GlobeNewswire Inc | Aug 11, 2021 04:01PM EDT

August 11, 2021

-- Second quarter total revenue of $97.4 million, up 117% YoY -- GAAP net loss of $9.7 million, compared to GAAP net loss of $4.4 million in second quarter 2020 -- Adjusted EBITDA loss of $3.7 million, compared to Adjusted EBITDA loss of $1.5 million in second quarter 2020 -- Raises 2021 revenue guidance to a range of $332 to $338 million; YoY growth of 59% to 62%

BUFFALO, N.Y., Aug. 11, 2021 (GLOBE NEWSWIRE) -- ACV (Nasdaq: ACVA), the leading online automotive marketplace for dealers, today reported results for its second quarter ended June 30, 2021.

We were very pleased with our strong results in the second quarter, which were driven by continued market share gains, growing adoption of ACVs value-added services, and favorable conditions in the automotive market, said George Chamoun, CEO of ACV.

Our investments in geographic expansion, and new platform features and offerings, are creating long-term growth drivers for our business to address the large market opportunity ahead of us. And, with the recent acquisition of MAX Digital we have broadened our suite of data services and digital solutions that we believe further strengthens our leading market position, concluded Chamoun.

Second Quarter 2021 Highlights

-- Revenue of $97.4 million, an increase of 117% year over year. -- Marketplace and Service revenue of $83.9 million, an increase of 119% year over year. -- Auction Marketplace revenue of $46.6 million, an increase of 98% year over year. -- Marketplace GMV of $2.1 billion, an increase of approximately 234% year over year. -- Marketplace Units of 153,274, an increase of 74% year over year. -- Adjusted EBITDA loss of $3.7 million, compared to Adjusted EBITDA loss of $1.5 million in second quarter 2020.

Third Quarter and Full Year 2021 Guidance

Based on information as of today, ACV is providing the following guidance:

-- Third quarter of 2021: Total revenue of $82 to $85 million, an increase of 22% to 26% year over yearAdjusted EBITDA loss of $20 to $22 million -- Full year 2021: Total revenue of $332 to $338 million, an increase of 59% to 62% year over yearAdjusted EBITDA loss of $62 to $65 million

Our financial guidance includes the following assumptions:

-- Market conditions that contributed to strong demand and higher unit prices in recent quarters are expected to continue to normalize in the second half of the year. -- Total operating expenses, excluding cost of revenue, are expected to grow approximately 66% year over year.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP measure; in particular, the effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

ACVs Second Quarter 2021 Results Conference Call

ACV will host a conference call and live webcast today, August 11, 2021, at 5:00 p.m. ET to discuss financial results. To participate in the live call, analysts and investors should dial (833) 607-1658 or (914) 987-7871, and use conference ID 8139887. The live webcast of the conference call along with supplemental financial information will also be accessible on ACVs website at https://investors.acvauto.com. Following the webcast, an archived version will also be available on the investor relations page of ACVs website. A telephonic replay of the conference call will be available until Wednesday, August 18, 2021, by dialing (855) 859-2056 or (404) 537-3406 and entering passcode 8139887.

The ACV management team will also be presenting at Canaccord Genuitys 41st Annual Growth Conference on Thursday, August 12th at 1:30 p.m. ET. The presentation will be available on ACVs investor relations website at https://investors.acvauto.com. An archived replay of the webcast will be available following the live presentation.

About ACV Auctions

ACV provides a vibrant digital marketplace for wholesale vehicle transactions and data services that offers transparent and accurate vehicle information to customers. On a mission to build and enable the most trusted and efficient digital marketplaces for buying and selling used vehicles, ACV's platform leverages data insights and technology to power its digital marketplace and data services, enabling dealers and commercial partners to buy, sell and value vehicles with confidence and efficiency. ACV's network of brands includes ACV Auctions, ACV Transportation and ACV Capital within its Marketplace Products, as well as True360, ACV Data Services and MAX Digital.

Information About Non-GAAP Financial Measure and Key Operating and Financial Metrics

We supplement our financial results with a non-GAAP financial measure, Adjusted EBITDA, and key operating and financial metrics, Marketplace Units and Marketplace GMV.

Non-GAAP Financial Measure

Adjusted EBITDA is a financial measure that is not presented in accordance with GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

We calculate Adjusted EBITDA as net (loss) income, adjusted to exclude: (1) depreciation and amortization; (2) stock-based compensation expense; (3) interest (income) expense; (4) provision for income taxes; and (5) other (income) expense, net.

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of stock-based compensation expense, (4) it does not reflect other non-operating expenses, including interest expense, and (5) it does not reflect tax payments that may represent a reduction in cash available to us. In addition, our use of Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net loss and other results stated in accordance with GAAP.

Operating 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 by other companies. Management intends to report Marketplace Participants, which is defined as dealers or commercial partners with a unique customer ID that have transacted at least once in the last 12 months as either a buyer or seller on our digital marketplace, on an annual basis.

