EX-99.1

EX-99.1 2 acva-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

ACV Announces Second Quarter 2022 Results
Gains Market Share, Delivers Solid Revenue Growth and Margin Improvement
Updates 2022 Guidance

●

Second quarter revenue of $115 million, up 18% YoY

●

Second quarter GAAP net loss of $25 million

●

Second quarter Adjusted EBITDA loss of $14 million; Adjusted EBITDA margin expansion of ~500 basis points from first quarter 2022

●

Expects 2022 revenue of $427 million to $432 million, growth of 19% to 21% YoY; expects 2022 Adjusted EBITDA loss of $57 million to $59 million

BUFFALO, August 10, 2022 — ACV (Nasdaq: ACVA), the leading online automotive marketplace and data services partner for dealers, today reported results for its second quarter ended June 30, 2022.

“We are very pleased with our second quarter results, which once again exceeded revenue expectations, despite continued headwinds impacting the automotive industry, while also delivering strong quarter-over-quarter margin expansion. Our growth is driven by market share gains, continued strong adoption of ACV’s value-added services, and traction in our growing suite of data and SaaS solutions,” said George Chamoun, CEO of ACV.

“While we continue to experience strong adoption across our growing marketplace, we are updating our 2022 guidance to reflect weakening consumer demand and ongoing supply challenges in the automotive industry, with a corresponding reduction in operating expenses,” continued Chamoun.

“These macroeconomic factors are expected to constrain wholesale volumes in the near-term, but we believe ACV is in a strong position to deliver sustainable growth as end-markets recover, while also continuing to scale our asset-light business model,” concluded Chamoun.

Second Quarter 2022 Highlights

●

Revenue of $115 million, an increase of 18% year over year.

●

Marketplace and Service revenue of $98 million, an increase of 16% year over year.

●

Marketplace GMV of $2.7 billion, an increase of approximately 27% year over year.

●

Marketplace Units of 148,047, a decrease of 3% year over a year, a 6% increase compared to first quarter 2022

●

Adjusted EBITDA loss of $14 million, compared to Adjusted EBITDA loss of $4 million in the second quarter 2021. Adjusted EBITDA margin increased approximately 500 basis points compared to first quarter 2022.

Third Quarter and Full-Year 2022 Guidance

Based on information as of today, ACV is providing the following guidance:

●

Third quarter of 2022:

Total revenue of $104 to $107 million, an increase of 13% to 17% year over year

Adjusted EBITDA loss of $13 to $15 million

GAAP net loss of $29 to $31 million

Non-GAAP net loss of $15 to $16 million

●

Full-Year 2022:

Total revenue of $427 to $432 million, an increase of 19% to 21% year over year

Adjusted EBITDA loss of $57 to $59 million; an approximate 14% loss at the midpoint of revenue guidance

GAAP net loss of $113 to $115 million

Non-GAAP net loss of $65 to $67 million

Our financial guidance includes the following assumptions:

●

Wholesale volumes are expected to remain constrained due to the ongoing automotive OEM production challenges and softening retail demand for used vehicles.

●

Marketplace conversion rates are expected to remain at the lower-end of our historical range until seller and buyer price expectations converge to more normalized levels.

●

Total non-GAAP operating expenses, excluding cost of revenue, are expected to grow approximately 23% year over year in 2022, reflecting a reduction in exit run rate by approximately $40 million versus initial 2022 guidance, and exclude approximately $43 million of stock-based compensation and $4 million of intangible amortization.

●

Third quarter non-GAAP net loss excludes approximately $13 million of stock-based compensation and approximately $1 million of intangible amortization.

ACV’s Second Quarter Results Conference Call

ACV will host a conference call and live webcast today, August 10, 2022, 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.

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 expenses, including interest 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 digital 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 ACV’s ability to deliver long-term growth and total addressable market expansion, our financial guidance for the second quarter of 2022 and the full year of 2022. 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; and (13) the impact that the ongoing COVID-19 pandemic and any related economic downturn could have on our or our customers’ businesses, financial condition and results of operations. 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 10, 2022. 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 Fox
tfox@acvauctions.com

Media Contact:
Maura Duggan
mduggan@acvauctions.com

ACV AUCTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Revenue:
Marketplace and service revenue	$	97,752		$	83,934		$	186,099		$	142,326
Customer assurance revenue		17,320			13,440			32,038			24,134
Total revenue		115,072			97,374			218,137			166,460
Operating expenses:
Marketplace and service cost of revenue (excluding depreciation & amortization)		49,893			42,788			97,145			72,297
Customer assurance cost of revenue (excluding depreciation & amortization)		14,575			11,129			28,211			20,515
Operations and technology		36,720			23,513			69,549			45,104
Selling, general, and administrative		36,144			27,513			72,196			51,478
Depreciation and amortization		2,479			1,761			4,864			3,529
Total operating expenses		139,811			106,704			271,965			192,923
Loss from operations		(24,739	)		(9,330	)		(53,828	)		(26,463	)
Other income (expense):
Interest income		638			45			682			71
Interest expense		(238	)		(251	)		(448	)		(461	)
Total other income (expense)		400			(206	)		234			(390	)
Loss before income taxes		(24,339	)		(9,536	)		(53,594	)		(26,853	)
Provision for income taxes		176			156			416			214
Net loss	$	(24,515	)	$	(9,692	)	$	(54,010	)	$	(27,067	)
Weighted-average shares - basic and diluted		156,703,734			154,572,225			156,484,903			94,762,407
Net loss per share - basic and diluted	$	(0.16	)	$	(0.06	)	$	(0.35	)	$	(0.29	)

