ACV Auctions Inc. (NASDAQ:ACVA) Q2 2024 Earnings Conference Call August 7, 2024 5:00 PM ET

Company Participants

Tim Fox - Vice President of Investor Relations
George Chamoun - Chief Executive Officer
William Zerella - Chief Financial Officer

Conference Call Participants

Michael Graham - Canaccord Genuity Group Inc.
Peter Lukas - CJS Securities
Rajat Gupta - JPMorgan Chase & Co.
Naved Khan - B. Riley Securities, Inc.
Chris Pierce - Needham & Company, LLC
Steven McDermott - Bank of America

Operator

Ladies and gentlemen, greetings and welcome to the ACV Q2 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference has been recorded.

It is now my pleasure to introduce your host, Tim Fox. Please go ahead.

Tim Fox

Good afternoon, and thank you for joining ACV’s conference call to discuss our second quarter 2024 financial results. With me on the call today are George Chamoun, Chief Executive Officer; and Bill Zerella, Chief Financial Officer.

Before we get started, please note that today’s comments include forward-looking statements, including statements regarding future financial guidance. These forward-looking statements are subject to risks and uncertainties and involve factors that could cause actual results to differ materially from those expressed or implied by such statements. A discussion of the risks and uncertainties related to our business can be found in our SEC filings and in today’s press release, both of which can be found on our Investor Relations website.

During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today’s earnings materials, which can also be found on our Investor Relations website.

And with that, let me turn the call over to George.

George Chamoun

Thanks, Tim. Good afternoon, everyone, and thank you for joining us. We are pleased with our second quarter performance. We delivered another quarter of record revenue that was above the high-end of guidance, despite market headwinds related to the CDK software outage in June. We also hit a new milestone in the quarter, with half of our regional markets achieving 30% franchise dealer penetration. Adjusted EBITDA increased 65% sequentially, resulting in a 700 basis point year-over-year improvement in adjusted EBITDA margin.

Along with our momentum in dealer wholesale, we are very pleased with the market adoption of ACV’s consumer sourcing solution, ClearCar, and with our ongoing technology initiatives to address the commercial wholesale market. As we pivot to the back half of 2024, we are encouraged by our strong performance in July and remain focused on driving top-line growth, expanding margins, and delivering our first year of adjusted EBITDA profitability. We’re confident that executing on this profitable growth strategy will result in creating long-term shareholder value.