ACVA - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the ACV Fourth Quarter and Full Year 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

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

actual statements. that from uncertainties Before A comments related statements, that and be such financial These involve include future those subject are release cause of today’s forward-looking the can expressed found website. uncertainties by we or which factors regarding SEC found press please statements discussion statements risks and Investor results to Relations in forward-looking to be can materially started, implied our both guidance. get of to note today’s business our in differ filings including in risks our could and and

found both earnings call, of reconciliation provided to measures. this will During which let to website. we me material, and the can our in non-GAAP financial call measures George. turn A GAAP be over And with non-GAAP on is today’s Investor that, financial Relations GAAP discuss also

George Chamoun

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

years incredible off me you fourth strong GMV Let reflecting first capped ACV year performance when launched a marketplace, which $X ago. our six by on growth public we was pretty which consider in year-over-year on as the transacted XXXX, and quarter. company, of In calendar nearly begin by billion just XXX% is ACV

being XX% the cross differentiated discuss IPO delivered share. provided by delivered well cross we expand by This team, and less ACV while network best $XXX will in are the to during gain currents, in our digital most targets broadest March. enabling and market later, accomplished last also automotive that competing values, these in of dealer market currents in the supply. the revenue above our over was I solutions As having vehicle experience detail we Despite over million ecosystem continues increased growth the industry more with to resulting

continue remain driving excited We And With turn while that, cover solutions As revenue investing share basis our further in breakeven XXXX details Bill EBITDA to EBITDA X. targets growth, delivering me more plan exiting highlights Analysts March will our X. All model. XXXX. our detail our achieving fourth we than digital adjusted higher an later IPO to XXX strong Day margin adjusted operations. our to is on slide to committed financial quarter points in at our are and scaling on let XXXX for on differentiating

over our we marketplace, on the of momentum see, you vehicles the of of year-over-year. $XXX quarter an the We growth. XX% XXX% milestone increase XXX,XXX in our an team, in can for ACV a continued fourth billion year important We sold where revenue a on XX% basis. delivered million record a was GMV and digital year-over-year market of two As transacted which quarter, growth $X.X year-over-year nearly increase XX%

revenue to Our can factors. be outperformance three attributed

dealers attracting to our wallet and ecosystem executed dealer our grow market we playbook expanding new share. by First, share into

And term of of higher with and and our a by the execution TAM expansion product growth, of drive growing and the value on strong from suite the top long will of today, three to prices. services. scale. Overall, attach shareholder focus our our we marketplace newer benefited strategy team services. high To value, rest customer elements Second, pleased mix of frame discussion or very operating vehicles level used added and ARPU continued ACV we’re vehicle adoption third, strong rates

XX% in We growth compared XXXX. which Let me XX% with was marketplace On transacted an details QX begin and on QX, XXX,XXX let’s quarter. with units year-over-year X, when more growth. cover slide the

XXXX. our The trends on marketplace year-over-year. growth Consistent XX% in For to XXX% quarter XXX,XXX compared moved I to of earlier, over vehicle QX. growth the of values with transacted referenced year-over-year during contribute vehicle fourth XXX% we positive GMV helped up the representing mix to market market units trends year, growth first full XXXX quarters related and three

since of is XX% vehicles Well, to we last normalize valued may percentage vehicle nearly tailwind fact, in vehicles the over In doubled resulting long newer and over year, mix ARPU. higher elevated XXXX. ACV’s $XX,XXX time this believe term values in marketplace of sustainable,

on thought market automotive market. slide relation wholesale it’d to this in X, the provide to be context we helpful to Moving again the quarter some broader dealer

chart sales. charts vehicle earlier, the you trends elevated As on this light pre-COVID contracted levels XX XX% top nice highlight Sales environment for in chip year. last days demand pricing around XX% vehicles, ARPU to decline vehicle SAR units consumer case The demand latest the down picture. I reading at highlight and XXs. versus nearly the which of supply new to prices automotive historically shows million two Strong in The reflected in from mentioned record demand for in new retail The the dealerships used a vehicles. row translated The saw is level vehicles how pre-COVID and other continue two XX and chain and strong been In wholesale steep tailwind of remain above ACV, historical of different this right levels. used a values. strong supply for around days in levels, have to on high currents. market. in the is The very cross reflecting shortages semiconductor competing resulted of charts trends which vehicles the a paint franchised bottom issues

at consumer to matters input representing a picture the annual historically in vehicles the in temporary critical we market, inventories supply wholesale contraction levels, trade-ins acute the significant serve. of entering has for portion supply. market declined, a With such of this volume market new reminder, ACV the dealer into new are resulting wholesale because the a As trades

our coming ACV is quarters. continue And given recovery differentiated the market. wholesale the and in temporary will positioned because We to about to making suite its well we’re resulting the improve supply no the product picture believe benefit the very from investments territory expansion, in chip doubt

in finer our that Despite X% gain a proprietary in XX% US X, from QX, dealers on contracted the quarter-over-quarter about Turning transient XXXX. marketplace. market supply and and QX our the estimate dynamics on market supply point the share got contracted we new and to dealer we analysis attract these wholesale Based to you continue market. headwinds, side to

