ACVA - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the ACV Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to introduce your host, Tim Fox, Vice President of Investor Relations. Thank you.

You may begin.

Timothy Fox

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

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

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

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

George Chamoun

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

We of are ACV EBITDA revenue by our very end high QX which adjusted profitability. quarter resulting exceeded and XX% of growth, team. delivered EBITDA and the execution revenue adjusted the full we of strong year another guidance, pleased capped off year first performance, in with year fourth full our

Our XXXX factors. driven key were results three by

business. wholesale dealer our in execution strong First,

share and marketplace. in gain our We dealers our the over market continue on of network transacting to expand dealer-partner with U.S. half

we moat while expand of dealer our traction transport map had exciting Capital, record with ACV margin solutions. executed our delivering and market competitive product an suite we expansion. grow in road growing TAM, ACV of to on our significant and Second, performance And third, along

XXXX, the to on delivering turn focused wholesale ACV muted for market. dealer top outlook line despite growth is a we strong As

growth exciting objectives. to value. on executing We're while will driving this adjusted We EBITDA strategy confident profitable shareholder long-term on in are also long-term invest expansion, growth that continuing meaningful focused significant create

turn of with We in nearly X. QX in recap remarketing GMV QX range, centers. year let's our gains $XX revenue our full XX%. in that, million results QX guidance to growth the XXXX, transacted of was resulting XXX,XXX across XXX,XXX year-over-year execution vehicles market and driven growth in With increased continued XXXX. billion a XX%. in of by GMV in revenue growth $XXX Unit sold above and solid was full of on of share year Slide our

pillars begin focus X. Next, discussion will maximize and scale. of innovation on Slide the Growth. to I on long-term Today's will value. X our shareholder strategy Growth,

context Slide to observations Turning dealer I'll wholesale market automotive for with about the X. start as volumes.

in back solid incentives, retail should growth the levels. On normalized benefiting X% year-over-year QX, recover sales New-vehicle to to front, retail from along in sales levels, more continue with with X% new-vehicle historical inventories XXXX, increased attractive OEM to

However, the water. to market used-vehicle tread continues

Used-vehicle the still off-lease inventory to XX% year-over-year has normal and affordability According recovery. retail sales primary full bottoming. remained headwind for year. our is QX and declined NADA, in modestly the returns volume to Consumer about below

We see wholesale the dealer volumes wholesale in to flat improvement to mix. resulted This sustained have in yet trade in XXXX. a

volumes by of prudent it's pockets in automotive our year-over-year. flat assume be believe for we're to terms XXXX, outlook broader will market. we encouraged In wholesale But of the approximately improvement dealer

X. Slide to Moving

XXX,XXX revenue our growth ACV in services, and over transportation Let's beginning deliveries quarter, XX% cover Transportation. delivered value-added on The XXXX. in strong another highlights team resulting with

both XXX By efficiency. growth margin high of our strong the XXXX, midterm Revenue leveraging pricing network, in optimized Transportation resulting expanded points operating target team margin ACV teens. across AI, has exceeding entire target the basis in and nearly

in QX. create to additional Partners service continued transportation services deliver accelerate off-platform densities new value-added these our vectors. Lastly, We're gain growth that and our excited Dealer long-term to with network traction

Capital results growth X. year-over-year strong Slide XX%. in to ACV Turning with of team The QX delivered full and accelerated revenue year revenue growth

As ACV been growth been recent quarters, our team risk that environment independent in Capital for an balancing in challenging has we discussed has dealers. and

Going can are manage accelerate confident forward, continuing risk. ACV while that Capital we we growth to

This our or addition and retail include early piloting Capital began that our floor marketplace. new strategies ClearCar dealer and dealer growth offering lever dealer core vehicles, on In another we the wholesale financing trade-ins business. Recall for Capital of offerings are with ACV for bundled to that XXXX. these are sourcing we sold ACV's plan creates supports excited offerings, in consumer-sourced adoption value-added long-term

Next address long-term drive element shareholder value, our of second Innovation. the i will strategy to

days. frame XX. core lot operations, tech differentiator on Slide our and products, that It's a is uniquely a not Technologies around investors these rapid underpins made I'll advancing are to decisions transform lost like machine language and that Turning our pace AI. ACV ACV AI in investment to are us about positioned large services models a hearing at automotive. learning how and are

AI intelligence tailored digital experiences based on buying marketplace, to to our deliver buying historical and we inventory. leverage proprietary and condition generate together data Within patterns with our enhanced available pricing

now vehicle ACV few can predicts within guide accuracy. will specific vehicle We incredible price. sellers AI what released market within new in by We listing vehicle its a on capability, value. dynamics $XXX retail and MAX just and prices is features local that to dollars, ACV predict informed This a pricing of for wholesale by hundred used sell powered with

