ACV Auctions Inc. Q1 FY2026 earnings call

First, continue to gain market share and expand dealer partner network to new record, with investment in field capacity and no-reserve offering contributing. Second, strong performance in ACV transport and ACV capital, and growing adoption of value-added dealer solutions. Third, gaining traction with emerging growth initiatives like initial launch of Viper and expanding TAM into commercial wholesale. Focus on delivering double-digit revenue growth and increased adjusted EBITDA while investing in growth objectives. Enhancing technology and operating models to be more resilient, attracting new dealer and commercial partners, and leveraging ACV AI for product roadmap and operating efficiencies.

Q1 revenue was $204 million, growing 12% year-over-year. Auction and assurance revenue was 57% of total revenue, growing 9% year-over-year with 3% unit growth despite a 5% decline in the dealer wholesale market; auction and assurance ARPU grew 6% year over year and 3% quarter over quarter. Marketplace services revenue, including ACV transport and ACV capital, was 39% of total revenue, with ACV transport having 18% revenue growth and over 120,000 transports delivered in Q1, ACV Capital with 30% year-over-year growth in Q1. SAS and data services products comprised 4% of total revenue, with high single-digit ACV max revenue growth offset by modest declines in legacy standalone inspection services.

Reaffirming 2026 revenue and adjusted EBITDA guidance. Q2 revenue expected to be $213 - $217 million, growth of 10 - 12%; adjusted EBITDA expected to be $18 - $20 million, reflecting 8% - 9% margin. 2026 revenue expected to be $845 - $855 million, growth of 11% - 13%; adjusted EBITDA expected to be $73 - $77 million, growth of approximately 28% year-over-year. Expected cost of revenue as a percentage of revenue to be modestly higher than in 2025; non-GAAP OPEX excluding cost of revenue expected to grow approximately 8% year-over-year.

Uncertainties in the broader macro environment, challenges in achieving market share growth as expected, risks associated with technology investments and their integration to drive growth effectively.

Q: Bob LeBic from CGS Securities asked about progress in hiring candidates and impact of market decline on go-to-market strategy.

A: George and Bill responded about hiring exceptional teammates, including territory managers and inspectors, and that despite market decline, they had record number of dealer visits and are using differentiated offerings like ACV AI to drive growth.

Q: Rajat Gupta from KP Morgan asked about first quarter growth rate and traction despite industry outlook.

A: George and Bill explained about conversion rate improvement in March, different regional results due to weather, and comfort in full-year outlook due to field footprint growth, differentiated offerings, and commercial focus.

Q: Andrew Bloom from Citizens asked about Viper rollout and AI efficiency.

A: George responded about Viper rollout progress, focusing on 2026 to scale for 2027, and about AI efficiency in inspecting cars and internal tech team efficiencies.

Q: John Healy from North Coast Research asked about commercial consignors and March growth rate.

A: George elaborated on commercial consignors progress in upstream and downstream, and Bill explained March growth rate context vis-a-vis market.

Q: John Babcock from Barclays asked about commercial consignors traction with captive Fincos and banks.

A: George responded about progress with fleet, OEMs, and banks/repos.

Q: Jeff Lick from Stevens asked about commercial sites and guarantee.

A: George repeated upstream and downstream commercial progress, and Bill explained guarantee penetration doubling and higher costs of no-reserve sales.

Q: Glenn Schell from Raymond James asked about VCI investment and Viper deployment.

A: George explained VCI training for multiple tasks and Viper deployment progress with number of deployed and backlog.

Q: Gary Precipino from Barrington Research asked about Viper integration with dealer DMS.

A: George explained how Viper data is used in dealerships for customer interactions and lead generation.

Q: Gary Precipino further asked about Viper and dealer DMS details.

A: George expanded on how Viper data is integrated into dealer systems for scalable processes and consumer interactions.