ACVA - Earnings call transcript Q3 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the ACV Third Quarter 2021 Conference Call. [Operator Instructions]. I would now like to turn the call over to Tim Fox, ACV's Vice President of Investor Relations. Please go ahead.

Tim Fox

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

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

George Chamoun

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

differentiating by for service in quarter the products. ACV thanking superior further the dealer growing delivering begin customer another network with market innovative team and me highly Let to our of ACV

for the factors detail ACV's discuss both tailwinds will I more the headwinds macro operating and in creating territory unchartered is with automotive later, business. industry As in

While guidance financial strong we continued the for long-term share, our to automotive quarter. market have technology investing in extend deliver navigating crosswinds, growth provided market position to aggressively to with you we addition performance last ACV presence, and our through coming lead exceeding sustainable expand gaining in are normalizes we our again as to these the results quarters. geographic Moreover,

Turning I'll to highlights Slide X. with our quarter. of third begin

with was see, momentum in a an our marketplace, basis. As increase XXX,XXX digital We the transacted the Revenue we sold GMV. of X-year and year-over-year XX% on can of of continued XXX% in of and where $XX vehicles high you quarter third XX% increase end market a over growth. year-over-year $X in guidance the second quarter million above billion consecutive our represented the

Our revenue factors. attributed to outperformance X be can

market dealers to proven we grow on to playbook into First, execute our ecosystem. by continue new our attracting share

continued Second, and QX customer and and throughout Overall, softening third, execution our of were strong adoption pleased rates strengthened ACV well services both our are of team very by ARPU we conversion the our with suite expectations. early after above in growing value-added the attach late of And offerings. QX rates quarter.

more in discuss for detail, will have again Bill year. the As increased our outlook we

we our and and rest our scale. of for XX% the strategy drive top-level expecting the a X discussion frame will product long-term operating value: the elements growth, full XX growth expansion, TAM shareholder deliver on To We outlook 'XX. the higher points are focus of of to now marketplace full year, beginning than our revenue today, to at

XXX% growth which XX% is unit with and growth Slide Let GMV units year-over-year marketplace growth. Year-to-date, me begin up with over when XXX,XXX let's compared more QX, was we details cover X, in quarter. QX transacted On compared the XX% to 'XX. referenced continued in to I trends values marketplace QX. Vehicle in contributed year-over-year and our of the in growth first move to market XXXX. in year. of with The mix half positive related this XX% upmarket earlier trends consistent vehicle to

In doubled nearly quarter. the valued during $XX,XXX fact, to year, percentage the over XX% of since vehicles last

While time, we vehicles of marketplace a no over believe in vehicle sustainable, long-term for frontline doubt will this values normalize mix tailwind elevated ARPU. resulting is ACV's higher in

Moving to wholesale relation context to it We Slide the thought market. helpful the X. would dealer automotive on to in provide broader be market

top how new semiconductor a the this trends picture. ARPU reflecting row XX a used XX vehicles resulted used strong earlier, chip market. case industry have light the level days The vehicle in contracted of nearly levels. above mentioned the pre-COVID in The on charts vehicles elevated, to vehicles, record I steep versus of in historical XXs. for paint the decline The highlight chart retail levels, bottom in for days elevated consumer The high levels [SA] historically sales. year. Strong tailwinds well-documented reading have around supply very different units this competing from franchise shows charts nice remain prices. down ACV, vehicle at is Sales X which in been vehicle highlight environment shortages is of a As crosswinds. in pre-COVID And demand around has see of which will automotive on X right The trends new the XX% X/X in pricing latest demand has the million dealerships demand the values. this reflected you and wholesale translated into and

the in market. market And chip serve. very making say well I ACV vehicle the the we're levels, declined, resulting this trade-ins will purchases positioned trades and doubt resulting technology, historically a of because such market, are for the wholesale has entering quarters. With the input recovery in why wholesale the a volume annual new in at into supply investments territory the a temporary representing a is contraction vehicle significant contraction benefit temporary we the given matter? portion of critical the in in So market coming improve Consumer both to dealer acute wholesale picture expansion no new the does inventories supply. from

to Turning X. Slide

rooftops, of the Let growth dealer continues XX%. the ACV eventual put, new headwinds unique in year-over-year me decline XX% cost The is in the is and a growth, in dealer we supply recovery. franchise Simply approximately and remained would us the reached else with that XX% attract 'XX. increasing or dynamics automotive quarter share, dealers. from levels, to while conditions. in point have XX% 'XX, X,XXX of We impressive ACV listings market unit the increased QX well gaining bodes sellers our of Despite for per platform market market in here QX our this in approximately QX a which marketplace and in QX, all listings of number during equal. decreased put by that supply dealers revenue XX delivering mirror record is at This of sample in about in the from an the on number headwinds, new finer marketplace first to transient the attracting units per dealer supply industry being pace quarter. of consistent supply our these points year-over-year dealer XX% we Had growth, we our sellers contraction XXX,XXX takeaway temporary observed the due half effectively QX. constraints, facing strong through the wholesale transacted market third wholesale Based estimate contracted quarter-over-quarter market. that a on QX transactions After KPI consistently

