ACV Auctions (ACVA) 7 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, greetings, and welcome to the ACV Q2 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, 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. such subject cause and materially actual expressed implied are factors and from statements or could that results by forward-looking to uncertainties risks involve those These statements. to differ and Investor A discussion be in Relations can release, website. SEC our be related press our and today's of business found in uncertainties filings both of can to found risks the which on our

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

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

of guidance that end June. record the high We outage market CDK despite above revenue performance. pleased are our quarter second was of with related in quarter software to headwinds the another We delivered

Adjusted are regional resulting We of XX% improvement franchise also margin. Along we in in point basis wholesale with ongoing quarter in penetration. solution, initiatives hit and increased our our new pleased with year-over-year a of adjusted our achieving momentum consumer dealer ClearCar with wholesale, market markets a market. sourcing the XXX EBITDA the address with commercial to XX% technology half milestone dealer in ACV's the sequentially, EBITDA adoption very

on of that that, results Slide turn result margins in As creating our we value. With delivering performance focused in EBITDA quarter encouraged executing and July pivot growth, let's and this strong to of the will our strategy recap remain expanding back driving half are a long-term profitability. of on X. XXXX, adjusted We're first by we on year top-line profitable confident growth to shareholder second

and strong a per year-over-year, decrease year-over-year GMV We to relative rates prices to modestly conversion teammates. vehicle declined strong as revenue year-over-year and driven XXXX. growth, $XXX listings unit quarter vehicles, XX% in by million. Second across GMV QX of mix ACV execution XX%, compressed increase my reflecting XXX,XXX wholesale grew sold XX% a

the highlighting However, ARPU year-over-year, increased X% to the ACV is market. delivering value

X. Next shareholder X Today's growth, I our begin the on will long-term scale. innovation maximize will strategy and discussion with on value; focus growth. of Slide pillars to

Turning Slide market context the wholesale volumes. as dealer for observations our automotive share about X. to I'll

New start off to a got retail QX. sales in positive

increasing outage a reflecting Used help However, continue the both the support CDK the sales a X% to challenges should year-over-year resulted retail approximately affordability positive of flat OEMs in outage vehicle new year-over-year, CDK the which sales note, half inventories retail are consumers. the incentives, normalize ongoing On sales for facing in declined retail quarter. XXXX. and and back

used lows. of from inventory terms recovered historical levels XXXX In the have overall vehicles,

remain they However, XX% normal. about below

of been we a before, has for percentage discussed the for dealers headwind used trades shortage a vehicle higher as retained supply wholesale As retail. dealer inventory

However, uptick the normalize QX we did inventories recover. in in as modest Trade-to-Wholesale mix we to and mix a see expect the

dealer believe and marketplace modestly automotive broader will in continue the which dealer XXXX. attribute in market improvement engagement. investments to our back to of we're the rates driving were Lastly, of in QX, wholesale and seasonal pricing Despite pressure, price the very the normal since that And solid will year. the has conversion for patterns follow depreciation the year-over-year, signs early ecosystem of balance, believe was half we we wholesale seeing normal On stabilized. early balance recover prices QX but increased above

to X. Moving Slide

growth, again efficiency. year-over-year. we over basis high-teens our significantly pricing team beginning year strong The quarter. delivery achieved with Revenue points transport ACV again while operating coverage XX% our delivered and was AI, margin XXX and volume cover over XXX,XXX transportation with optimized once results expanded in Transportation. in QX. team AI the lane highlights past By the value-added in Let's services, leveraging on the delivered over expanded XX% driving

growth, recently our excited is services partners. network to create off-platform traction new deliver carrier We're stages, long-term relationships. and early launched accelerating value-added service but that our gaining in with transportation while the dealer densities Lastly, deepen

