ACV Auctions (ACVA) 8 Aug 232023 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the ACVA Second Quarter 2023 Earnings Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Tim Fox, Vice President of Investor Relations. Please go ahead.

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

by forward-looking expressed Before we note to statements. forward-looking statements results please such could get risks These differ or and future guidance. from are involve to statements, factors cause comments financial that that regarding statements including today's started, implied include those subject uncertainties materially and actual

A in and related of be press discussion on and our to uncertainties both found of the our risks our business can website. Investor which release, in found can be filings Relations SEC today's

to materials both Relations in we this discuss me non-GAAP and which will to measures GAAP During call GAAP today's with be And is turn Investor can provided our financial the found on over measures. also earnings non-GAAP let call, that, financial website. A of reconciliation George.

everyone, for Tim. and Thanks, thank afternoon, joining you Good us.

very high We team gain the quarter, revenue exceeded again pleased the we reflecting ACV execution to share. that as once by quarter second continue momentum another strong the record-breaking in of market in are guidance, end ACV's continued with

resulted of our ACV leverage and a the adjusted for the ACV to growth strong, that, margin to which EBITDA, recap contributed revenue highlighting was Demand Transport also With Slide guidance, in growth versus XXXX. in quarter Capital on X. let's And profitable focus brief driving very QX both exceeding expansion revenue and model. turn on our continued

increase year-over-year. year-over-year, continued moderation, last market Despite fall. guidance, end million $X billion moderation of price above year-over-year, declined resulting from price XX% revenue high reflecting quarter Second was $X.X million this increased in our growth X% of $XXX reflecting of wholesale ARPU prices. GMV of the

engagement. rate, QX which an results sold of from conversion in a range of benefited increase and benefited unit innovation, growth from a focused vehicles in our sequential Year-over-year We strong enhancing in data-enabled XXX,XXX marketplace year-over-year. dealer growth marketplace, increase from X% on

again discussion to On rest long-term innovation three scale. I today's the our growth. strategy growth, shareholder pillars and value; with Slide will I'll of maximize X, begin the frame around of

the by X, the are Slide wholesale I'll market. observations begin volumes in as QX, about retail for sharing the automotive seeing trends context market broader In increased we light vehicle On depressed the X% in from supporting levels. running is retail SAAR which levels, still to XX% inventories quarter-over-quarter below about and XX% are recovery slowly sales. increased dealer is but pre-pandemic building, year-over-year key

were issues flat consumer year-over-year continue demand. affordability impact Used and vehicle quarter-over-quarter as sales to retail

volumes of In were XXXX in fact, used retail the about year. half XX% below this first

X% Combined, is which used retail positive into about sign wholesale market. units for and new year-over-year, supply increased a the

As in wholesale we rates prices declined levels high expected, QX. seasonally quarter-over-quarter and from conversion

and more follow rates follow normalized prices a will believe we curve this will seasonal normal also However, conversion year depreciation patterns.

On that to later. take balance, giving of guidance we show for raise year, will end market conditions continue us you confidence continue to again believe signs Bill through the to which improvement, early

seasonally below approximately with that market normalized given ACV contraction of to will by and share quarter. market that to in continues but this estimated market dealer confident market growth growth wholesale line grew from market gains. volumes we in Slide year-over-year the remained XX%. share QX, well the our benefit Turning both now as unit strong recover, U.S. remain QX, estimate an expansion In X% that and XX%, the our X; implies were market We first

growth wrap to like section with value-added highlights Next, up on services. I our the would

of on is schedule. X; strong First, the and Slide Transportation ACV quarter delivered ahead another team scaling

reaching cycle times attach in carrier the resulted range. rates strong Our mid-XX% record in network

investments driving growth both in are and and operating AI efficiencies. by technology dispatching Our optimized pricing

year-over-year. mid-teens, an in resulted margins efficiencies basis the points in of XXX These revenue increase over

at discussed recent revenue our we margin teens. financial high Day, our assume targets in XXXX Analyst the transport As

are track achieve on So objective. squarely that to we

delivered QX. team volume XX; Capital Turning time Capital results maintained over revenue resulting strong Slide growth XX% in ARPU first combined in expansion, ACV a QX, QX, After in this achieving rates our delivered level year-over-year in loan to with very growth. ACV also and for XX% the XXX% strong attach

important with confident Along our and the We long-term ACV in offerings, driver. that profit plan be core products our ACV market. investing consumer floor we Capital for dealer remain Capital emerging enabling new to will are sellers, an growth

second to XX, case, drive Slide rates. and I'd this the to we're our like innovation highlight in improving our conversion on element innovation; Turning growth leveraging strategy, to of how

of We have our format. the auction live XX-minute expanded traditional rollout complementing further our auction, two-hour

our just buyers with even a more also of auctions In We're to vehicle for merchandising listings links segmented quarters, specific criteria half by testing over are two set inventory. on a provide right hours. we new for are running of the few searching where short flexibility

to extends easier page display that buying data enhanced makes digest, faster our condition vehicle Our dealer enabling for decisions our to mantra continuous vehicle improvement partners. for

dealers alerts leveraging historical AI are based that matching inventory our We buying to patterns. their to on capability enhance feed