AI our the driving accurate condition inspection transparent platform, higher and sellers We delivering on marketplace. prices reports industry. our are in the seeing and most our buyers within adopt ACV is foundational increasingly, conversion

comprehensive the augmented merge flag vehicle VCIs inspections, condition into into model. this known from condition from contains commercial of inspection databases expand are and our based of vehicle, the adjacent vehicle reports our risks market. on touch we These condition model a and we data data, or incorporating platforms guide through to added we as our We're most Dealers them industry. one millions and structured in Before This believe disclosures with the advanced technology process. third-party insights data represents

ACV for are like new has number own solutions our partners applications a use our piloting e-commerce and ClearCar reform we've informed Trade-in and inspections AI AI-enhanced for powers cases, Solution auto incredible product which of their our consumer-facing to partners. map. our road feedback, received Dealer

Analyst principles To AI-enabled exciting products of started, wrap forward know, guiding in marketplace March. driver and up, innovation and one ACV's key getting as upcoming look services at inception, a been and has We're new some you success. only our more we of sharing to since Day our

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

William Zerella

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

performance. strong Along expansion revenue very pleased growth, business and meaningful EBITDA demonstrating growth, our margin are QX delivered with we We of financial model. the adjusted with our strength

XX, Revenue from recap quarter year-over-year was the results. fourth a our XXXX of in range, $XXX end representing high Slide begin with line was QX XX% of million On of with above revenue acquisitions growth. let's our guidance expectations.

organic was So performance the strong over driven year-over-year. of approximately XX% growth again by

strong points EBITDA operating of exceeded the upside $X driven by margin and high-margin of by auction The XXX with adjusted guidance, year-over-year. assurance end and million leverage. EBITDA improving basis was revenues high Adjusted

points was end XXX above year-over-year. the with income non-GAAP increasing Finally, net high of guidance, also basis margin approximately

Auction grew total review on and assurance Next year-over-year let's additional and XX% revenue XX% year-over-year. reflects and This details. revenue revenue XX, unit was auction of XX% growth and Slide performance ACV $XXX, for revenue XX% and and Transport of year-over-year, revenue for Capital. year-over-year. ARPU was revenue grew assurance XX% which grew reflecting services ACV strong Marketplace revenue XX% of total record

X% comprised accelerating of growth SaaS to services total Our data revenue, year-over-year. products XX% and with

points percentage I'll year-over-year. revenue The operating Non-GAAP of discipline auction approximately costs scale revenue focus as year-over-year. as expense assurance a improvement of basis revenue, decreased and ACV points on excluding Next, revenue, These cost we review Non-GAAP reflect was Slide driven on QX cost percentage XXX results by as a and of Transport. of our our decreased XX. by business. basis results expense, optimize XXX

strategy Moving to frame investment Slide profitable XX, growth. our as drive we I'll

in decrease efficiency discipline operating yielding in spending EBITDA. growth and adjusted in improvement OpEx Our focus significant XXXX, in resulted on a a

center increased approximately Even basis adjusted our investments. expected, as XXX OpEx platform marketing commercial and XXXX, these margin EBITDA by investments, year-over-year. In increased growth growth points strategy with to support

highlight and cash our cash structure million on and securities Next, equivalents strong I capital XX. will Slide $XXX in $XXX with million We and QX marketable ended debt. of

Auction highlight our strong improvement QX our In that year reflects cash figure EBITDA operating full the million. of in adjusted positive cash strong Note our significant $XX includes we balance margin flow transition the right, million to and of float expansion. This on $XXX our business.

XX. XXXX Now turning Slide to guidance on

the growth growth million, approximately year-over-year the to of to midpoint expected guidance. are EBITDA range we quarter, million of first million be $XX to the of to expecting in the year-over-year. of XX% is reflecting of at million $XXX $XXX in $X range revenue XX% XXX% For Adjusted

For $XXX expecting of the XX% to of year-over-year XX% range XXX% Adjusted year-over-year. EBITDA of the be million, year, to in the range expected we $XX of midpoint revenue is to million are $XX the approximately guidance. at in full growth growth of $XXX million million, to reflecting

relates to flat approximately that guidance, be it for will volumes year-over-year As assuming we're XXXX. wholesale dealer

We expect wholesale patterns. follow seasonal depreciation to normal and price conversion rates

growth, excluding amortization and growth XXX by non-GAAP revenue to continue points. OpEx revenue approximately and also We basis expect to exceed cost depreciation of

XX. Slide model. updating approximately We're X.X come in we to units target expect the mix The now key moving assumptions Commercial to Wholesale. and million midterm continues finally, model of total And assume to our from XX%

margins mix performance. and underpinned be expanding we've to continue sustaining in gains also targets demonstrated revenue market scale through and share Our which by our clearly

to based by power auction our partners. factoring also recent and higher delivering value pricing in ARPU we've the demonstrated in on dealer assurance years We're

new of on We $X.X dive billion forward updated deep of our Day. million. look targets taking such, you and March Analyst through adjusted As EBITDA $XXX at are our our a targets to revenue

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

George Chamoun

Bill. Thanks,

Before questions, summarize. your will take we I

pleased very with our We execution in are strong XXXX.

