ACV (Nasdaq: ACVA), a leading digital automotive marketplace and
data services partner for dealers and commercial clients, today
reported results for its first quarter ended March 31, 2023.
“We are very pleased with our strong first quarter results, with
revenue above our guidance range and year-over-year margin
expansion, resulting in Adjusted EBITDA results also above our
guidance range,” said George Chamoun, CEO of ACV.
“Market conditions improved in early 2023, and combined with
ACV’s continued share gains we delivered record revenue in the
quarter. Our dealer partnership network and competitive moat
continued to expand, and we benefitted from adoption of our broad
suite of solutions. We achieved this while expanding margins and
carefully managing our cost structure,” continued Chamoun.
“We are encouraged to see early signs of end-market recovery and
have raised our full-year guidance to reflect strong first quarter
performance. We believe ACV remains well positioned to deliver
sustainable growth as end-markets recover, while also continuing to
scale our business model,” concluded Chamoun.
First Quarter 2023 Highlights
- Revenue of $120 million, an increase
of 16% year over year
- Marketplace and Service revenue of
$105 million, an increase of 19% year over year
- Marketplace GMV of $2.4 billion,
approximately flat year over year
- Marketplace Units of 151,563, an
increase of 8% year over year
- Adjusted EBITDA of ($6) million,
compared to Adjusted EBITDA of ($18) million in the first quarter
of 2022
Second Quarter and Full-Year 2023 Guidance
Based on information as of today, ACV is providing the following
guidance:
- Second quarter of 2023:
- Total revenue of $117 to $120
million, an increase of 2% to 4% year over year
- GAAP net income (loss) of ($21) to
($23) million
- Non-GAAP net income (loss) of ($7)
to ($9) million
- Adjusted EBITDA of ($8) to ($10)
million
- Full-Year 2023:
- Total revenue of $468 to $478
million, an increase of 11% to 13% year over year
- GAAP net income (loss) of ($87) to
($92) million
- Non-GAAP net income (loss) of ($27)
to ($32) million
- Adjusted EBITDA of ($27) to ($32)
million
Our financial guidance includes the following assumptions:
- We believe that supply headwinds
impacting wholesale volumes in 2022 will persist in the near-term
but will begin to ease as new vehicle production and inventory
continue to recover.
- We are expecting wholesale price
depreciation to moderate in 2023, resulting in conversion rates
normalizing throughout the year.
- Second quarter non-GAAP net income
(loss) guidance excludes approximately $13 million of stock-based
compensation expense and approximately $1 million of intangible
amortization.
- Full-year non-GAAP net income (loss)
guidance excludes approximately $55 million of stock-based
compensation expense and $5 million of intangible
amortization.
ACV’s First Quarter Results Conference Call
ACV will host a conference call and live webcast today, May 10,
2023, at 5:00 p.m. ET to discuss financial results. To access the
live conference call, please pre-register using this link.
Registrants will receive confirmation with dial-in details. A live
webcast of the call can be accessed here. Participants are
encouraged to join the webcast unless asking a question. An
archived webcast of the conference call will be available on the
investor relations page of the Company’s website at
https://investors.acvauto.com.
2023 Analyst Day
ACV is hosting an analyst meeting on June 1, 2023. The event
location is Convene at 530 Fifth Avenue in midtown Manhattan. A
live webcast of the event will also be accessible on ACV’s website
at https://investors.acvauto.com. The program will begin at 1:00
p.m. ET and conclude at 4:00 p.m. ET followed by a reception with
ACV’s management team. To register for the event please send an
email to ACVAuctionsIR@icrinc.com.
About ACV Auctions
ACV provides a vibrant digital marketplace for wholesale vehicle
transactions and data services that offers transparent and accurate
vehicle information to customers. On a mission to build and enable
the most trusted and efficient digital marketplaces for buying and
selling used vehicles, ACV's platform leverages data insights and
technology to power its digital marketplace and data services,
enabling dealers and commercial partners to buy, sell and value
vehicles with confidence and efficiency. ACV's network of brands
includes ACV Auctions, ACV Transportation and ACV Capital within
its Marketplace Products, as well as True360, ACV Data Services and
MAX Digital.
