Acv Auctions Inc. · NYSE:ACVA
Acv Auctions — Q4 2023 Earnings Presentation
34 slides from Acv Auctions's earnings presentation, Feb 21, 2024
Slide 1: Q4-23 Earnings Presentation
Q4-23 EARNINGS PRESENTATION F E B _ 2 1 _ 2 0 2 4
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 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 4: Highlights
HIGHLIGHTS Q4-22 Q4-23 2022 2023 $98M Revenue $118M $422M Revenue $481M YoY Revenue YoY Revenue (2%) Growth 21% 18% Growth 14% $1.75B GMV $1.85B $9.0B GMV $8.8B Marketplace Marketplace 125K Units 144K 546K Units 599K 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 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 7: Market Backdrop
GROWTH Market Backdrop New-vehicle production, inventory, and retail sales continued to recover from historical lows Used-vehicle retail sales declined modestly YoY, as volumes were pressured from a lack of late-model inventory, and elevated prices and borrowing costs “Trade-to-wholesale” mix remain
Slide 8: Continued Market Share Gains
GROWTH Continued Market Share Gains 2023 vs. 2022 RETAIL DEALER WHOLESALE ACV MARKET SHARE 12M 8% 10% ACV Unit Growth Units Share Dealer Wholesale (7%) Market 17% ACV Market Share Expansion 2018 2019 2020 2021 2022 2023 Note: Market share data to be provided on an annual basis going forward Source:
Slide 9: ACV Transportation
GROWTH 80%+ ACV Transportation AUTO DISPATCHED Full-year attach rate in the mid-50% range with >325K transports Cycle time improved >20% YoY 90% lane coverage with AI-optimized pricing in Q4-23 900 bps of revenue margin expansion YoY in 2023 9 9
Slide 10: ACV Capital
GROWTH ACV Capital Strong attach rate in the low double-digits ~80% YOY REVENUE GROWTH ~50% YOY LOAN Continued rapid revenue growth VOLUME GROWTH Strong loan volume growth and ~20% YOY RPU EXPANSION expanded RPU Figures reflect 2023 vs. 2022 results 10 10
Slide 11: Consumer Sourcing
GROWTH Consumer Sourcing • Empowering dealer sourcing • Transparency and accuracy • Seamless deployment • AI imaging and self-inspection • TAM expansion 11
Slide 12: Commercial Wholesale
GROWTH Commercial Wholesale Large market with volumes recovering in Rental, Repo and Fleet categories ACV uniquely positioned with deep data moat and vibrant marketplaces with a growing nationwide buyer base Texas-based auction group expands Remarketing Center footprint Auto IMS platform a key unloc
Slide 13: Innovation
03 INNOVATION Q 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 14: Innovation for Growth
INNOVATION Innovation for Growth • New auction formats and lanes • Improved UX • Inventory matching and notifications • Enhanced pricing engine • Private Marketplaces • S.A.M. • ClearCar • AI-optimized Transport pricing
Slide 15: Innovation for Scale
INNOVATION Innovation for Scale Enhanced Inspection Platform Delivering Quality and Efficiency • CoPilot • ArbGuard • Apex • AI-powered imaging apps
Slide 16: What's Next?