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

market addressable new while attractive market conditions share growth to our commercial for We marketplace as market, positions which our dealer attracting and by improve. ACV partners continue to gain expanding

delivering an differentiate are product ACV road We AI exciting to drive further by powered on and efficiencies. operating map ACV

drive substantial on targets delivering in updated We adjusted that shareholder are on value. XXXX. And EBITDA growth achieving will our focused we believe significant midterm

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

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

Operator

comes line Sheridan Eric [Operator of Sachs. with Instructions] Our Goldman first question the from

Eric Sheridan

embedded the share that are making sort can we your of George, you're or you've driving of bit assumptions same-store dynamics, of dynamics, bit about with of terms so talk sort to underlying those over the In yield last of the forward market understand respect forecast, initiative elements maybe return of platform underlying gains in new share little better little made assumptions. some on in a the some investments the some is of of gains, market couple the years just a

EBITDA how with I versus achieving And to forecast, want outperforming about the thinking to if extra out the in go balance EBITDA through business year? forecast you're either as number kind just refresh philosophy the profit year ways it. invest of finding on hitting to the and that even between it we the produce incremental understand do some Just versus you behind the X

George Chamoun

Eric. certainly, Yes,

So first was at year. share our really question pace. our market we're The thoughts on were on this the gains what same direct continue the assuming

between thought rate. our for conditions, share on continue market. overall assumed thought interest you the concerns When market assume other flattish automotive, flattish out in the has wholesale look year places and take at consistent this of at wholesale to -- there market a market a our some is we other rates, same all considerations thought the Our going the

we've no keep far taking So how to been share really going. in change -- thus

would just new that we right And conditions message all is an to share some thought we've our faster same of with same overall is and value-added been same is a possibility. flat your be the execution, wholesale year-over-year. could market gains, grow But consistent point, dealer the getting market that at services, assume now but

Is question? that first your on helpful, Eric,

Eric Sheridan

That Thanks. is helpful.

George Chamoun

I'll -- in. and we're Bill can And lean start Yes. question, the second

And exciting and health -- as product What quickly. of AI believe where right, We're We've our to year-over-year got you when improvements. at I investing is -- seeing we're we a to obviously, strong world advantage continue got look we very year-over-year, benefits. lineup an are everything continue changing of unique very invest. quickly, we've XXX-plus well. believe in overall technology. a to EBITDA percent demonstrate sort We very,

William Zerella

actually It's XXX%.

George Chamoun

year-over-year XXX% improvement.

on showing to Analyst we'll doing map. Day of be improvement overall, really the while an quite So see that today, highlighted some We've you'll incredible on things got I your bit Eric, product as a this a of point, road incredible well.

the show improve overall that? current look path we products, more want the strength when add expansion to Bill to in of road but map I our in continue that EBIT our you product if know any also core. at So you our invest don't to

William Zerella

how say, growth. I Yes. Eric, of would investment you mean I earnings question balance always versus a driving it's

when back, driving on So in we're take you growth, a EBITDA XX% right? revenue improvement XXX% step adjusted

past, the performance we've of same do we of drive tended we're terms pass to which portion In how is that always continue year. some in growth. to what happened time, last terms in over through the kind But of of thinking at overperforming, future

the are that's that's So balance, calls those always and -- make. the we that

growth. drive to able over-perform still we've rate invest and future far, to think So at a we important is been

like for the play out guidance with conditions. year, respect see we'll especially market over to for And how time, So good things least year. about initial we feel the kind at balance, of every the pretty

Operator

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

Christopher Pierce

I market volumes. similar volumes going the on just National low Association hit double-digit to commercial. I'm from wanted dealer There's Auction showing and get in but to the in out January wrong, Auto -- growth acronym flat in articles Auto there

tax So just been 'XX. where the guys think it saying refund get to kind of was to market's coming is strong, in I are you just maybe flat understand that want you're but forward? sense a pull So of from? want I you season

George Chamoun

think, I Yes, question. great listen,

why really it's think also a have range. I we

bit it's why to think we whole I What thought have happens process what -- like incorporate process. -- if little range a a to better bit have is here the little if that range. with a we're worse, into a flattish start it's saying, happens hence Let's or