Next, on X. Slide

with We are expansion. team territory ACV making great pleased the our is on progress

Over goal XXX our the by next year-end. opening of XX territories the we'll remaining be days, to achieve

marketplace, increase and our nearly by execute be go-to-market we each effect the proven we'll By to capacity, initial engage the country. over the creating inspection times footprint that our in on repeated positioned to territory the launch, XX% dealers we've year-end, Following U.S. XXX in by network franchise the investing dealers our with all powerful playbook across attracting

year-over-year X. 'XX. pent-up versus Moving growth created against marketplace of Note year-over-year on very from the 'XX that Slide benefited QX XX% the to greater results, XXX% in and early pandemic. revenue which growth was demand Auction months QX comparison than COVID the strong was

that sourcing I our contributed this offering, to Live our Appraisal, growth Slide Turning quarter, unit XX. year. now to Last consumer has highlighted strong

offering dealers vehicles unit to effective contributed to an quarters. states are XX a gained with category, high being leveraged volume Live Appraisal year today has to mover This consumers this efficient We dealers single-digit offerings it by the and their in is marketplace. this plan growth enabling coming with way across in year-to-date, percentage over country XXX% the QX. and in our of we ACV's expand and traction offer early our on sales sell our significant Appraisal in this Live an year,

tuned for penetrate to as front stay more continue on this opportunity. market large that we So

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

launch auction to ACV optimize provide Marketplaces the with Private XXXX. country, to another we offering on will in offerings foundation Marketplaces to I streams dealer marketplace leverages platform launched open also an technology dealer profit ACV's in their in technology groups ACV's trades new generate a This largest within supply XX. plan commercial June. both to Moving Private seamless provides the downstream to with for and create dealers Marketplaces Private Slide engage the and revenue maximizing speed. marketplace. avenue we private groups, for our that a update lays enable

strong dealer over XX seeing today. are demand initial large We live with groups

of largest rooftops. dealer one groups about excited especially with hundreds in are the We a the operating recent country partnership of

then extensive The with look of of aged on to dealer focused coming this high-growth an chosen We to testament based Marketplaces the the phase Private technology, Marketplaces the inventory. to customer network. against inspection their quality engagement like engagement to scope core power group's initial scalability won adoption strengths field of in key was around other forward and include incumbent updating This our the transactions capabilities. Private you and strategic test leader We quarters. inspection supporting market capabilities. our ACV's private on trading ACV business. sourcing Following partnership and platform vendor, on win market-leading consumer We the innovation, the a network a our private is flexibility expanded

to Slide now Turning XX.

programmatic very of It's also already in a enabling dealers the innovative contributed to traction single-digit are QX. percentage this way days, of the our early market We marketplace excited our engage offerings. about but of with buying units low

a on supplier. include diverse today with integrate real-time companies and that technology with platforms live specialty car APIs marketplace. a with is parts We're rental have API customers who buying dealers leading bids large directly set Our that to of dealers, auto engaging generate our ACV's

superior will our partners beta and with This in buying is the enable user dealer rest by marketplace year-end. deliver in needs. X offer programmatic team dealer participate enables trusted their efficient believe inspection nationwide buying our to with inventory results which addition, In lists programmatic in our we to programmatic automatically dealers wish inventory for be launching our and to of ACV capabilities by creating highly our experience will will These offering together source buying a experience, partners.

Slide Moving to XX.

engaged making guidance, data are growth early to are together Digital great that teams management MAX vehicle fully integration natural intelligence joint progress developing create in We in Digital's on The while MAX current we with in front updates tech complement the our marketing services to a coming integration. exciting pricing and our ACV's inventory as sales look sharing quarters We campaigns. offerings forward and merchandising XXXX. products the ACV's synergies. launch integrated strategy are

Turning to Slide XX.

wrap me value-added our this update services. an on up with Let section

while services resources Transportation technology the are new differentiated continues a ACV partners Capital. line growth We driving to creating for the ACV be the top Transport key These significant to of to platform. ACV. in both strong buyers delivering investments and by enabler to and and market ACV attracting efficiencies highly for our are scale also investments making

offerings June business, is in growth, improving around attach loan are XX% we times of milestone the growing has quarter-over-quarter. revenue like market, just QX. continues X built finance The launched transport resulted in cycle QX, our into strong increased quarters. Capital attach and The partner beginning transport XX% plans transport into digits Our reached volume loan achieved rates tracking ahead attach within of since per rates carrier ACV Recall with the Capital X in this mid-single XX% our traction around reaching targets. over team and long-term a initial of the our to XX% the which milestones gain rate that network the assumed fast in translating years. in new year. in

XXXX. also of digital and In margin We capital with at growth Bill growth and scale. nearly was platform new ACV and revenue financial business we through another have capabilities, our expected across our growing continue opportunities about we're for our excited of by for hand avenues created technology to With driving that, our expanding in QX to exciting take features the of me solutions. that results across powerful point revenue long-term our leveraging XXX% growth be over driving data our suite how adoption summary, you to let proof