Slide the growth, managing challenging and environment offering growth ACV's to then with an for in The team is capital first provides on The the business, floor retail delivered once dealers. plan driving that new independent consumer expands piloting the while are to wholesale market. Capital for a the addressable continues sold that that trade-ins again offering team risk or X. Turning Along be financing ACV vehicles new marketplace. core dealer in

forward new sourcing positioned We vehicle updating uniquely in ClearCar support these We you coming bundle look to on to the ACV strategies. offerings with our dealers' are Capital to quarters.

of second shareholder delivering of XX, Features strategy call, drive important dividends. Earlier paying some mentioned innovations. It's strong auction conversion market. marketplace are I'll element QX our is growth product growth-oriented that first innovation. merchandising, Moving in to Slide lever. advanced recap investments what which an the AI-enabled experience dealer best to is rates, value, believe clear flexible we like long-term are the on our the formats On pricing buying the vehicle data and our search, I

pipeline footprint technology progressing delivering drive to marketplace standardization with will initial commercial features initiatives investments our are and support commercial platform with consignors. These help AutoIMS Our integrating focus our in across key on growing the displacements new a MAX QX in re-marketing and rates The gain with new of very to continues high with retention centers. traction market of growing along prospects. competitive ACV key suite

to the making nature drives, delivering than automotive we Legacy appraisal of strong solutions more ACV's Lastly, fully cases. Whether across or don't use to critical service process dynamic see channels consumer dealer tools factor. of consumers of vehicles a we accurate interest an market, the are vehicle praising through capture excited and the their ACV With in are art the dealers science. success appraisal trades solutions, sourced category, making in number are a offers is science. self-inspection digital the pricing are

category, still of self-inspection believe on a expansion. data can in Our based It's appraisal solutions opportunities, exciting detection that AI but growth long-term and this our number damage we millions incorporate inspections unlock imaging including TAM mode. pricing is in days of for localized condition-enhanced real-time early

solutions, fastest-growing prospects. of Market And wholesale video and dealer of website XX% ClearCar solutions, opportunity XXX Monk's highlight are positive. Classic growing self-inspection and partners, Let's XX%, they're CoPilot exterior dealers' very posted strong along we significant now high-risk featuring XX, team a lead Elite data highlight Slide year, feedback transaction feedback share quarter, vehicle by remains even are increasing mileage the of quarter, our inventory legacy Last excited is another turns Group, in conversion dealer partner. On accuracy. a from dealers vast ACV which by wholesale including we pipeline X.X is retail to and today we're one for AI from customer Dealer nearly ClearCar, for nearly ArbGuard. investments And of deriving of operations. Again, set ClearCar. of tools. turn data, value IR becoming to regarding deliver a technology hear examples to on Auto increasing marketplace. representations model, by based profits a versions ACV vehicle. our live costs. visual ClearCar reducing increasing Classic dealers make producing specific level using describing adding deeper ACV set X.X with new success, broad very condition estimate MAX a XX a share based attraction our improving this generation while on to diagnostics. We with remained further cosmetic profits retail from leverages the we and strategic benefiting And to Elite our great and on ArbGuard partner wholesale vehicle ACV and wallet using of we leverages our from of part one directly launched that an failures Slide and our the that It's industry-leading solutions. CoPilot higher of relative

with to growth sharing you growth next me more to and details how over that we are inspection that, excited and of scale. great delivering quarter. With to ACV record dealer wrap results across operations, of scale. our QX And in and up driving hand technology milestone both efficiency the take team We our VCI partners to is contributed our Bill look industry-leading to driving financial own innovation. you to to very and nationwide a through level forward team. I'll a we're our inspectors, our on it share let for technology

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

recap versus grew with demonstrating are EBITDA the guidance end the our QX We was Along end pleased our It's that XX% performance. not expansion million a Adjusted quarter. transient at adjusted QX. accelerated of EBITDA we We revenue second business range achieve factors let's of growth, $XXX of worth the improved margin and with results. range and would our EBITDA points high in million high delivered strength our above XX, approximately quarter pleased or our Slide adjusted the and QX guidance record growth, meaningful margin revenue were our XXX EBITDA exceeded model. On financial for very with guidance have of was sequential begin results the impacting adjusted of basis margin year-over-year. Revenue $X of midpoint 'XX. noting strong of in to

