Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to the ACV First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Fox, conference Relations. Vice like speaker to now Tim today President would hand over a your I of Investor

Tim Fox

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

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

will and can also measures in discuss today's which is materials, During financial this Investor Relations earnings our both provided non-GAAP measures. call, non-GAAP A be of to GAAP we in GAAP reconciliation website. financial found

let that, the call me over to George. turn with And

George Chamoun

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

end record highlighted rates; with our start attach our high are ACV in We pleased guidance very number Capital to by the range; in ACV and of quarter. includes: of strong well Transport. record the was above year This a record the achievements record margins revenue which

line. delivering from drove bottom share execution the that by market the While market we continued benefited also while ACV from the quarter, was tailwind it positive gains, team to

deliver focused two the our to while adjusted our target. moderate, to industry the moat share, scale balance at EBITDA of Looking market growing continue the to we driving expect and years on technology expanding on headwinds over experienced past XXXX, remaining

recap that, results quarter slide a turn to XXXX first With X. let's of brief on

growth in of GMV year-over-year. billion was high highs the offsetting was with decrease First flat decreased million half above quarter XXXX. GMV million year from first resulting in year per wholesale quarter revenue $X.X $XX guidance of X% growth the vehicle the over in XX% an end of $XXX as prices unit historical of unit solid in

on XXX,XXX last sequential X% our year. our expectations XX% in improving from growth we year-over-year, vehicles to share conversion experienced of half which from which the sold growth quarter gains rates marketplace, was due and continued levels market low We back and exceeded last

slide scale. three to X, growth, relation I'll of today's value: rest slide the long-term dealer wholesale our around shareholder innovation discussion On I'll and on again frame of with pillars begin automotive market. growth. in to drive the market providing strategy On context broader the we're the X,

X% SAAR of In increased which a is QX, new year-over-year, light in growth. row quarter third the vehicle

are XX% running building retail key below is about which SAAR course, levels. But recovery still in a to is Of slowly sales. inventories pre-pandemic more robust

year-over-year, which retail market. sales increased the positive the sales plus in the increased but mid-single supply wholesale is Combined year-over-year were vehicle for of a affordability new used down modestly Used as impacted used segments QX, issues digits demand in vehicle quarter-over-quarter retail in market. sign in

As assume mentioned we normalize conversion And rates back conversion depreciation price in the normalized. throughout I QX as rates wholesale earlier, year. will bounced

Bill raise of later. through year, fair are it's signs think, I us which early balance, giving some the that will improvement guidance On to you for take conditions market to say showing end confidence

share. our sequential and showed key a US Turning normalized market nice growth volume, gaining estimate now executing to improvement remain the that seasonally market slide wholesale focused X. strong initiatives first but on We the in to continues quarter. We remain below dealer against

XX% in and that our share Given ACV grew market of by year-over-year growth estimated this XX% implies an X% approximately unit contraction market QX.

section growth quarter with ahead I slide Next, the continues Transportation schedule. and would another I'm our of ACV to to highlights wrap value-added that delivered services. X, impressive share On on to scale pleased like up

Our strong fast in carrier and network XX%. again cycle once times attach resulted rates exceeding

times buyers record benefiting on achieved both this we again and marketplace. sellers cycle our quarter, fact, In

transports XX% impressive dispatched automatically QX, and Over year great investments growth ago. of a operating These breakeven is ACV the example our driving were that Transport in mid-teens, of are revenue a in resulted efficiencies. which efficiencies our in how was technology which is margins given

XX%. our As targets a revenue margins assumes current reminder, Transport XXXX financial of

achieve ahead to of managed years we plan. this So three target

XX. to slide Turning

growth. over Our QX XXX% ACV attach resulted combined great rates XX% first loan over with team volume And RPU results. Capital expansion growth. Capital XX% driving also exceeded in the time, delivered for revenue

to continued ensure going an investments driver important drive is growth that ramp ACV and have forward. dealer to profit Capital to engagement our and We scale

areas conversion Turning and On second strategy dealer XX, QX a were innovations to our element to the drive long-term growth-oriented value slide shareholder of to acquisition of helped our rates. of focus Two like product I'd few innovation. to strong contribute our results. highlight that

On the Monk to marketplaces private and groups, and was new to which attractive dealer an be marketplace. sourcing source key attracting tools ACV's Drivably solutions like especially dealer front, consumer dealers This with true continue acquisition of to dealer like new partners. were large

and pricing expanded Next, including to we auction enhance capabilities intelligence. conversion several new rates, formats

very new Based has XX-minute results dealer formats broad we began which know, a the especially on higher-end you experienced traditional testing ACV's As market adoption. live vehicles. encouraging, were and on format auction, is feedback,

few our And is for working. In our half of just conversion now auctions this demonstrates rates about two short a have hours. we running QX strong quarters,

to types We continue continuously enabling testing will for different vehicles. us to formats in invest optimize of auction

for a both pricing automotive vehicle leveraging dataset. our is enabling condition learning guidance and our partners. powered dealer innovation growing engine, innovation leading to our This better data industry-leading curated our growth machine by Additional is

as Digital. price its Drivably such range tools of now For of the several ACV dealer expanded powers including Market Report, ACV ACV elements point The guidance and cases partners. MAX pricing past year, the a we've creating broader for use and Auctions products, consumer our coverage, engine