Lastly, drive goal rates engine, to the provide which our dealers our success curated set. data even along learning we guidance is leverages data continue on higher automotive holistic vehicle industry-leading innovate by here growing machine and to with with marketplace. The pricing is on powered condition pricing our to

ACV products, powers we're brand Digital. now upgrades engine to making and ACV ACV car including clear Auctions market report, sourcing consumer MAX several The tools pricing of our

XXX earlier, we mentioned over conversion results. basis in and a expanded I innovation points As believe year-over-year is rate element these key our driving

our reducing investments in arbitration that case, costs. highlighted we examples this costs; customer operations, delivering On while success Slide tech into extend XX, of

minimizing here arbitration satisfaction The customer is optimizing key has accuracy. a for both and know, margins. been key you focus As inspection

inspection. and ArbGuard, an apps. conducting CoPilot, data Several innovations inform vehicle-specific machine inspection to and before and our analytics efficiency; predictive and and learning, and that are accuracy AI-powered improving our imaging ArbGuard, Apex CoPilot, issues VCIs after leverage our sensor

delivers teammates. device, VCI our productivity transparency additions the Apex, collection next-gen operating inspection significantly also vehicle for into increasing higher Our while

continues helped reduction X% accuracy AI performance list market. Virtual increases in and year-over-year, the QX, conditions arbitration specific to costs like an great imaging converters improve. catalog drive in by identifying which these current is rust. In Our innovations

To that own industry-leading wrap our innovation, think partners our delivering dealer operations. agree team and is to to technology on up you'll I our

road exciting innovation map an scale, both more have to next drive forward We sharing of look to growth we and quarter. and

Bill driving that, With to we're over me let and hand how our financial at through take results to growth scale. you

for everyone, George, us and today. you, Thanks, thank joining

adjusted We above our our are delivering financial again upside very performance, revenue with range with QX pleased to EBITDA. record guidance

EBITDA versus QX the of expansion 'XX. with demonstrated model also and meaningful business strength our We adjusted revenue margin margin

I'll year-over-year. Turning above a $XXX also range QX XXX of with versus basis 'XX, million the EBITDA recap of $X second our of guidance leverage demonstrating operating results. the margin adjusted grew points X% attractive improved Revenue approximately Slide begin end in XX. our of beat our and loss Adjusted guidance to high EBITDA our quarter million was range model.

additional growth was revenue and of in unit ARPU Next, revenue, XX, which year-over-year also year-over-year. grew XX% increased year-over-year X% assurance revenue, reflects QX 'XX. auction revenue which details. Auction I on This total Slide X% cover and versus of and $XXX performance insurance will solid X% results

going we were a pricing ARPU despite we earlier, price George forward. we able X% per headroom year-over-year, to and of As believe fall, by in our still decline increases unit grow have XX% and mentioned reflecting GMV last

Services grew for year-over-year. by Capital. and record were which both XX% Transport total Marketplace XX% revenue, ACV of Results ACV revenue, driven was revenue

comprised Our and X% and SaaS revenue service products X% total grew data of year-over-year.

We're platform, MAX quarters, the position significant As few Digital near-term. the we reacceleration improvements growth to to for approach entering in measured making XXXX. discussed are improvements over while customer these confident we the a MAX more a last taking of acquisition

by revenue percentage points cost revenue The strong approximately of Slide Turning quarter. I a XXX year-over-year. to in XX. the was as cover improvement now auction by and ACV Transport. costs basis results will assurance driven decreased both QX and of

mid-teens transport As in George which distance is striking we within margins XXXX QX, of mentioned, our target. revenue delivered

continue discipline reflects year-over-year investments increased the in cost our growth expense initiatives. excluding to Non-GAAP of years technology made expense, significant and year-over-year the scale We prior we optimize market focus to and operating as expansion business. This revenue, year. support we XX% versus X% prior on

and let to investment Slide strategy profitability. Moving to XX, me path our frame

and adjusted our to conditions material year, growth we accomplished results, in seen Our this preserving QX in result and this technology have as position is And decrease go-to-market reflected as OpEx ensure a discipline to EBITDA in operating a expected in loss ACV improve. our while our you've declining focus investments efficiency year-over-year. is spending strong by resulting in on XX% over market

QX cash the We float Next, structure cash and debt capital includes to highlight securities in million I on Capital. $XXX QX growth equivalents $XXX auction marketable ended ACV our business. will and $XXX long-term finance Slide our in strong our million that of Note million of and XX. of balance with

the business trends previously, of amount a the discussed balance sheet in two each operating final float our weeks of cash on on corresponding the can flow. we've has quarter meaningfully and impact on based As fluctuate

For first improvement operations of significant from in the cash $XX loss a the XXXX, half $XX first half flow million. of was from the million XXXX.