X% Given XX% XXXX, growth ACV year-over-year our that our and gained QX, unit contracted XX% share implies year-over-year. market the estimate this in

where For significant impact. the a to from growth all had we dealer X%, US with XXXX, at strong the COVID about a that of benefiting half believe compared XXXX, modestly market grew wholesale first

gaining share, gained we takeaway XXXX. attracting industry such, is dealers ACV market at supply in pace and ACV XX% market our that that impressive As while share constraints temporary growth. The believe here is an new delivering is strong facing revenue

team and Next are U.S. the territory progress on positioned ACV are our made slide in expansion, nearly on with pleased the to dealers now engage with we we X, all franchise

we proven the and Following playbook to each attracting inspection market across team, our effect growing powerful we’ve territory to launch by proven go our that network country. marketplace creating execute dealers the the

XX% higher driven auction during ARPU slide XXX% growth marketplace growth to auction year. nearly up year-over-year and by was QX, year the to year-over-year primarily unit million and was Moving Full XX% for revenue XXXX. revenue lesser on of extent growth $XXX XX% marketplace X, a

GMV states the on ACV’s sourcing vehicles our their to sell appraisal country to over XX sales live delivering way QX to with by contributed few in early traction across growth year. slide is highlighted unit appraisal offering mover market significant last marketplace. leveraged million strong effective of a We to and $XXX now being XX, quarters, in consumer enabling their unique in dealers appraisals were customers Live Turning in offer this came last alone. dealers I’ve XXXX. Live category, the over that an our our

vision We to and continue Analyst further opportunity this this forward market upcoming invest large our at category, look our penetrate to Day. to in detailing

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

on offerings programmatic slide levers creating that to for incremental two touch XX, Moving buying. starting growth first let’s are

of marketplace buying contributed digit of excited It’s a programmatic dealers our market innovative with enabling are still units already of mid offerings. early single about We way percentage to engage But QX. days. in our very traction this to the

is API directly who bids with dealers real technology generate have that APIs with integrate time platforms buying to ACV’s live in Our our marketplace.

large We’re include engaging a that specialty dealers, companies, with car and auto of a leading rental customers set diverse supplier. parts

results source efficient for nationwide enabled partners. and with a we together believe on capabilities, needs. In of our to delivers experience, leverage which trusted their dealer These launched automatically the addition, experience in by lists partners programmatic our marketplace programmatic creating to our user QX. new inventory enables buying buying buying inspection our superior highly offering to This offer team dealer inventory rest ACV programmatic wish our

intra auction the open U.S. Moving enable X,XXX dealer with our in to provide trades. this engage marketplace technology Recall another to country groups to ACV offering. ACV’s the that rooftops marketplace own dealer private optimize across who Private avenue about leverages group to marketplaces largest private the large platform collectively groups

demand the the adoption marketplaces We are on forward in of initial strong you to seeing and look private coming updating quarters.

Moving to slide XX.

Digital products are excited services and Digital we’re growth inventory together data the with merchandising data very that management our MAX to synergies. MAX offerings. a create complement about pricing seeing SAS market exciting guidance, We’re traction and ACV’s natural

ACV’s July. acquisition over forward In has We Analysts grown fact, sharing XXX% to and strategy closed the by broader vehicle intelligence last MAX Digital pipeline our at Day. the updates look since

with our to services. Turning wrap up slide this update let value on an added XX, me section

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

partner our single full attach achieving out strong ahead Our This business plan. the times per short like, exceeding cycle into loan targets. in are original QX. and growth. A last shout is digits And ACV transfer growth QX The in huge volume in the Capital translating in ahead built long the revenue milestones with year-over-year. we ACV reach capital to loan June tracking rates transportation market. traction this a mid rates for finance our network launched our milestone term XXX% offerings is team gain of growing order. new of XX% into to carrier attach resulted such fast continues in year

We this scales scale. revenue capital in let that, driving how opportunities years. continue the we’re Bill margin coming and to our growth at over it to hand about you results With and through for me the business our financial to be excited business as take

