Slide 1: Q3-22 Earnings Presentation
Q3-22 EARNINGS PRESENTATION N O V _ 9 _ 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 STATEMENTS 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 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 4: Highlights
HIGHLIGHTS Q3-21 Q3-22 $92M Revenue $105M YoY Revenue 36% Growth 15% $2.0B GMV $2.1B Marketplace 141K Units 133K 4
Slide 5: Maximizing Long-Term Shareholder Value
MAXIMIZING LONG-TERM SHAREHOLDER VALUE GROWTH INNOVATION SCALE Transforming the automotive market with Leveraging technology to extend ACV’s Proven business model delivering the leading digitally native, data-driven competitive moat and to create additional growth at scale, with attractive platform,
Slide 6: Growth
02 GROWTH Q 3 - 2 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 7: Retail is a Critical Supply Source for Used Wholesale
GROWTH Retail is a Critical Supply Source for Used Wholesale Retail Vehicle Market Dealer Wholesale Market Wholesale Inventory DEALER TO CONSUMER Physical Auctions NEW VEHICLES USED VEHICLES Hybrid Auctions 16,500+ Franchised 38,000+ Independent Digital Auctions 17M units1 16,500+ Franchised Private
Slide 8: Retail Sales Continue to Decline
GROWTH Retail Sales Continue to Decline Used Vehicle Retail Sales New Light-Vehicle SAAR 9.0 18.0 8.0 16.0 7.0 14.0 6.0 12.0 Units (M) Units (M) 5.0 10.0 4.0 8.0 3.0 6.0 2.0 4.0 1.0 2.0 - - 19 19 20 20 20 20 21 21 21 21 22 22 22 19 19 20 20 20 20 21 21 21 21 22 22 22 3- 4- 1- 2- 3- 4- 1- 2- 3- 4- 1-
Slide 9: Auction Industry Data Reflect Weaker Trends
GROWTH Auction Industry Data Reflect Weaker Trends Persistent price depreciation impacting auction conversion rates 9
Slide 10: Solid Listings Growth Despite Market Backdrop
GROWTH Solid Listings Growth Despite Market Backdrop Franchise dealer penetration reached 33% across the U.S. - an increase of 500 bps since Q4-21 Listings +19% YoY +24% YTD Conversion Rate Variance 14% 12% 11% 11% 6% 6% 2% 2% 2% 1% 0% 0% (1%) (3%) Pre-pandemic average conversion rate (7%) Q1 Q2 Q3
Slide 11: Units and GMV Reflect Conversion Compression
GROWTH Units and GMV Reflect Conversion Compression Marketplace Units (000s) Marketplace GMV ($B) The YoY change in conversion rate in Q3-22 was a >30K unit and ~20% unit growth headwind (5%) YoY 6% YoY 153 148 2.7 141 140 139 2.5 133 128 2.4 118 2.1 2.1 2.0 103 88 83 1.3 1.1 0.9 0.6 0.6 Q 1 - 2 0 Q
Slide 12: Continued Market Share Gains
GROWTH Continued Market Share Gains Q3-22 vs. Q3-21 ACV Unit RETAIL DEALER WHOLESALE ACV MARKET SHARE (5%) Growth YoY 3M 7% Units Share Dealer (21%) Wholesale Market YoY ACV Market Share 16% Expansion YoY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 2021 2022 Source: Company data, NADA 12
Slide 13: Transportation
GROWTH 70%+ AUTO / SELF Transportation DISPATCHED >50% Attach Rate Strong Adoption of ACV Carrier App 70%+ Auto / self dispatch Low double-digit revenue margin 13 13
Slide 14: ACV Capital
GROWTH ACV Capital 2x YoY increased attach rate > 75% YoY loan volume growth Strong adoption of ACV Capital Portal Go-to-market expansion continues 14 14
Slide 15: Innovation
03 INNOVATION Q 3 - 2 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 16: Innovation for Growth