into On our our revenue slide that QX, while reducing XX tech delivering success customer XX% In investments despite year-over-year declined of costs. revenue are operations, examples costs growth. extend of delivering

to was As I results. mentioned earlier, these contributor ACV key a Transport

frequency, which We from and reflects benefited training. lower also in investment inspector technology ACV's arbitration

innovations ArbGuard. are that and efficiency are and accuracy inspection Apex, improving Several Copilot

collection our next-gen productivity Apex increasing delivers the teammates. inspection into VCI of operating also higher device while transparency vehicle significantly conditions, Our

recent before like accuracy again Copilot machine inspector More an analytics, our and inspection sensor innovations and after ArbGuard, on inform leverage issues to conducting efficiency. driving learning and data vehicle-specific predictive VCIs and

you'll think up that on market industry I technologies delivering our our wrap to and To innovation, leading is team operation. own the agree

our June. more innovation and growth to We Day both have and forward detail we Analyst of in at exciting scale, look drive an to roadmap providing

me to how financial you at it we're Bill to hand let through that, over growth With our driving take results scale. and

Bill Zerella

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

QX with financial record pleased We with performance. very above EBITDA. guidance are revenue range, delivered our upside to We our adjusted

adjusted QX meaningful We also margin expansion model business and of EBITDA demonstrated margin versus with revenue the XXXX. strength our

to review high Turning with margin business of begin adjusted model, slide with $XXX meaningful I'll expansion our and of XX, was margin quarter above revenue first our XXXX. the QX a of results. end million Revenue versus EBITDA

the in grew with million , results Revenue end Turning first our a range high to XX% of and over above year to $XXX QX compared was I'll our review XXXX. strong of year Slide the of quarter guidance results. XX, begin

in XXXX EBITDA Adjusted improved margin range model. demonstrating points EBITDA of operating million, QX leverage attractive approximately $X beat versus X,XXX the our loss also our and basis guidance

of I revenue total additional million since which XX, XXXX. XX% Slide increased $XXX on This Assurance was revenue, Auction of QX in over of represented year October. Assurance revenue ARPU year-over-year strong XXXX. Next cover X% CAGR revenue record will details. fee versus QX a and year revenue and our results Total XX% unit XX% increase benefiting $XXX, from growth performance Auction and last reflects

was total revenue XX% strong. Capital. also Results Marketplace Services in were year over by ACV Performance increased year. Transport revenue, and driven of which both ACV XX%

grew products Our total X% year year. SaaS comprised and Data and over X% of Services revenue

are last a to mentioned growth for of more measured platform, while positioning acquisition entering to As approach XXXX. I ourselves customer we reacceleration improvements significant taking we Digital MAX make the quarter,

revenue the and ACV a and XX. approximately percentage both Transport. of review over by revenue XXX Turning driven now was in to cost as Slide The costs basis QX year improvement strong Assurance I results quarter. year. by will points, decreased of Auction

George as we growth margin schedule. target the in reflects revenue we support ahead our QX in initiatives XX% discipline, versus including This to revenue and optimize over significant focus XXXX cost Non-GAAP prior QX reflects XXXX. achieved over in investments, Transport of operating made of QX our year years scale technology three we business. years expense market expense As year our increased year on continued mentioned, and in X% and year expansion

to let frame our Moving strategy me to XX, profitability. and Slide path investment

in growth investments, in ensure is results, result efficiency preserving strong accomplished as operating focus seen Our this improve. market a to in you've discipline go-to-market and have to And on material our a in decrease OpEx technology is position in and spending conditions our reflected as QX we while ACV expected XXXX.

long-term Next, of and that equivalents and on float includes million marketable structure million securities strong QX our I QX and finance our capital $XXX in balance will to million $XXX Slide growth cash We cash Note, XX. our of the debt in highlight ended business. $XX ACV with Auction of Capital.

million, on quarter, sheet, previously QX corresponding driven and operating million trends amount based and final two the flow. of in in cash discussed float on cash meaningfully from XXXX. by QX we significant sequential the the fluctuate was a business $XX loss each increase from balance operations of a float As impact our on was improvement In the $XX in can weeks flow has

Now, we'll XX. on guidance turn to Slide

expecting expected quarter million million. in of And are range second XXXX, be revenue to the loss a adjusted of of the For $XXX is EBITDA in range $XX million to we million. $X the to $XXX

and over this $XX an to EBITDA of For a $XXX the XX% exiting adjusted range range $XX XXXX EBITDA we expected XX% to committed nearly remain representing Adjusted revenue improvement of be the expected to in to of XXXX, are a growth we XX% million, breakeven versus million year achieving year. $XXX raising year. to year million, to million loss full of is our

vehicle guidance, normalize assuming near-term, new as that our in improves recover the continue but to throughout relates the it throughout We're to wholesale year, production assuming depreciation conversion As constrained as are the that moderates. inventory remains price rates also supply and year. we

our me up by financial Slide Let wrap target. on reviewing XX, XXXX

a in and our in EBITDA challenging execution adjusted with XXXX, pleased to revenue of macroenvironment, very of in adjusted we with are billion $XXX ability million confident remain achieve margin. and our $X.X XX% We EBITDA

a penetration technology you wallet providing platform revenue market our our with the gains; to improvement investment enabling including commitment markets business number sustained opportunities Our confidence balancing wholesale; and margin including: broad expand Analyst commercial consistent upcoming on We adjacent in by reinforced in dealer forward strong efficiency; into our a to and growth share our as of long-term at operating our Day TAM resulting to share on is factors, scales. durable and targets details, June and long-term look growth increased Xst.

let turn George. that, it And back with me to

George Chamoun

Thanks Bill.