to XX. Now on I'll Slide guidance turn

expected range $XX of to For $XXX EBITDA in in the to revenue Adjusted a $XXX the is million. third quarter of $X expecting to the range of XXXX, we're be million. million loss million

to $XXX For our XX% to million of a growth range XXXX, expected million, of raising revenue the to year we are XX% $XXX year-over-year. full representing

to loss range million, also EBITDA of exiting are a We EBITDA year. remain this $XX and adjusted breakeven million to we $XX our reducing committed achieving adjusted to expected

historical and are of recover. patterns inventory follow to year, relates that price assuming remain that it rates seasonal assuming at conversion also as normal the lower wholesale the continue continues. in As half and improve depreciation used our second in that guidance, and near-term new to production the vehicle We're we supplies levels

Let XX targets. by our financial me XXXX Slide reviewing wrap on up

with $X.X margin. in of a ability million We remain our $XXX our execution of EBITDA to in adjusted macro with and XX% achieve EBITDA and are adjusted in revenue confident XXXX very environment challenging pleased billion

investment into factors, wholesale, revenue TAM As detailed resulting technology our adjacent expand including long-term dealer number gains. our improvement growth scales. increased in to and broad is market we business strong share, confidence margins, Analyst and a by our growth a our platform, wallet in of efficiency, including our sustained opportunities as commercial share operating consistent enabling to penetration at commitment June, and balancing and reinforced markets, in Day

to back it turn George. me let that, with And

Bill. Thanks,

take we your let summarize. Before me questions,

very quarter to ACV pleased We deliver execution in of proud strong results. and with these are especially second we the are our Teammates our

and market We're offerings. attracting to continue commercial share wallet share, growth market ACV which executing We of dealer improve. attractive and traction and as in partners our an for gain new marketplace territory our penetration plan to by gaining gaining suite positions by expanding conditions

product an map exciting addressable market. to differentiate our further delivering expand are and We road ACV

the over we and We generate billion drive are target attractive medium-term, on track adjusted achieve significant margins, our near-term with believe and revenue over to will value. $X EBITDA in shareholder

deliver over are these I'll team that, With to goals. the committed the Q&A. operator results achieving building to to while world-class begin on We our the turn to call a

comes [Operator question Instructions] line Our Graham from of first Michael with the Canaccord.

okay? me hear you Can

We can.

Good. and question the to just -- congrats ask macro the just I question I on dealer for wanted environment thanks on wholesale. a Okay. for want execution. the

think are to there car You we sales it which are market kind picking get market? levels of curve want normalcy still facing used that also of I the continue healthy, getting sort think trend? more used prime mentioned ask in for helps on And you of used just the of where . new period positive marching that new vehicle can its towards sort of this for the long how high market, takes the prices if but up pump we're to retail are do you inventory

a in that the of steps sales Analyst And quite back the talked one take for being Investor market new return starting normal normal. new one place a Yes. to all our -- and thanks we about Michael, And that really this production, to conditions, question. of bit talked again, car on towards we about Day. car the come sort

there. great progress seeing We're

They're these are There's these consumers even with around concerns cars. incentives starting coming great this of all the very, new out. the that thoughts about cars. all very of new cars. putting incentives these excited around to are the excited products -- OEMs buying new are see economy, to sort So put

used really you starting So step to start back. to one important used rates see -- down. value once important seeing is car, want car come car starting interest an happen. that new be cars. to car that has We're don't to been buy used than that buy part. That's if help production That's because will lower has come of to also down And you to number a also, it those also cars. could come said, value And new new with

come sales car right little think volume new like significantly. used bit to see a I sales more direction. We'd car So back

start we'll And you add then start the about of to when on to -- over used cars couple up net also see normalcy. dealer think path next lots

the I -- So said said probably I Day, positive these are Investor really all are the Analyst on but same we signs. thing

then being from start this and also would get things our the and this trough, that. thought thinking part be said between year to our -- trough we'll of And all where that the the for We of year, forecasting be are where we now we're year, and year towards by next the to we'll to it XXXX, back see come start XXXX, year But back was normal. normal. expectations. really, part starts

from comes question next Nick of JMP line Jones with Securities. the Our

scenario guess of kind depreciation? year. do I gives more a where you in of depreciation if in get are I less do better . are I And what Thanks. on then maybe volatile? your the dealers bid there's on prepared unit the that and one trajectory arbitration cars the more volatile confidence result in you some more expectations feel around to guess, Great. guess, things rest of for of volatility,

