ACV Auctions Inc. Q4 FY2025 earnings call

George Chamoun noted ACV's Q4 execution, with revenue at the high end of guidance and adjusted EBITDA above the high end, driven by dealer wholesale despite challenging conditions, gaining market share, expanding dealer network, and driving value-added solutions adoption. ACV Transport and Capital had strong revenue performance, and the product roadmap was executed to differentiate the marketplace experience. For 2026, expecting low double-digit revenue growth and ~28% adjusted EBITDA growth with additional growth investments. Bill Zerella discussed Q4 financial results, revenue details, costs, investment strategy, and strong capital structure. ACV is leveraging AI to attract buyers/sellers, increase penetration, etc., driving growth through dealer wholesale, data services, geographic expansion, marketplace service offerings, innovation with AI-driven products, and a commercial wholesale strategy

Q4 revenue was $184 million, growing 15% year-over-year and selling 193,000 vehicles. For the full year, revenue grew 19% and units grew by over 86,000 (12% year-over-year), with adjusted EBITDA growing by over 100%. The dealer wholesale business was a key driver. Auction assurance revenue was 55% of total revenue, up 11% year-over-year. Marketplace Services revenue was 39% of total revenue, growing 23% year-over-year. SaaS and data services products made up 5% of total revenue, with year-over-year growth accelerating to 8%. Non-GAAP cost of revenue as a percentage of revenue increased ~400 basis points year-over-year due to higher arbitration costs, while non-GAAP operating expense, excluding cost of revenue as a percentage of revenue decreased ~400 basis points year-over-year reflecting operating leverage

First quarter revenue is expected to be $200 million to $204 million, representing 9% to 12% growth. Adjusted EBITDA is expected to be $14 million to $16 million, with a 7% to 8% margin. For 2026, revenue is projected to be $845 million to $855 million, a 11% to 13% growth. Adjusted EBITDA is expected to be $73 million to $77 million, a ~28% year-over-year growth. Non-GAAP OpEx, excluding cost of revenue, is expected to grow approximately 9% year-over-year

Forward-looking statements are subject to risks and uncertainties. Arbitration costs were elevated in Q4 but are expected to normalize in 2026. Market conditions and competitive pressures can impact performance. AI adoption and potential competition in the automotive industry pose risks

Q: Double-click in terms of 4Q '25 units sold, deceleration reason and MAX road map.

A: Q4 had a tough comparison. Adding inspectors, territory managers, and differentiating with MAX to drive growth.

Q: 2026 guidance, incremental margin slowdown, AI risk.

A: Incremental spend on go-to-market, market share acceleration later, AI as a disruptor with benefits and protection.

Q: Conversion rates, outsized growth in regions.

A: Conversion rate up year-over-year due to better buying experience, region-specific growth through talent and strategy.

Q: Viper rollout, price guarantee progression.

A: Viper rollout with dealer goals, price guarantee progression with a potential mid-20-ish percent range.

Q: Competitive dynamics, ARPU.

A: ARPU modeled to hold up, not temporary, focusing on a leader position.

Q: Footprint expansion, Viper update.

A: Hiring and training inspectors, Viper rollout with early dealers and goals.

Q: Market outlook, arbitration expense.

A: Market expected to be flat in 2026, arbitration expense improved by removing bad actors and using inspectors.

Q: Helping dealers run business, Viper service attachment, data ownership, private label auctions.

A: Service attachment gains, data usage and ownership, potential non-volume contingent recurring revenue.

Q: Guarantees and Viper.

A: Guarantees drive increased bidding, Viper with credibility through data accuracy