GMV to was As and during ARPU George our per depreciation mentioned QX, unit which price above relative pressured earlier, forecast. normal

to and in these We market digesting we seasonal normal follow arbitration arbitration expecting balance transient because an patterns factors the as declines. to price also had have and the I as cases quarter year. unit early of depreciation refer per increase are in were price dealers rates for stabilized the GMV

margin at guidance Finally, of our the basis year-over-year. with income XXX increasing non-GAAP range points net midpoint was approximately

grew of Slide of details. and auction Transport were year-over-year. total was revenue Results XX, Capital. XX% year-over-year XX% XX% highlight quarter to and revenue grew strong XX% ACV This which another on total and performance record Marketplace revenue and assurance I and revenue grew growth additional revenue unit year-over-year. X% Next revenue reflects assurance performance and would ARPU was like of year-over-year. Auction XX% Services for driven by ACV $XXX,

returning Our services X% of growth products SaaS total data comprised revenue to with territory. positive and

remain ACV ACV the MAX suite will As George mentioned are confident long-term very new MAX of earlier, with pleased that and the growth. drive relaunch we

revenue XX, by was assurance the decreased ACV Next and cost review I'll of XXX approximately in QX of points The by on percentage Transport. Slide driven basis improvement results a revenue costs and as year-over-year. quarter. auction

XXX discipline of points scale QX. and to business. optimize decreased we in of basis a year-over-year focus excluding as cost revenue percentage operating revenue, on continue expense expense, as our We Non-GAAP

Slide to me driving strategy XX, profitable Moving continue growth. as our frame we let investment

significant resulted a in decrease focus operating a spending EBITDA. XXXX, yielding growth in on and OpEx Our in discipline improvement in adjusted efficiency

EBITDA we For approximately year-over-year. our these XXXX, in investments, expected basis investments. with center continue an increase Even by OpEx is points commercial on adjusted platform XXX execute re-marketing strategy growth to as we margin to expect and increase

cash equivalents strong ended will marketable $XXX QX We I $XXX revolver. Next our in securities our and and XX. and on highlight debt Slide on capital cash of with million million structure

Our amount In operating QX of profitability the excluding first float that This right, margin includes on cash trends we highlight $XXX and business of each half the on million XXXX. our sheet a which transition generated strong we in business. fluctuates the X cash The auction float, balance $XX cash for quarter, on XXXX. flow. change increase impact Note the the to of is in final of half corresponding cash float of year-over-year, when based reflecting operating in marketplace improvements. significant has strong flow balance first weeks the flow our of million in figure a our operating meaningfully on

guidance to Slide turning on Now XX.

$XXX the revenue profitability to range $X the each $X commitment EBITDA to XX% achieving growth For is range our of with of million, in quarter $XXX of XX% the we quarter, in going expected million, million third to million Adjusted consistent to expecting forward. year-over-year. are

and year-over-year. is of EBITDA growth to the revenue are of the to we range now be of now to $XX the XX% to For XX% is $XXX expected year, million $XXX the in of million, guidance. million expected in raising range adjusted to full $XX Revenue midpoint EBITDA be million. representing Adjusted

normal seasonal half to recover rates to and price relates dealer it wholesale of modestly in conversion the wholesale guidance, patterns. we back depreciation are As market continues and XXXX the assuming follow that

revenue of to model, all performance. OpEx our which revenue, and approximately revenue target to and sustaining depreciation growth by Slide We share amortization in gains, to points. And we mid-term percentage demonstrated scale, through to also exceed XX, moving adjacent continue clearly cost remain underpinned markets and achieving margins our market penetrating expanding XX finally, growth, by excluding expect of committed mix non-GAAP is we which

turn long-term are will on wholesale drive and volumes expanding Our recovering mid-term let primarily market in addition, targets back which share, time. to over historical that, predicated dealer consistently taking me growth. And it with we But our a George. are TAM to