Thanks means answer about the used have, I chime planning very modeled year. feel our good we do And can how and question. feel values as going but more of We we've Yes, Nick. part We for that that declining from used have comfortable in, Bill down. very car do what don't car for if completely, we average GMV. values the

miles question, of got is is and and many we the the they've year. a put it. I let's to say, on number think I what a trade but it's walking miles throughout will got how one, a would XX,XXX a be a question. your down put day, then does which this, it, mean at number They've on the great because vehicle, end on got all say new So feel going this dealers are about got good for number they've side I is think in. consumer trade of this the whatever or flip a together to And that

based were averages by is not those data to AI and helping got report, with their really data the More and that the help get dealers out powering were starting that use for helping places. dealers We're the the -- more to starting We've many data. great data, more over way done dealers providing dealers our trade. real-time we're are and value books to and This just pricing. just our data market old understand on months. new there into the to ACV consumers real-time

they And hard selling won't consumer. priced wholesale have if the it because Nick, time price then right in they have right, the a to market. they'll it

a data, market real-time vehicle dealers our assessment is think in we value that condition unique of market the combination that the plus of how we data market. helps declining take then So the that

to they're be the price them. we're help right consumer, And here they'll long fine. to As as

I'll I of couple think And just yes, -- add points Nick, here. a

double So in come our guidance prices second down half. digits for assumes that the the

to So QX. into also was an attributable and assumptions. add saw our you'll versus notice mix we've And marketplace that marketplace. in our in unit would baked per that in our that QX GMV our that we on increase I in actually improvement

going though, forward. that, assuming not we're So

assuming second are decline We in there steady the half. a is

Really helpful. Thanks George. Thanks Bill.

question line Goldman Eric Sheridan the comes Our next Sachs. with of from

about longer the gap come I question. you a back about remarks Analyst understand your upon medium you either I even key conversion. conversion up that talked think a sort widening industry. or little you what you opened You've of gap that see And as to want touched to the bit from Can prepared taking want themes in the term? you so vis-a-vis over to Thank long-term, when to maintaining the about talk today. for two to we've Day much as

also then And pricing.

Any into in but updated fed terms broadly the platform last are on get those thoughts took other, concepts pricing of each year. longer-term two elasticity price wanted over . to thoughts. and just updated long-term any sort You maybe of

get on Sellers of don't conversion of to ourselves, selling. the up. have cars rates their We conversion and it's lot Thanks, and they're just buyer to and spend bidding And Yes. benefit not selling sellers seller the obviously, our remind focused Eric. because a helping on on focused buyers. and both faster more to they're resources inventory that both quicker, health buyers their because wasting time. the

the it's So beyond model customers. . itself, end important for the really

the it's things. On side, seller several

us talk auction been about hearing formats. So you've

these about the mantra talk sort different quite lanes us selling of ways. bit the We're right on and vehicle are were merchandise a that each hear be of fit should way. in vehicles conceptually doesn't one size can You all, different different investing this

talk a more sort us six time and then of and effort hint to nine merchandising We've really been pretty at talk we building, significant about got over we've a hear we're You'll as but out we allow little months. about our there on a I [ph]. fully that it And putting it more the when more strategy. next

merchandising, So more on that's thing. key to come one but

significant see buyers for So just wasn't seen And is XX came minutes, on merchandising not got AI -- to and the vehicle. making buyer. up this it that effort, think we've and merchandising matching a it a the pretty said lot right? sure

buyers. got buyers signed really So data around we've rich sellers all and matching these country all and we've up this the got

So we've on got matching. a tremendous effort

and there spending. we're that significant other some resources So technology

for cars when out, to them. about buyers broadly, sure make you right want the the bidding friction you then on taking And are think

from asset issues the that less vehicle that helps report lower it's given or meaning condition data from on create a that issues that magic. you you if vehicle, more and So get other a -- or risk, higher risk

So answer quite improving on a rates. on to condition -- the working long-winded bit us

on This about you're of now. making XX this connection matching a on working We'll sure up done. how talk the is really this from asset, we're to right be years can buyer. sellers never going given like call and and buyers, globally any because right, we from seller investing it's

think room. value. about about pricing really but we've you too buyers with say could assurance. that think how today, in to bit give more we've that offering our talk is said and got way we today, price a room that much quite of I On And that meaning the don't I'll straddle we base

you to -- it pricing. buyers it's of tit So get compare mean can't assurance. the competitors' for level tat our a I certain

then in to And we'll offer start addition, assurance other some initiatives. buyer

We today. We'll have there one product launching be out more.

talk have more of towards room, you'll topic. some that do and us end to about Eric come more today, the on But probably that say for probably So we hear the that I'll year. more

Operator, question. we're ready for the next

next Our of John Colantuoni Jefferies. the from question comes with line

I hope taking just for there. questions. want I Thanks didn't start guidance. with the to break right my Starting system with

So a revenue your calls in of outlook in quarters. the for next growth sequential couple acceleration

you to And down assurance, and and expectations are conversion the marketplace relative . embedded of what's that in drive and to your your specific your and listings? for expectations? a factors marketplace delta sort outlook and rates break what in assurance key services just Can could data. And terms of

the and sequentially time auction next bit margins transportation on I then for just two and capital they've and And moderated other -- sequentially a first in services. that's sorry, little moderated They question, years. think gross quickly

about for time? drove then in moderation. opportunities there's about higher rate to sequential bit lot the And to what just continue that there. attachment a I a related capital talk And that, know so over ACV talk to drive maybe the little

Sorry about that.