William Zerella

Thanks, George, and today. us everyone, you, joining thank for

are QX factors our again George We the and with call. to having despite upside EBITDA guidance financial both adjusted revenue challenging delivered on pleased macro outlined performance, earlier our the

model. inherent million or underscores guidance. very This results with third results. business driven XX% the million of generated Turning our to quarter begin above Revenue review $XX Slide and loss was favorable was XX, in the of of also leverage quarter I'll high QX and Adjusted revenue by revenue EBITDA our XX%. relative of performance was of the our of $XX guidance solid growth to year-over-year our a in end operating

of above of driven by our and revenue expectations. the which revenue, year-over-year transport expectations. year-over-year ACV The As basis percentage exceeded expected, increased points year-over-year XXX our increase as of was a modestly increased approximately mix cost and was revenue primarily

we with customer costs Additionally, arbitration higher assurance incurred in associated revenues QX.

as we're these percentage we and to less points However, approximately increase of making Total than operations by expect revenue, The investments normalize of excluding fuel planned strategy. our XXX revenue with our technology a functions, long-term to across year-over-year year-over-year, historical expected. QX, investments operating basis our growth norms. reflects go-to-market consistent in costs, portfolio, cost increased costs

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

assurance. and between approximately revenue, balance a revenue the customer with diverse of Auction mix have in Marketplace evenly We revenue with XX% split service

Marketplace due quarter-over-quarter, reflecting primarily Auction XX% Auction wholesale rate. Profitability XX% the modestly the consistent market. the throughout penetration Marketplace up revenue was constrained was quarter. improved and remained the strong versus XXXX, the Auction of but conversion continued historical our wholesale declined Marketplace above strong to with and market in expected, expectations, in reflecting acquisition quarter rates revenue supplies As dealership in Year-to-date, high

in services also Capital. business full outperform continued quarter Our Transportation revenue to and MAX Digital. strong a of expectations results nearly Services with reflects

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

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

I As delivering offerings investment today, our you throughout new territory technology earlier, significant of share for plans, And market our is XXXX a drive discussion to and as on heard mentioned we're ACV. to expansion investing year in additional launching cost again, this year-over-year expected our highlighting into operating increase adjusted operating operations. flat of expense, XXXX, EBITDA despite our revenue. be These XX% And the in translate is to excluding our investments leverage underlying a business increase, margin with in model. scale

to Slide turn XX. I'll guidance on Now

For million million revenue meaningful the range XX% and fourth $XX to is million. rate. XXXX, are be expecting acceleration of over of rate quarter quarter to of loss million, in our year-over-year the EBITDA the third $XX of range to growth growth XX% Adjusted to in we $XX $XX expected a a

again For the are raising year full XXXX, we guidance. revenue

increase the $XX EBITDA lower of midpoint from of million $XXX an and of to previous approximately the $XX XX% Adjusted million are year-over-year We rate million loss to expecting our $X revenue $XX guidance. million, our range in guidance. million to of is million than $XXX growth previous XX% a now at

in QX which persist up highlight strong trade-in for year guidance. to demand wholesale likely constrain may in Our To approximately vehicle about comments, let guidance And near of Slide our my backdrop the capital XXXX. sales chain values excluding of an the we debt business. vehicle are increase XX. expecting on we cash grow each amount that equivalents, on $XXX float investment expenses, that by pressure of long-term during structure business. trends on To from cost auction operating the X ACV strong the cash sheet in the supply million assumes my which new associated with balance of our me fluctuate The ended $XXX,XXX of in We float term. market. reflects a million We the supplies meaningfully, on of business point driven ended can with in Capital the the due to throughout We're plans, quarter final full earlier volumes, total XX. vehicle Note XX% our used with our wrap our finally, XXXX, quarter our $XX of since operations to revenue, million quarter. float will also and challenges generated associated creating positive automotive and $XXX flow the weeks vehicle assuming balance marketplace continue that June in for will in turn

cost me George. let back of and continue Given to And at Capital we are that, it the with levels our our to optimize strong turn self-funding position, ACV capital, business. current cash

George Chamoun

Bill. Thanks,

questions, your summarize. let take we me Before

with while the headwinds. pleased our quarter third through in supply We execution are short-term the navigating

to continue to growth our gain customer gaining strong our new ACV marketplace positions within forward. by market wallet customer going We attracting dealers which for share by share base, and existing

territory our expansion plans. executing are We

gaining and promising Our synergies growth are market for MAX emerging Digital see latest offerings our traction in acquisition. the some very

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

Operator

[Operator Instructions].