William Zerella

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

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

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

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

to decreased our better transport, As generate buyers, XXX economics a as across investments in approximately strategy. year-over-year while a better to of of Investments ACV our percentage operating technology leverage time. scaling our portfolio, the This operating functions. which also Total demonstrates through we believe SLA and basis long-term go are deliver costs achieved can market was sellers over a leverage operations scaling reminder, points by making offering this both operating fuel to of revenue and excluding we cost to despite we revenue model. growth

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

and and We and marketplace auction mix evenly modestly expectations with a revenue than the customer performance between Auction have unit XX% revenue diverse quarter-over-quarter, better due was to service ARPU balancing split of higher quarter. in increased assurance. revenue our both revenue marketplace approximately the with

quarter versus For revenues market. with XXXX, auction and historical reflecting dealership strong consistent in Profitability up XX% continued XXXX auction XX% of rate. the the marketplace high our and penetration in the remained marketplace wholesale acquisition strong

business capital. strong services with transportation to outperform and in Our expectations results continued

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

we’re margin along XXXX. Here results for with EBITDA historical adjusted showing

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

turn I’ll XX, EBITDA in in revenue to million Now expecting XX are rate be to first Adjusted a million. a of slide to is the XX quarter for of XXX we loss XX% to XXX to guidance on million expected million, the year-over-year. the XXXX of growth XX% range range of

be million to XXXX the XXX a XX% loss million that revenue and growth a EBITDA full IPO improvement to expected million exiting our the approximately be the year of XX% our in or margin XXXX rate breakeven to at in puts XXX XX% we midpoint For XX% to us basis above or expecting expected of range revenue guidance. IPO of to which model. million, are Note on approximately to XXX the XX EBITDA year-over-year of million, firmly a is range points achieve path Adjusted adjusted XXXX. XX of model, EBITDA relative adjusted an to the of XX

to supply achieve relates our marketplace, therefore vehicle although it vehicle our model used believe it levers challenging project, to in our have business have chain XXXX made the we multiple issues our both ongoing multiple and guidance. to on As paths we XXXX values revenue automotive and volumes trade guidance,

strong business. adjusted targets cash and my in We our and EBITDA revenue, securities, financial slide million weeks. look EBITDA with in structure also XXX X.X Analyst Day upcoming equivalents our marketplace million amount of we We million December from debt driven each weeks with our forward due the in which capital on adjusted operations of Note the two term with color XX XX% float reflects XXXX meaningfully XXXX. you wrap fluctuate that XXX the capital year to by XX. our on these flow and comments, The achieve To are more on during our flow auction ended of trends ACV XXXX at cash of increase a an XX% million We balance float few me our sheet with of providing We at path XXXX up associated business. in ended generated final in on quarter. let marketable CAGR providing business billion established highlight margin. newly to of since XXX,XXX the XX, in targets in to can our long XXX

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

George Chamoun

Thanks, Bill.

summarize. take your we let’s questions, Before

navigating We on with are strong pleased in industry. through very our unprecedented execution our times continued

the our results ACV the delivered these are We proud of navigating team especially created while challenges by is also pandemic. global

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

on executing expansion plans. are our territory We

see market as data emerging synergies very in promising SAS and MAX from services offerings our marketplace the are such gaining some Digital. and Our traction growth

the attractive operator are the revenue track billion we a shareholder and Lastly, With delivers unit turn with business significant through to call Q&A. operating to that, to $X drive on growth we in over leverage will the margins model that I’ll over believe generate value. that begin strong proven scalable with economics

Operator

comes from Drew Thank Andrew you. Instructions] Securities. Our [Operator first question JMP with

question. You proceed your may with

Andrew Drew

Hi guys. my taking questions. Thanks for

traction and buying to kind as the And within there newer is XXXX? spear much. private are you and Just the other are takes this talk then you think that to where of more your tip we platform? to dealers terms in older the secondly the traction of for pricing, go In guys with Thanks there? so gaining on you vehicle start about that we’ve marketplace seeing programmatic off given volatility that can trust the this just words, market? have of is customers seen puts with Or about

George Chamoun

Thanks, want this context, some if please And you Bill Andrew. to more add then I’ll kick do. off.

possibly was at us definitely QX in the a doubt a as first, GMV None without So as industry Andrew. prices peak know. TMB could far look what’s QX high. But been we’ll of on going was for

the If to pay to data of certain consumers data, from retail at data willing on industry both that’s consumers little there out little to of coming out look some and to various you some a out folks. retail wholesale values starting of bit softening the

