Slide 1: Q4-22 Earnings Presentation
Q4-22 EARNINGS PRESENTATION F E B _ 2 2 _ 2 0 2 3
Slide 2: Forward Looking Statements
FORWARD LOOKING Statements in this presentation regarding future performance and future expectations, beliefs, goals, plans or prospects include forward looking statements for purposes of federal and state securities laws, including statements regarding ACV’s avenues for STATEMENTS long term growth
Slide 3: Highlights
01 HIGHLIGHTS George Chamoun CHIEF EXECUTIVE OFFICER Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 4: Highlights
HIGHLIGHTS Q4-21 Q4-22 2021 2022 $100M Revenue $98M $358M Revenue $422M YoY Revenue YoY Revenue 86% Growth (2%) 72% Growth 18% $2.5B GMV $1.8B $7.9B GMV $9.0B Marketplace Marketplace 139K Units 125K 561K Units 546K 4
Slide 5: Maximizing Long-Term Shareholder Value
MAXIMIZING LONG-TERM SHAREHOLDER VALUE GROWTH INNOVATION SCALE Transforming the automotive market with Leveraging technology to extend ACV’s Proven business model delivering the leading digitally native, data-driven competitive moat and to create additional growth at scale, with attractive platform,
Slide 6: Growth
02 GROWTH Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 7: New Light-Vehicle Volumes Ticked Up in Q4-22
GROWTH New Light-Vehicle Volumes Ticked Up in Q4-22 Units Declined 8% in 2022; 20% Below Pre-Pandemic Volumes Quarterly SAAR Annual SAAR 18.0 18.0 (20%) 16.0 16.0 (8%) 14.0 14.0 Units (M) Units (M) 12.0 12.0 10.0 10.0 8.0 8.0 6.0 6.0 19 20 20 20 20 21 21 21 21 22 22 22 22 2018 2019 2020 2021 2022 4-
Slide 8: Used Retail Impacted by Affordability Headwinds
GROWTH Used Retail Impacted by Affordability Headwinds Units Declined 11% in 2022 Quarterly Sales Volume Annual Sales Volume 8.0 30.0 7.5 (11%) 28.0 7.0 26.0 6.5 24.0 Units (M) 6.0 Units (M) 5.5 22.0 5.0 20.0 4.5 18.0 4.0 16.0 3.5 14.0 3.0 12.0 19 20 20 20 20 21 21 21 21 22 22 22 22 2018 2019 2020 2
Slide 9: Vehicle Inventories Rebounding
GROWTH Vehicle Inventories Rebounding Wholesale Market Benefits From Sales of “Aged” Inventory and Trades on New Vehicles Sales Used Light-Vehicle Days Supply New Light-Vehicle Days Supply Source: Black Book Source: JP Morgan 9
Slide 10: Solid Listings Growth Despite Market Backdrop
GROWTH Solid Listings Growth Despite Market Backdrop Listings grew 20% YoY in a market where retail sales and The 1,200 bps YoY conversion rate decline created a trades declined ~10% YoY ~125K unit headwind in 2022 Listings +20% YoY Conversion Rate Variance 9% 7% (0.2%) (3%) Pre-pandemic average con
Slide 11: Continued Market Share Gains
GROWTH Continued Market Share Gains 2022 vs. 2021 RETAIL DEALER WHOLESALE ACV MARKET SHARE Dealer 12M 7% (20%) Wholesale Units Share Market YoY ACV Unit (3%) Growth YoY ACV Market Share 17% Expansion YoY 2018 2019 2020 2021 2022 Source: Company data, NADA 11
Slide 12: Transportation
GROWTH 80%+ Transportation AUTO / SELF DISPATCHED 50%+ attach rate Record cycle-time achieved in Q4 80%+ Auto / self dispatch Low double-digit revenue margin 12 12
Slide 13: ACV Capital
GROWTH ACV Capital Strong attach rates in Q4 drove loan volume growth, coupled with increased average loan value Investing to drive dealer engagement and scale 13 13
Slide 14: Innovation
03 INNOVATION Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 15: Innovation for Growth
INNOVATION Innovation for Growth • Marketplace 2.0 • S.A.M. • New auction formats • Enhanced pricing engine • Private Marketplaces • Mobile Carrier App • Transport lane pricing • ACV Capital Portal • Drivably and Monk 15
Slide 16: Innovation for Scale
INNOVATION Innovation for Scale “Copilot” • Apex • AI-powered Virtual Lift apps • Copilot CATALYTIC OIL LEAK RUST DETECTION CONVERTERS • ArbGuard • Advanced title processing
Slide 17: What's Next?