Information About Non-GAAP Financial
Measures
ACV provides supplemental non-GAAP financial measures to its
financial results. We use these non-GAAP financial measures, and we
believe that they assist our investors to make period-to-period
comparisons of our operating performance because they provide a
view of our operating results without items that are not, in our
view, indicative of our operating results. These non-GAAP financial
measures should not be construed as an alternative to GAAP results
as the items excluded from the non-GAAP financial measures often
have a material impact on our operating results, certain of those
items are recurring, and others often recur. Management uses, and
investors should consider, our non-GAAP financial measures only in
conjunction with our GAAP results.
Non-GAAP Financial Measures
Adjusted EBITDA is a financial measure that is not presented in
accordance with GAAP. We believe that Adjusted EBITDA, when taken
together with our financial results presented in accordance with
GAAP, provides meaningful supplemental information regarding our
operating performance and facilitates internal comparisons of our
historical operating performance on a more consistent basis by
excluding certain items that may not be indicative of our business,
results of operations or outlook. In particular, we believe that
the use of Adjusted EBITDA is helpful to our investors as it is a
measure used by management in assessing the health of our business,
determining incentive compensation and evaluating our operating
performance, as well as for internal planning and forecasting
purposes.
We define Adjusted EBITDA as net loss, adjusted to exclude:
depreciation and amortization; stock-based compensation expense;
interest (income) expense; provision for income taxes; other
(income) expense, net; and other one-time non-recurring items of a
material nature, when applicable, such as acquisition-related and
restructuring expenses.
Adjusted EBITDA is presented for supplemental informational
purposes only, has limitations as an analytical tool and should not
be considered in isolation or as a substitute for financial
information presented in accordance with GAAP. Some of the
limitations include that (1) it does not properly reflect capital
commitments to be paid in the future; (2) although depreciation and
amortization are non-cash charges, the underlying assets may need
to be replaced and Adjusted EBITDA does not reflect these capital
expenditures; (3) it does not consider the impact of stock-based
compensation expense, (4) it does not reflect other non-operating
income or expenses, including interest income and expense, (5) it
does not consider the impact of any contingent consideration
liability valuation adjustments, (6) it does not reflect tax
payments that may represent a reduction in cash available to us,
and (7) it does not reflect other one-time, non-recurring items of
a material nature, when applicable, such as acquisition-related and
restructuring expenses. In addition, our use of Adjusted EBITDA may
not be comparable to similarly titled measures of other companies
because they may not calculate Adjusted EBITDA in the same manner,
limiting its usefulness as a comparative measure.
Non-GAAP net income (loss), a financial measure that is not
presented in accordance with GAAP, provides investors with
additional useful information to measure operating performance and
current and future liquidity when taken together with our financial
results presented in accordance with GAAP. By providing this
information, we believe management and the users of the financial
statements are better able to understand the financial results of
what we consider to be our organic, continuing operations.
We define non-GAAP net income (loss) as net income (loss),
adjusted to exclude: stock-based compensation expense, amortization
of acquired intangible assets, and other one-time, non-recurring
items of a material nature, when applicable, such as
acquisition-related and restructuring expenses.
In the calculation of non-GAAP net income (loss), we exclude
stock-based compensation expense because of varying available
valuation methodologies, subjective assumptions and the variety of
equity instruments that can impact our non-cash expense. We believe
that providing non-GAAP financial measures that exclude stock-based
compensation expense allows for more meaningful comparisons between
our operating results from period to period.
We exclude amortization of acquired intangible assets from the
calculation of non-GAAP net income (loss). We believe that
excluding the impact of amortization of acquired intangible assets
allows for more meaningful comparisons between operating results
from period to period as the underlying intangible assets are
valued at the time of acquisition and are amortized over several
years after the acquisition.