INNOVATION What’s Next? • Tailored dealer experience to drive Conversion • Relaunched / rebranded MAX Digital (ACV MAX) • Off-platform Transportation • ACV Capital loan management system (LMS) • Remarketing Center integrations • Dealer Self-Inspection for Private Marketplaces and Live Appraisal
Slide 17: Scale
04 SCALE Bill Zerella CHIEF FINANCIAL OFFICER Q 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 18: Solid Q4-23 Performance
SCALE Solid Q4-23 Performance REVENUE ($M) % YOY GROWTH ADJ. EBITDA ($M) ADJ. EBITDA MARGIN (2%) 21% ($13) ($5) ($9) – ($7) $116 - $120 $118 (5%) $98 (8%) – (6%) (13%) Q4-22 Q4-23 Q4-23 Q4-22 Q4-23 Q4-23 Guidance Guidance Note: Refer to the Appendix for information on the GAAP to non-GAAP reconcilia
Slide 19: Diversified Revenue Streams
SCALE Diversified Revenue Streams Revenue Breakdown ($M) $118M SAAS & DATA SERVICES $100M 7% Flat $98M YOY SAAS PRODUCTS DATA-ENABLED SOLUTIONS 8% 8% 38% 36% 29% 35% YOY MARKETPLACE SERVICES TRANSPORTATION CAPITAL AUCTION & ASSURANCE 56% 19% 57% 56% YOY AUCTION FEES GO GREEN ASSURANCE Q4-21 Q4-22 Q4
Slide 20: Delivering Margin Improvement and Managing OpEx
SCALE Delivering Margin Improvement and Managing OpEx NON-GAAP COST OF REVENUE NON-GAAP OPERATING EXPENSE (EX. COR) % OF REVENUE % OF REVENUE 61% 54% 57% 51% Q4-22 Q4-23 Q4-22 Q4-23 Note: Refer to the Appendix for information on the GAAP to non-GAAP reconciliations 20
Slide 21: Balancing Growth and Investments
SCALE Balancing Growth and Investments ADJ. EBITDA MARGIN ADJ. EBITDA ($M) NON-GAAP OPERATING EXPENSE (EX. COR) ($M) % YOY GROWTH ($31) ($44) ($56) ($18) 56% 22% 8% $268 (4%) $248 $203 (12%) (13%) $130 (15%) 2020 2021 2022 2023 2020 2021 2022 2023 Note: Refer to the Appendix for more information on
Slide 22: Proven Business Model with Margin Expansion
SCALE Proven Business Model with Margin Expansion Regional Annual Revenue ($M) Continued margin expansion and OpEx Break-even 15% Adjusted 25% Adjusted leverage support mid-term Adjusted EBITDA Adjusted EBITDA EBITDA Margin EBITDA Margin margin target of 25% 35% of Regions (~ 50 Territories) achieve
Slide 23: Strong Capital Position and Cash Flow
SCALE Strong Capital Position and Cash Flow OPERATING CASH FLOW ($M) ($M) As of December 31, 2023 Cash, Cash Equivalents and $411 Marketable Securities (Includes ~$134M of auction float) ($18) ACV Capital Receivables $119 Long Term Debt $115 Total Assets $923 ($75) Total Liabilities $466 2022 2023 2
Slide 24: Guidance
SCALE Guidance Assumptions Dealer wholesale market expected to Q1-24 2024 grow modestly year-over-year (dollars in millions) Revenue $141 to $146 $610 to $625 Conversion rates and wholesale price deprecation expected to follow normal YoY Growth 18% to 22% 27% to 30% seasonal patterns GAAP Net Income
Slide 25: Mid-term Target Model
SCALE Mid-term Target Model $1.3B REVENUE $325M ADJ. EBITDA ADJ. EBITDA 25% MARGIN 25
Slide 26: Wrap Up
01 Executing on Growth Strategy and Gaining Share 02 Expanding Addressable Market Wrap Up 03 Delivering on Product Roadmap and Expanding Competitive Moat 04 Driving Profitable Growth Through Scalable Business Model 05 Building World Class Team with People-First Culture 26
Slide 27: Q&A
05 Q&A Q 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 28: Appendix
06 APPENDIX Q 4 - 2 3 _ E A R N I N G S F E B _ 2 1 _ 2 0 2 4
Slide 29: 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 2022 Q1-23 Q2-23 Q3-23 Q4-23 2023 GAAP Net Income (Loss) ($77.2) ($41.0) ($78.2) ($102.2) ($18.2) ($15.6) ($18.2) ($23.2) ($75.2)
Slide 30: 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 Q4-22 Q4-23 GAAP Cost of Revenue $52.8 $60.6 Non-GAAP Adjustments: Marketplace & Service Cost of Revenue SBC ($0.2) ($0.3) Non-GAAP Cost of Revenue $52.6 $60.4 GAAP Total
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 NON-GAAP FINANCIAL they assist our investors to make period-to-period comparisons of our operating performance because they provide a view o
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 future FINANCIAL METRICS performance. Our key operating and financial metrics may be calculated in a manner different than similar business metrics used b
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 STATEMENTS Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial gui