Bill. Thanks,

Before summarize. we will your I take questions,

and our strong We QX are are teammates results. very pleased proud delivered with especially these in that ACV of we our execution

share new ACV our marketplace, growth dealer to gain market by our market, to addressable partners which positions improve. continue while market and We attracting commercial conditions attractive expanding as for

are exciting an to We efficiencies. on ACV map differentiate product and operating further delivering road drive

our to shareholder We achieve on our that deliver will track drive XXXX adjusted are we targets on mid-term EBITDA believe value. significant targets and

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

[Operator Instructions] comes Genuity. Canaccord The Graham from first Michael question with

questions. Congrats on the X continued momentum. I had

you was, market just progress being of able point Could what elaborate as market just what we what that some the signs are you're still bit the say remind you kind a you maybe to looks of first Like, talked signs when are muted, the you focused there? recovered? has like but could half. about The are? on key second progress us of on towards metrics And it those little that seeing the

prior that saw CDK Yes. CDK why When the George. of quarter the here, This going out few the because in first really outage. the new there, We we to first we has is believe outage, continued normalize. was the vehicle quarter the We the was to right of look in part positive of months new the mentioned inventory signals the only flat direction. reason at

a OEMs cost could -- of was and there the even out with very putting direction, positive. seeing in We're the new for all incentives that new of see half We're with seeing out the leases and high even already lower capital, incentives more they cars. going there. So more fantastic. do on right we may incentives going sort That's with interest you when year Back about products. rate, other more think of what

positive. that's So

more This the wholesale things trades consumer okay in, vehicle, the returning as and a dealer it as market a in it that to we or the mix. help is One trends see XXXX when is a of back to far point us Trade-to-Wholesale and keep dealer comes retail of obviously new really And all of there is And of a And lack XX% wholesale because there below the they've used now it. vehicles first been XXXX keeping lack was there still inventory. of XXXX from lack was used. just to level. was a

which was, did see uptick on to start back back a sort normalcy vehicle way where here. of retail, starting So that to up they're we're still says, a starting at working But are to lots. towards our willing we wholesale it, okay, slight to start it in not add but cars dealers versus their lots, to coming

we vehicles. wholesale will start we see see that, to to more As dealers start

So Michael, that's helpful. hopefully,

Bob next CJS with question Labick is from The Securities.

Bob. landscape you talk Yes. the ahead? in the It's for is Can about commercial auction Pete the physical Lukas acquisitions for reconditioning opportunity space? What

support the got commercial in getting offerings really support where really be back-end to use good Yes. need through One AutoIMS partners We're product -- And the commercial. We've here. now middleware the go of to we're the that looking as reconditioning. before as past, of mentioned I AutoIMS doing year. And consignors, the that commercial methodology well. We're on a we're included in to have ready end partners progressing commercial live that for integration the strategy leveraging cases really is commercial feel we're we the with don't X to about our and is at where parts able use.

that very So about the on progress integration. happy there

that which the case large the need we place need a use way. very say need category, put we're to excited you a moved on within have commercial is. And of We second integration We need ] some times it really is a mentioned recon, the tire category, is key a they that and reconned, vehicle it's that be support that a minor recon. lot like minor So vehicles wherever a that, change our to and we're part vehicle just it's that's market, locations of specifically to doesn't or examples where now there in doesn't category get or on and in reconditioning. to be would need XX repo [

of least what locations the of way to XX% of we said think population. over get XX% the at I XX

with our go journey us having to locations progress very on country after So that help of the commercial happy the space. across

that country to prioritizing that locations, footprint And looking get look full of the terms as it presents do itself across expansion? one wherever you're the area at mentioned those there? in the you you opportunity of then for? timetable Is or other kind or how the over And to across the