We exclude contingent consideration liability valuation
adjustments associated with the purchase consideration of
transactions accounted for as business combinations. We also
exclude certain other one-time, non-recurring items of a material
nature, when applicable, such as acquisition-related and
restructuring expenses, because we do not consider such amounts to
be part of our ongoing operations nor are they comparable to prior
period nor predictive of future results.
Non-GAAP net income (loss) is presented for supplemental
informational purposes only, has limitations as an analytical tool
and should not be considered in isolation or as a substitute for
financial information presented in accordance with GAAP. Some of
these limitations include that: (1) it does not consider the impact
of stock-based compensation expense; (2) although amortization is a
non-cash charge, the underlying assets may need to be replaced and
non-GAAP net income (loss) does not reflect these capital
expenditures; (3) it does not consider the impact of any contingent
consideration liability valuation adjustments; and (4) it does not
consider the impact of other one-time charges, such as
acquisition-related and restructuring expenses, which could be
material to the results of our operations. In addition, our use of
non-GAAP net income (loss) may not be comparable to similarly
titled measures of other companies because they may not calculate
non-GAAP net income (loss) in the same manner, limiting its
usefulness as a comparative measure.
Information About Operating and Financial
Metrics
We regularly monitor the following operating and financial
metrics in order to measure our current performance and estimate
our future performance. Our key operating and financial metrics may
be calculated in a manner different than similar business metrics
used by other companies.
Operating and Financial Metrics
Marketplace GMV - Marketplace GMV is primarily
driven by the volume and dollar value of Marketplace Units
transacted on our digital marketplace. We believe that Marketplace
GMV acts as an indicator of the success of our marketplace,
signaling satisfaction of dealers and buyers on our marketplace,
and the health, scale, and growth of our business. We define
Marketplace GMV as the total dollar value of vehicles transacted
through our digital marketplace within the applicable period,
excluding any auction and ancillary fees.
Marketplace Units - Marketplace Units is a key
indicator of our potential for growth in Marketplace GMV and
revenue. It demonstrates the overall engagement of our customers on
the ACV platform, the vibrancy of our digital marketplace and our
market share of wholesale transactions in the United States. We
define Marketplace Units as the number of vehicles transacted on
our marketplace within the applicable period. Marketplace Units
transacted includes any vehicle that successfully reaches sold
status, even if the auction is subsequently unwound, meaning the
buyer or seller does not complete the transaction. These instances
have been immaterial to date. Marketplace Units excludes vehicles
that were inspected by ACV, but not sold on our digital
marketplace. Marketplace Units have increased over time as we have
expanded our territory coverage, added new dealer partners and
increased our share of wholesale transactions from existing
customers.
Forward-Looking Statements
This presentation contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements concerning
our financial guidance for the second quarter of 2023 and the full
year of 2023. In some cases, you can identify forward-looking
statements because they contain words such as “anticipate,”
“believe,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “will” or “would” or the negative of
these words or other similar terms or expressions. You should not
rely on forward-looking statements as predictions of future
events.
