and go like pay there's dealers consumers dealer's be doing they're an going an a that XX consumer's more because Basically, that where event partnered they and might

So just, thing. are our that the pay to enjoying because product. And going we're car. not this to our almost to going most noise. They're product your the sort first say, there's of dealers It's of pay your going to most going car, for everyone's differentiation. was become right? That's I'm

to why pay be right. going like, most It's back. -- You're how, but the to it of going

year, to expanded has earlier least and at a and bit partners our something appraisal that's grown. how got market dealer much mentioned this quite live So we they've

sort that go we're that help more will they're addition, seeing appraisals, will currently to marketplace and Max products We're doing data will more. The behind our, help even you're pricing capabilities to to products cause compete scenes alluding our be In there's doesn't that. our, build additional and when it this and of dealers our coming. tech the alluding

As will of our dealers product cars. consumer part that help roadmap compete for

think our cars roles. could So we more love consumers. you to sort category. buy think dealer partners very And about the well from positioned ACVs We of are

technology, what the the these and type partners, network, data, for that dealer of for and, the need the nation's they inspection our we provide has scale, all that's So the dealer Shopify role largest someone partners.

Unidentified Analyst

Good guys. Thanks so luck. much

Operator

further this I turn At Fox I'm time, you. over Thank the Tim closing no for questions. to showing to would back call like remarks.

George Chamoun

call joining everybody Great, today. for thanks. Thank the you

websites. in I'll conferences So we're are road a participating virtually the our here. CanaccordGenuity to be All couple details conference coming at going the on up the of tomorrow. on be

again, have forward the months. the you in your look you I for coming a we ACV. hope to interest great you So circuit evening. on And thank conference in seeing

Operator

conference This Thank for call. you concludes participating. today's

now may You disconnect.

ACV Auctions (ACVA) 12 Aug 212021 Q2 Earnings call transcript