But there. mixed to happen are be wrong. if data specifics, of to there's data There's you obviously, seeing is out really economists lot on going retail mix what we this year. look at a And want with don't the

January We that, ends was that like okay? So year And to be really point, Chris. we're a for month. strong your on bank But not to had being that, whole going ACV. very if the would strong up fantastic,

ACV, February, at probably going retail right? reading, also see not anything it's we're February, be up as like to you're sales changed could But end being -- think will year-over-year. I lower

talking looking end up not lower being I'm about even wholesale retail. or whether -- sales year-over-year, not Now retail at

it it it challenges was -- We it was interest could we that concerns, was whether not. would whether whether mean weather, are other see rates, that February's either temporary or

so of the us There's all there's macro lot middle. you this there's all take and -- We And right, There's right when think tariffs down prudent there. else. to about concern out everything the a it's for this crosswinds some in, stuff. assume

for Assume on these better. and flattish, of there's that's us reason all predict will no to going be don't prudent for think take shareholders. it messages out for different us our any there and I

this of -- wholesale and showed with after situation could a a to few Wholesale January December's a be wholesales year always but in is all. was But January keep weeks us there mind, retail. result point, -- So activities. your up

or January And actually to data so come was starts out. retail much we'll not as year-over-year see how up the

start And February trend up so up how really to or follow of was how down. let's is much much that January

Hopefully, it's you shareholders, right thing better middle. predict the and we down hence I So all the that, doing for our range. us give basically we're why and think than a

Christopher Pierce

Can there affect do that the And from some talk marketplace see CarMax wholesalers I for the of some that you just -- these the there's about any you're seeing in lastly in Is of tech then their changes power things more like And -- on out that. the way? appreciate updating then Carvana changes would what something buyer-facing me. your become as Or volumes forward? and as that tech? you

George Chamoun

Yes. had on always hundreds now, IPO the questions we've day, very I consistent we've we've mean the always of to at up There's right? I of auctions. competition. been our of competition had end lot regional competition, there. think from gotten We've a The

have respect marketplace for marketplace, the last from you some years think We up some was that other saw that question I draw out there companies. things of couple that our the But things there come like other competition. of all

You're consistent a hearing very message.

incredible proposition an got dealers. for value We've

capital, we've value-added got We've broader else have that. a got really offerings, We got offering We've feel marketplace got And we transportation. tools. we've anyone believe world. the about pricing than in we good

competition, So position competition. but the love there we we're always We will respect in. that be really

Operator

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

Peter Kirk Lukas

It's Pete Lukas for Bob.

other are you space And doing on commercial players XX-plus what Just you than your storage the you to for more incumbent key gives with build as differently this the your out are What offerings? and than network, that advantages locations. repo? recon space

George Chamoun

questions. Two great

So one, else your understand. to point, part, sort just of everyone help to your first

that the to repo and of need You for your land point, some other categories.

have TAM our to excited starting the So to broaden land allow we're us really about.

right the having ACV important. locations the your is point, to brings But so offering And unique twofold. then is

our to way a of the on to not upstream. One we're vehicle. works, able once to condition vehicles great will we're And just offerings data week. service way commercial is that going the help also based our day, data be the go condition all partners going decisions make That every auction

to they them that goes one use the starting value today car their understand our rental the who's category in cars. We to upstream re-market wholesale who decisions re-marketer make have start to with. to of help even data before And on

to go we -- to there. you some with to going physical that going to that it get get we -- of Day, today. actual all we'll healthy the is. see disruption Those Analyst on that location. what tease just We Once I'm you have believe, some

efficient, to technology there, of have auction. get incredible car, not fastest-growing the condition to of allows more companies local our means really and the expedite. Obviously, us traditional broader going scope vehicle one And the marketplace some that but makes the that once the the built then last right we've us reach least, size than gets But of marketplace. you're

buyers all we've we're the the to buyer report, So and to and condition Condition base Report. vehicles. to got dealer side leverage in used commercial ACV now ACV to love wholesale able going would scale car that the who and country over them take They dealer every love bring buy

Peter Kirk Lukas

on of that guess, are greenfields? this acquisitions easier in helpful. -- market seeing staying be harder to looking many would how And Is or just terms And many how is getting Very then, topic, it just are year at the I in you you locations? what acquire overall?