The forward-looking statements contained in this presentation
are based on ACV’s current assumptions, expectations and beliefs
and are subject to substantial risks, uncertainties and changes in
circumstances that may cause ACV’s actual results, performance or
achievements to differ materially from those expressed or implied
in any forward-looking statement. These risks and uncertainties
include, but are not limited to: (1) our history of operating
losses; (2) our limited operating history; (3) our ability to
effectively manage our growth; (4) our ability to grow the number
of participants on our platform; (5) general market, political,
economic, and business conditions; (6) our ability to acquire new
customers and successfully retain existing customers; (7) our
ability to effectively develop and expand our sales and marketing
capabilities; (8) breaches in our security measures, unauthorized
access to our platform, our data, or our customers’ or other users’
personal data; (9) risk of interruptions or performance problems
associated with our products and platform capabilities; (10) our
ability to adapt and respond to rapidly changing technology or
customer needs; (11) our ability to compete effectively with
existing competitors and new market entrants; (12) our ability to
comply or remain in compliance with laws and regulations that
currently apply or become applicable to our business in the United
States and other jurisdictions where we elect to do business; (13)
the impact that economic conditions could have on our or our
customers’ businesses, financial condition and results of
operations; and (14) the impact of such economic conditions in the
wholesale dealer market included in our guidance for the second
quarter of 2023 and full year 2023, and the related impact on the
performance of our marketplace and our operating expenses,
stock-based compensation expense and intangible amortization. These
and other risks and uncertainties are more fully described in our
filings with the Securities and Exchange Commission (“SEC”),
including in the section entitled “Risk Factors” in our Form 10-K
for the year ended December 31, 2022, filed with the SEC on March
1, 2023. Additional information will be made available in other
filings and reports that we may file from time to time with the
SEC. New risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. In light of these risks, uncertainties and
assumptions, we cannot guarantee future results, levels of
activity, performance, achievements, or events and circumstances
reflected in the forward-looking statements will occur. The
forward-looking statements made in this presentation relate only to
events as of the date on which the statements are made. We
undertake no obligation to update any forward-looking statements
made in this presentation to reflect events or circumstances after
the date of this presentation or to reflect new information or the
occurrence of unanticipated events, except as required by law.
Investor Contact: Tim
Foxtfox@acvauctions.com
Media Contact: Maura
Dugganmduggan@acvauctions.com
|
ACV AUCTIONS INC.CONDENSED CONSOLIDATED
STATEMENTS OF
OPERATIONS(Unaudited)(in
thousands, except per share data) |
|
|
|
|
Three months ended March 31, |
|
|
2023 |
|
|
2022 |
|
Revenue: |
|
|
|
|
|
Marketplace and service revenue |
$ |
104,863 |
|
|
$ |
88,347 |
|
Customer assurance
revenue |
|
14,763 |
|
|
|
14,718 |
|
Total revenue |
|
119,626 |
|
|
|
103,065 |
|
Operating
expenses: |
|
|
|
|
|
Marketplace and service cost of revenue (excluding depreciation
& amortization) |
|
47,575 |
|
|
|
47,252 |
|
Customer assurance cost of revenue (excluding depreciation &
amortization) |
|
12,143 |
|
|
|
13,636 |
|
Operations and technology |