Before we take summarize. let questions, your me

our are We with in pleased quarter. strong the very first execution

our results. We ACV are that especially teammates these delivered proud of

new by share our positions market improve. gain ACV attractive conditions share, market to wallet marketplace continue by as We which gaining attracting dealers growth and to for

an executing with suite traction are territory our We offerings. on of penetration and gaining plan expanding

We are addressable and further differentiate our an delivering roadmap product market. exciting to expand ACV

to term, with our significant believe $X we generate shareholder We in targets value. medium EBITDA that achieve track drive over near-term revenue margins billion are on adjusted the will and attractive over

to team committed world-class are goals. achieving our results on while to We deliver a these building

the the turn operator over I'll that to With begin call to Q&A. the

Operator

Daniel Instructions] with Thank first [Operator Stephens. from question Imbro comes you. Our

proceed. You may

Daniel Imbro

Hey the quarter. evening congrats on guys good and

George Chamoun

Daniel. Hey

Daniel Imbro

that was of or my per is And growth you growth you've needed double-digits. coming more market as what learning progress of X% growth. relative first about outperformance want investment on we George, volume dealerships from that start you new that scale? at you added making question down about? look When to to the terms vehicles the rooftop incremental Up then I on are cost talked your expectations metric in are

George Chamoun

overall the the have It once share X%. listers. from answer let customer the Bill a I'll you for the was existing XX% wholesale of great third. job combination impressive that in good. first again within we of I'll the us we dealers. meaning new of another acquisitions doing our When and growth, at obviously, listings sounds look listers market quarter a answer both contracted to more new contracted things market the two side a we're new Yes, also But wallet itself so saw grew

would say instead both. was So, the one of other thinking I really or it

think between XXXX we it'll be I drum So, think in the And and that had same success quarter. beat. I moving great forward now

and size share it But share. wallet additional really to a the and overall acquisition Bill starting other on obviously at listers between was would I high you to additional question. now if back of market the Just the customer the say submarket. is itself and wallet come and meaning both then jump want expanding level,

Bill Zerella

Daniel. Hey

So, I to would on side. way about pieces think go-to-market this the say is the there's two

in fully country. terms essentially of staffed we're So, our across sales field organization, the

So, the continue more generate we volume can with to existing staff. there

us number listings listings incremental on to of adding Really inspectors -- we add is cost continue add the the the only on marketplace. as

that's the So, our we're of essentially variable the rest cost. future already structure the year. cost support the growth Otherwise only for incurring to

Daniel Imbro

cost It's great. I then that's on a good ask follow-up And wanted Yes, actually my the update. to takeout.

of generated. some the But a those some are year? good or think relative talk you example savings the those XXXX to so As cost out far savings of quantify have have you savings efficiencies maybe tech last maybe I and about cost profitability where about you Thanks. where guys can been timeline guys initiatives of and laid Transportation is

George Chamoun

transportation I'll and intelligence, areas building, enumerate chime in Bill our start and big allowed just us our at platform investments lanes technology our and ones, look effectively. to to had go it when more pricing you the If we in. like price can I ahead

So, pricing, important real-time and intelligence. more they of for is know to just we transportation to the have bidding. instead historical really want cost having now that's more because And they're dealer data a while while bidding of take

example. as it scale is to as transport an Two relates

get to you have able you're from pricing carrier. your scale, better more As

those two of are So, transport. within examples area the things

allows of When in inspectors becoming efficient, us have to utilization our increased it you like for format at investments and utilization look more like getting a auction areas conversion conversion our rate. team better resources areas higher of because rate,

better price then have better also guidance. say is having way I one to would And generally conversion

on where So, worth a wasting you we $XX,XXX, time. day on car when its helps know and $XX,XXX dealer example as better technology going its you're we're you you is the think for our be in is know if about walking for convert to and day best best asking

these engine So, can we pricing now inform a dealers our are help assets worth. that have what

the areas top better of also So are are tongue many more. efficient. ones Those becoming there's area we're like title of an It's my where here more that management.

of can team areas new We now scale titles of scanning much and haven't them. AI our other we more that become org leveraging had in because scan titles really having tools, parts bunch to make these up of has efficient by where a decisions just

would of it's Daniel, So those the ones business many areas top mind. but of be

Bill Zerella

of I Yeah, a just would add Daniel. couple other points,

technology We've transport about dispatches of another quarter the no become past human of just this in we're more terms past That's first So in on automated were intervention. our how example. basically talked XX% using to so that efficient.

and driver big our to quarter. terms our team was for were it quarter effective overall other actually by frequency quarter was we in benefit The margins better during the during the were of the arbitration much The costs. our managed more material

to the Day about ebb at that past, talked margins? we're more our to to op going model. effectively directionally, and in But over in driving there's flow June manage target arbitration. talking be towards this able accretive on be will an our we've directionally our and about costs be we'll time, Xst terms believe But we as to more So of Analyst

Daniel Imbro

Great. of and Appreciate all forward. best the color luck this going evening

Bill Zerella

Thank you.