INNOVATION What’s Next? • Leverage AI across ACV – inspections, marketplace, pricing, and operations • Conversion enhancement and dealer experience • Improved condition reports and lower arbitration exposure • Expanded Transportation and Capital solutions • Next-gen SaaS and Data Services offerings
Slide 18: Scale
04 SCALE Bill Zerella CHIEF FINANCIAL OFFICER Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 19: Solid Q4-22 Performance
SCALE Solid Q4-22 Performance REVENUE ($M) % YOY GROWTH ADJ. EBITDA MARGIN ADJ. EBITDA ($M) ($16) ($13) ($17) – ($15) 86% (2%) $97 - $100 $100 $98 (13%) (16%) (18%) – (15%) Q4-21 Q4-22 Q4-22 Q4-21 Q4-22 Q4-22 Guidance Guidance Note: Refer to the adjusted EBITDA reconciliation in the appendix 19
Slide 20: Diversified Revenue Streams
SCALE Diversified Revenue Streams Revenue Breakdown ($M) $100M $98M SAAS & DATA SERVICES 8% 8% 5% YOY SAAS PRODUCTS DATA-ENABLED SOLUTIONS 36% 35% (3%) $54M YOY MARKETPLACE SERVICES TRANSPORTATION 8% CAPITAL 27% 57% 56% (3%) AUCTION & ASSURANCE YOY AUCTION FEES 65% GO GREEN ASSURANCE Q4-20 Q4-21 Q4-
Slide 21: Delivering Margin Improvement and Managing OpEx
SCALE Delivering Margin Improvement and Managing OpEx COST OF REVENUE % OF REVENUE OPERATING COST (EX. COR) % YOY GROWTH 81% 58% 54% 0.2% Q4-21 Q4-22 Q4-21 2% Q4-22 Note: Refer to the GAAP to non-GAAP operating cost reconciliation in the appendix 21
Slide 22: Balancing Growth and Investments
SCALE Balancing Growth and Investments ADJ. EBITDA MARGIN ADJ. EBITDA ($M) OPERATING EXPENSE (EX. COR) ($M) % YOY GROWTH ($76) ($31) ($44) ($56) 56% 22% (12%) (13%) (15%) $249 $203 $130 (72%) 2019 2020 2021 2022 2020 2021 2022 Note: Refer to the adjusted EBITDA and operating costs reconciliations in
Slide 23: Strong Capital Position and Cash Flow in 2H-22
SCALE Strong Capital Position and Cash Flow in 2H-22 OPERATING CASH FLOW ($M) ($M) As of Dec 31, 2022 Cash, Cash Equivalents and $497 ($2) Marketable Securities (Includes ~$145M of auction float) ACV Capital Receivables $78 Long Term Debt (ACV Capital related) $76 Total Assets $915 ($73) Total Liabi
Slide 24: Guidance
SCALE Guidance New-vehicle supply remains constrained near-term, then improves as production Q1-23 2023 and inventory continue to recover (dollars in millions) Revenue $107 to $110 $460 to $470 YoY Growth 4% to 7% 9% to 11% Conversion rates increase from Adjusted EBITDA Loss ($14) to ($12) ($35) to
Slide 25: 2026 Financial Targets
SCALE 2026 Financial Targets $1.3B REVENUE $325M ADJ. EBITDA ADJ. EBITDA 25% MARGIN 25
Slide 26: Wrap Up
01 Executing on Growth Strategy Despite Challenging Markets 02 Expanding Footprint and Gaining Share with Proven Playbook Wrap Up 03 Delivering on Product Roadmap and Expanding Addressable Market 04 Driving Profitable Growth Through Scalable Business Model 05 Building World Class Team with People-Fi
Slide 27: Q&A
05 Q&A Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 28: Appendix
06 APPENDIX Q 4 - 2 2 _ E A R N I N G S F E B _ 2 2 _ 2 0 2 3
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Reconciliation GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) 2019 2020 2021 Q1-22 Q2-22 Q3-22 Q4-22 2022 GAAP Net Income (Loss) ($77.2) ($41.0) ($78.2) ($29.5) ($24.5) ($23.7) ($24.5) ($102.2) Non-GAAP Adjustments: Contingent Gain (Loss) 0.0 3.1 0.0 0.2 0.0 0.0
Slide 30: Operating Cost Reconciliation
Operating Cost Reconciliation ACV Auctions Inc. Quarter Ending Quarter Ending Operating Cost Reconciliation - Detailed Dec - 21 Dec - 22 GAAP Marketplace & Service Cost of Revenue $45.6 $40.6 Marketplace & Service Cost of Revenue SBC $0.1 $0.2 Non-GAAP Marketplace COR $45.5 $40.4 GAAP Customer Assur
Slide 31: Information About Non-GAAP Financial Measures
INFORMATION ABOUT 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 NON
Slide 32: Information About Non-GAAP Financial Measures (Con't)
INFORMATION ABOUT 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 NON-GAA
Slide 33: Key Operating and Financial Metrics
KEY OPERATING AND We regularly monitor the following operating and financial metrics in order to measure our current performance and estimate our FINANCIAL METRICS future. Our key operating and financial metrics may be calculated in a manner different than similar business metrics used by other comp
Slide 34: Forward Looking Statements
FORWARD LOOKING 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 lon