|
35,660 |
|
|
|
32,829 |
|
Selling, general, and administrative |
|
41,797 |
|
|
|
36,052 |
|
Depreciation and amortization |
|
3,285 |
|
|
|
2,385 |
|
Total operating expenses |
|
140,460 |
|
|
|
132,154 |
|
Loss from operations |
|
(20,834 |
) |
|
|
(29,089 |
) |
Other income
(expense): |
|
|
|
|
|
Interest income |
|
3,296 |
|
|
|
44 |
|
Interest expense |
|
(315 |
) |
|
|
(210 |
) |
Total other income (expense) |
|
2,981 |
|
|
|
(166 |
) |
Loss before income taxes |
|
(17,853 |
) |
|
|
(29,255 |
) |
Provision for income
taxes |
|
347 |
|
|
|
240 |
|
Net loss |
$ |
(18,200 |
) |
|
$ |
(29,495 |
) |
Weighted-average shares - basic and diluted |
|
158,694,919 |
|
|
|
156,104,971 |
|
Net loss per share - basic and diluted |
$ |
(0.11 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
|
ACV AUCTIONS INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(Unaudited)(in
thousands, except share data) |
|
|
|
|
|
|
|
|
|
March 31,2023 |
|
|
December 31,2022 |
|
Assets |
|
|
|
|
|
|
Current Assets
: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
317,149 |
|
|
$ |
280,752 |
|
Marketable securities |
|
|
208,708 |
|
|
|
215,926 |
|
Trade receivables (net of
allowance of $4,371 and $4,860) |
|
|
189,167 |
|
|
|
168,732 |
|
Finance receivables (net of
allowance of $2,256 and $2,275) |
|
|
104,305 |
|
|
|
78,047 |
|
Other current assets |
|
|
11,916 |
|
|
|
11,317 |
|
Total current assets |
|
|
831,245 |
|
|
|
754,774 |
|
Property and equipment (net of
accumulated depreciation of $7,635 and $6,986) |
|
|
5,558 |
|
|
|
5,710 |
|
Goodwill |
|
|
91,995 |
|
|
|
91,755 |
|
Acquired intangible assets
(net of amortization of $13,190 and $11,990) |
|
|
18,194 |
|
|
|
19,291 |
|
Internal-use software costs
(net of amortization of $8,368 and $6,930) |
|
|
42,285 |
|
|
|
36,992 |
|
Other assets |
|
|
5,870 |
|
|
|
6,400 |
|
Total assets |
|
|
995,147 |
|
|
|
914,922 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
Current Liabilities
: |
|
|
|
|
|
|
Accounts payable |
|
|
387,745 |
|
|
|
323,661 |
|
Accrued payroll |
|
|
10,215 |
|
|
|
10,052 |
|
Accrued other liabilities |
|
|
15,406 |
|
|
|
14,504 |
|
Total current liabilities |
|
|
413,366 |
|
|
|
348,217 |
|
Long-term debt |
|
|
95,500 |
|
|
|
75,500 |
|
Other long-term
liabilities |
|
|
5,375 |
|
|
|
5,481 |
|
Total liabilities |
|
$ |
514,241 |
|
|
$ |
429,198 |
|
Commitments and
Contingencies |
|
|
|
|
|
|
Stockholders' Equity
: |
|
|
|
|
|
|
Preferred Stock; $0.001 par
value; 20,000,000 shares authorized; 0 and 0 shares issued and
outstanding at March 31, 2023 and December 31, 2022,
respectively |
|
|
- |
|
|
|
- |
|
Common stock - Class A; $0.001
par value; 2,000,000,000 shares authorized; 128,854,443 and
121,214,275 shares issued and outstanding at March 31, 2023 and
December 31, 2022, respectively |
|
|
129 |
|
|
|
121 |
|
Common Stock - Class B; $0.001
par value; 160,000,000 shares authorized; 30,275,430 and 37,241,952
shares issued and outstanding at March 31, 2023 and December 31,
2022, respectively |
|
|
30 |
|
|
|
37 |
|
Additional paid-in
capital |
|
|
848,832 |
|
|
|
836,695 |
|
Accumulated deficit |
|
|
(365,554 |
) |
|
|
(347,354 |
) |
Accumulated other
comprehensive loss |
|
|
(2,531 |
) |
|
|
(3,775 |
) |
Total stockholders' equity |
|
|
480,906 |
|
|
|
485,724 |
|
Total liabilities and stockholders' equity |
|
$ |
995,147 |
|
|
$ |
914,922 |
|
|
|
|
|
|
|
|
|
|
|
ACV AUCTIONS INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH
FLOWS(Unaudited)(in
thousands) |
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash Flows from
Operating Activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(18,200 |
) |
|
$ |
(29,495 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operatingactivities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,392 |
