Slide 1: Q2-22 Earnings Presentation
Q2-22 EARNINGS PRESENTATION A U G _ 1 0 _ 2 0 2 2
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 STATEMENTS regarding ACV’s avenues for long term growth
Slide 3: Highlights
01 HIGHLIGHTS George Chamoun CHIEF EXECUTIVE OFFICER Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 4: Highlights
HIGHLIGHTS Q2-21 Q2-22 $97M Revenue $115M YoY Revenue 117% Growth 18% $2.1B GMV $2.7B Marketplace 153K Units 148K 4
Slide 5: Maximizing Long-Term Shareholder Value
MAXIMIZING LONG-TERM SHAREHOLDER VALUE GROWTH INNOVATION SCALE Transforming the automotive market with Leveraging technology to extend ACV’s Proven business model delivering the leading digitally native, data-driven competitive moat and to create additional growth at scale, with attractive platform,
Slide 6: Growth
02 GROWTH Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 7: Softening Consumer Demand Impacting Price & Supply
GROWTH Softening Consumer Demand Impacting Price & Supply Retail Used Vehicle Sales Wholesale Prices 9.0 (15%) YoY 8.0 7.0 6.0 Units (M) 5.0 4.0 3.0 2.0 1.0 - 19 19 19 19 20 20 20 20 21 21 21 21 22 22 1- 2- 3- 4- 1- 2- 3- 4- 1- 2- 3- 4- 1- 2- Q Q Q Q Q Q Q Q Q Q Q Q Q Q Source: NADA Source: BlackBoo
Slide 8: New Vehicle Supply Remains a Headwind
Millions of Units GROWTH 7.50 9.50 11.50 13.50 15.50 17.50 19.50 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Source: Bureau of Economic Analysis Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 New Light-Vehicle Sales (S.A.) Nov-21 Dec-21
Slide 9: Strong Listings Growth vs. Tough Compare
GROWTH Strong Listings Growth vs. Tough Compare The YoY change in conversion rate in Q2-22 was a 30K+ unit headwind Listings 75% YoY 18% YoY Conversion Rate Variance 14% 12% 11% 11% 6% 6% 2% 2% 2% 1% 0% 0% (1%) (3%) Pre-COVID average conversion rate Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3
Slide 10: Solid QoQ Unit Growth with Strong Vehicle Mix
GROWTH Solid QoQ Unit Growth with Strong Vehicle Mix Marketplace Units (000s) Marketplace GMV ($B) (3%) YoY 74% YoY 27% YoY 68% 2-Yr.1 153 148 2.7 141 139 140 2.5 128 2.4 118 2.1 2.0 103 88 83 1.3 1.1 0.9 0.6 0.6 Q 1 - 2 0 Q 2 - 2 0 Q 3 - 2 0 Q 4 - 2 0 Q 1 - 2 1 Q 2 - 2 1 Q 3 - 2 1 Q 4 - 2 1 Q 1 - 2
Slide 11: Continued Market Share Gains
GROWTH Continued Market Share Gains Q2-22 vs. Q2-21 RETAIL DEALER WHOLESALE ACV MARKET SHARE (3%) ACV Unit Growth YoY 3M 7% Units Share Dealer (20%) Wholesale Market YoY ACV Market Share 17% Expansion YoY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 2022 Source: Company data, NADA 11
Slide 12: Transportation
GROWTH 70%+ AUTO / SELF Transportation DISPATCHED >50% Attach Rate 20% Transport revenue growth 70% Auto / self dispatch Mid-single digit revenue margin 12 12
Slide 13: ACV Capital
GROWTH ACV Capital >2x YoY increased attach rate > 100% YoY loan volume growth Strong adoption of ACV Capital Portal Ramped up go-to-market 13 13
Slide 14: Innovation
03 INNOVATION Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 15: Consumer Sourcing
INNOVATION Consumer Your Car Sourcing Live Appraisal Next 15 15
Slide 16: Smart Acquisition Manager
INNOVATION 15%+ Smart OF UNITS SOLD Q2 2022 Acquisition Manager S.A.M. formally launched in July Relevant & engaging notifications Intelligent auto-bidding option for buyers with customized business rules 800 new dealers adopted S.A.M. in Q2 16 16
Slide 17: The Rollout: Inspection Hardware Upgrades
THE ROLLOUT MICROPHONE IOT INTEGRATION ARRAY AMP, OBDII, Virtual Lift Microphone Array for noise cancelation, superior audio quality WIRELESS VIBRATION Wireless pairing and capabilities Sensor upgrade –Frequency putting the iPhone back in our Envelope 0Hz – 350Hz allowing for inspectors hands predic
Slide 18: Scale