Our Colantuoni comes first question from Jefferies. with John

John Colantuoni

couple nearly a your ACV's how So on which in sequential XX% gains. just of follow-up. start to sequentially dealer share over in the dealer about And gain looks quarters. wholesale wholesale got how with was Maybe the increase It talk you means trended context XX% share. down ACV last gains wanted has can to past XQ of trajectory give of I I've XQ, sequentially quarter continued like share in trended to perspective us the

George Chamoun

question. the Yes, But start Tim thanks chime and could then and John. Bill I'll for first, certainly, accordingly. in

as a that, a it for we or -- in we wholesale our that market our we so obviously turn, new was wholesale we've of than digital, the category described less dealer XX% sellers, changes And where taking units record-breaking overall the new as been -- mentioned, category, we've saw whether products, we we was all were -- the but that had with wholesale segment, launching be in as physical share. gain, the obviously, We, down dealer believe. about just sellers, in down significant category, were that more a -- we As wholesale down.

want more? so market share. So results we to really than wholesale, proud our add overall grab better any do the with dealer additional to ability for of you did the very Bill,

William Zerella

No.

I think only to best to John, ability, and been. I of out look, has would is estimates -- these the that, last yes, our what add, what few I are mean, market trends have the and quarters and to the over the the of out thing figure scope kind year-on-year trying try done

these on So estimates our are best we based on see that our data can the side.

John Colantuoni

marrying Great. wanted it about providing with programmatic QX on talk about see if conversion can quickly you'll how any overall question you ask the you Maybe to you auction And maybe ramp gains ACV. how about rates platform. to And talk it the buying be tool. to in a just expect it and

George Chamoun

Yes, certainly.

rates conversion yes, have ACV. strong on been So very

very conversion a these capabilities really -- are sellers right perspective, operating extremely ensuring really from value from well. the the is platform getting is to So proud just going we're additional we've really that buying for add Programmatic our vehicles.

of their low to single-digit and there's buyers other with. know, The It how low buying user of are which platform of starting fantastic. dealers right automatically our I user product. then you now obviously to dealers is with our API; first, happening and And these the phases percentage are wish say, The of we're create in many, list. is experience. types we're API, already integrating really cars of beta with programmatic would largest computers The experience some is the going them not sort the X well. Meaning, the in of have programmatically, allows their the second, buying: As really that's based love dealers today, broadcasting handful dealers, preference. on already buying

don't experience. a user this platform we a programmatic that don't team have dealers technology can we have for integrate, or So have

So far good. so

year getting So just impact I them in the think, a a already of make, onto more the I well getting extremely likely But from because think throughout the we'll we're dealers rate system. meantime, trained, next demand it executing more see perspective. material

John Colantuoni

little October, an how -- end talk you August, if trajectory one upward conversion squeeze back started in. could if sales about have little since bit maybe Can Maybe about wholesale given a beginning more that you're rates late a talk the does bit prices in to able toward QX? to and impact I unit move of

William Zerella

Yes. Bill. it's John, Yes.

we conversion increase prices few down about through saw rates QX, if back kind the platform declining week. over call, just August going started our talked September. What over months July in the though, on So to last in since as of week beginning basically observed we coming conversion look we of on our was in as then, rates an last we

continued So continued lot we so far. September. started platform October our on a really November in through strength of That through has seeing and

companies So September. we're market. from up ecosystem. think in the certainly seeing bit a Prices lot more heard a back stability other moving probably comments the similar started you've And actually in in I

the we've of as kind our dynamics on So well. platform observed same

Operator

comes Our with Ali next from question Guggenheim. Faghri

Ali-Ahmad Faghri

I Even that guess fourth helpful. the maybe commentary third volumes can relative quarter and perhaps understand quarter? GMV be for directional guidance, would embeds what your on then per help better unit, you us So to

William Zerella

Yes. Ali, it's Bill.

can roughly first, it's QX. in assume to GMV, you similar So we've on what seen

dramatic that GMV. So shifts on no in regard

guidance. other the terms In of factors affecting

so mentioned with we've on in in know as holidays. we continued towards conversion factors I an As QX it seasonal platform. improvement really we November. seen on That the our far in the platform velocity That's more October, said, strength earlier, has associated so get that rates,

we've but as trends. assumed seasonal consistent year it's have this not, same previous who with in or quarter dynamics not the different those we years. of Whether kind assumed is or this knows, So

that modeling. So we our into baked unit

we units dynamic platform But the can decline our had is numbers modest that counter expect baked quarter-on-quarter. the sellers into on some that you have additional we well. So is new as number potentially in our there of

you some sense hopefully and puts of kind got directionally. takes. gives But you've that So

Ali-Ahmad Faghri

transport of here, XX%. a That's rates helpful. your follow-up as on then attach And

mentioned, you quarters. just your midterm X target hit in you As

attach transport can think you do where rates go from here? So

George Chamoun

we our long-term between hitting already think between I this long-term think let's our area. we're we over to as provide in plan say, more we'll the there. new Obviously, March, goals and goals -- I and, now need guide guidance since now

just hitting. think mean the hitting little I actually of are we're not look really Transport's into really and exciting We metrics money, app. cars we're a quicker team to turn really -- this days. We early KPIs and well. business, -- in launched fantastic the Transport, still I what's is around for where a the going only carrier bit us we're put turning making the We a dedicated tech of starting at we're quicker. metrics

Like see hours. within You're sort us XX to just ordered it was the I to unbelievable can't these happiness. me sending all car, starting of shipped I believe dealers

has really going of KPIs incredible. So mean a that are step should The We're That's back. a about improve. accomplishment. just been a just well. making think XX% money, we taking great I tiny bit and

value but ACV we're was think business. within is going really a to add, almost seeing significant additional at Transport I it's So looked as become

hopefully, gives a we're little to our But prior updated color. going objectives since goals point, need already your ones. you to more So that we've hit and

Ali-Ahmad Faghri

more That's can I if squeeze in then here. helpful, And one George.