George Chamoun

because Yes. ACV year We're first the greenfield -- really going a end to be with year for we this is will exciting our location.

will technology very break this the exciting for to we'll back And be or Our there ready ready year. for the software and ACV still services year. be be ground, could half M&A next year of

banking on not it. We're

whether and greenfield. going and Of talking we're course, open forward to or just we're ahead When are up isn't there want the moving we need. to to market we something a that what manageable for at costs be to someone folks cost assume for in to we going acquire, not, the rent go rent, a really but happens we're if look

year. reconditioning bring running location, one to excited the put rent do running. tech have So of the is we're And up this to we at and we're really all the least and by have, up need and facilities, the that we end up basically right

William Zerella

we're requirements, perspective. obviously, our greenfield dramatically if rollout capital M&A would could and that should from with an I and successful Bob, right, add, reduce

George be running. we and said, And our have having a the lot what be between asked forward. us will it really clarity of capital more and really first and then running, first greenfield. M&A requirements question. greenfield of to depends since up year, kind to mix able up also as a our by us we'll that And gauge better And that in upon we're the So give regard. investors we'll little But of have our move end the anxious greenfield

Operator

question comes JMP the Securities. Jones line with Our next Nick of from

Nicholas Jones

business? the about on? it Can lever How you behaving about you are that And pricing in thinking of kind could pull competitors how thinking strategically? just still remind you kind us Is a today? are are how you of

George Chamoun

Yes. our still -- Thanks, question. still price -- bit competitors. are little Nick. fees Yes, a lower the our than We're great

for this a So for it we But more about don't at shed competitive have a year. call to That's too I about a much thinking reasons, have for this on but how we it want do room room year. little do we're like point. the this, little obviously,

William Zerella

Yes, a our mean, Nick, we result would X%, as to I of I add, up able was ARPU that numbers the if look right, the price some pass marketplace of at year, you for last just through. increases were

lower a assuming this in model of percentage for certainly increase our we're So year.

Nicholas Jones

then guess I can call on think Got half get about I I those disclose normally them could you wait the on those you are dealers it. the can of said we platform And update K. the transacting now. if think to -- you I numbers unless that on for

should But Marketplace? the mean behavior we just and churn of kind like can the churn how is businesses about you It the the I of users. of overall speak sounds to think to about Can are using the years the extremely How responding stickiness share. low. negligible, to you platform and gain folks wallet go shifting us it's you the by. kind as as understand help If just of the share? plan really

George Chamoun

our we've to the have in in built -- mean, think very some early very in The Nick, Yes. of is to market market I longest you'll the share is about and been see markets we've Northeast, we the the way significant. at this share. substantial markets retention our start

great markets X And so even to confidence grow gives us it when where that We've for the at you we've been continued years. share. X, --

your retaining customers. you're if share growing early keep can only You

bringing point wallet early I couple going you're our what some that We've we're on believe in our you markets. with how share that of Day, So what new and these on only a X-K, not to share show see which grown grown bring to slides participants. we've And to the looking is of point only in participants. of for, also not and shows kind out we're but will I'll that, I'll Analyst

Operator

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

John Colantuoni

some doing to embeds I'm year. math think Just year if about is full wondering normalized level mid-teens outlook the to the expecting you're be wholesale back given next envelope of of like unit growth organic that ACV's mid-teens way market growth? something suggests flat growth right the

as part vectors you I'm wondering key And And, over a growth of growth could I that, talk could if to unlock incremental that the have follow-up. time?

William Zerella

then start in. I'll George let add John, and I'll

you're So correct.

growth, is we've are mid-teens very consistent frankly, average basically We what assuming unit which essentially on market share with last year gains. years. last the and few That's seen

embedded that So is an assumption.

So pretty that's I with time quite been for that's consistent And we've now. correct. what saying, some think,

if George, that? you know, to to don't want I add

George Chamoun

Yes.

two at look can you if a think sort about how dealer it's was strong strong way nice. you but start share, the have was year bit. different if versus because think January and climates. look little was -- also a kept And January for wholesale funny we of was February, up the to And very taking started year you at it that us. how I --

of affordability, and see concerned fourth saw great could if we us. do So and see we see like back good we the that -- in less then a buying going Right. tailwind, we on quarter, cars we consumers and for be parts

of is that win be their our services because that would tools on drive. to going be example, We're Within of for wholesale is Number our execution Analyst assume two, helping of dealers market pricing can helpful. cars change. new this just with Because control these which we're But and yes, these some some buy we dealers of see flat. in that for and help assume trades some on out see control. But service got and Day. to new products. the market conditions starting our value-added you'll customers new will appraisals, of our we've