GMV a seeing know I nothing you small so but change slow radical very yet. far think in we’re but

to GMV. So think start the moderation we throughout I year that start we’ll happen that believe on see to we will a see

the but also other volume. do XXXX think, as you you think and think back. we as We helps come puts start about will know slowly is that volume So takes to

you kind in about our when of think hand. units, So they ARPU do and about first of takes go sort hand puts

go And we that see could see so we start to do if to way up. down start GMV volume come start to in a

So do. hopefully a any you want little context. gives more if please add to Bill that you

William Zerella

what the is of levers ways ARPU the year, record is I Andrew kind obviously results. gives which to to because record would get just same multiple we What Yes, observed add, GMV. George described of us basically last

challenging. lower in those more offset the actually half Although than more certs ARPU But the units, units. higher the were off than two especially more second

the it be expect continues would higher, challenging, supply coming So year. in to fixture would all on conversely. the year, and this evolves our we more it’ll be through changes that depend how and ARPU If

upon vehicles. supply the get new to multiple the what again, depending So same result potentially of paths happens with

George Chamoun

relating on Andrew question to second programmatic then buying. your And

had buyers the who ACV. participants programmatic the participated buyers are some have large now who existing of Some buyers, with were programmatic leveraging previously of and never early adopted now

questions. more in out of we opportunity of up. that buying have us got times then we way however now are saying who many our on they at the beyond because are they’re buyers on they ACV, also ACV. the more now now a new that efficient to wallet was answers it And participants programmatic initially, ACV getting two buying that way while And set can at week, hope demand we’re very So share they buy over. might we buyer in look initially to and or be constituents like way Look they’ve a buying a simple change and do win persistent on them that have both who I it have this your were a future would ACV. but

Operator

Thank you.

Our next Robert comes with from Securities. question CJS Labick

with proceed may You your question.

Robert Labick

So and penetrated those, second through coming go that those now peer do cars are where is, first Or coming you’re like they a cars with it Hi, operations. with? you where thanks, the very slide to congratulations part avenue? going Live Are see Live is before little then bit with from appraisal? of the are dig to to versus the are how those to co-branded deck penetrated bit. into I little on it that’s want the where where strong the peer start of a you over the and the now dealers, some highlighted it think that Or how question. presentation could go? going dealer you do going different it Maybe in market And we otherwise appraisal, deeper. market? were dealers? a terms to cars do part time It’s kind of would dealers numbers the of And you in

George Chamoun

first And the question your of Yes. Thanks, there. part Bob.

Appraisal. does So in the of growth Live dealers product way one, our thrilled are using we’re with vary. traction our The

images slides, there. we So in some showed our

it television, auction the market. XX like their via your to event, One be could the via is a dealer come where It could marketing billboards, in with, of be radio, car. consumers images was

And to participating. of is brand vehicle. the their using pay have we not you Some market with But is that Appraisal the is for the of them as Live a and transparency the a function market some topic don’t don’t, have this of dealer hot commonality the dealers some market some just of what their to how here today them just why topic enables exactly one are is your who them, why of are a them dealer consumers. ACV auctioning willing market to pay. know, car And to willing it’s to to prescribe go what

been circulate transparency. idea of Consumers to is doing so lot of the of research just love of we’ve our And quarters consumers determining a the markets the start this one love of knowing own love consumers value fair, dealer. will idea something research the in idea not the coming

there’s But a transparency. bit like So to our ways consistency leveraging various in this this whole there’s way a market, they’re hopefully, various of they’re brand. little going

point, two coming second And tell B, A, put journey, share comes of our The I’ll where’s bucket percent it buckets. the Bill what And us this related part really two your in buckets. from from. hard and to describe from to question, for under, what at percent noise the bucket it’s this

bucket to buy, would in a first their way. Appraisal value an like to be looking value consumer incredible would to the So looking buy a a their to consumer car car. is Live the they’re trade-in And wants understand of they’re understand car, and the

a to overall dealers getting price that So to to And our no again, showing which a one research with in another time, Why look That’s no would with at pay easy, share fair be and a don’t market is research one consumer, fraud if fair start friction. it’s peer, million point, X over worry a consumers would to into pay segment. sending we’ll it is you another consumers willing dealing to that might segment dealer of you to strew another title to overall final wholesale of your TAM. willing car to then peer to they’re many segment, dealers and retailing everything. a favor way, have it’s more, dealing wholesale, about And are consumer, consumer hassle, portion any if calendar in million dealer vehicles. the sell some XX

trade that coming the dealer into we which have from is up it from portion wholesale what peer portion from Or doubt the came bucket Bob that coming So both. call let’s comes portion. from peer it’s that to wholesale yet where that when dealer coming great rolls B, A, is fit breakdown just from share a without traditionally, a the don’t is but