you've be which locations, On -- far go have an locations. us to small Yes. in we're been thus would it's going X in acquisition, acquisitions. the seen really there's majorities parts One via if

those if to In location these be There path in-house then not the the the outsource the we're there's of a are on and/or acquisition, reconditioning. we're really, go whether markets can country some decide going a there down. be acquisition market. rent going would where it a outsource that an us markets, it's we in or reconditioning viable In So based in just some acquire. business won't do we'll for path target land, to could markets, just the you many after,

rent we're markets And or offering way, so we to go was market. not the acquisition all ahead there the we the go want the country, a either for need small to bring or whether really across land to and going we just

Gupta with next question is The Rajat JPMorgan. from

like, I like either to I quantify And follow-up. CDK clarification. or one call. a that part impact business the the EBITDA? just you had initial I quick from Great. the did of have was curious missed I any revenue on

in. want if I'll certainly, Rajat. chime Yes, start, Bill, and you to

we impact really a was that you that of going know, slowed the the the was mentioned car we did earlier cover what the Rajat, end did pretty at used off sales sales start -- you call, really a the really as quarter. and new good car in space and CDK broadly is new down didn't all we see, towards So the

is exact on of number, fantastic quarter, had be for what an we impact exact it. and us. $X Our put The really of still an don't an revenue. million that the over over but we a approximate definitely number but range tough $XXX,XXX was EBITDA really was impact. It Obviously, impact was to definitely know, it of would

went other a the dealers redundancies lot That's I helpful. we on options. Got explore dealers to trying have topic, mean, from and it. and then a other heard And the with just experience of CDK related given through

opportunity You closer as with their obviously dealer get are at was closely management getting into things? I like, other side just and all stage, maybe maybe system ACV products. with work for getting the I closer about the do curious more more event the an MAX and you this you dealer, see of opportunity? some integrated ACV how to to like, with know, don't the I'm how that curious systems think

top, even group somebody And person question. sure options. he category a lot it was he doesn't to make from the fun XX it, thought think topic. And was Yes, he how a dealer top was he on Rajat, work listening I recently wanted top had call really it's phone the X that more I on senior to because it this and great with how let's interesting or with was us a the today. about

well. you think it I said So

a these It's the are vendors breed. is they're couple They're make think to going And dealers the answered everything where think hearing. be got to what of to to trying careful software that. careful more are bit I careful a of a all-in-one stated one to different kind stack. be be going while about into be you going that they're put going about of systems I'm sure little question. they best There's You to more I question category probably --

in today. It in or here, we've our I like and each much so good I and next and okay, can they us. your want So help change But got X, MAX faster between and back to XXX like, I quarter up the to AC say got are we hurt. point, diversify can systems. got an -- create this don't start took it be IT think fact trajectory we're nearly than can end in we're could selling of strength that signals know only people we've incredible don't those signals their for products team, it definitely if or for sort great to we going like product products, this area tech teammates we've a of the to help and dealers real technology sort will

that's question. but it's think on I think all So a also I probably great that, today

question from Securities. Khan Naved B. comes The next Riley with

Yes.

your dealers. should in of that think of you I penetration have about the count Is prepared achieving wallet that XX% I leaders metric just I share? remarks, franchise or a that just of then And about XX% talked market you shared? follow-up. that How think the the is

working That's with a Yes. just yet. A good point us. share count it's not those of mean, I wallet full of clarification.

have XX% be a had So we also if selling -- we'd your point, -- wallet share. lot cars, their would XX% more of we to

think right. -- it first that's sort of -- think victory. your your the you're It flag part just of means as success, in you that celebrating when to path we're each So about of about

of more with victory that victory And start gaining the second is they're The first is wallet the part part working we us. of share.