So been a about exciting. long this is you've hearing for time bundle all talk getting very us

crazy. within Our hundred price other of and what car dollars going now to like dealer, for when We going bundle to in retail ACV the say what of managers could managers guidance, a for with we're a if our general all $XXX a any few of think you price with of our to within this. in car it's first, these put you could and we have, few used sell can't predict them tools, Max. that do of -- that's predict competitors that a And they wholesale, sell impossible. part within in and the hundred legacy it's you Because their room said, dollars, put took like if a you

we great. So Having are these that, tools new. feel said

are there -- to am make quickly, where it bundles going don't want will there's out as change. early I We on still automotive about adoption. forever, still Our how be humans change bullish and who we're have AI think but and to and I could to decisions who have

would a old vast could But exciting value-added ways the we see more services. our broader an Either rate the be even us those you have these old from market We'll even ways. or to for ways year. higher, tools get better two to faster getting of do take one better, could help right? fast, we the modern dealers and how see we'll go So give

John Colantuoni

just that, perspective And competitive Clear? seeing the you're front? Great. curious your on to to maybe was as get plans expand I us what part And on on your just Carvana's perspective of ADESA give

George Chamoun

don't homework. do are I I these most embrace dealers mean, think I own shall are some you your saying. like others of to products listen, think going

industry. things You've this of in we a of lot heard talked about kind

to to them. not I'm really So speak going

commitments launching of a neutral what get to tremendous value-added great partners. broad from doing. independent. our feel suite wholesale we're a We dealer because get a our thing starting broader service a We're new we -- offerings. offering. amount We're we're But We're about from party. We're of of dealers. actually That's data

you or whether competitors. you're competitors, to always the mentioned it's So going other company have

partners, investors the to for dealers be to with in the with great should should the right asking. spot asking feel bringing should commercial like be That's what should be who right. with? we're is partner And question the the the dealers a So we're Who dealers what of offerings market. partner partner That's and suite we is. dealers

Operator

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

Rajat Gupta

wondering adoption is the just just could terms Max ACV of update if and like on and you Just there go-forward in ClearCar an combo. scale? provide to And us plans

Clearly, was mind ACV when improvement the share. MAX were in in a like show, it significant looked definitely particular, at NADA you like

So how targets? follow-up. starting are there I your to inflection any contribution? if just And in see a just adoption, curious midterm then have products you're And quick these to integral

George Chamoun

great Yes. a question. Thanks, mean it's Rajat I

your of So homework. you've doing obviously some been

brand We consideration as services. are -- for on I a would and dealers say these we're a like finally data arriving

there incumbents, right. was Obviously,

So the Max dealer reception data rooftops, we dealer recently The services, and which are player over way group really XX these are in won We about. group, getting a we're a with a for excited new incredible. regional we is ClearCar. ACV

of Now for it XX look and revenue -- at at now more doesn't cuts. is to than now get era it $X,XXX do year. ACV AI. of to this, And about think sort a worth is way dealership per rooftops, their materially them wholesale look the change month does lot you in AI the them. retail those in by $X,XXX what They're what We're But you a month us subscription. subscription. we're powered their price advancing we to a when our that But when helping is

know a you and really low -- partnership, we're able were a And giving when subscription. we're we're offering So -- more. to or an that. product really them leaning and get XX if month we they in very they incredible wholesale look It's know important for cars at

We're when not services So commitment partnership to at banking enabling invited That's it's that's But in huge a our partnership. their where We're the a also incredible at a a make a annual like your think get way they're quarterly have quite not now. inexpensive, here business treated charging plans. meetings, you're an they to that, lot. is least is you on right meetings. wholesale. And midterm SaaS about data like not a you what treated partner, When right?

real car intimate been in partner. we're invited like where all speak Other me brought all owner that. -- a can't the vendors recently to I've say the to used has GMs, becoming managers the to

discussed auction that. that companies of They really Some say the companies, can't earlier. we other marketplace

So our huge expectation the a revenue SaaS say, way side. a like to on long-winded position. don't We have in we

I feel at. on partnerships, we and at we where way build look as have Bill we're this As but discussed, great to a

Rajat Gupta

it. off-platform Got in then helpful. form services, transportation 'XX? there? gradual mean like these will levers you Or appetite verticals a in And contribution just of the of incrementally of couple That's be in into terms more it and financing any

George Chamoun

have one selling great to faster. ACV another Transport the grow -- question. cost have actually us it we in ACV person we It's We stand-alone. to Transportation The listen,

ACVs So disclosure, X Transport we just have spend. That's network off selling full a person right not go-to-market huge now.

and know first a we the while style. beta ready our just tend stay and We get So like these product it right. to where periods be we for you wanted to in to foremost, want

first don't don't we our one We outside closed have market. an -- on the transfer. your So of off have really

has word-to-mouth mouth, and auctions, ACV the within of primarily that grown word been great. we've So

sell or year, couple bit it And next to and I'm But profile is got this year to Maybe more folks great healthy it's there, do we've us network. our in that's little lean a it. margin add off we'll because great. to a a not more. offering start sales that we'll sure in