04 SCALE Bill Zerella CHIEF FINANCIAL OFFICER Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 19: Strong Q2-22 Performance
SCALE Strong Q2-22 Performance REVENUE ($M) % YOY GROWTH ADJ. EBITDA MARGIN ADJ. EBITDA ($M) ($4) ($14) ($17) – ($16) 117% 18% $115 (4%) $109 - $112 $97 (12%) (15%) – (14%) Q2-21 Q2-22 Q2-22 Q2-21 Q2-22 Q2-22 Guidance Guidance Note: Refer to the adjusted EBITDA and adjusted EBITDA margin reconciliat
Slide 20: Diversified Revenue Streams
SCALE Diversified Revenue Streams Revenue Breakdown ($M) $115M ‘20-’22 CAGR $97M 7% 127% SAAS & DATA SERVICES SAAS PRODUCTS 60% 4% YOY DATA-ENABLED SOLUTIONS 36% 35% 23% YOY MARKETPLACE SERVICES TRANSPORTATION CAPITAL $45M 9% 24% 62% 57% AUCTION & ASSURANCE AUCTION FEES 9% YOY GO GREEN ASSURANCE 67%
Slide 21: Delivering Margin Improvement
SCALE Delivering Margin Improvement COST OF REVENUE % OF REVENUE TOTAL OPERATING COST (EX. COR) % OF REVENUE 59% 60% 56% 57% Q1-22 Q2-22 Q1-22 Q2-22 Note: Refer to the GAAP to non-GAAP operating cost reconciliation in the appendix 21
Slide 22: Balancing Growth and Investments
SCALE Balancing Growth and Investments ADJ. EBITDA MARGIN ADJ. EBITDA ($M) TOTAL OPERATING EXPENSE (EX. COR) ($M) % YOY GROWTH $(76) $(31) $(44) $(57) 56% 23% (12%) (13%) (15%) $251 $203 $130 (72%) 2019 2020 2021 2022 2020 2021 2022 Note: Refer to the adjusted EBITDA and adjusted EBITDA margin recon
Slide 23: Strong Capital Position
SCALE ($M) As of June 30, 2022 Cash, Cash Equivalents and Marketable Securities $512 (Includes ~$124M of auction float) Strong Capital ACV Capital Receivables $77 Position Long Term Debt (ACV Capital related) $71 Total Assets $977 Total Liabilities $462 23
Slide 24: Guidance
SCALE Guidance Q3’22 2022 Wholesale volumes remain constrained due to ongoing OEM production Revenue ($M) $104 to $107 $427 to $432 challenges and softening retail demand for used vehicles. YoY Growth 13% to 17% 19% to 21% 2-Year Growth 54% to 59% 105% to 107% Conversion rates remain at or below the
Slide 25: 2026 Financial Targets
SCALE 2026 Financial Targets $1.3B REVENUE $325M ADJ. EBITDA ADJ. EBITDA 25% MARGIN 25
Slide 26: Wrap Up
01 Executing on Growth Strategy Despite Challenging Markets 02 Expanding Footprint and Gaining Share with Proven Playbook Wrap Up 03 Delivering on Product Roadmap and Expanded our Addressable Market 04 Driving Profitable Growth Through Scalable Business Model 05 Building World Class Team with People
Slide 27: Q&A
05 Q&A Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 28: Appendix
06 APPENDIX Q 2 - 2 2 _ E A R N I N G S A U G _ 1 0 _ 2 0 2 2
Slide 29: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation Quarter Ended Quarter Ended ($M) June 30, 2021 June 30, 2022 Net Loss ($9.7) ($24.5) Depreciation and Amortization 1.8 2.6 Stock-based Compensation 3.8 8.4 Interest (Income) Expense, Net 0.2 (0.4) Provision for Income Taxes 0.2 0.2 Other (Inc
Slide 30: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation Year Ended Year Ended Year Ended ($M) December 31, 2019 December 31, 2020 December 31, 2021 Net Loss ($77.2) ($41.0) ($78.2) Depreciation and Amortization 1.8 7.2 8.8 Stock-based Compensation 1.0 5.7 23.7 Interest (Income) Expense, Net (2.1)
Slide 31: Operating Cost Reconciliation
Operating Cost Reconciliation Quarter Ended Quarter Ended ($M) June 30, 2021 June 30, 2022 GAAP Marketplace & Service Cost of Revenue $42.8 $49.9 Marketplace & Service Stock Based Compensation $0.0 $0.1 Non-GAAP Marketplace Cost of Revenue $42.7 $49.7 GAAP Customer Assurance Cost of Revenue $11.1 $1
Slide 32: 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 33: 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 34: 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 35: 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