And as to launched? to seems that the the pushed I the that second do first part of marketplace Is bit. half? little that. beta to plan developed? maybe place originally, it testing -- product was at have in you it expect think I On that and Are of commercial or then was launch with out think is in been a Should of half the said your product we you customers of launch have And when year, the any the end FinCos? being private expect platform, Because year XXXX. you it this it

George Chamoun

Ali, for Thanks, Yes. bringing that up.

private even probably the extremely than marketplace better, faster well, for were expecting. going we dealers, On going it's

saw about these closer the probably XX We offering You bit probably right on this us hey, big to a launch updates of dealer group say, QX. capabilities our until shifted you're little already we're focus the and now commercial resources of dealer of wanted dealer probably part now. launching year, as we a a that's why groups seeing week won't to groups,

these remind whenever things, we're side work group the you're building all dealer the just you on really you As doing incredible. you And know, prioritizing. just is are why. But

You look their at end up inventory. getting first

get that, goes look the into get They with groups dealer have we So an inventory. will getting trade first. our at end first And marketplace. up open or a It the a platform a trade. aged

So we're still very It's time good commercial double excited been about probably a to dealer. opportunity. in also down the

know, years. commercial year a next to prior stay to relatively As you is low segment compared going as

we have this in things, think what late launching prioritize the I us you're of So bigger out worked picture has whether seeing end that year, up our groups extremely just well. early it QX, in QX, and dealer needed

Operator

Our next question comes from Stephanie Moore with Truist.

Stephanie Moore

private the why helpful. would this would guess ACV the on distinction marketplace dealer benefit platform? or these first I do out to something. original private what's a I'm the to Actually, they there them just a missing these not getting other, groups start But just the seeing clarification and I'm follow-up be new ACV and so on -- the marketplace Maybe just new versus last question. the with engage, one

George Chamoun

Stephanie. certainly, Yes,

marketplace, our dealers The to for the your a their thank sell So right? you. that car, trade, had fresh -- it's those of marketplace fantastic and other aged is way open handful ACV's So cars letting point, open before solution. into their go dealers or sell years to is within to solves for as fantastic a any auction. an last group wholesale for marketplace first whether have a platform a with whether we've vehicles What cars, to it's private

order right they're not sure wholesaling wholesaling comes Like want their what of the like vehicles the belong make to as operations. first? it that and at look group. So to they're Dealers vehicles,

So of, tried to I that this. there's competing historically been have solutions couple do say, would a

the up the say, were we So we this in come first idea, first, category. execute to weren't extremely well would I with the but

so And be have fresh what in dealer group car, an a group on allows or the trade to it. aged whether take, their it

at consumers where land dealer of whether cars or case that's group their consumers Ford this is cars a don't from out will month, use Another their will x they let's a necessarily in it say at know groups car store buy they given come land, from are level. And store. XXX buying Chevy that

their So buying what as it cars it goes Private Marketplace not consumers, keep it again, for, first. from are leveraging to And decide on ACV ACV groups ACV. gets some of into then wholesaled within if these they they're group,

Stephanie Moore

very are also -- this mentioned as And point? franchise with could then traded other could you giving helpful. that Is well. in we're these something also be be think that's I first their fair No, this Absolutely. the And them dealers used vehicles that with look a that off-lease presumably, and dealers. with

George Chamoun

Yes, categories other And or categories. whereas a within off Ali We -- as lease. other and is was proper. within companies those commercial, little a our current need co-brand that's bit there's platform like a fleet of more solution, mentioning, ACV is Auctions the correct. what white There's label

got capabilities, the little And match are to an I'm little there of that here, have then of not is embedded the label what can requirement but data which more more benefits bit solution. they'll we've partners a commercial a get than co-branded before do So get there's other inspection looking of need per work really white deliver more also ACV, our we we just to for. technical to on platform bit trying car. to really too sort a more

strong deliver will from of our still are then which there also certain benefit next differentiated we get think sort other capabilities. year, and we and they the So need, capabilities

Stephanie Moore

some team, your about relates just sales would some the And teams, thoughts improvements I scale older what a seeing you're whether on expanding some scale seeing Absolutely. obviously markets, meaningful bit building to the the being just investments. inspection maybe your labor from to the benefits And you're in the more very talent. talk other are then into up leverage then efficient. standpoint as impressive it's from new you're of my markets? able a attract operating Whether of Could despite you you to question being maybe they're also, seeing hear little on, love

would that helpful. all So be

George Chamoun

really, are -- also We're planned. chime I'll going and our then really as markets Yes, can start in. mature Bill

seeing efficiency. We've -- year So been a the capital able than we're originally lot talent we've year. mature hire been planned able in less mean we increase our to had using markets. this I to the throughout we're you're