I topic Our even product I'm second. off here then more differentiated get a for probably is the going I realized, guess, to

to team going and great He's ACV and NADA, down I'm walking I'm elevator he "You the transport down have me Transport how idea at I'm Transport and to do of me a dealer to hearing could. my said product, pitch own getting than cars -- is" his now cool up his a it And from ACV Ohio on why. I was no and store probably to to better using me store pitched Pennsylvania. off so do retail dealer

ACV just we On started did just to capital, lean. start We Capital.

managing capital cautious. a We we start would we now that sales we grow confirm start capital really think done a feel feel ready we the risk but good Bill? to more. do added our good still, bit really, to a can looking I'm versus dealers I we're this more say, about We and couple accept on I feel We're We still year really how little on platform growth. -- good more were really new at than to folks about cost we've we're to faster. bit of that. deny

William Zerella

just of talked in would on Yes. made of Rajat, terms management Capital, I years over ACV that we've couple about we've loan our and investments add last the the our and platform system infrastructure.

a managing an really now team good of excellent also we terms risk. job. in done has Team have we're So a position in where

the go-to-market good baking Capital we're that. to place ramp year, this certainly making really have feel able our ACV in and sure to we being about faster right OpEx growth, support team we into So

Operator

from Our the Naved question comes Riley. with next of line B. Khan

Naved Khan

rate maybe about maybe that? quarter, how George, and the that the for and year-on-year drivers conversion trended fourth you sequentially talk in can

question on for because pretty margin. a year-on-year full fourth pretty you It the quarter the had it a have And other year. nice looks uptake transportation I was is like strong

I the think teens. above of said you're you target high

and you're assume thoughts you there. XX%, close can levels? to So those to maybe Just sustain

George Chamoun

were that's On rates right. slightly up, was question, nice. Yes. QX conversion which your first

So that for a conversion higher rate you're a obviously, being forecasting. it conversion right? our have We in us. nice a up is business, little you When did bit little end than up tailwind rate, helpful,

$XXX going car. bundling. starting you got that move A When and $XXX And is transport, on. in your on or second transport better early the going place you've question, And look at still I'm at -- place faster from So are and we're -- B, a to look what But to vehicles. to if -- you is the bundling why why move, Yes. reason you're and this it, car sorry, one cost cost to to do you it's you we're right margins

going have already that direction. a we And truck in

and hardest if buy to these get does a One is car than probably the can start the it truck, ways moves transport versus of about I one-off to down. ways one thought the cars for done process this more thing new for in research of, about put their that's old somebody your costs transport

on improving margins. been we're are to to this early savings dealers while we've But our bundling. ACV Well, And our able in growing. we pass Transport

ACV numbers. not here. off You our our ACV it Auctions, Transport closed network only can little popular, but getting on in see

And more we'll the a bundling the bundling will we right? the to The able like -- take probably real could transport bundling bigger but this there. next be significant it won't in us get more get do. Like to percentage, X be get overnight, be years to

it's margins both And a benefits, also increasing. lower two seeing so because, -- cost again, it's our and the it's are great just dealers --

William Zerella

Naved, terms business about we in a will kind at speak an Day Yes. expectations for Analyst of bit updated March. of margin transport view our the in

tuned stay So that. for

Operator

with the line comes Nagle America. from Curtis question Bank of next Our of

Curtis Nagle

year. Just I the margins of guess one on the for shape

So growth year bit lower maybe why the full I half, decent margins think, is I than be guess not would by, XQ almost the quite, year. higher full than a XQ than rate when revenue

Is this any just kind of investments? I of great. would that is be think help maybe midyear perhaps or stronger on basic reflecting arc typically seasonality? the Just

William Zerella

This is sure. Yes, Bill.

So -- of so things. a couple

biggest the year trade is the of when for NADA, the the is largest QX we have industry show the event. kind of company, So which first,

does bake So of into kind every that QX.

drag, also function OpEx. also that will, of on of it's sort of is So have -- There you if timing a investments. you

in increased year next QX for in flowing growth investments could or So kind this some rather, through that start we for that made year, of support QX.

have So some you there. sort distortion of

quarter. significant. in year. QX much into EBITDA, XXX% on for just versus the guidance, our the by frankly read wouldn't I It's Based growing that XXX% year-on-year But we're not that adjusted differential

XX% that not dollar frankly, large differential is, a So amount.

a there, in that there's bit So little of regard. distortion

wouldn't read So it. I much too into

Curtis Nagle

And the I maybe thinking volumes in of, to Start shape again, anything for terms back on whole? how I of guess, kind scenarios positive? of it range year just is of are going enough. point like that year But generally flat assuming then Or the of right. kind the bunch guess a Okay. Fair the industry of flat, you're wholesale turn of the just sounds kind a being sort negative, some about, within as contemplated.