|
|
|
2,515 |
|
Stock-based compensation expense, net of amounts capitalized |
|
|
11,505 |
|
|
|
7,549 |
|
Provision for bad debt |
|
|
2,176 |
|
|
|
1,793 |
|
Other non-cash, net |
|
|
(302 |
) |
|
|
659 |
|
Changes in operating assets and liabilities, net of effects from
purchases of businesses: |
|
|
|
|
|
|
Trade receivables |
|
|
(21,487 |
) |
|
|
(6,603 |
) |
Other operating assets |
|
|
(841 |
) |
|
|
(5,433 |
) |
Accounts payable |
|
|
62,761 |
|
|
|
(7,526 |
) |
Other operating liabilities |
|
|
3,976 |
|
|
|
5,085 |
|
Net cash provided by (used in) operating
activities |
|
|
42,980 |
|
|
|
(31,456 |
) |
Cash Flows from
Investing Activities |
|
|
|
|
|
|
Net increase in finance receivables |
|
|
(27,407 |
) |
|
|
(19,420 |
) |
Purchases of property and equipment |
|
|
(266 |
) |
|
|
(748 |
) |
Capitalization of software costs |
|
|
(4,943 |
) |
|
|
(3,942 |
) |
Purchases of marketable securities |
|
|
(35,602 |
) |
|
|
(7,411 |
) |
Maturities and redemptions of marketable securities |
|
|
41,950 |
|
|
|
- |
|
Sales of marketable securities |
|
|
2,402 |
|
|
|
- |
|
Acquisition of businesses (net of cash acquired) |
|
|
- |
|
|
|
(18,913 |
) |
Net cash provided by (used in) investing
activities |
|
|
(23,866 |
) |
|
|
(50,434 |
) |
Cash Flows from
Financing Activities |
|
|
|
|
|
|
Proceeds from long term debt |
|
|
95,000 |
|
|
|
60,000 |
|
Payments towards long term debt |
|
|
(75,000 |
) |
|
|
- |
|
Proceeds from exercise of stock options |
|
|
899 |
|
|
|
411 |
|
Payment of RSU tax withholdings in exchange for common
sharessurrendered by RSU holders |
|
|
(3,619 |
) |
|
|
(1,274 |
) |
Net cash provided by (used in) financing
activities |
|
|
17,280 |
|
|
|
59,137 |
|
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash |
|
|
3 |
|
|
|
8 |
|
Net increase (decrease) in cash, cash equivalents, and
restricted cash |
|
|
36,397 |
|
|
|
(22,745 |
) |
Cash, cash
equivalents, and restricted cash, beginning of period |
|
|
280,752 |
|
|
|
565,994 |
|
Cash, cash
equivalents, and restricted cash, end of period |
|
$ |
317,149 |
|
|
$ |
543,249 |
|
|
|
|
|
|
|
|
|
|
The following table presents a reconciliation of non-GAAP net
income (loss) to net income (loss), the most directly comparable
financial measure stated in accordance with GAAP, for the periods
presented:
|
Three months ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Net income (loss) |
$ |
(18,200 |
) |
|
$ |
(29,495 |
) |
Stock-based compensation |
|
11,505 |
|
|
|
7,924 |
|
Amortization of acquired
intangible assets |
|
1,173 |
|
|
|
1,228 |
|
Amortization of capitalized
stock-based compensation |
|
277 |
|
|
|
- |
|
Acquisition-related costs |
|
206 |
|
|
|
- |
|
Contingent losses (gains) |
|
- |
|
|
|
200 |
|
Non-GAAP Net income (loss) |
$ |
(5,039 |
) |
|
$ |
(20,143 |
) |
|
|
|
|
|
|
|
|
The following table presents a reconciliation of Adjusted EBITDA
to net income (loss), the most directly comparable financial
measure stated in accordance with GAAP, for the periods
presented:
|
Three months ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Net income (loss) |
$ |
(18,200 |
) |
|
$ |
(29,495 |
) |
Depreciation and
amortization |
|
3,392 |
|
|
|
2,516 |
|
Stock-based compensation |
|
11,505 |
|
|
|
7,924 |
|
Interest (income) expense |
|
(2,981 |
) |
|
|
166 |
|
Provision for income taxes |
|
347 |
|
|
|
240 |
|
Acquisition-related costs |
|
206 |
|
|
|
- |
|
Other (income) expense, net |
|
96 |
|
|
|
691 |
|
Adjusted EBITDA |
$ |
(5,635 |
) |
|
$ |
(17,958 |
) |
|
|
|
|
|
|
|
|
ACV Auctions (NASDAQ:ACVA)
Historical Stock Chart
From Mar 2024 to Apr 2024
ACV Auctions (NASDAQ:ACVA)
Historical Stock Chart
From Apr 2023 to Apr 2024