Bill. it's John,

question let So the first. me second answer

execute transport saw yet we business. really level just our we quarter-on-quarter, high continue QX transport in our a what another to at improvement in which of margins terms was So in

we're So happy pretty that. with

was certainly that part So it. of

in increases on in customers. the interest we're an environment, rate Also mind, capital our through side, those rate increasing keep passing to

also well. all And would terms doing competitors I as that's our of a So in tailwind expect are margins. as of

services, So those okay? to marketplace dynamics with are the respect two

we share of quarters. terms we continue on for the at the past we've to been so XX% is quarter, -- would we based guidance, of which QX this In seems share that tell gained you zone to of I gained the several that our rate gain last assuming be in what for math, our kind we're

we're extrapolating So continued share certainly gains.

half, that That's if are there that just I add, second anything factor to there's at there's to think in execute George? drive all But that guidance. we the well. probably a will internally initiatives of continue level allow we've Obviously, this you into the know say a don't seasonality I point. want as number baked would we us at to other our

No. Obviously, a favorable compare.

obvious. we the we've saying And happy the year the we're way just just the . of So But assumes executing just execution. with end keep the met.

Riley. of Our line comes next with question from the Khan Naved B.

for lot. I Thanks George, clarify two are from hearing to of heard dealers you right? say just a I are that hours, on but hi. to that And this. you Did auctions what Yes maybe up you the that wanted correct, format? running half is

then It looks helpful. platform? be there seeing self-inconversion, kind on front? Or And growing? it would it the you but like any dealer of to respect are stable? that What can share with on count you is anything Is it

Yes.

So yes, hours. in heard you the two correctly

if sellers of the some to [ph] who more higher offering to we platform. So today are way, sellers think offer give two good top-producing real some our our We also sellers it in are that new the on our them conversion rate to it so . auction also primarily signs. we time almost with showing like a primarily and our estate, as

love sellers typically -- Dealers it.

Some buyers love it.

There's of little like got bit way favorite of approach sort to -- anything, a everyone's keep things. We own making Some their tweaks. don't. buyers

change the for like notification notification their things only the to want to that. get -- when not have they no week. and if but down the able -- matter this a rollout have fact, into they think and like next choose I buyers on they and them, even notification get we can within some pick be As week of week, XX get happening they'll minutes, to

conversion. industry. then taking you're buyers with helping look matching never is you're back it, the outpace a in level, high It and sellers. us helping it at what's step, And happening It's So done.

now, set each out give to one So it control to loves whatever happens we're doing. sellers we'll more buyers is point. And this keep working the right at way just iterating. -- we it's there and to do what to that team and feature a just live so have

Got . then count, it. or And on any the color commentary dealer

Yes, dealer about a account, pretty only really year. we doing But talk we're not do a something once quarterly. -- we're that generally, we It's consistent company.

You're seeing us quarter-over-quarter and being what add pretty our consistent. gains

I consistent. So say would

Our Christopher next with question comes from the Pierce Needham. line of

rental I'm an but in and there at Day. expert -- be not car the on from new assume. and break certainly You sales, guys does touched they're you taking needs of curious, new in on if cars OEMs. How seeing allocations penetration of we're guys kind car I'm that taking defleeting, here, kind just it. you to sales, cars, down I lot Analyst of touched car when you rental would some a

allocation more that's guys because opportunity? opportunity you than you changes How Is getting made become do that view of from the kind the and thought that near-term of OEMs? you've you're have an might

We a commercial land, need few way, as The Chris. look scale. sector. commercial thing hundred commercial into that like doesn't to it some a thing all us not this historically, some I've new at opportunity. broad TAM for when the you a to low, mentioned the grow I we definitely, you is in been Yes, nice all new month, it's -- nice The right? So very it's units is think, a

can would across country, so one rental. the we example gain Rental land. the have elements don't be even we the of an that's -- where of We're where units nice

still defleeting the is Now low. very

go it nice see starting to it's to up. So

think really I level. high

exact you become But a yes, going that units month, the hundred answer then the starting from thousand, to a give back. substantial few question they'll I'm and the to more to part few time. over come is simple of is a and ecosystem We'll go numbers. more

of when of XXXX, the industry so that's example the low industry compared wholesale historical showing And to think turn right direction, to in positive very, that's but the I not very one coming low, de-fleeting starting about some part in now normalcy, signs. low, volumes, a and to back very

core you the just about MAX guys you dealer curious, for? Digital putting revamping see Okay. -- talked of is product And kind then of And hoping I'm intending within early just is what year. . kind forward? kind Is are back it there out use it lastly, or data? that next going what pricing what are there of a just it on Or what more you it the you to down much? dumbing to

this to article because say press happen drill does January a to a news not that's or way little where a okay? it try I'll release make try probably February. not supposed still in until to I'll color, or But

they're to going acquired going If here, the and inherited to that we trade so you Digital they're how the price help trades how connect the dots MAX and dealers inventory, both and price of sort that. level. the around some merchandising also it . merchandising a really does high and like imaging photos helps like areas I inventory Internet, right on the put at price retail their do dealers