off-platform ACV been Maybe on movement potential be Okay, little of talk that on can spoke Has financing. over how then sort the front? a also on rate of about Capital, time? the what's great. And there? core, you there attach big maybe opportunities that any And be just bit, new that

certainly. Yes,

to all, on year, Capital. yes, our mention execution we consumer of both obviously the independent compete. higher to weren't dealers did purposeful. it interest to that ability the is We for we'll saw very we as of risk continue intending ACV grow, it's with We their to calls Much last few the and So we're rates pleased but all with this fast. that signaled to team's and grow related

growing, but and a bad debt also has in our improvement, of pretty expense, while improving both growing team year-over-year our actually managing tougher fantastic job done debt meaningful environment. So on bad a

will see So of I healthy. with for this team's there a I'm piece independent think just thrilled really market also dealers we dealer execution come dealers you lot selling get dealers, little year. of franchise cyclical And down, rates a in independent junkier bit next a see growing independent of the cars. interest the There's stop that's kind -- going can healthier some of the being of into

So be that for I will year. tailwind dealer think another next independent the

we we this. It's vehicle. because in you from that area way, dealers to franchise, doing wholesale others cars. we the on Capital. The credit the buy reasons it a early team's will job So have I'm product when competitive -- But these excited you just together time just products our wanted whenever fantastic it, value new that's help execution for got really X your that on each on marketplace very of extending could in of an ability will independent, mentioning some be be where to to a price you're And you're products And we ACV -- be Capital the buy I'm lots, that one cars excited we ClearCar -- we're our tremendous if think it. are it it to bundle super based about ACV consumers. a bundling based about about that I advantage both just stage, I'm and just with I'm add excited this will of about. really believe

Having that, very unique basically we're very acquisition. consumer early. So we're said fund to this position in a

in It happy to I actually first I'm first year. have until launched we we technically started. think our that ramp excited we're have This technically was live live. it just live, dealers won't few and really that announce was gone just -- but got I we not -- next we're pilot, with

is Chris next The from Needham question Pierce Company. & with

anyone intensity Has yet? asked competitive on

have we just I'm do joking. competitors? Chris,

customers on From Copart be talking is physical the noise in then houses. wholesale. physical auction and a Auto can couple has up of ramping side, America's bought CarMax making And Auction local to investors, MaxOffer,

market of of do they newer some broadly. like thinking coming or from to about this a how you to think these you're they intensity want defend because to trying get sense about just I are competitors how share growth So market the a it's players? competitive Are or

Yes. this back, or from you be the journey. I started if else. you auctions mean, X it been somebody been Chris, there's auctions, when country of mentioned physical whether by hundreds physical owned look day across group There's we the

auction whether this company of Even own you long company change Fed A they've competitive doesn't the So for time. some folks been the on the are mentioned, really B in or salvage off a other who category nature. category and in

You how it's go press release, long. look the and back at can

change mind So there's in really been competitive my no the on nature.

I think direct we've look I when you at think see to going competitors, you're quarter-over-quarter. our other better done

job I your market as I got simple in are we've but competitors XXXX. a We've think you some respect It's doing quickest So we're every be, this -- we in. since answer started in that strong got really I great would the well, been say, would competitors. very competitors, one big we journey who way one,

competitors and has be, would nothing answer we got short changed. keep a going. So We've always

and year. second the what posited second theory I don't it the like does you durable CDK industry? we goods line-up And and cuts half strength 'XX half rate and used the macro see of I but know these car in are you coming. predictions, a for make than And then say macro half are normally of to in interest easy given guys stronger disruption Perfect. we used car if 'XX the on have a kind the of second in would comps

question, we're a chime in for a huge it here safer I improvement. moderately things think to And -- the let are me be on believe that's banking in to improve. We not you Bill, I'll this Bill would. will we might planning if say way, actually, here. it second. need But

go. You

Sure.

lower start our think if the raised a right, with I end take of our guidance, back revenue guidance. So you and let's step we

that we the current the revenue And far to rate prepared in we July. macro It's the which midpoint start XX%, That pretty in up was certainly a to moved seen remarks environment. year So over August. strong to so said, carrying that we've QX. growth a is mentioned a good case considering XX% full growth of into our

basically that we're XX% However, guide extrapolating is rate QX not though to our XX% really yet, growth even revenue growth.