Bill the there. little extremely So more really business add -- could become a bit operated has well. has

addition glad In technology on what's and question. the the and field, going in I'm -- product our to asked you

and doing else? more I earnings so of We But delivering capabilities in our haven't helps anything you It done our job that for -- really high we're updates really in next say of so just other so results. call. superior inspections planned. at far, in We're to in far updating level, add would the we'll do Bill, helps delivering It good. sort a a efficiency. we're But maybe that inspections platform. do great want as really platform

William Zerella

So way. point I levels that there's we're a I what particular get to would been do out. in we And can, wouldn't see business. investing, across to that guess efficient It's kind order And to we would you're able across I starting terms that much Yes. I us. right? investing very as this some investment the business of to we're think much look, add, I area again, volumes running say for frankly, has one pretty company be of basically way is, scale we of broad-based everything of the this larger in every entire that. any in operationally Stephanie, year in an

in certainly we But grow benefits that as are time, to I the this year. So over P&L again, through see some you think, these get of larger flow scale. will starting

Operator

comes next with Sandler. Piper Alex Our Potter from question

Alexander Potter

Okay. Great.

anyway. to a So that's I'll little maybe ask unfair, ask going question a but I'm

GMV mix is permanent unit obviously, the the of right high in you've Clearly, because in. nature, super now, partially market, richer got is per You of in super, more coming structural more some nature. mentioned, but it

think a GMV unit this past normalized, in per So disruption to seat, more build long-term sort you out something of if settles that's where out? and model, you're trying you're looking my do COVID of all to

George Chamoun

we you Alex, model it, unfair it What a that's did with question. [Mike]? question. years, fantastic in it's out glad I'm led an

Unidentified Company Representative

[indiscernible]

George Chamoun

we question. Yes. we I model. had in think the In we a only had the long-term all, mean provided XX,XXX you long-term Alex, I it's model -- great

we long-term starting in question. we is are our it. not I'm metrics is really think to hit But answer that going to it a all So what model great sensing much we're have would I predicted would sooner. hit we

need as updated along. We will goals move we

it fair to a we're I answer think it's very think don't prepared I question, but yet.

William Zerella

Yes. The only -- yes, other Alex good thing I and would add, it is question. a

the from basically now. our already everyone If in have we ARPU the at model projection gave X-year hit right, we XXXX the look syndicate that you IPO, for

was fact, XX QX. X in In it

George's XXXX, back we per terms terms X we've GMV and So of right? of model in gave the in exceeded the unit. projected guys, If you ARPU, you to it go to Auction-only in XX had -- we projection already X-year at long-term point,

we're of longer-term we of right? to prices this put certainly, for out targets cars, elevated at over there, some that used result already exceeding moderate And time. those. a But the will that versus start is So least

So...

George Chamoun

And I thing. one more think

fresh, important APIs, seeing ACV of why segment think our for are mix here bit a seeing industry, -- buying cars, filters ease a to is I either mix on you're the as of ACV, is confidence we're lean and arbitration vehicles. we're them because dealers broader going the I see happen the really see going And you're our pointing we but really here you're being units, to will some in programmatic experience stay, more is stay. declines this platform these the starting the cars, we've whatever of out flipping we're added excited. that to is couple over last or little us really buying from to ACV you unbelievable product on confidence the confidence, and broader Obviously, a the we're see the in believe leveraged think you'll buying these mix that low -- our price quarters, that to fresh the confidence, rate, consumer see

all on objectives. this updated Alex, goals as more and sort to our reupdate start on we of you come So to

Alexander Potter

that one expected. looks Obviously, some good really than least the line higher [non-X] actually Maybe That's Great. all commentary. It's rates see. like helpful It That's to number. attach okay. is a business That's answer. are top there Okay. all doing of last profitability at Transport. one then trending on ACV

forward I any, you commentary guess, be for can in recent most add the and ACV Just profitability on helpful. then Transport looking would quarter

George Chamoun

your those And start, planned, Bill and of chime I'll across To can where of of efficiency point, So are right? areas going is plan. better we ahead Transport kind in. the than business is one

the devoted we had a why, least Transport. people we you when team if to ask went over we -- At only on few public, -- have we dozen. So tech a it's now

in somewhere the people We're us now very we So be across and organization been just in full We've seen -- XXX-plus our product board. tech around transparent. our you've scaling hiring, tech.

hiring. We've So we've got more resources the resources. we're got

You're And dealers, the are seeing to for will just where things scale. us we're that turn right, us great but to KPIs right? We're one as about Carriers of plan a expanding resources, also great getting business it our of We're get team. that's only Transport areas help cars into And starting of additional lean they're is profitable more products. not great seeing saying tech in ACV. job some this faster. important And releasing just in. doing is You're benefit. QX starting a those these

their job the got ACV. in make their fulfilling across You've how right Entrepreneurs whole now who that's all country, around they cars literally carriers the country, is just money.