process the of taking We assets. are the in ACV

our to want I refresh next early keep The Super up event year project. because Bowl is of to hoping sort which ADA like heard year. every talk the how done. that kind understand -- year, we're get help think vehicle about, like and what So this think some like of And end and show relates things of our of we're to this a of about pricing. is objective us an things NADA you've is saying condition self-inspection with yes, And reason we

our allows their leverage bit a more. fresh data these own product broader value this self-inspection how fun of dealers in to do view little line force sort the do have It's to ACV and it's of them little way, understand here going own a with to this a time and out a of come set. assets help that

think teaser I it's yes, for So all today. a

a Day. you to more next little bit at early and come Analyst give can and than year. think now I did I more between

line question comes Citi. from of Ronald next Josey Our with the

me Can okay? you hear

. Ron. certainly, Yes,

was As live. true if I

say to using prices that. much data quick experience. don't maybe, improving might you the too So heard on more I what ACV's call to just set that I a dealers say to be are and George, utilizing auction but I the coming market follow-up want understood you thought about or

just So about as can down what we pike. and about here now be available you tell in the what's us the coming might think

you think shares all wallet we big heard of Talk and can about us being is -- wallet follow-up. Analyst I on part these which as share tools reduced. how sales have improve a friction we the process was one different overall to earlier and as about just how gain, quick the Day, And just and just help

Okay. Great.

So your pricing lives question, Ron, the places. ACV first engine several in on

MAX is those just one places. So of

So being within to a really market an bit because self-based matching you're ports, go go car, the as data. more report that's at the that to look the there's more way it little gives pricing -- seller where customer auction, while a and all being little free, was that versus bidding and dealers it's market can a it data deep that helps the acv transactional able bit auction, to maybe a on built, this you in a value-add auctions oriented buyer

launch the was The updated seller on just to pay that side. to the the pricing A screen. screen newer get is engine area to taking we launch

of price team So our the on. helping thing been was a what decide the That seller asset. that iterating recent has

this So you. for inspected we've vehicle

car. You thought was it a $XX,XXX

a price. looks was That change pricing like inspected a That you like MAX. more. level bit in being for from now an buyers the little car, same not engine helping -- example. we've went Again, want your also helping sellers is it to it, part it's free, reserve $XX,XXX to that subscription Now

broader MAX whether as if workflow, tool. not into it. helping is just broader, Digital it's go going you Whereas just it management going price, retail that this take to a about going imagery where a a it's in into and wholesale Think trade or you MAX Digital, you're into car

a just what's it's So value. use wholesale broader than case the

learned and taking So those priding it's into all a it broader platform. lessons

question. your was that So first

second was question. question -- around your I'm second Your sorry, repeat

think -- gains think around Well, And around I it wallet . share gains. was was I answered sort the of all share wallet you

right. All Perfect.

Go ahead. one. You had another .

of out announcement it. clear call on was hear the just haven't about We heard Analyst one that didn't -- Day. And -- we

. So

Yes.

the point, pricing So the and your part that's goes. engine where there to

helping me sentence. thank my own So you for finish

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from vehicle. we're that, And on number putting all a a

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making a aggressive. got from have the there. content to year, up see up there. some get ways. of said I now now we Day Analyst similar now website We've we'll to probably We're and But our between the you'll before, what end more And

Our comes Bob Securities. from line of next the with CJS question Levick

hear Yes. for Bob. Can Lukas you me? It's [ph] Pete

you into that We've built inspections. talked numbers? the in technology One terms of on efficiency those inspections But kind you're bit and always about for the of of remind looking a in of of expand us areas has tell XX to XXXX . terms been out. roll biggest numbers, focus VCI your us can that of

Yes. It's Bill.

double we've about running currently So inspections talked past, And for six inspector. roughly our or in so on around that. as we're average are inspectors the best-performing

average territories. obviously inspectors got in mature less we've below the So some

certainly average, So on of our not productivity what greater but inspectors efficiency we've maximum best assumed is XXXX, the by at today.

So assume high day average single a digits up on to inspections by XXXX.

So that into our directionally modeling. is what we baked

there add? missing those there strategy? anything you lot about helpful. more. 'XX next in goals, which the we build that goals? Is And on innovating, was be of it always . should Is is terms get know a talked about very something you're versus up call, there thinking a Extremely one or to and But and the helpful. then piece need We a buy just to to you

No.

