ACV Auctions Q2 Earnings Call Highlights

Key Points

• Strong Q2 performance: ACV Auctions reported revenue of $214 million, up 10% year over year, while adjusted EBITDA reached a record $21 million and exceeded the high end of guidance despite a 6% decline in dealer wholesale volumes.
• Marketplace conversion pressure: Lower used-car values widened the gap between seller expectations and buyer pricing, reducing conversion rates and limiting unit growth. ACV is expanding its field sales and inspection capacity, particularly in emerging regions, to support future growth.
• Growth initiatives and outlook: Transportation, financing and no-reserve auctions boosted results, while the company commercially launched its AI-powered VIPER product and expanded commercial remarketing efforts. ACV reaffirmed 2026 revenue guidance of $845 million to $855 million and adjusted EBITDA guidance of $73 million to $77 million.

ACV Auctions NYSE: ACVA reported second-quarter 2026 revenue of $214 million, up 10% from a year earlier, as the digital automotive marketplace said it continued to gain share despite a weaker dealer wholesale market. Adjusted EBITDA reached a record $21 million, exceeding the high end of the company’s guidance range, while non-GAAP net income was $10 million.

Chief Executive Officer George Chamoun said the company’s results reflected execution in a “challenging market environment,” citing dealer wholesale volumes that contracted about 6% year over year during the quarter. ACV sold 211,000 vehicles in the period and said it expanded its dealer partner network to a new record.

“We delivered record revenue with adjusted EBITDA exceeding the high end of guidance,” Chamoun said, pointing to field-capacity investments, growing use of its no-reserve offering, and performance from transportation, financing and dealer software products.

Marketplace growth amid conversion pressure

ACV said auction and assurance revenue, which represented 55% of total revenue, rose 6% year over year to reflect approximately flat unit growth. Auction and assurance revenue per unit, or ARPU, increased 6% to $554.

The company said a gap between seller expectations and buyer pricing contributed to lower conversion rates in June and July. Tim Fox, who was named ACV’s new chief financial officer during the call, said conversion-rate compression reduced unit growth by roughly 600 basis points. He added that the company had forecast listings accurately and reported record seller and buyer activity, but saw conversion rates decline by roughly 300 to 350 basis points during the quarter.

Chamoun attributed the issue to declining used-car values, which he said left some sellers seeking prices above what buyers were willing to pay. Management described the effect as temporary and said it expects the market to become more supportive in the second half. Fox noted that third-party data showed dealer wholesale volume fell 6% in June and 8% in July.

ACV is increasing field capacity, including territory managers, vehicle condition inspectors and sales executives focused on opening new dealer rooftops. Chamoun said the company expects to have at least 15% to 20% more salespeople in the field by year-end, alongside additional inspectors.

Fox said five emerging regions where ACV made substantial go-to-market investments generated mid-teens unit growth in the second quarter, including one region that grew in the 30% range. The company expects the hiring investments to contribute more significantly in the third and fourth quarters and into 2027.

Transportation, capital and no-reserve offerings support revenue

Marketplace services revenue accounted for 41% of total revenue and grew 17% year over year, driven by ACV Transportation and ACV Capital. The transportation business delivered 125,000 transports during the quarter, with revenue increasing 19%.

Chamoun said ACV used artificial intelligence to optimize transport pricing and maintain margins even as diesel prices increased. The company said transportation revenue margin and attachment rate remained in line with its midterm target, while off-platform transportation services continued to gain dealer adoption.

ACV Capital’s attachment rate reached a record in the high teens, according to management. The company cited an expanded go-to-market strategy, new product offerings and risk-management process improvements as contributors to the financing business’s performance.

ACV also said its guaranteed no-reserve auctions were its fastest-growing marketplace channel. The offering guarantees sellers an outcome, while providing buyers no-reserve auctions. No-reserve transactions represented the mid-20% range of units sold during the quarter, and Chamoun said the company sees the mix reaching roughly 30% of total units over the longer term.

The higher mix of no-reserve sales increased non-GAAP cost of revenue as a percentage of revenue by about 300 basis points from a year earlier. However, ACV said the sales generate stronger marketplace liquidity and are accretive to adjusted EBITDA. Adjusted EBITDA per unit rose 11% year over year to a record level, with the company’s most profitable region delivering more than $300 per unit.

VIPER launches commercially as commercial strategy advances

ACV formally launched commercial availability for VIPER, its AI-enabled solution designed to help dealers acquire consumer vehicles through service lanes, assess vehicles and identify service upsell opportunities. Chamoun said ACV was engaged with more than half of the nation’s top 50 dealer groups through significant discussions, orders or expected orders.

The company expects to build more than 100 VIPER units in 2026 and said its 2027 goal is at least 500 units, though Chamoun emphasized that next year’s plan has not been finalized and demand could support a higher figure. Dealer groups have ordered varying quantities, including some with seven units and others with 20 units, he said.

VIPER’s business model includes a subscription fee and wholesale-volume commitments. Dealers can reduce their subscription cost by committing more wholesale volume to ACV, according to Chamoun.

ACV also discussed its commercial wholesale initiative, which targets upstream and downstream vehicle remarketing. The company recently began remarketing vehicles from a top-five fleet consignor and said it was nearing an agreement with a second large-scale consignor. ACV is also integrating with a captive finance off-lease company and adding another top-four rental-car consignor to its marketplace.

Management said the commercial software platform is now operational and that commercial volumes are expected to contribute more meaningfully in the second half, particularly the fourth quarter. ACV also plans to open its second Greenfield remarketing center in Chicago within 30 days, following an earlier opening in Houston.

Guidance reaffirmed; CFO transition announced

ACV reaffirmed its full-year outlook despite macroeconomic uncertainty. The company expects 2026 revenue of $845 million to $855 million, representing growth of 11% to 13%, and adjusted EBITDA of $73 million to $77 million, or approximately 27% growth year over year.

• Third-quarter revenue guidance: $219 million to $225 million, up 10% to 13% year over year.
• Third-quarter adjusted EBITDA guidance: $21 million to $24 million, representing a 10% to 11% margin.
• Expected 2026 non-GAAP operating expense growth, excluding cost of revenue: approximately 6%.
• Expected 2026 go-to-market investment: approximately $10 million.

The company ended the quarter with $242 million in cash and cash equivalents and $205 million in debt. Its cash balance included $175 million of marketplace float and reflected a $50 million accelerated share repurchase program announced in the prior quarter. ACV said it expects positive operating cash flow in the second half.

Chamoun also announced that Chief Financial Officer Bill Zerella is departing, with Fox, formerly ACV’s vice president of investor relations, succeeding him as CFO. Chamoun credited Zerella with helping guide ACV through its initial public offering and scale the business, while saying Fox’s experience with the company’s strategy, operations and financial planning positioned him to lead the next phase.

About ACV Auctions (NYSE:ACVA)

ACV Auctions operates a digital marketplace designed to streamline the wholesale used-vehicle auction process for independent dealerships and larger automotive groups. The platform enables dealers to participate in live, online auctions, submit real-time bids, and access guaranteed-sale programs that reduce the risk of inventory moving. By replicating the dynamics of in-lane bidding in a virtual environment, ACV Auctions connects sellers and buyers across a broad geographic footprint without the need for physical auction attendance.

In addition to its core marketplace, ACV Auctions offers a suite of software tools and data-driven services aimed at improving transparency and decision-making in the remarketing process.

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