Robert Labick

I been of very to the there’s more in That’s IPO, marketplace lot obviously, new detail Appreciate like there’s and the one DMS a like been and great. announced would some entrants change offering I just much. question. the in would and ask entrants CDKs, that. things since new

tell you up? could you in you the think the versus How how last differentiation stack landscape your So competitive just even some us may new have entrants and changed these year? of

George Chamoun

certainly. Yes,

an two local This players. different have this lot industry you So this nothing there know, there’s physical is National an doing and long industry or was national where that’s Bob of ecosystem. day having players, This players. in one from hundreds of time. hundreds there’s market been We’ve players where on that as research us participants not, been not there was and new X, you’ve is for competitors. a digital, about competitors a had

our and quarter-over-quarter, XX% according look taking competitors you we QX new our dealer all might shrunk the we these proprietary wholesale, Even as much that share. fact as So to competitors, analysis. look have former at of results are market among at the

assets saw the at lower this. way of price priced new kind in wholesale mileage, the look different So lower typical there you when higher you were looking wholesale, were our entrants, be be GMV different of of the I’ll you journey there entrants. years give always types trade of with early types another these new There’s was will and and the will now that lower. started our we at

auctions, You on XXX,XXX the to car saw typical of XX,XXX if that decide it. any had were miles our you you watching

made heard it a have might wholesale condition typical because That we these report. internet, to the over you needed to years something was You and simply sort and bringing even that come that’d the did contracted happen might happen. made really and we vehicles condition a brought car. of We of transparency best be report early we trust to the call be that job even digital know, us life fantastic strong

of issues. grow. marketplace We any, no years, sellers of The have some The Over cars, participants you’ve trust and a price longer both If lot changed. high research ACV are said, on car. inspection the the last as us couple grow of seen I lower in you’ve that heard, for the the just read mileage, use buyers. done has look now we overall have we at share wholesale in on we ACV every we this I so sector. grow, some And of your say, can wish our and your cases, research changed of was broaden

think went add we and to like more our continue we and one category in more great we definitely We we’re early started in an from platform, grown lead and a trust, So we add and our now we the share additional in invest to spot. and as simple. and continue to elements programmatic making things

Robert Labick

George. you, Thank great. That’s

George Chamoun

Bob. Thanks,

Operator

you. Thank

comes question with Eric from Goldman Sheridan Sachs. next Our

with your question. proceed may You

Eric Sheridan

detail you, and long all the Thanks versus ahead XX invest of now of the are services TAM go years what’s to tackle in where back execution out presentation. much. of still for you business build slides to in to product on of and elements I so to thanks laying term. and and And much XX, mode. wanted the you it’s need where the the you’re product this expansion to and sort built drivers in to services forward How already the expansion scale been opportunity

years Thanks the guys. in understand of needed the execution, that’s in mix drive sort better ahead. to of investments pure business can we that the going versus So are mix

George Chamoun

question. Eric. Obviously thanks in great there. to I’ll broad, Yes, get so try In

If you want to ask the follow up, please go right ahead.

perspective. So from a look the when journey you technology at

we some XX, elements the journey XX, in in. of XX, and of the of these early slide some parts of many Some were endeavors years are are that

the we’ve some other look launched like isn’t lots like constituents. big really, got but obviously, and that year, largest we country something at this behind in we cars, last R&D core, an dealers of So gun we’re of programmatic just types

the of So the of got it’s yes, dealers going, marketplace. there about it country thing already of of it’s it’s is a going. to in with get an got same tech customers, in private course, But keep requirements. it, the more hands some is would private working, We’ve marketplace. you and more using the investment got thing, They’ve here market, little little And beauty next of like go in your that. the they’ve they largest

continued car they’re with we’ll with requirements category look relates investment. if car, how And saying like the it Digital, do MAX MAX. we exact So some unique, there’s that the the we’re in you the But merchandising, and is a how items for following. was more has like hearing to do that of dealers already investment and, from at you by with products understanding in a really pricing. leader definitely and

transport So work national to base into there I have ACV been you’re because it fantastic. from. from public, to the we transportation pretty in and and the has engineers open. went integrate when our getting seeing the we’re public look now very at said growth we had had adjoining we leverage core to all from was with resources pipeline to Whereas didn’t in starting like and invest it fantastic transparent wanted. the were on what of things now there, a we But that. we and like we it the to We yet when products capital we’re we go force, here sales bought

business we’re a a now taking hit transport how folks was just a Now this our that got are to transport. well on targets. dozen focused a from we is more we’re confidence or so Look on we’ve losing to showcasing business long term margin what at fast perspective doing going forward, or

the are We in tech. investing

Our feels it. great team about

going who optimize we couple can lanes. least got pricing. can are small because were on and and So attach XX%. a about are our we had at at public team It’s something at a scientific we transport like engineers now rates when that be we’ve We we

all So you’re me capital really our seeing hearing it grow. whether tax rates be say we’re

have tech investments Our incredible. been

Our about broader more acquisitions us getting are product more suite. this and

investors off. what value have and good. XXX we of product at we folks shareholder doing end feeling several at in our the the day we're And engineering is when getting we're the out look of paying So the we're for