I vision, we and everyone better keeping of without all plan, really better. like want the up building. to making protection we're on we felt patent on Analyst the And because legally both inspection little own laid our of and for bit our think product you out on the things ourselves exactly expansion we're giving protected to, Day, right, a our sort keep

I think where vehicle really this is with AI said in leaned we and condition we're help future us really leveraging to inspection. the

it's we're I the industry. area And ahead way an of think

just there, we've you is our think that more keep growing been us think keep I question been. believe So just growing. anything just have answer way you going path Territory expansion, we're the to I we've believe like continuing to to executing your

our side, start TAM the be expansion. that part On of a to commercial would

out. also So . lay we that part, started to

continuation the pricing market It's Those power are Yes. the a of leveraging Look, some gains. by of recovering time. it's biggest over And XXXX. our that share drivers. quantify we it's

breaking revenue the If the out together look put different that you go and back components. at chart . we

line comes Stephens. question Daniel Imbro from next Our with the of

Maybe Daniel is about talked I of long-term inspections follow-up. market a question and some services then one still When one offer, share. you've from longer-term think but the you important about and we liquidity Stephens. really want start. share, to

I buyers -- adding with or would your there? earlier the judge to still the auction think but are guess returns how your liquidity at out platform? omnichannel comment you versus I large you competitors sellers consistent, seller are relatively

as in new the buyer the not our I executing, buyers, We're say, bringing significant planned. effort on weeds. got -- we've -- to get We've on with into pretty side, got would

month ago little or of I in it. we're had we yes, record, like seen months think, here. haven't new ago, one pretty clapping psyched internal So most about up . many, We're amount in buyers a we two think all month. And two many -- signed months a as months, which the is

even board, a internally, I Consistent retention would acquisition would there record say, I was right? buyers little are on new been, So consistent. coming though broken buyer new consistent, say has

So really no change.

where parts last You We're I've all for are you some telling we different up that or the six, no enough demand, supply known many those of those what get the as and for which right? seven of bringing years than the on regions years, country -- have really more have There sellers to is get last been don't couple certain me more bring you in can demand of supply. buyers.

in matchmaking bit regard. a There's of that little

word sellers guess consistent. I -- and We've the would would use consistently adding I on I . So buyers. been

weeks. of expectation run picked outlook on I what's at pieces rates three, those into a kind just . previous then year didn't Bill, question conversion the any have your Could EBITDA two comment discuss last exit Is positive you And Great. to clarifiers see John's maybe quick earlier, rate. to the this of the that four guidance? That's helpful. up baking And industry

Yes.

So and to -- on in based seasonality, Daniel. moderate that's conversion half we the assuming second just rates because are

the So I terms another We from QX was well conversion good out there. have rates, of down ordinary but QX, above did in norms. historical quarter it was of nothing say in would QX

that we kind rates conversion what So the talked that pretty I have we are would say is pre-COVID, expect year rates with right? well. norms our the of And conversion historical doing consistent to which is are about mid-XXs, previously

all year conversion there number and from that's talked X-hour we're to up to sort remarks, baked And to so exit are my where to at this in. So the breakeven things we're -- seeing. we the of Yes, And we I auctions that We doing. continue we're a that that are. drive believe reiterated far commitment try results happy they things to pretty . I with prepared about continue EBITDA of our in reiterate rates are

Great.

-- And off cut can sorry . to towards was else you something there add? you

that conversion it last you say, And things, rates x look up weeks. let's these some about the be your seasonal A external we at seeing Yes. versus typical going you're will let's pattern. data was of think saying say, of just lot when from, us

now We the and a have have of saying, of happen could job tee end to obviously what tough the year. --

two That's to the always It's follow seasonal for things. go. separate it's prudent just So just patterns. prudent say those to way . to why us

Gupta comes Our next line JPMorgan. the question of from with Rajat

for Thanks questions. taking the

customer Just about it a just couple terms anything move gross an you of the on sequentially. -- there in talked then like there? year-over-year the quick ones; inspection the cost? improvements green margins And up Was arbitration party. of over to assurance, flag Was lower pick

quarter, had we just what was specifically nice to better And OpEx sequentially really it then a We like there expected. the than move in to quarter. seasonally follow-up actually second flag in margin down lower was the curious anything little a there came see a

first call second a second in pickup the But the a light half half, the in half. for guidance continues versus to seasonally

going could about just for on So preparing Any there? Or Thanks. curious add. other you year? what's you next color

Hey Rajat.

I'm to Okay. of track the all keep parts different your trying question. of

customer -- So on was for so let first me one the margins assurance.

go remember sequentially So QX, we we we that the And say did in the if obviously, you which quarter-on-quarter. QX, up right? arbitration on about talked costs that in blended at front, had great overall, expected we margins gross our QX, our performance would drove, XX%

your And trailing and margins, that taken down. then average In actual margin. terms in actual either reduction in that, accounting or I the is . what at kind the of we've drove you look what XX-month reported works for think the if it upon again, the up quarter, how right? of through depending That's moves you

So frankly, at not all. us surprise was to a that

bottom And line the of strong end overall we mentioned, EBITDA which In fact, was than with margin at million. performance you we the loss our day, really a had a with better actually the of obviously, OpEx $X was that efficiencies XX%, modeled little revenue internally.

the know I on OpEx. was So third question

this, remind what actually in half, But So of and just to of then terms your me I'll part a second second timing that was. question for is answer the let me so the OpEx of one, go spend.

we So so our every is overall, our on a numbers. half. But for was? slightly the you're is guidance, our linearity me of Obviously, what losses half year question into your the new you're the beat our based try exact what obviously, those terms we're seeing be guide, versus projected can't in remind spend we'll full baked second what to Now second EBITDA the OPEX lowering of OpEx in first quarter higher right? --

a line, how Yes, better more seasonally OpEx quarter sequentially in despite was on it down it was sequentially.

what just So curious I like . was the sequential drove reduction there.