George Chamoun

Thanks.

Operator

Thank you.

Colantuoni comes question John from Our next with Jefferies.

may You proceed.

John Colantuoni

is trended to I begins taking year wanted conversion you is is my overall in January and like conversion moderate moderate. But wholesale April. prepared then back quarter guidance low In for start elevated throughout consistent at based help I with XXXX XXXX conversion give about remain for remarks us the Thanks March that. your segment sort sources moderate second to as to with February you towards expectation when your with the and units capital talked curious auction is Hi. and in around in second you your XX% the level to depreciation to rate. to with And to revenue prices the before revenue they and questions. in were of along the looks I'm year? you can accelerating expectation question And rates expected saying levels like single-digits of -- are cadence like growth for the the Just of looks conversion on look and some transportation? rates Thanks. Can half. clarity for growth second in on your remainder rate us other

George Chamoun

I'll can John. and Certainly, Yeah. start go fill and Bill ahead in.

So conversion strong when also the meaning obviously quarter at of auction your were there's typically is part rates you strongest QX conversion a seasonality industry and rates. look

So to return in years, these over see normalization and we'd true But least QX perspective, from the return out to moderate start down whether in then and higher think forecast to think be the normal. like that's it if expect to but we'll that our what next not. a you or years. at assume on the thing about all expecting. start rates that's not, at not that's as prudent go And a way I forecasting would least like how of events prudent when actually down that or few conversion to we at see to a non-COVID Obviously there's factors we is lot least see world we'll what historical back to a we're or average

sales at looking obviously QX up year the used right about new used volume too It's moving volume about a there's positive -- car to question quarter I car the The across many has quarter-over-quarter. into of second in in want volume read lower year so QX. don't off right much way. industry retail this more parts The sales, X% -- car way. were now was over really started either higher being

at just moving look want all pick the to you going parts, to prudent up. come all But not if together. Bill be knowing parts moving how If are you all trying the we're to

Bill Zerella

to Yeah strong I year. quarter. half of Backdrop continues to would George second again the the said QX so the pretty quarter about here just going resolve a and is but year as backdrop is And into this will to we're assuming recover. But the what that the wholesale good improve quickly QX issues over our be add guidance to chain the to is And QX subject because point. at that and in that's strongest though a how talked we're it's John those continues of time for basically marketplace. affect typically assuming TAM is our the quarter, that is we've supply also supply supply

raising in on we're balance point, the course again overall still So And guidance the early for targets. and at of growth this our year, we're year.

now you that understand that's it we think using hopefully that about the the right our of backdrop way terms and helps for we're growth. assumptions in So

John Colantuoni

details. the Appreciate Thanks.

Bill Zerella

John. Thanks,

Operator

you. Thank

comes question JPMorgan. Rajat with Gupta next from Our

You may proceed.

George Chamoun

Hey, Rajat.

Rajat Gupta

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

question versus million Just the Thanks. like the the somewhere perspective. maybe equated maybe If were Anything thinking some a of implied earlier, second for changed the in follow-up loss cushion guidance from color the some has gave end have previous you to the driver the more half. close the on that midpoint. for quarter, there's $XX have know I to on to of smaller more at but XQ a more the And you're the I midpoint. spending the Obviously what to like you prior include EBITDA year I remainder would it numbers in in back follow-up. EBITDA compare but of picture, just fourth in the year? the an like terms implies at if initiatives of there. $XX prior adding or loss rest curious guidance and million bigger And the EBITDA context it I guidance a the market what's today

Bill Zerella

it's Yeah. Hey, Bill. Rajat

guidance right? guidance year we're are it's and increasing early million $X what so by since of managing passing comfortable see revenue by million, full how $X efficiencies. basically to continues is year we full cautious for pretty We this So still the point feel So a the through little unfold. being operating year. and our we'll terms in at be our increasing year going and Obviously the we're our expenses we're EBITDA guidance in we're to this with focused

Rajat Gupta

months about Got full it, in industry like the ago. there's that's got you changed it. the in of how thought terms year But for general nothing versus three

Bill Zerella

would bit year. at little we're early No expect we mean, puts a room a a still this the some of and potentially in takes ROI. investment all. to not other if think good again And ourselves giving make I you there's lot there's of as

But So of ourselves room bit we're full through little year. passing the the beat point. majority giving directionally the this of a for at QX we're to

Rajat Gupta

was for on the with to year. still it. of the well? the case revenue guidance, your new Got for as full guidance then just half grow non-GAAP the previously the And OpEx it guidance Is revenue that at rate

Bill Zerella

Yes it is.

Rajat Gupta

the Got it. in right. All I'll jump queue. back

Bill Zerella

clarification. forget just Don't that Rajat, a excludes D&A.

Rajat Gupta

Yes, excluding cost and D&A, of right? revenue

Bill Zerella

Correct.

Rajat Gupta

right. All you. Thank

Bill Zerella

Thank you.

Operator

Thank you.