with the really just And I additional I create additional I anything on, this know scale. left Bill, don't efficiency tech proud at. And team so out. we're along the we think put where and will of if we're investments,

William Zerella

I talked fully transport for touch. all increase terms would quarter, of transactions that So actually XX% human over transports. right? last And scheduling we've quarter, add, last believe And about we just just I automated, and time. that No. created in effectively will no of arranging automation spoke this about we were

another yet of... example So

George Chamoun

And of in almost we ready. our of this XX-point-something percent, were where done were past XX%. dispatches part, quarter, way just carrier this programmatic XX% shy we The had a a

another just So -- just like our area things where is team that's it. killing

Operator

Rajat comes from with question next JPMorgan. Our Gupta

Rajat Gupta

So a around competitive just landscape. more had question the broader like

down have the in numbers backlog maybe quarter-over-quarter, a more slightly sequential night We talked more CarOffer decline. U.S. flattish -- last about maybe

to But market. digital going to the market, And rate the versus of landscape, the outperformed So aggressively platforms these you your competition. performance overall come more? you start overall more peers? within would on more Are seeing other some some you invest soon here mentioned pressures is just just broadly how the dealer-to-dealer the as then in you U.S. EBlock

update them relative just competition on And your Any thoughts So on have follow-up. would the performance just I quarter. broadly be that helpful. and to a in third

George Chamoun

again we've getting Thanks from Yes. into for answer, we these George. my question. without had of -- one is competitors Raj, We the X. any day generic competitors of have, it's hundreds

cars a the a somewhere whole competitors our is all digital way, million percentage, of guys, year. but small The One category One sells X around point, to a in sells -- your cars the a few still in of million year. growing. we're -- And aggregate, a we're us right?

quarter the maturing. are in I'm other record-breaking technology? break the more way for had investing is, a are in we key than new like sellers. sure look wholesale the a So in. the And last quarter And new was folks category, down to record you tech overall what going that you investing had likely is create sellers. segment wholesale. at resources And to building we any say for do dealer business, well. for have And Are I you execution. is what they And think our doing? really I differentiated, the as our right our your road going of for team? the Are Are right We my us invest in And you And what building dealers? the you're doing fans something so we've dealers love love far. problems love map. I believe culture? to love to the solving you are like raving I team. got we're

So there's always competition. going to be

X, when to We've with. to day got had and We great we very it got We've right, little momentum. a have got field work capital from resources, scaled tremendous had team. tech we've today,

good. feeling we're So

Rajat Gupta

investment just more... significantly are follow that. more of volumes Just down the The quarter, trying just given to get fourth that And Great. OpEx here up ahead your quarter-over-quarter? is in curve, like pickup to

George Chamoun

we're that of sort to of to just trying of hire we've give folks trying we're -- hire, hire. half over on can Yes, in. Bill more is more trying add fidelity it. But more can Bill us to tech little to resource few field folks people. we're sales a dozens and got more start, a -- the I'll side

we an we've expand -- on half mentioned add to is But that. if that it's this more is over trying Bill, can don't there's to investment people fidelity side. of know area, I any So but the

William Zerella

that, as Rajat, I Yes. planned. we I -- would is the thing say, only would invest we're had look, across mean I business to what the continuing

those that previously projected. have Although than investments lower said, been

modeled XX% investing for we're was lower year. actually dollar is than increase we of investment year, to year-on-year while originally that expected had and amount about coming So the this OpEx into

projected. as kind than spend, and side improvements kind market looking driving kind of just So and terms into we're but about. we're next OpEx think new spending right, new of product that and of the we're money but across level had we the several the efficiencies look, executing the two, we continuing years invest the on into on at in growth, less just technologies obviously we But of operational of spoke previously OpEx about not next lower business a quarter over to or

Rajat Gupta

a worried Got it. just are sort it. some you about programmatic forward competitors on like around about of as have how And this do landscape. competition lot here -- to just come then you Then going follow-up that? get talked Are you this competitors of have you've And them buying last one Got just onboard? discipline extent. any You seeing other about investing. like like talked

on economics would also helpful. to be Just that any the on related front color that

George Chamoun

Yes.

been has lots of strong. There to out been always per has -- Our been unit point, lots there. revenue there's your of competition -- we're competition. We've

right? platform. adding if look operating you this amidst if as we're So are like the well. a extremely changes just strong. leveraging We're this Our marketplace, if that, -- unit to all you even look planned, we performing We're this like is lot doing doing at amidst sellers the at of revenue these in all how as per resources competition, less than obviously,

say you going building of with your do, I'm And so said of products, competitors us Y, really on have out across even aware great more we're our platforms respectful. in grow that relationships we -- we've great were Z out to the to go -- competitors, thousands be outperforming that focused the But what really you dealers And need there plan, can we building always X, hearing we our you're though future. building to there's there. U.S., be plan,

Rajat Gupta

on traditional any business, Got it. economics quick thoughts the that? And on versus like the programmatic just buying

George Chamoun

of programmatic. parts two There's Yes.

a really economics. You is more heard buying me talk there's difference It's on to way the about just no buy which the side, the really vehicle.