the on is declined year-on-year. QX, improved So still dealer roughly but data caveat here X% in auction market modestly it based wholesale the

going believe you've much is macro dealer how at all half, second of wholesale to that's in got we these recover, So provide a cross-currents unclear and the play. going it's but still tailwind to

guiding see second us We away in quarter. we're here certainly seeing these to because a are far. net that to halfway certainly, only from a so is, we're positive just a half. we're strong growth feel the like cautious we're trends we little but week nice the But QX, for through So the start really revenue

So gives you a that context. more hopefully little

[Operator from of next is question America. Nagle Curtis with Bank Instructions] The

is McDermott on Nagle. for This Steven Curtis

profitable to kind reach you mind if margin to Do another you as like remarks. You of about talked needed have expansion exclude more kind would look your after. then just of expanding were those prepared philosophy Yes, I your are still investment kind investments? And what of what in investments the well, and targets? one

ahead. don't Bill, go why you

Yes.

incremental dollar much which net way will is about incremental is we every making. given EBITDA for any that we how of we're investments the generate So of think revenue, this

really we of how strategy in bringing M&A, we impact margin year, year, So incremental obviously margin on EBITDA had dollar pursue we -- Last OpEx. that there. for let's incremental deliver has were as OpEx additional incremental we This through much we of the terms part we're margin every EBITDA commercial as that managing start an deliver since significant as strategy. tightly

pretty head few and nice next to a commercial down doing us which on to when take And can execute revenue we account dollar we're about those a the good we track that we to years margin every forward. into course the drive is strategy investments, growth EBITDA our basically where a top-line, build on of going really that incremental modeling targets. we can expect gets feel of XX% improvement the to place the deliver all towards assuming So of we over in good we going EBITDA, mid-term forward really as

to be we investments, way investments, terms think would of revenue about kind weren't growth. frankly, those would we model. that kind if making If that the think So of our in I because we it weren't these impact of that's discern the making hard

generation investments, So those don't not well. because easy we to got it's out less as margin if and make parse revenue generation we've that

that's the think we not way it. about So

towards makes Got lines? certain across it. was typically board it Yes, or service, you've that you're I the et cetera? of sense. more targeted think certain product along thinking XQ. And then I this prices raised just around if the at in is time same And wondering least a or or kind is that historically,

year. small raise of this always for certainly. did decline QX. And for values in market price -- obviously, quicker in our other We looking car Yes, that and our conditions the plan a on based so We're was did used We part have some factors. start of fees. timing we at to see,

we're that targeting told we we've make a at you to our you all, target decided So $XXX. there. change when look small And

call we model fees, Green, If the together, we -- put were and sell we you the the mid-term take is $XXX assurance all buy product in QX fees, our $XXX. those fees you Go

I part services. over So any we the then value-added look with these $XXX. And puts of feel opportunity about will going and very what's be and between takes your at now other on of second quarter we've going target our forward, But quarter on goal -- the small being a years, that's fee few got everything have to -- doing last going confident beyond on. increases, do question, else expand based the there next one $XXX,

So that the to more could one buyer think a assurance either example. services as offer about value-added products

trialing we're services. value-added So always additional these

fee that. to have question in one these be we we're just your time, it to that it the see value-added services. to in question a also think be I In doesn't trialing these great second small any was increases, opportunity products So some start of relates could

closing further hand gentlemen, would the and remarks. are questions, Ladies Fox to for conference as I Tim there no like now over to

the And to thank I'd to quarter. the you conference joining We look circuit call this everybody like seeing today. Thank for us you. on on forward

with for out have check great different and website interest next so. over evening. a your conferences thank can in the again, our we'll or And the ACV You attending all month be you

today's teleconference. This you. Thank concludes

disconnect your at participation. you may You time. this your for lines Thank