Pierce Our Needham & comes Chris question Company. with next from

proceed. Your may

Chris Pierce

guess of the get guys would a you sure I are opportunity to the of with How higher that see out to priced what two. just one, and how I times I doing? curiosity. make the case want right. Longer I'd is priced do you why opportunity higher vehicles, be vehicles. in that auction helping are the like heard you think I first On sense

George Chamoun

in if we're category. share within private One Yeah. priced us market sell stores category would that their would And successful our winning several winning vehicles more -- to for group. they in then example share higher vehicle be own marketplace, their doesn't if to Chris ways. be open an that launch dealers use That why it's Hey, of for not they it try in then marketplace. first we're

when mix a where the units to consumer a our And car right not is areas dealer sourcing ACV. of consumer sourcing of our in them helps those examples it starting from the our it's we're and also for basically win. and are just then a And tools, fit --

there's higher we've your priced types years, core segment. And of really of vehicles. of the mix the continued different for increase question that to to the over last buyers So two-ish

who independent vehicles significant some now And got You've dealers we percentage to our those purchased in dealers vehicles. vehicles those by buying have and addition dealers independents. you buy being also of franchise franchise have a

So participants and higher where car higher-priced a the more make format for cars, the the difference. a ASP priced was material. but format has vehicles additional time might made in the that that have XX-minute versus $X,XXX $XX,XXX, larger that on time say between sectors really allowed the lower the helped two-hour It let's didn't In fringes not material a difference.

And we're look still auction. We tried four-hour we a at testing. as tried auction it model, a XX-hour

So hours. the right the there's to now spot hour hours example. two a an around sweet two down Maybe as one goes

at So a look perfect science. as yet these don't like

testing are lot. We a

you can tweaking. a keep these... ever You'll But where a be one-minute auction, still know future be two-hour-type auction. I if need not. there'll auction a XX-minute than basically us don't one-hour or time a there'll there'll see a more be have that and And auction I imagine you'll

Chris Pierce

a Is way... there

George Chamoun

ahead. Go

Chris Pierce

these market think just average there you was is say versus is a vehicle it your I No. saying, frame levels? at to vehicle is industry way share priced where higher-priced an where at

George Chamoun

think at I Not is one versus we I just today. to -- have our share market don't enough what I data it. suggest we think yet. I would it if don't had have another ASP share

Chris Pierce

a is right what macroeconomic floor the harder banks about what And floor a that to I've for probably go I'm the time just given if lastly, just good makes this pulling conditions? now the dealer curious right plans. that's floor does on candidate hearing then, for product? plan ACV floor Capital plan plan back been not a taking And in opportunity, Okay.

Bill Zerella

Yeah. Hey. It's Bill.

players banks seeing Those plan these dealerships. the pulled on regional they in is biggest they're and prime two floor for service players So franchise primarily space. competition our mostly the AFC market Frankly our smaller of some are our business, what back you're have and is NextGear.

Look, we grew quarter this of again revenue our north past XXX%.

conditions. and to sensitive said as grow the continuing obviously that can. are we're more with business risk to being aggressively macroeconomic much invest we That we as So

for this cut quarter-on-quarter. that debt even with But past expense quarter bad in we example our half

of job So also doing continuing I is think our while a managing strong manage great growth team risk. terms our in to

rest going we're And with the happy. the year. we're pretty through path of So to that continue

Chris Pierce

Okay. Thank you.

George Chamoun

Chris. Thanks,

Operator

Thank you.

Our with next from Bob question Securities. comes CJS Labick

You may proceed.

Bob Labick

and… Thanks

George Chamoun

Hi Bob.

Bob Labick

HI. I little great here. on a a quarter, as been we've wanted discussing talk the really formats, good about to stuff. bit the Congratulations auction little

a GMV really pickup had nice unit. You sequential in per

if double very did like sequential think It I math the pricing was Manheim the I change in quickly. roughly

result car better a is auction changes of point? you sequential just formats? unit in GMV a as a that used of also have in So I starting mix Then, attribute auction beyond What per kind pickup values would the to on format. follow-up

George Chamoun

Yeah. Thanks Sure. Bob.

a So, not but any in in more to a segment supply to from Like, secure more way these you you ability secure units. repeat myself, demand. sourcing one our more the is the can attention get from

the -- other actually to tools us sourcing. mentioned I marketplace and products like secure demand side. starting these Number assets. the two secure one get to private we're of related is some of So some is helping

private vehicles internally Now groups use for dealer that it large on several marketplace demand. actually ACV brings of bid the to

-- So you're to the when there now Private open ACV you supply product these buy group not help to those like Marketplace on only a buy cars to going marketplace. but a when to they're go cars tools in within

So that's say. to an where example helps one I would get that supply us product

the And in of attention would areas just are industry more to say pay generally, themes to what is if vehicles. aged you dealers look I at going

on lot? do they're to, the So I attention see inventory going my Marketplace you're right pay have dealers Private or whether to not, using

than would quarter levels. XX% still not still lower XX% XXXX supply. say, last I down was there's to lots we're enough overall about still Generally -- dealers' supply in

we're lots. supply still So missing in dealers'

start to have certain one given it's you a certain of dealers will types vehicle vehicles. many Having any may class said whether that, out age or ASP in

dealers So, that category. X Bob help several reasons in not need this

really get buyers more, sellers become to well category. known starting helped has and us and product Our mix the in we're

known double I as I say expensive a when report inspection down And buying value on inspections helpful. very being could little our ours, about the When in like you're think of would bit you industry inspection the as the an an car, condition is best well.

more Analyst we're come to to of the deeper bit probably probably go now a things good we'll those between are and but some say. things hopefully doing some Day, little So, in

You said you had a follow-up question.