Marketplace GMV - Marketplace GMV is primarily driven by the volume and dollar value of Marketplace Units transacted on our digital marketplace. We believe that Marketplace GMV acts as an indicator of the success of our marketplace, signaling satisfaction of dealers and buyers on our marketplace, and the health, scale, and growth of our business. We define Marketplace GMV as the total dollar value of vehicles transacted through our digital marketplace within the applicable period, excluding any auction and ancillary fees. Because our definition of Marketplace Units does not include vehicles inspected but not sold on our digital marketplace, GMV does not represent revenue earned by us.

Marketplace Units - Marketplace Units is a key indicator of our potential for growth in Marketplace GMV and revenue. It demonstrates the overall engagement of our customers on the ACV platform, the vibrancy of our digital marketplace and our market share of wholesale transactions in the United States. We define Marketplace Units as the number of vehicles transacted on our digital marketplace within the applicable period. Marketplace Units transacted includes any vehicle that successfully reaches sold status, even if the auction is subsequently unwound, meaning the buyer or seller does not complete the transaction. These instances have been immaterial to date. Marketplace Units exclude vehicles that were inspected by ACV, but not sold on our digital marketplace. Marketplace Units have increased over time as we have expanded our territory coverage, added new Marketplace Participants and increased our share of wholesale transactions from existing customers.

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-term growth and total addressable market expansion and our financial guidance for the third quarter of 2021 and the full year of 2021. In some cases, you can identify forward-looking statements because they contain words such as anticipate, believe, contemplate, continue, could, estimate, expect, intend, may, plan, potential, predict, project, should, target, will or would or the negative of these words or other similar terms or expressions. You should not rely on forward-looking statements as predictions of future events.

The forward-looking statements contained in this presentation are based on ACVs current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties and changes in circumstances that may cause ACVs actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. These risks and uncertainties include, but are not limited to: (1) our history of operating losses; (2) our limited operating history; (3) our ability to effectively manage our growth; (4) our ability to grow the number of participants on our platform; (5) our ability to acquire new customers and successfully retain existing customers; (6) our ability to effectively develop and expand our sales and marketing capabilities; (7) breaches in our security measures, unauthorized access to our platform, our data, or our customers or other users personal data; (8) risk of interruptions or performance problems associated with our products and platform capabilities; (9) our ability to adapt and respond to rapidly changing technology or customer needs; (10) our ability to compete effectively with existing competitors and new market entrants; (11) our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business in the United States and other jurisdictions where we elect to do business; (12) general market, political, economic, and business conditions; and (13) the impact that the ongoing COVID-19 pandemic and any related economic downturn could have on our or our customers businesses, financial condition and results of operations. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission (SEC), including in the section entitled Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC pursuant on May 13, 2021. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and other filings and reports that we may file from time to time with the SEC. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, except as required by law.

Investor Contact: Tim Foxtfox@acvauctions.com

Media Contact: Maura Dugganmduggan@acvauctions.com

ACV AUCTIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)

For the three months ended June30, For the six months ended June30, 2021 2020 2021 2020Revenue: Marketplace and $ 83,934 $ 38,310 $ 142,326 $ 72,906 service revenueCustomerassurance 13,440 6,587 24,134 14,228 revenueTotal revenue 97,374 44,897 166,460 87,134 Operating expenses:Marketplace andservice cost ofrevenue 42,788 15,323 72,297 36,930 (excludingdepreciation &amortization)Customerassurance costof revenue 11,129 4,654 20,515 11,934 (excludingdepreciation &amortization)Operations and 23,513 13,875 45,104 30,821 technologySelling,general, and 27,513 13,891 51,478 36,962 administrativeDepreciation and 1,761 1,463 3,529 2,672 amortizationTotal operating 106,704 49,206 192,923 119,319 expensesLoss from (9,330 ) (4,309 ) (26,463 ) (32,185 )operationsOther income (expense):Interest income 45 141 71 650 Interest expense (251 ) (180 ) (461 ) (291 )Total other (206 ) (39 ) (390 ) 359 income (expense)Loss before (9,536 ) (4,348 ) (26,853 ) (31,826 )income taxesProvision for 156 48 214 95 income taxesNet loss $ (9,692 ) $ (4,396 ) $ (27,067 ) $ (31,921 )Weighted-averageshares - basic 154,572,225 21,369,825 94,762,407 21,283,589 anddilutedNet loss pershare - basic $ (0.06 ) $ (0.21 ) $ (0.29 ) $ (1.50 )and diluted

ACV AUCTIONS INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data)