George Chamoun

a we're mean of Yes. some more earlier, I little I give -- but to color. this I'll mentioned Yes. try

you we see picture be So like January very year, think of great. be more side did year, like strong. when is get showed whole like like of a year you what of our kind the a little if about optimism right, range, the That more higher think us about January. would the the was It this if would

But it was whether factors. February, other weather, was whether

to but seeing probably you're talk weather. there. just there's I think factors when dealers, don't weather of other it, was out think they it's And a we big part

of they're consumers I think wondering there's much how some is -- also. just this

with us to of going the for anything predict doesn't make it everything just outside to our in world we that sense it thought control. So on predict -- own just

the let's can. we our to we you we confidence as really thought such now. with market control right as just really, know ironic go know So saying, what, way, that us the year and down try started what is a gave And January, give the had investors out right Focus almost February best take the of -- middle. can and it incredible that this the out such and of it's it an this mixed

Operator

Beck the comes next of Raymond line from Josh with question Our James.

Josh Beck

Maybe two parter.

pre-COVID inventory, I 'XX and just just Is the we below year? of in I little likely see think And XX% this is And said maybe unfair the beyond, for know remain to kind levels. But of scenarios around. you kind there. on that it then in zone curious so probably So was start then there's to many improve. because that a it going

analysis, in But tariff help helpful? mean, you were ways. auto a be some think lot new widen of helpful and versus affordability if cars used to argue But well. that us gap I scenarios we would would heavy just any could you obviously can scenario as it get through that tariffs, be

George Chamoun

here, -- first assume without weren't we first Yes, entertain and try your if tariff then question, of tariffs. your your pretend both and conversations -- let's with first on question, questions to let's certainly. On -- we'll

would year, improvement Without have we I But would would to year, into guessing. XX% would be there thought to improvement. only starting we're like ending eventually thought was steady more steady have tariffs, throughout I gain year cars. the have going the next XX% it again, Dealers all a like used and

consumers. So I more some of them see buying from think we'll cars

behind are buy. to them and more ACV scenes. we're Folks others We're more. think like the doing I doing for

slight each been type So a would like the little improved I would of month would big not throughout there a bit a improvement year, have have bang. thing. It thought be

Your second the think lot a everybody question what is Like trying I tariffs. industries respond. how mean? first is do I OEMs in to obviously, out think this is question, figure could of different

to challenges. cost full there's I dealers the past, already the in both affordability their knowing think some and consumers,

these all OEMs they that passing it. have consider of right, not healthy of margins, still Some could

levels. balance OEMs, new are think actually lots to new historical some the historical that car dealers higher though inventory -- on car of And I with back is So inventory than levels.

the OEMs truly -- come have going So in, they're have tariffs if creative. to to are to get going to

going to going we're assume. higher see to to and residual things, or other okay, lease going think be a they're and whatever they're assume I I'll payments thinking, value

pay high tricky, cars more fees, They can't lots going just these and floor on to force plan the out. have dealers their to figure to be it's

priced you the through I'm obviously, these ifs, kind before of are consumer, tariffs be either impacted. OEM, to through. topic that to brands in impacted, consumer. way are tough new the with the just to before go if dealer, the priced the that for have be at the lower flow meaningful all retail less any first least hate And right? I It's the that brands a so passed would higher, then starting then could were And maybe

more have flip go they on would be marketplace our that more your And point, a if actually on so might up. our all conversion platform, keep marketplace of dealers then dealers conversion, when But you that, trades, trades, think side cut you the -- negative. few the as to

So probably more we efficient. would get

hits in it sudden, a more way, of supply all if a we efficient. So meaningful get

quarters COVID. in rates conversion crazy where of really couple a we saw had guys You

So with bit going right for assumptions those is all this telling of market was quite lot for market, on this this last control. we're were We're year, a some good all assume in before to assumptions there, your shape. analysts going are these world, think this, weaker a ACV year. flat out the going so the to I in we're year, a that stuff And their on in model all as recovering had craziness of all out the the be whatever going focus other craziness there this tariff you

Operator

closing And I will the Tim we the Fox of for end have question-and-answer session. reached now remarks. to call turn the over back

Timothy Fox

live Thank available. have today. thanks, of for Great. you on and us joining not, everybody, obviously, And to who March you, in a the those forward seeing us webcast call can join XX. we'll York look We New on if

once And and have you evening. great thank a again, your for interest in ACV,

Operator

does today's conclude gentlemen, and ladies And conference. this

You may you disconnect this for time. your Thank at your lines participation.

ACV Auctions (ACVA) 19 Feb 252024 Q4 Earnings call transcript