Bob Labick

No XX What great. formats and said XX or you how talked you you minutes do yeah bid/ask auction whatever. marketplaces minutes follow-up you or two about to that? and it's can envision really minutes one that think minutes was my new about from And about for

do bid/ask a to timed to Because level one multi-day just ever give just and units or How units might you and dabble days your that sense does three play auctions a something? for or about relative of or experiment or period in higher the out you there. couple competitors just lower higher-cost have think us bid/ask GMV that better

George Chamoun

Yeah.

I know marketplaces today. exact have the private number we don't So of

let's are we those XX least So say, differently. have, Each private one today. configured marketplaces at of

So one be of might five and them two days, one three it's might days, really be fascinating.

in well. we're private probably get marketplace. working And XX So formats learn to okay, different the get to from supporting And you that. you learn what's

got capability have their like elements other we've a that go promote helps run they before vehicles list also dealer We the live.

from techie that crazed two can change like even days days our private to and of to going it. the here. marketplace right having it meaning, tech. formats the we're it without industry We we're be too able in building really technology our a like the wants at flexible about we So Not robust day change The platform the to more three wherever can is most code key. go one to idea support look actually change get doing

So going look market ready. the wherever we're is

which we was what saw did benefit two over find Now we no hours, was interesting.

we a say to less make benefit. on If an you hours two would from three benefit but saw I to versus no XX saw days, going you mentioned We hours two versus some XX, were bet material. hour

from if much to but need think going three you yes, now, So or a was that more XX gambler minutes two time. don't helpful I I days. was right wouldn't bet on think I I

And think vehicles is is I some you somewhere hour So need. all and probably fine. an minutes between XX it's for minutes two really

Bob Labick

That’s super. all Thanks. appreciate detail. the Okay. I

George Chamoun

you. Thank

Operator

you. Thank

from question next Eric Goldman Sachs. Our comes with Sheridan

You may proceed.

Eric Sheridan

margin side of on the two Thanks, the questions. Hey, the so and equation. everyone. taking Thanks much. Maybe costs for

case broader on this model or line? a and help breakeven to getting want might torque the how that of can in in of is economic to towards better maybe the for how achieve terms versus broader top where to of line of flex get the on EBITDA within continue about versus different what business In that environment year, us to shift top your goal how different understand on outcomes base goal think the end you outcomes you there bands to

EBITDA? this part then target question there. you'll longer-term, Analyst margin, when think the And the not out exiting profitability you've exit but can Day term obviously, of the And about, be maybe on goals long sense help about year margin you incremental to to and broader got this get we better a the second of about of front-run rate the Thanks much. against think so how investors year incremental your

Bill Zerella

improve cost first our would I Yes, by QX think manage start Bill. margins revenue ability structure really it's reflects time. saying, and our Eric, our I to over our performance

we've is and a when significant was XX% only time time this with revenue the company of public previous COVID that out before business. and were costs hit amount margins fact, the the In taken being the second of reached

So normal will. environment that run you rate was if a

lot think that And here managing profile but phenomenal I optimizing the driving the reducing of job OpEx revenue frankly, talked But really initiatives managing way we've business, in has in a costs just our run the of done both a in but we've terms past just team OpEx we the undertaken. really the and margin not about right?

those opening that more capacity in example, cost our lowering us arbitration shop low-cost resources a India For more, costs. talked and allows effectively. We've ramp much about much optimizing to in up geography

engine how right go-to-market We've is now staffed. about fully basically our talked

up without we'll discretion are revenue those not meter to able will. nature in any more down in or costs structure, But whatsoever. and generate be to change of margin them lot whether So incremental we maintain you or our costs cost really if neutrality. of the of in meter them are rest subject even A that fixed terms

and go we to would leverage a we'll how June as the long-term really Xst, grow accrue targets line. see and scale pushing more we terms just time still through continuing say the of we feel I in how talk year, hit on more good So levers more we over little obviously we as about our about top

three of transport examples, other QX. think years I seen in literally obviously, what hit ahead schedule target, margin we've our you've

of have business achieving our of every well we're we're terms we're show literally quarter So that trying our about investors. that in our over seems what I we targets is what of in to layering committed guess optimizing we that it we think to time improvement investors strong another command advance model, how and area operations over

I at more a good. really feel through lot to expect we detail Day. this So go Analyst again the And in

targets and that hopefully gives So little year about of we those bit a color will hit you especially. how helps this exiting think you it

Eric Sheridan

Great. look X. Really appreciate Thanks. I June to forward and Bill

Bill Zerella

you. Thank

Operator

you. Thank

Our from Ron next Josey Citi. with question comes

You may proceed.

