Slide 1: Q3-23 Earnings Presentation
Q3-23 EARNINGS PRESENTATION N O V _ 6 _ 2 0 2 3
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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 long term growth
Slide 3: Highlights
01 HIGHLIGHTS George Chamoun CHIEF EXECUTIVE OFFICER Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 4: Highlights
HIGHLIGHTS Q3-22 Q3-23 $105M Revenue $119M YoY Revenue 15% Growth 13% Marketplace 133K Units 150K $2.1B GMV $2.1B 4
Slide 5: Maximizing Long-Term Shareholder Value
MAXIMIZING LONG-TERM SHAREHOLDER VALUE GROWTH INNOVATION SCALE Transforming the automotive market Leveraging technology to extend Proven business model delivering with the leading digitally native, data- ACV’s competitive moat and to create growth at scale with attractive unit driven platform, creat
Slide 6: Growth
02 GROWTH Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 7: Market Backdrop
GROWTH Market Backdrop New-vehicle production, inventory, and retail sales recovering from historical lows Used-vehicle retail sales increased modestly YoY, though volumes continue to be pressured from a lack of late-model inventory, and elevated prices and borrowing costs Dealers continue to retain
Slide 8: Continued Market Share Gains
GROWTH Continued Market Share Gains Q3-23 vs. Q3-22 13% RETAIL DEALER WHOLESALE (M Units) ACV MARKET SHARE ACV Unit Growth YoY Dealer (2%) Wholesale Market YoY ACV Market 15% Share Expansion YoY Source: Company data, NADA 8
Slide 9: ACV Transportation
GROWTH 80%+ ACV Transportation AUTO DISPATCHED Mid-50% attach rate with >80K transports - ~20% increase YoY Cycle time improved ~20% vs. 2022 Expanded carrier coverage of AI- optimized pricing High-teens revenue margin 9 9
Slide 10: ACV Capital
GROWTH ACV Capital Strong attach rate in the low double- digits ~80% YOY REVENUE GROWTH ~40% YOY LOAN Continued rapid revenue growth VOLUME GROWTH ~30% YOY RPU GROWTH Expanded RPU and strong loan volume growth 10 10
Slide 11: Innovation
03 INNOVATION Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 12: Innovation for Growth
INNOVATION Innovation for Growth • Empowering dealer sourcing • Transparency and accuracy • Seamless deployment • AI imaging and self-inspection • TAM expansion 12
Slide 13: Innovation for Scale
INNOVATION Innovation for Scale Enhanced Inspection Platform Delivering Quality and Efficiency • CoPilot • ArbGuard • Apex • AI-powered imaging apps
Slide 14: Scale
04 SCALE Bill Zerella CHIEF FINANCIAL OFFICER Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 15: Strong Q3-23 Performance
SCALE Strong Q3-23 Performance REVENUE ($M) % YOY GROWTH ADJ. EBITDA ($M) ADJ. EBITDA MARGIN ($12) ($4) ($10) – ($8) 15% 13% $115 - $119 $119 (3%) $105 (9%) – (7%) (11%) Q3-22 Q3-23 Q3-23 Guidance Q3-22 Q3-23 Q3-23 Guidance Note: Refer to the Appendix for information on the GAAP to non-GAAP reconcil
Slide 16: Diversified Revenue Streams
SCALE Diversified Revenue Streams Revenue Breakdown ($M) $119M $105M 7% SAAS & DATA SERVICES (6%) YOY SAAS PRODUCTS $92M 8% DATA-ENABLED SOLUTIONS 8% 38% 38% 11% YOY MARKETPLACE SERVICES 35% TRANSPORTATION CAPITAL AUCTION & ASSURANCE 53% 55% 17% 57% YOY AUCTION FEES GO GREEN ASSURANCE Q3-21 Q3-22 Q3
Slide 17: Delivering Margin Improvement and Managing OpEx
SCALE Delivering Margin Improvement and Managing OpEx NON-GAAP COST OF REVENUE NON-GAAP OPERATING EXPENSE (EX. COR) % OF REVENUE YOY GROWTH 55% 50% 18% 9% Q3-22 Q3-23 Q3-22 Q3-23 Note: Refer to the Appendix for information on the GAAP to non-GAAP reconciliations 17
Slide 18: Balancing Growth and Investments
SCALE Balancing Growth and Investments ADJ. EBITDA MARGIN ADJ. EBITDA ($M) NON-GAAP OPERATING EXPENSE (EX. COR) ($M) % YOY GROWTH ($31) ($44) ($56) ($21) 56% 22% ~9% (4%) $271 $248 $203 (12%) (13%) $130 (15%) 2020 2021 2022 2023G 2020 2021 2022 2023G Note: 2023 refers to the midpoint of guidance Ref
Slide 19: Strong Capital Position and Cash Flow
SCALE Strong Capital Position and Cash Flow OPERATING CASH FLOW ($M) ($M) As of September 30, 2023 $9 Cash, Cash Equivalents and $450 Marketable Securities (Includes ~$162M of auction float) ACV Capital Receivables $106 Long Term Debt $105 Total Assets $959 ($75) Total Liabilities $492 YTD - 22 YTD
Slide 20: Guidance
SCALE Guidance Assumptions Q4-23 2023 (dollars in millions) Revenue $116 to $120 $479 to $483 Vehicle supply remains lower than historical levels near-term, then YoY Growth 18% to 23% 14% to 15% improves as production and inventory continue to recover GAAP Net Income (Loss) ($24) to ($26) ($75) to (
Slide 21: 2026 Financial Targets
SCALE 2026 Financial Targets $1.3B REVENUE $325M ADJ. EBITDA ADJ. EBITDA 25% MARGIN 21
Slide 22: 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 23: Q&A
05 Q&A Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 24: Appendix
06 APPENDIX Q 3 - 2 3 _ E A R N I N G S N O V _ 6 _ 2 0 2 3
Slide 25: GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) to Adjusted EBITDA Reconciliations
GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) to Adjusted EBITDA Reconciliations Reconciliation GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) 2019 2020 2021 Q1-22 Q2-22 Q3-22 Q4-22 2022 Q1-23 Q2-23 Q3-23 GAAP Net Income (Loss) ($77.2) ($41.0) ($78.2) ($29.5) ($24.5) ($23.7) ($24.5) ($1
Slide 26: GAAP to Non-GAAP Operating Cost Reconciliation
GAAP to Non-GAAP Operating Cost Reconciliation Reconciliation GAAP Operating Expense to Actual Actual Non-GAAP Operating Expense Q3-22 Q3-23 GAAP Cost of Revenue $58.5 $60.4 Non-GAAP Adjustments: Marketplace & Service Cost of Revenue SBC ($0.2) ($0.3) Non-GAAP Cost of Revenue $58.3 $60.1 GAAP Total
Slide 27: 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 NON-GAAP FINANCIAL they assist our investors to make period-to-period comparisons of our operating performance because they provide a view o
Slide 28: 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 29: 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 future FINANCIAL METRICS performance. Our key operating and financial metrics may be calculated in a manner different than similar business metrics used b
Slide 30: 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 STATEMENTS Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial gui