Acv Auctions Inc. · NYSE:ACVA
Acv Auctions — Q3 2021 Earnings Presentation
29 slides from Acv Auctions's earnings presentation, Nov 10, 2021
Slide 1: Q3'21 Earnings Presentation
Q3’21 Earnings Presentation Investor Relations November 10, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes forward looking statements, including statements regarding ACV’s avenues for long-term growth and total addressable market expansion, our financial guidance for the fourth quarter of 2021 and the full year of 2021, and operational and product str
Slide 3: Trusted Digital Marketplace for Wholesale Vehicles & Data Services
Trusted Digital Marketplace for Wholesale Vehicles & Data Services Q3’20 Q3’21 Long-Term Strategy $1.1B $2.0B Marketplace Growth GMV GMV 118K 141K Marketplace Units Marketplace Units TAM and Product Expansion $67M $92M Revenue Revenue Operating Scale 112% 36% YoY Revenue Growth YoY Revenue Growth 3
Slide 4: Trusted Digital Marketplace for Wholesale Vehicles & Data Services
Trusted Digital Marketplace for Wholesale Vehicles & Data Services Marketplace Growth TAM and Product Expansion Operating Scale 4
Slide 5: Marketplace Adoption with Strong Vehicle Mix
Marketplace Adoption with Strong Vehicle Mix Marketplace Units (000s) Marketplace GMV ($B) 19% YoY 79% YoY 153 101% 2-Yr.1 $2.1 141 $2.0 128 118 103 $1.3 88 83 $1.1 $0.9 $0.6 $0.6 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 1Q3’21 units sold vs. Q3’19 units so
Slide 6: Strong Demand…Weak Supply
Millions of Units Millions of Dollars 9.5 11.5 13.5 15.5 19.5 7.5 17.5 7,000 9,000 11,000 13,000 15,000 17,000 19,000 5,000 Sep 2019 Oct 2019 Sep 2019 Nov 2019 Oct 2019 Dec 2019 Nov 2019 Jan 2020 Dec 2019 Feb 2020 Jan 2020 Source: Bureau of Economic Analysis Source: Bureau of Economic Analysis Mar 2
Slide 7: Temporary Softening In Wholesale Market
Temporary Softening In Wholesale Market U.S. Franchise Dealer Wholesale Units • Sample of ~1,000 franchise dealers ~(10)% QoQ • Franchise wholesale market estimated to have contracted ~10% QoQ in Q3’21 and ~15% vs. Q3’19 • Listings/Dealer decreased 10% QoQ in Q3’21 • Assuming Listings/Dealer in Q3’2
Slide 8: Nationwide Coverage by Year-End
Nationwide Coverage by Year-End Tracking to 2021 target of 160 TERRITORIES 8
Slide 9: Solid Auction Marketplace Revenue Growth
Solid Auction Marketplace Revenue Growth Auction Marketplace Revenue ($M) 22% YoY $47 213% 2-Yr.1 $40 $34 $33 $25 $24 $18 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 1Q3’21 Auction Marketplace Revenue vs. Q3’19 Auction Marketplace Revenue 9
Slide 10: Consumer Sourcing Going Mainstream
Consumer Sourcing Going Mainstream • Real-time competitive offers for consumers - powered by the ACV Marketplace • >110% unit growth YTD vs. 2020 • High single-digit % of Q3’21 units sold • Live Appraisal sales in 48 states in 2021 Live Appraisal 10
Slide 11: Trusted Digital Marketplace for Wholesale Vehicles & Data Services
Trusted Digital Marketplace for Wholesale Vehicles & Data Services Marketplace Growth TAM and Product Expansion Operating Scale
Slide 12: ACV Private Marketplaces
ACV Private Marketplaces • Launched June 2021 • Private auction platform leveraging ACV’s leading marketplace technology • Enables dealers to optimize trades and aged inventory for both profit and speed • Creates downstream supply for ACV’s open marketplace • Live with >20 dealer groups 12
Slide 13: Programmatic Buying In Flight
Programmatic Buying In Flight • Automated bidding and buying • Driven by data from ACV’s industry- leading conditions reports • “Buying API” live today • ACV programmatic user experience in beta and launching in Q4 • Low single-digit % of Q3’21 units 13
Slide 14: Expanding Our Digital Capabilities
Expanding Our Digital Capabilities • Leading provider of SaaS-based automotive data and merchandising solutions • Provide dealers with unparalleled data and capabilities to source and sell wholesale or retail vehicles • Tools include pricing guidance, merchandising, and inventory management 14