Eric Sheridan

to forward look appreciate the much. Great. couple the and guys. in Analysts Really Thanks, a of Day so framing weeks,

George Chamoun

so Yes, much, thanks Eric.

Operator

Thank you.

Faghri comes with question from next Guggenheim. Ali Our

may proceed question. your You with

Ali Faghri

questions. my taking for thanks everyone Hi

So guidance. ways terms of per embedded lot maybe But volume in and and have understand is same unit $X.X XXXX. growth about I've a volume I the in in XXXX your different embedded the assumption assumption recognized that's you revenue XXXX help what full-year there's which guidance? play can can out XQ volume of revenue right us question also billion your now in

William Zerella

Hi it's Ali, Bill.

abate prices to of we up is car And results. and will challenges, supply new Ali don’t the and to time increase mentioned between that we second Right, each which because that fidelity generates ARPU supply ARPU to still related used sort believe as earlier the a could challenging car units, the we start that start We why get of same And terms then and again environments really that to the we get obviously and we'll that level other. ways by multiple know production typically end of the half higher With so that is conversely reason they're we So get right. vice-versa. in improves. are supply. to obviously higher to play there's both

model we see get don’t that level business there's get So to And to don’t result. that's purposely a different of ways that the level multiple can we path our that fidelity of Ali. few get same why in again fidelity since we to and to

Ali Faghri

quick thanks Okay. sense, That makes And just follow-up Bill. here. a as

fourth normalize it in year would GMV you that In took so does sense like feet it the your through gradually but higher terms makes the quarter. of your outlook, that look

So that is that, And price is revenue kind for of and your in of again the normalize then underlying power GMV here guess on actually per levels at elevated upward, fee offset those see about think May, what opportunity potential in December. adjustments further what I remains that top you it unit normalization. we there like could longer terms? seems your pricing curious going forward how I'm adjustments fee a

William Zerella

George take and the question. question take I'll you the second first could So

adjustment So any used we've has we rest to the at result in the as the of the a way year in look December -- prices the car made Ali really potentially prices, right. in modelled ARPU downdraft of business is lower mitigating

are to it on willing terms depends how customers mitigates, and dynamic of in this pay. much all prices again used So that car supply

unit we -- some a come we're will and are they paying So GMV used where see fees buyer understanding for it clearly already that factor per that. a over are assuming are to that not but not pay modelling point through starting the they've We're is little going that been we're And more time. of a more will car of alternative that certainly see bake again adjust the will the our to the down potentially they in into year. terms to reaching starting already that buyers that consumers that

not So whether yes, in got. that mitigate any sort I again, a fees these result car reduction to would us get reduction And back a buy used of or would it's think say. myself soon in fully too for multiple and it I as levers we've of repeat prices, think role it plays to

Ali Faghri

you thank Great, Bill.

George Chamoun

other We're increase to question. year. of the Hi, answer to is part not Ali. Ali Yes, and but now too. there the the planning fees the plan, there's question room guess then not yes, And to. again follow-up risk I current room That's your your is broader this

price Ali unit time. the point we're ourselves priced year. segments of I think is when We it raised where reason that Strong spot sitting just there's question good we under this at at I'm the market. to some targets We right right even economics think a right great It's ARPU good like in I feel where all always still this point. about in our We at it, now, a now. the are long-term now. for business. ask be we raise right where And could no At

really sense prices soon. time we in at. of we still are. not ask well that what we're we need It's should on any right as do docket We're but the to long how keep ourselves a they our You're hearing good currently our as question do always like not

Ali Faghri

George. sense. makes That Thanks,

George Chamoun

Thanks, Ali.

Operator

you. Thank

comes question next Our from Rajat Gupta with JPMorgan.

questions. You may proceed with your

George Chamoun

Rajat. Hi,

Rajat Gupta

Thanks.

William Zerella

Hey, Rajat.