We haven't programmatic really capabilities. selling announced yet any

look some to to this -- in and models. don't simple would expectations any I lean with the way say create to some But want of I these improve of could of yet unit new a per perspective. years quiet selling down. -- been few not have in on you're any bit those any revenue capabilities, it is and I buying be sell for -- at And seen it. really my on next opportunities be revenue that. to -- of a the more over level, little But some I say, some this and we've to way and we're There are a at just the might simple a is go us You've won't but to opinion, buy, at execution these doing would what seeing confidence from don't of high all, me, sort of features, look models lack

Operator

from comes CJS with Our next Bob Securities. question Labick

Robert Labick

per grew it's higher Obviously, to up it quarter go GMV of other digital this than and do year-over-year lot peers, with than But and has also digital that. something your unit. back market to faster year-over-year, a also to materially peers. wanted I

So mix. higher and you're obviously a higher point, I price guess, a attracting

that us kind you to better doing faster, mix sense. So this maybe of better differently you're help that's understand what enabling and get if mix, makes

George Chamoun

you've won't industry. if know been Yes, experience. this a would certainly, tell everybody, just least long it you've auction this obviously call at watching And I for I'll how don't of been -- Bob. decade watching date I I

Robert Labick

You're being kind.

George Chamoun

demand if a second time. not for have because $XXX,XXX don't try demand try with going the back demand going for it with and way clean will full X $XX,XXX They're that demand supply, buying, you where going from you. try come to to starts $XX,XXX, not buyers for demand on a a we've asset. to $XX,XXX, got we once, Yes. at issues, got everything have and demand, now for The a with We've look is have side, cars And CARFAX. to really cars. a you But we've perspective, if bad they're folks got cars simple or they're third that you CARFAX $XX,XXX coverage right from

started the a dealership So sort service have that auction back segment, stuff, we the up, you when full even aged all And at covered. now out the look now as of of just where whole segments we of you got though auction. and we're type grown we've the

thing. there's live. ACV. trust is, of before of as the the these So done is that brand why? know, in before programmatic there's reason question got inspection, Because the right that I is we that buy you then just The assets. the a confidence could we these we got lot there's We're buying new to of got done done. features do in We trust some going

lot consumers in cars these wholesale and Bob. on a they and ACV, Now these want the a one XX a you for that it's every great, the whether of we've And platform, people, best trust are best car is the flipping ready got tech aged they're vehicles. about, whether that details, under days cases, use with now, old, buyer think an from we've sitting that's you use Each buying know built from them right that that. the that's now, perspective, those case all could it's

have, the more of more power right, platform. the the confidence leverage to demand the get our broad you from So you supply

Robert Labick

Got it.

a then you've in while inspections the answers, ago And one think But your I Okay. at and past, your as success, think. the talked you Great. are to inspection upgrading in critical of little this hinted I system. about

about inspection integrating multiple that? inspections. more when the or talk lack progress we your, Can term, might system better of a for next-level towards hear you been You've about maybe

George Chamoun

the certainly. have Bob, a our well. now. inspectors... name But is inspection outside. for It's live believe right code app. XX it We SIA, name -- it's Yes, internal single I over have don't we we going Yes,

Unidentified Company Representative

Inspector?

George Chamoun

-- of have our XXX we so Oh, teammates already inspector utilizing are now this. over

actively out. And you really We're an one say, your beta. to So whenever it's platform internal would from beyond, rolling you're I this another, to train teammates. going really really want

efficiently, off-lease they're bad. make allows really a app do tech us is it and else to us per another. create inspectors to bring walks actually platform. our You with remind inspection to us starting one big our was types sure just not wholesale our it's It in on why Allows a or through that some to addition, right more intelligence. or car, inspections the do but same to inspections. things commercial reports other vehicle. this of allows to It But one to of It's product going from we teams largest everyone want platform do only here, have on our to that which and

that to specific report, be a it's bad example, has Let's CARFAX, whether for damaged say, or whatnot, AutoCheck or others. send it that vehicle meaning, CARFAX we been or can

of out platform. likely about over from there. inspection team I QX, yes, We're platform. trained and our would And So beginning inspection end think we to cases multiple say, of going And by it's the, one well. would different all use have QX, advanced this moved of

Operator

have Fox we for over questions. turn like the time to call That's back closing the I'd for to all Tim remarks.

Tim Fox

you on the to seeing We on details your great quarter, again, forward have circuit virtual for a today. call a going you And us look this Great. months. would please joining coming thank thank on look our and Thanks, investor to investor be interest number in everybody for next in of and Michelle, I to We're so ACV, the in the like conference over participating website. evening. for events

George Chamoun

Thanks.

William Zerella

night. Thanks, Have a good everyone. Bye.

Operator

concludes This the conference.

You now disconnect. may

ACV Auctions (ACVA) 11 Nov 212021 Q3 Earnings call transcript