George Chamoun

Ron. Hi,

Ron Josey

can talked sales or just tailwind market the coming Is onto and just driving a is site But Great. you this staffed the listers broader an guys. the outperformance. a bit the you quarter that the new these Hi, -- joining I is marketplace. little is to all. impressive of gains joining more listers mentioned listers just platform listers dealers, guys. for new answer Thanks driving about? understand George point just little the one. earlier listers to has number specifically new on overall both. a it on team the And I'm That's dealers now new what's think adoption of help ask driving for the we fully I us for you trying the question, approach know wanted the new that these platform share improved call taking new these improving what's I about greater probably volume you like understand just is But talked bit

rate. is then And margin could Transport because what we gross this commented at and to you But Day the talked on so think do XX% to Thanks, Analyst attach we these getting go Where Capital or business particularly where achieving mid-teens profits wait you within question guys. or about the marketplace ACV for already we services Eric's the XX% that gross when margins I marketplace talked can in achieving a know about? we're go Bill here profit core look services business. just from

George Chamoun

questions, Sounds Ron. good good. Always

used dealer about way have to of share some have going for think that'll not you market we think our you've for to what be content regions dealers. in seen June share about helpful us going all acquisition wallet It'll second, to the my June do some the where using in double-digit about a be lower help in number talk platform of Tim's dealers all. we're dealer think acquisition. kick a to And market the on us and of but In past it So and then me method. like you there's share dealers cohort dealer to acquisition And spoil we high significant about another we a Ron. at level how single-digit have some

up And years, simply It's winning woke isn't how long would for a just wallet we're The a I here been in for ACV has who this like Those new -- it's a whether this these following story machine been this and share have is we listers. regions. been us matter or here. of we're say very or months quarter consistent.

years there share. new on great bringing today. was bringing quarter what maybe over we're We value-added today we're consistently the consistent. dealers we're representing wallet quarter sell dealers. say it's quarter buy of to new really platform. Every do both and are a dealer winning win a but We that's and tools of another ago more I than listers. a would services And driving Every been have out of array on to on It broader handful

that's think for So I today.

Bill it to we'll leave second there question. the think will maybe go I and

Bill Zerella

Yes.

same dynamics bit we've of and the except revenue XXXX tell us see Xst I going different will different. we is intriguing by So a some discussed bit margins things, of June those pretty to hit discuss think a but few just year little allow A last is that same of since you'll of talked target get Ron new that year in be I will changed some in terms that to we the have XX% the of we a things what path about will last find you there that target actually to way. that hitting

Ron Josey

you. you See one Okay. June. Thank

George Chamoun

Ron. Thanks, Okay.

Operator

Thank you.

comes Graham question from Canaccord. next Michael Our with

proceed. may You

Michael Graham

Yes XXXX Bill just I a not ask I in did June mentioned those contributor territory businesses terms expansion? at will X, expect on that question what here, to two you prepared looking And be about commercial growth specifically and things. territory wanted cadence being but about One mentioned the we you of adjacent then wholesale. you about targets in expansion ask the the think is I potential to remarks should

a So might as if little a you bit that here just preview. wondered I expand on

George Chamoun

Fair enough.

plan. You that going to the plan going said of in June. go all you ask over weren't That's any you of we're questions to [indiscernible] the Then That's that.

really in XXXX the we're objectives. all there we're yes, money to need field spending out from an it it managers the out there. expense look in have at our as already you of the sales relates we to great So, the the a spot team profile, on When majority territory we head

out in out dealers as are are relationships going with building who there teammates So field. and these the this look at my their

to XX sales that directors team. those territory that have addition In regional managers manage also we

set we're there. So

presidents team. that vice then several managing have are that We

that ready team accounts are All here, to staff major growing relationships. are on these keep a our have We teammates ready ready.

That's current with We team. we pretty That could than have more be team sales. have a good-sized another a today. we today sales lot already team of inside doing units inside the

we've We shy to a about go weren't this So large building team invested, Mike. TAM. really world-class after

would few generally field. folks as say more after few talk of So would a handful I'm it June meeting. say, we the yes, the adding a in but call going I there'll material. about more a would will commercial to bit I not relates be more little segment folks, us I

the leaders area. that do want the bit in new little specific category. focused we're intentions that's where spoil now the in a in amount but an Yes, little commercial to XXXX growing might bit area content, a getting Don't about that our more on. hiring of and between we hear about more great have we're business might You of hear you area

Michael Graham

so guys. much, Thanks right. All

George Chamoun

you. Thank Yeah.

Operator

you. Thank

Securities. JMP Jones with Nick Our comes from next question

proceed. may You

Nick Jones

the George, if mid-single auction like it I digit per Thanks back it release looks was back how for -- know questions. if to sequentially. stepped Hey, the taking in Great. If Bill. marketplace is up I going? don't it's in unit into I revenue

anything pricing thinking call how on you're then just any about I the Thanks. question So platform? question guess to on one there? out update And two

Bill Zerella

basically Hey, year-on-year. so so Assurance Yeah. was and more Auction a quarter $XX on our or went than ARPU quarter Nick, about little and up $XX up about

QX. a that GMV Plus, So did But unit increase quarter-on-quarter associated is went the again increase. pretty year. had per fee fee that we year of lot was that down and by in offset slightly we the benefit up on the on with mix marketplace good

a in drive has structure strong the in pretty good we're how fee and well the frequency I've that. with terms arbitration of it's really that team our So that place us mentioned been as combined margins helped managing well and

George Chamoun

see might would price like I ARPU. sometimes confident not confident When think is per said down see just at quarters we're we spoil, them. right? GMV people than look pretty different. of Bill get I us being year broadly unit. That that and over of you're we've to that, area unit get like grow. in comfortable one more come the theme. on that's XXXX on you this how back-to-back said a higher Again example an I in to in areas the earlier it themes the revenue lower our mention would marketplace Copart's increase how we'll look year the the as now he said seeing XXXX ARPU in numbers. some of we other as We're be each Having like any content think between ARPU to still and revenue been we'll in Not we to could our one we'll a is per of It going area but feel again I one that specific year. there range, lot at And say an one bit be

Nick Jones

Thanks, Bill. Great. George. Thanks,

Bill Zerella

you. Thank

George Chamoun

you. Thank

Operator

Thank you.

from America. Our of with comes Nat Bank next Schindler question

You may proceed.