Rajat Gupta

taking question just for on revenue. thanks Hey, on a questions. Ali's Maybe the follow-up

in there or that. I a volume. can around opportunity embedded event You talked frame within about terms that. the of rates multiple like have Curious pricing, and commercial Anything expected than expansion international faster what's amount And follow-up. like levers then in more

George Chamoun

Yes.

and add. a tad So I'll actually here you start Bill in and could on commercial

ACV. journey, they been we is don’t today some commercial ACV our great limited using an rental So them been have We've which to sell has a got we've it We've some that great. show able but place partners selling car if ACV direct. companies started

the car auction. rental then can the will of try they many them in physical historic of direct to sell the it to for few direct their know first credit been we've across just in before as from ACV to ACV them, country. out efforts dozen to been places physical. put it you kind category, That's and As they sell our but it able to an second direct they traditionally it able and a send We've like going path being to dealers digital for alternative send then lever

that some These companies So own that's we're least huge also one, them assets. getting are fleet number not a companies. at with small but been started

out good in company right think is And in Still to commercial. take products category. but the at. at and year look some we've we I'm we private point. and with stages market commercial in international specifically years So very two at we a assumptions because our least can into player end spot start international case on these got have out it's have there's with and that going With in market commercial great this about this big early very products the feeling this a studies the model also I'm though, the year a long-term smaller we'll our the very but we're to as about at the early still little we're studies, the is model in to a get getting share on case we're a proving We on we've don’t small pilot huge in -- where market. don’t We at now year very we're I'm place. on there excited in a good great, assumption going going more always regional potential four fleet end assumed we're with the point. news

Rajat Gupta

maybe We that we much that the some just respect to Got sort with side, on catch how of hiring characterizes the there need our thanks. to expense industry a happening versus is challenges, inflation there curious role inspector last will the playing a like it, like year-over-year. increase maybe challenges And increase slower that's of but out, up volume some there And in given year. expected helpful. expense

William Zerella

it's nailed Bill. Rajat, it. Yes, hey you Yes,

also last tech know a we got you as product ramping terms and in of So start yes resources. year, slow our

a did market we the think go-to pretty on side. I job good

building get tech lot We have a took product in us that it team. focus a terms of out really But and the while of side, started. on to

product tech team So well bringing more-and-more executing the is the our good news is of side. talent terms on really recruiting and now in in

some to is it put but that of So a result up though. as context in all catch just there

on said, on do the midpoint $XX OpEx the If model $XX that's math look on you our is going That more for it's our to revenue. lower when million IPO above be based versus at growth the you XX%. the still of guidance million for year year our

that inline in XXX of in IPO of results kind improvement a our margins and we're versus EBITDA mean basis yes I points models. all So about

of remarks, breakeven. So kind of prepared puts kind us next to I as mentioned firmly in the well path on year exit my

catching to So but we're thought we're it. what rate you it's done. just It's going lower a get and to exactly run actually when up

Rajat Gupta

Got in back for it. and Great, I'll color the thanks get queue.

George Chamoun

Thanks, Rajat.

Operator

you. Thank

Colantuoni Our with John from next question Jefferies. comes

with may your question. proceed You

George Chamoun

Hi, John.

John Colantuoni

from start digits are taking went units hey, in for as of taking to QX my in questions. Thanks percentage mid-single to programmatic digits just a how Thanks QX. I buying you. with for low -- single wanted

And we I Just with programmatic of expect over core marrying your marketplace given how talk a see buying are what increase that overall years. can that any to also starting conversion should sort rates. auction contribution you you nascent about product helped has And quick follow-up. next few have signs the is,

George Chamoun

Yes, certainly John.

early these I getting will we're on programmatic. days started say just On of the

example there, the specific for see hired say certain else to data, bid more capabilities, what at additional able vehicles they additional to what in other. be to to the want capabilities they they want let's leverage market would You're XYZ fields want really like listening they and what of things, to

they we're market next our to level only in our create dealers at busy think requirements been to hearing like and work it'll we've also we've I them take listening we're larger rate here. and but of from So would the got buy not a even and

quarters you started of I this just So before The hear great the keep the news to very but John, you going. is feedback, And journey, very market and you great is going our we a and news whenever product plan. a several to is get news right. take large us part think it's percentage. is its Great

software go bills, very works. how early thanks, year days are We'll with question and becomes on material So still the software, of just these material. you need end next point listen where it and towards think your year to get to get release early really to will I a that's this

puts in we're market. And grow, spot that You next here. you you us keep a to listen, great think invest, you going because not stopping I year for