Slide 15: Value-Added Services Gaining Traction
Value-Added Services Gaining Traction • ~3,000 carrier partners • Attach rate in the mid-single digits; wallet share growth • Q3’21 attach rate ~50% • ~30% QoQ loan volume growth • Transports increased >70% YoY • Revenue per loan up >15% YTD • Winning in the market with fast cycle times benefitting
Slide 16: Trusted Digital Marketplace for Wholesale Vehicles & Data Services
Trusted Digital Marketplace for Wholesale Vehicles & Data Services Marketplace Growth TAM and Product Expansion Operating Scale
Slide 17: Strong Q3'21 Performance
Strong Q3’21 Performance Revenue ($M) Adjusted EBITDA1 36% YoY $3 $(12) $(20) – $(22) $92 5% $82 - $85 $67 (13)% (25)% Q3'20 Q3'21 Q3'21 Q3'20 Q3'21 Q3'21 Guidance Guidance Cost of Revenue2 Total Operating Cost (ex. COR)3 56% 59% 47% 50% Q3'20 Q3'21 Q3'20 Q3'21 1Adjusted EBITDA as % of Revenue; See
Slide 18: Diversified Revenue Streams
Diversified Revenue Streams Revenue Breakdown ($M) $97 $92 14% 14% 13% YoY Customer Assurance Go Green Assurance $67 $69 Other Price Guarantee Products 38% 16% 15% $54 43% 67% YoY Service $45 $42 18% 35% Transportation 35% 15% Capital 18% 35% Data Services 33% 40% 48% 44% 49% 50% 22% YoY Auction Mar
Slide 19: Demonstrated Operating Leverage
Demonstrated Operating Leverage Adj. EBITDA Margin Total Operating Expense (Ex. COR) $ (29) $ (76) $ (31) $ (52) 57% YoY $205 (15)% (15)% $130 (72)% (81)% 2018 2019 2020 2021 2020 2021 Note: Refer to the adjusted EBITDA and adjusted EBITDA margin reconciliation in the appendix 2021 values represent
Slide 20: Guidance
Guidance Revised Previous ($M) Q4’21 2021 2021 $83 to 86 $341 to $344 $332 to $338 Total Revenue 54% to 60% YoY 64% to 65% YoY 59% to 62% 135% to 144% 2-Yr. 219% to 222% 2-Yr. 211% to 216% Adjusted EBITDA Loss $22 to $26 $51 to $54 $62 to $65 • Strong used-vehicle demand expected to continue through
Slide 21: Strong Balance Sheet
Strong Balance Sheet ($M) As of September 30, 2021 $602M Cash and Cash Equivalents (Includes ~$153M of auction float) ACV Capital Revolving Credit Facility $0.5M Other Debt $0 Total Assets $980M Total Liabilities $404M 21
Slide 22: Summary
Summary Strong Execution Despite Challenging Market Factors Gaining Share, Attracting New Dealers and Growing Wallet Share Executing on Market Expansion and Product Road Map Proven Business Model with Scalable Growth and Operating Leverage 22
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix 24
Slide 25: Information About Non-GAAP Financial Measure and Key Operating and Financial Metrics
Information About Non-GAAP Financial Measure and Key Operating and Financial Metrics We supplement our financial results with non-GAAP financial measures: Adjusted EBITDA, non-GAAP cost of revenue and non-GAAP total operating cost (excluding cost of revenue); and key operating and financial metrics:
Slide 26: Key Operating and Financial Metrics
Key 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 b
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Year Ended December 31, September 30, September 30, (in thousands) 2018 2019 2020 2020 2021 Net Income (Loss) $3,159 ($24,803) ($35,774) ($77,216) ($41,021) Depreciation and Amortization 2,025 2,493 271 1,839 7,244 Stock-based Compensation 343 9,787 7,219 998 5,705 Int
Slide 28: Operating Cost Reconciliation
Operating Cost Reconciliation September 30, September 30, (in thousands) 2020 2021 Cost of Revenue $33,829 $53,918 Stock-based compensation $3 $107 Non-GAAP Cost of Revenue $33,826 $53,811 Total Operating Cost (Excluding Cost of Revenue) $30,096 $62,530 Stock-based Compensation $340 $9,681 Intangibl
Slide 29: Forward-Looking Statements
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 avenues for long-