George Chamoun

Nat. Hey,

Nat Schindler

the X% Index X.X% be Dead perfect average partially so thanks. year-over-year right? XX% the If the an was were side. marketplace look flat. related units. at sense I But of on so in Obviously to increases. there was Makes that year rise you And up question. by pricing look Hey, GMV in revenue last and price down it's previous from flat guys. Manheim the would if Hey, about averaging

and bridge You've on can so because increase? a dollar increasing talked just that how Could unit that I more you in and much getting price number that in of $XX the you volume percentages because terms help that how year-over-year about do are are basis. me understand X% you much getting

Bill Zerella

and actually Nat, X% Hey, the RPU split two. roughly growth, growth between unit X% it's so literally XX:XX

Nat Schindler

the price and vehicle So the unit pretty basis vehicle unit. from, on of your is about you're getting moving the half -- just the just you're that, pricing is the getting half cost you're from fact

Bill Zerella

question, No, I you were the think revenue. about asking

Nat Schindler

the the growth, though GMV flat even is to revenue -- X% growth if the is the is contributing flat. but no, Yes, X% GMV unit

Bill Zerella

down. Our is year-on-year actually GMV

Bill Zerella

per unit. GMV,

Bill Zerella

in per okay. flat GMV of It's dollars. terms unit

Nat Schindler

yes. unit, per GMV

Bill Zerella

per So, unit the in right our GMV basically, -- flat of offset dollars is dollars reduction increase total. GMV in increase I'm terms It's our because RPU sorry, unit down. in

the two other. offset each So,

Bill Zerella

other In we... words,

Nat Schindler

[indiscernible] total XX%.

Bill Zerella

Yes.

clear, because okay? so, basically it's it GMV GMV So we per grew more units. me decline X%, roughly in with X% an units flat was, So restate our unit, was now okay? let we what offset

year makes flat on sold So That's we decline. were sense? the the why more dollar units That and offset dollars year.

Nat Schindler

this how is unit specifically, and part other you at price, at I in of GMV units is, raised flat, would being related? is to fixed What and obviously, I'm XX% the And growth because how get what related much -- XX% growth but with be I growth is, revenue revenue the of No, GMV component very the revenue would unit be much get increase to is part the so of some marketplace of price Yes. up growth. was X%. trying trying not

George Chamoun

So, non-GMV related.

Nat Schindler

be and would half? just half It

Bill Zerella

higher X%, carried first about talking X% X% growth RPU, X% at we year, roughly on it units an it's driven the up more Yes, was price year of sold unit. actually a by higher unit also roughly units about which in revenue, those So but was per right?

Nat Schindler

even though unit per price revenue increase... And

Bill Zerella

unit. per Revenue

George Chamoun

lower being average that yes. Yes at

Nat Schindler

Yes.

you what X% XXXX get on to versus versus the last was it as hit year-over-year, at pricing look versus this XXXX. if price an -- QX So about quarter, trying for Manheim XXXX index I'm is the

quarter it This looks April like X%. --

not So RPU grows -- ARPU.

sale As car, to of GMV the translate much because grows, how the of price does that ARPU?

George Chamoun

question. your get I Yes,

the about what high $XX, I per and But is four -- think for -- at X% think past X. I we'll think from of saying? percentage, is it we're I idea here's differential has was a that things unit said in X% an four on -- level, the about of what and prepare buy you that. answer. a think the the Mike two we a I difference, fee

Bill Zerella

Nat are impacted struggling terms our affects is Yes, GMV, buy only only is, partially I think our in fees you're that fixed. in that understanding maybe of ARPU GMV sell fees because what our

So are our fees the buy only of our... variable portion

Nat Schindler

Yes.

Okay.

Bill Zerella

But that's one part of it.

it, the of marketplace. part other on The is mix

is our buyer vehicles. is, only lower-priced is, fees. again in impact other So terms mix But our higher-priced going the the our variable equation GMV regardless the of are versus RPU what to of is, part variable vehicles what

we muted a spend help. through numbers can quarter. get on the and in maybe down, offline impact walk And up Nat, you given some or terms with that'll RPU any of you So impact time you in actual more this either

Nat Schindler

mean to. I taking June your didn't [indiscernible] like from I'm sorry Xst.X everybody else, content

George Chamoun

you. All Thank good. Nat. Thanks.

Nat Schindler

Okay.

Operator

Q&A Thank any the over like closing this session. to Tim Fox, you. for I'd now the concludes back remarks. to And turn call

Tim Fox

our I you. release an are registration you can and on today's look evening. you find press to interest a Analyst Thank your of I June great on details and then, that in but have And us thanks Day guess Xst, again seeing need who we ACV we in to everybody, for website. those Great. joining remind and don't have our on forward

Operator

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

now may disconnect. You

ACV Auctions (ACVA) 10 May 232023 Q1 Earnings call transcript