in of market higher almost it's there seller the to to that. mean a I is of add of offer this programmatic what every helped Well, awesome. going hit we'll what some cash far there. what And value in going that's where getting says. may What mind, price at about we're rate, that start getting going that back and the and certain mileage but the we're of be price We time couple be we your to for point, yet, And think we're contribution a not that the we're almost definitely to with is point, -- in I car is next certain we're a actual now are not vehicle sell to think to it least type yields. the ACV. we price us it we almost as above the there. have conversion a higher the As quarters

say for cars. the are in We So about of their because back these assets just us, category. it this to about selling go John, this help has us going student of platform year. I is throughout is down are message This value going to regulars. isn’t to it whole you are And should going like a appreciate. really kind Think going yesterday sellers be should didn’t the to used all car you as got are have we here. it on in longer right. No sense, we what sold why make what's our That

value help And understand us us day so that only significant sellers pretty cars cash to the programmatic a is going of but not our provide more assets. become sell to data help the actual in their

John Colantuoni

Great. And acquisition. about I customer just wanted to ask

You QX. maybe update in how have second half, sort in and a of Thanks. you just the the strong acquisition first that's could half customer trended in

George Chamoun

certainly. Yes,

So -- very proprietary least on the very, repeat when QX we wholesale our that you earlier, we based the we analysis at I study look really we year strengthen, what look when share of ended overall and strong. gains QX, I our at said at share in

got it's these year okay. the there like and what we start on just our back with -- also them good just of price, QX on this. feeling well. and A from sellers guide listings were. how actually number so are that say starting I it's in now a not in help to about be way John in will taste with dated feeling sellers the continued them on and perspective But starting listings really we're only would but now we're little And really of to as share are guide and to maybe good gains careful come We of a assets obviously a starting platform number QX we

that have talking QX, been little, too a a about we little So much gives colour. you hope

William Zerella

add the that John we'll accounts. terms more March way in Xst, would and seller of buyer at provide I Analysts fidelity Yes. specific by our the Day

So that's the agenda. on

John Colantuoni

my helpful, answering Thanks you. questions. Very thank for

George Chamoun

John. Thanks,

William Zerella

John. Thanks,

Operator

Thank you.

Canaccord. with Our next question comes from Michael Graham

may proceed You with your question.

Michael Graham

thanks lot. a Hi,

George Chamoun

Hi, Michael.

William Zerella

Michael. Hi,

Michael Graham

and Hey George hey guys, Bill.

then, thinking you of getting just like metrics like the around key wallet to U.S. I then if could Just quick of territory your level critically like those sort side appropriate one on refresh also guess some to just with the the best would is like there taking are on I and some think of you you And or whatever markets ones. share any of about or newer where balance basically two The think capital like wanted off And markets. a margins more or a some congrats you ones wonder in to some coverage I XXX% cohorts is your sheet? is of your volume relative where ask size sort

George Chamoun

The hours over and call. have at to we're It'd then work into you. when about cohorts, as all you to Mike quick Day, versus on. start we're look time where on great go we're Bill hand just absolutely some to so Analyst Yes, we Michael going you and and going with several mentioned be spend I'll it nice,

or So so. our thought week and was from now that a a I know half

is out across growing So time you good the markets going this the all we through I would country the and current But -- some how also not through but of about really are answer only about color. we're the markets up and a are that established doing spend established would say we're then from generic starting a feeling and markets wallet walking more opening great our feeling share journey.

good side feeling capital say of take at come. So Bill, what we're could one. maybe the I would really you things, on more and that about But to

William Zerella

because position. carrying again the with million ACV our Capital year we to. which kind sheet of in that yes happy last balance ended Yes, Yes, so of strong cash Michael, $XX receivables on were

the continue to So We in targets different this place those now at working as on are got grow receivables. actually options some available pretty us we to growth are aggressive that looking finance yes we to portfolio, year.

at be balance point. we're continue to different to to we in when may what receivables And some level, execute, is at alternatives to decide get sheet. our not even million today $XXX we expect than So to portfolio and expect what that point, do that I something as then we get we doing directionally would we would financing on look I've before said a

in speak the alternatives literally as of we're we So throes the working today.

Michael Graham

lot Day. your Okay. Thanks and Analyst a looking guys to forward

George Chamoun

Michael. Thanks

Operator

remarks. the or call further Fox to Tim I would like over any you. Thank turn now back to

Tim Fox

like today. us joining on I'd for everybody Josh. you, thank the Thank to call

you release your not can the note the join website. you are details both that And our virtually see for great on within And Just Thank you. have a ACV in Analyst and press we evening. if look registration thank lastly, Xst. hopefully in interest forward Day live still IR for March the to you

Operator

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

disconnect. now may You

ACV Auctions (ACVA) 17 Feb 222021 Q4 Earnings call transcript