INNOVATION Innovation for Growth >1,400 dealers adopted S.A.M. to date New auction formats and data insights to improve marketplace conversion Private Marketplaces attracting large franchise dealer groups 16 16
Slide 17: Innovation for Scale
INNOVATION “Copilot” Innovation for Scale Formally launched Apex Now deploying Virtual Lift applications CATALYTIC CONVERTERS RUST DETECTION powered by AI Introducing pre-inspection “Copilot” - delivering insights based on machine learning and predictive analytics
Slide 18: Scale
04 SCALE Bill Zerella CHIEF FINANCIAL OFFICER Q 3 - 2 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 19: Solid Q3-22 Performance
SCALE Solid Q3-22 Performance REVENUE ($M) % YOY GROWTH ADJ. EBITDA MARGIN ADJ. EBITDA ($M) ($12) ($12) ($13) – ($15) 36% 15% $104 - $107 $105 $92 (11%) (13%) (12%) – (14%) Q3-21 Q3-22 Q3-22 Q3-21 Q3-22 Q3-22 Guidance Guidance Note: Refer to the adjusted EBITDA reconciliation in the appendix 19
Slide 20: Diversified Revenue Streams
SCALE Diversified Revenue Streams $105M Revenue Breakdown ($M) $92M 8% SAAS & DATA SERVICES 20% YOY SAAS PRODUCTS 8% DATA-ENABLED SOLUTIONS $67M 35% 38% 26% YOY 6% MARKETPLACE SERVICES TRANSPORTATION 29% CAPITAL 57% 53% AUCTION & ASSURANCE AUCTION FEES 65% 7% YOY GO GREEN ASSURANCE Q3-20 Q3-21 Q3-22
Slide 21: Delivering Margin Improvement
SCALE Delivering Margin Improvement COST OF REVENUE % OF REVENUE TOTAL OPERATING COST (EX. COR) GROWTH YOY 64% 59% 55% 18% Q3-21 Q3-22 Q3-21 Q3-22 Note: Refer to the GAAP to non-GAAP operating cost reconciliation in the appendix 21
Slide 22: Balancing Growth and Investments
SCALE Balancing Growth and Investments ADJ. EBITDA MARGIN ADJ. EBITDA ($M) TOTAL OPERATING EXPENSE (EX. COR) ($M) % YOY GROWTH ($76) ($31) ($44) ($60) 56% 24% (12%) (14%) (15%) $251 $203 $130 (72%) 2019 2020 2021 2022 2020 2021 2022 Note: 2022 figures represent the midpoint of guidance Refer to the
Slide 23: Strong Capital Position
SCALE ($M) As of Sep 30, 2022 Cash, Cash Equivalents and Marketable Securities $502 (Includes ~$138M of auction float) Strong Capital ACV Capital Receivables $74 Position Long Term Debt (ACV Capital related) $71 Total Assets $900 Total Liabilities $401 23
Slide 24: Guidance
SCALE Guidance Q4’22 2022 Wholesale volumes remain constrained (dollars in millions) due to OEM production challenges and Revenue $97 to $100 $421 to $424 softening retail vehicle demand YoY Growth (3%) to 0% 17% to 18% Adjusted EBITDA Loss ($17) to ($15) ($61) to ($59) Conversion rates remain at or
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 3 - 2 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 28: Appendix
06 APPENDIX Q 3 - 2 2 _ E A R N I N G S N O V _ 9 _ 2 0 2 2
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Reconciliation GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) 2019 2020 Q1-21 Q2-21 Q3-21 Q4-21 2021 Q1-22 Q2-22 Q3-22 GAAP Net Income (Loss) ($77.2) ($41.0) ($17.4) ($9.7) ($24.8) ($26.3) ($78.2) ($29.5) ($24.5) ($23.7) Non-GAAP Adjustments: Contingent Gain (Los
Slide 30: Operating Cost Reconciliation
Operating Cost Reconciliation ACV Auctions Inc. Quarter Ended Quarter Ended Operating Cost Reconciliation - Detailed Sep-21 Sep-22 GAAP Marketplace & Service Cost of Revenue $41.5 $46.3 Marketplace & Service Cost of Revenue SBC $0.1 $0.2 Non-GAAP Marketplace COR $41.4 $46.1 GAAP Customer Assurance C
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