June30, December31, 2021 2020Assets Current Assets : Cash and cash equivalents $ 664,324 $ 233,725 Trade receivables (net of allowance of $3,158 234,174 104,138 and $2,093)Finance receivables (net of allowance of $96 26,508 8,501 and $40)Other current assets 12,249 8,041 Total current assets 937,255 354,405 Property and equipment (net of accumulated 5,328 4,912 depreciation of $3,481 and $2,439)Goodwill 21,820 21,820 Acquired intangible assets (net of 9,899 11,491 amortization of $4,651 and $3,059)Internal-use software costs (net of 11,796 7,775 amortization of $2,734 and $1,963)Operating lease right-of-use assets 1,643 2,000 Other assets 1,212 2,147 Total assets 988,953 404,550 Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)Current Liabilities : Accounts payable 367,583 151,967 Accrued payroll 12,317 8,109 Accrued other liabilities 5,944 4,375 Deferred revenue 3,686 1,504 Operating lease liabilities 786 746 Total current liabilities 390,316 166,701 Long-term operating lease liabilities 918 1,323 Long-term debt 500 4,832 Other long-term liabilities 5,217 5,054 Total liabilities $ 396,951 $ 177,910 Convertible Preferred Stock : Convertible preferred stock; $0.001 par value;0 and 230,538,501 shares authorized; 0 and115,269,221 shares issued and outstanding at - 366,332 June 30, 2021 and December 31, 2020,respectivelyStockholders' Equity (Deficit) : Preferred Stock; $0.001 par value; 20,000,000and 0 shares authorized; 0 and 0 shares issued - - and outstanding at June 30, 2021 and December31, 2020, respectivelyCommon stock; $0.001 par value; 0 and311,100,000 shares authorized; 0 and22,331,842 shares issued and outstanding at - 22 June 30, 2021 and December 31, 2020,respectivelyCommon stock - Class A; $0.001 par value;2,000,000,000 and 0 sharesauthorized;40,225,160 and 0 shares issued and outstanding 40 - at June 30, 2021 and December 31, 2020,respectivelyCommon Stock - Class B; $0.001 par value;160,000,000 and 0 shares authorized;114,445,042 and 0 shares issued and 114 - outstanding at June 30, 2021 and December 31,2020, respectivelyAdditional paid-in capital 785,875 27,322 Accumulated deficit (194,046 ) (166,979 )Accumulated other comprehensive loss 19 (57 )Total stockholders' equity (deficit) 592,002 (139,692 )Total liabilities, convertible preferred stock $ 988,953 $ 404,550 and stockholders' equity(deficit)

ACV AUCTIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)

Six months ended June30, 2021 2020Cash Flows from Operating Activities Net income (loss) $ (27,067 ) $ (31,921 )Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization 3,728 3,178 Stock-based compensation expense 6,630 3,130 Provision for bad debt 1,589 3,670 Non-cash operating lease costs (6 ) 6 Other non-cash, net 475 90 Changes in operating assets and liabilities, net of effects from purchases of businesses:Trade receivables (131,479 ) (50,676 )Other current assets (4,209 ) (1,188 )Accounts payable 215,286 60,682 Accrued payroll 4,208 3,933 Accrued other liabilities 1,532 1,036 Deferred revenue 2,182 635 Other long-term liabilities 163 1,302 Other assets (218 ) (1 )Net cash provided by (used in) operating 72,814 (6,124 )activitiesCash Flows from Investing Activities Net increase in finance receivables (18,153 ) (966 )Purchases of property and equipment (1,664 ) (1,931 )Capitalization of software costs (4,597 ) (2,508 )Acquisition of businesses (net of cash - (5,500 )acquired)Net cash provided by (used in) investing (24,414 ) (10,905 )activitiesCash Flows from Financing Activities Proceeds from issuance of common stock inconnection with initial public offering, net of 385,852 - underwriting discounts and commissions andother offering costsProceeds from long term debt 5,250 3,387 Payments towards long term debt (9,582 ) (1,971 )Proceeds from exercise of common stock options 679 185 Net cash provided by (used in) financing 382,199 1,601 activitiesNet increase (decrease) in cash and cash 430,599 (15,428 )equivalentsCash and cash equivalents, beginning of period 233,725 182,275 Cash and cash equivalents, end of period $ 664,324 $ 166,847 Supplemental disclosure of cash flow informationCash paid (received) during the period for: Interest (income) expense 185 (70 )Income taxes 112 (23 )Cash paid included in the measurement of - 338 operating lease liabilitiesNon-cash investing and financing activities: Right-of-use assets obtained, including initial - 718 adoptionStock issuance costs in accounts payable 140 - Contingent consideration - 5,700 Purchase of property and equipment and internal 858 121 use software in accounts payable

Three months ended June30, Six months ended June30, 2021 2020 2021 2020Adjusted EBITDA ReconciliationNet loss $ (9,692 ) $ (4,396 ) $ (27,067 ) $ (31,921 )Depreciation and 1,837 1,733 3,728 3,179 amortizationStock-based 3,763 1,033 6,630 3,130 compensationInterest 206 39 390 (359 )(income) expenseProvision for 156 48 214 95 income taxesOther (income) 43 21 58 (10 )expense, netAdjusted EBITDA $ (3,687 ) $ (1,522 ) $ (16,047 ) $ (25,886 )