Yes, good question.

that's the actually, marketing happens X-figure is our the us. and NADA for QX, expense on trade side single a in largest cost which So show.

that hits only and So occurs our obviously QX financials.

that So the quarter-on-quarter terms of is primary in the driver . decline.

it. it. Got Got

about . anything industry. an or arbitration the given concerned on industry short why So the because price nothing there arbitration was are just be of in perspective to specific coming clarify declines like period from to the

like even try telegraph as much this always like possible. QX was exceptional. -- Like we That's as do to our we internal beat We right. We expectation.

of this I think QX don't year. hit exactly later But quarter. the to said directionally, in our expect I specifically, we goals, closer XXXX

So expect way. I is of quarter-to-quarter like to it linear that be don't all

hitting as our EBITDA, beat did and did exceeding we beat guidance we on internal goals our yes, goals well. or But margin us

So not only our our OpEx, internal. but beat we

we So internally better it planned. execute than was -- we did had

And nothing where that follow-up. part of second your question,

. or just were the compare like nothing quarter-over-quarter that. with are We It customers arbitration, was

added Yes. we would QX, in XXX way, I add I would -- employees. the also by Rajat,, over

I of So QX. because show in trade mentioned, was, the expense sequential while the as decline

levels. lot spending of and exercise discretionary our discipline around We continue a to prudence

efficiencies trying as we're and to continue those and . to technology every drive invest very invest in the to quarter, and operating And future to as we in also for very, focused always that best continue on can. do go-to-market expect we and

question line with Prestopino Research. Barrington the Gary next Our of comes from

of couple questions A Good. here.

quarter? how conversion of this, know could I talk in don't about your the what give rate, . rates directionally answer you industry exact out conversion George. you excess rates conversion but If your can maybe you were in the were

satisfaction. go way. probably it's we're everyone not Again, -- conversion customer not It's likes ahead -- we're this helping But on look We're thing. in slightly helping rather rate all -- schedule. same I this it executing doing conversion of units, I'd would the they're is Gary, using a how at there. rate it's

or And ecstatic. our doing to give yes, competitors, to you hard probably me thematically, our generally many job. of would we're a sellers appear many a better it's number are like really a say, of but for But compare I speaking,

the feeling doing more stuff right out whether these helping the lot wasting on are keep of they're and we're bidding if vehicles, like Buyers is not talking cars you buyers time guidance, about more of month, Gary. and week it's with take we -- every bid getting the actually the meaning industry every car helping, because declining, and they're a stuff used it, pricing all macro all our here, merchandising,

the and and not -- as on I that's competitive our people phone. of sellers have product sort the on a we and in thing. field is advantage both complement one a together out have we come It's resources, in the And the well technology sort help and as vehicle. buyers think of

about So we're feeling good it. really

. specifically, question what answer starting good a doing. your about numeric like given So to number, feel we so we're

better, less lot seeing they're that and people are the are out and supply car are you is, franchise especially question second the in new on the a -- than keeping selling it OEM dealing more because system the mean specifically on the then are dealers field with franchise get And in the -- okay. rather the trade I your lot? retail dealers to maybe field, to That's dealers guys through you apt seeing that starting is side vehicle it

know willingness things starting I we this up. That's because Gary, it sign first, to But So list gets to out come confusing. of a all yes, are trade. don't granularity give

a for us. sign that's So positive

dealer up. the see to to starting are start we as yes, more willingness. lot And So fill

XX%, were Is these Keep lower 'XX. than still Tim. lots in to most of they XX% mind, are right in dealers' that right,

empty dealer's have You're of lots of still Gary, XX% spots for vehicles. a seeing, lot to XX% a

X, even early like was a recovery. supply happen, step step early starting cars see that car a signs, almost supply -- bit that willingness to while will X, is take used bit starting new little but to of that we're but little in So is step like one

But to I early I've for up will year-over-year. that this that year-over-year dealers positive saying until some opposite wholesale, willingness signs the are vehicles wholesale been next year-over-year, year, point. yes, can Obviously, hopefully, -- so say show by dealers' have

session. Fox question-and-answer I'd concludes remarks. to like closing for the Tim turn back call today's to That .

like Wednesday Please we're Canaccord's call thank joining I'd Boston. Golf note the in at us Liz. be everybody that Thanks, Conference for Annual to Great. going today. this on to participating

over So the Once in we and you thank look there again, your a have another forward for interest evening. conference ACV, . you to quarter. great or seeing hopefully at

today's conference Thank for call. concludes This participating. you

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