ACV AUCTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	June 30, 2022			December 31, 2021
Assets
Current Assets :
Cash and cash equivalents	$	303,942		$	565,994
Marketable securities		207,978			13,765
Trade receivables (net of allowance of $4,266 and $3,724)		225,856			222,753
Finance receivables (net of allowance of $971 and $636)		77,289			44,278
Other current assets		11,514			10,623
Total current assets		826,579			857,413
Property and equipment (net of accumulated depreciation of $5,793 and $4,636)		5,620			4,916
Goodwill		90,681			78,839
Acquired intangible assets (net of amortization of $9,593 and $7,070)		21,211			18,130
Capitalized software (net of amortization of $5,006 and $3,837)		25,738			17,844
Operating lease right-of-use assets		5,292			3,264
Other assets		2,332			2,554
Total assets		977,453			982,960
Liabilities and Stockholders' Equity
Current Liabilities :
Accounts payable		356,490			395,972
Accrued payroll		12,002			11,961
Accrued other liabilities		10,786			9,806
Deferred revenue		5,067			4,317
Operating lease liabilities		1,515			1,306
Total current liabilities		385,860			423,362
Long-term operating lease liabilities		3,958			2,049
Long-term debt		70,500			500
Other long-term liabilities		1,470			952
Total liabilities	$	461,788		$	426,863
Commitments and Contingencies (Note 5)
Stockholders' Equity :
Preferred Stock; $0.001 par value; 20,000,000 shares authorized; 0 and 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		-			-
Common Stock - Class A; $0.001 par value; 2,000,000,000 shares authorized; 114,933,675 and 106,420,843 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		115			106
Common Stock - Class B; $0.001 par value; 160,000,000 shares authorized; 42,613,583 and 49,661,126 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		42			50
Additional paid-in capital		817,338			801,142
Accumulated deficit		(299,171	)		(245,161	)
Accumulated other comprehensive loss		(2,659	)		(40	)
Total stockholders' equity		515,665			556,097
Total liabilities and stockholders' equity	$	977,453		$	982,960

ACV AUCTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six months ended June 30,
	2022			2021
Cash Flows from Operating Activities
Net loss	$	(54,010	)	$	(27,067	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		5,101			3,728
Stock-based compensation expense, net of amounts capitalized		16,293			6,630
Provision for bad debt		4,100			1,589
Other non-cash, net		406			469
Changes in operating assets and liabilities, net of effects from purchases of businesses:
Trade receivables		(6,154	)		(131,479	)
Other current assets		(134	)		(4,209	)
Accounts payable		(39,475	)		215,286
Accrued payroll		(317	)		4,208
Accrued other liabilities		895			1,532
Deferred revenue		739			2,182
Other long-term liabilities		213			163
Other assets		(209	)		(218	)
Net cash provided by (used in) operating activities		(72,552	)		72,814
Cash Flows from Investing Activities
Net increase in finance receivables		(33,892	)		(18,153	)
Purchases of property and equipment		(1,809	)		(1,664	)
Capitalization of software costs		(8,689	)		(4,597	)
Purchases of marketable securities		(197,312	)		-
Maturities and redemptions of marketable securities		2,000			-
Acquisition of businesses (net of cash acquired)		(18,913	)		-
Net cash provided by (used in) investing activities		(258,615	)		(24,414	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs		-			385,852
Proceeds from long term debt		130,000			5,250
Payments towards long term debt		(60,000	)		(9,582	)
Proceeds from exercise of stock options		759			679
Payment of RSU tax withholdings in exchange for common shares surrendered by RSU holders		(2,556	)		-
Proceeds from employee stock purchase plan		930			-
Net cash provided by (used in) financing activities		69,133			382,199
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(18	)		-
Net increase (decrease) in cash, cash equivalents, and restricted cash		(262,052	)		430,599
Cash, cash equivalents, and restricted cash, beginning of period		565,994			233,725
Cash, cash equivalents, and restricted cash, end of period	$	303,942		$	664,324
Supplemental disclosure of cash flow information
Cash paid (received) during the period for:
Interest (income) expense	$	(201	)	$	185
Income taxes	$	299		$	112
Cash paid included in the measurement of operating lease liabilities	$	662		$	-
Non-cash investing and financing activities:
Stock issuance costs in accounts payable	$	-		$	140
Stock-based compensation included in capitalized software development costs	$	750		$	-
Purchase of property and equipment and internal use software in accounts payable	$	288		$	858

The following table presents a reconciliation of Non-GAAP Net loss to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented:


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Non-GAAP Net loss Reconciliation
Net loss	$	(24,515	)	$	(9,692	)	$	(54,010	)	$	(27,067	)
Stock-based compensation		8,369			3,763			16,293			6,629
Amortization of acquired intangible assets		1,300			774			2,529			1,592
Amortization of capitalized stock based compensation		164			-			164			-
Contingent losses (gains)		-			-			200			-
Non-GAAP Net loss	$	(14,682	)	$	(5,155	)	$	(34,824	)	$	(18,846	)

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented.


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Adjusted EBITDA Reconciliation
Net loss	$	(24,515	)	$	(9,692	)	$	(54,010	)	$	(27,067	)
Depreciation and amortization		2,585			1,837			5,101			3,728
Stock-based compensation		8,369			3,763			16,293			6,630
Interest (income) expense		(400	)		206			(234	)		390
Provision for income taxes		176			156			416			214
Other (income) expense, net		(292	)		43			399			58
Adjusted EBITDA	$	(14,077	)	$	(3,687	)	$	(32,035	)	$	(16,047	)