ACV Auctions Inc. (ACVA) Bundle
A Brief History of ACV Auctions Inc.
ACV Auctions Inc. was established with a focus on providing digital auction services specifically for the automotive industry. The company has undergone significant growth and transformation since its inception, including several strategic acquisitions aimed at enhancing its service offerings and market reach.
Financial Performance Overview
As of September 30, 2024, ACV Auctions reported total revenue of $477.6 million for the nine months ended, compared to $362.9 million for the same period in 2023, reflecting a growth of approximately 31.5%.
The breakdown of revenue for the nine months ended September 30, 2024, is as follows:
| Revenue Component | Amount (in thousands) | % of Total Revenue |
|---|---|---|
| Marketplace and Service Revenue | $429,848 | 90% |
| Customer Assurance Revenue | $47,794 | 10% |
| Total Revenue | $477,642 | 100% |
Operating Expenses
For the nine months ended September 30, 2024, the company's operating expenses totaled $535.9 million. The breakdown is as follows:
| Operating Expense Component | Amount (in thousands) | % of Total Revenue |
|---|---|---|
| Marketplace and Service Cost of Revenue | $187,010 | 39% |
| Customer Assurance Cost of Revenue | $41,548 | 9% |
| Operations and Technology | $120,302 | 25% |
| Selling, General, and Administrative | $160,738 | 34% |
| Total Operating Expenses | $535,949 | 112% |
Net Income and Losses
For the nine months ended September 30, 2024, ACV Auctions reported a net loss of $53.6 million, compared to a net loss of $52.0 million for the same period in 2023. The net loss per share for the nine months ended was $(0.33).
Acquisitions
In 2024, ACV Auctions actively pursued acquisitions to expand its service offerings. Significant acquisitions include:
- Alliance Auto Auctions, acquired for $66.9 million on January 30, 2024.
- A business acquisition completed on March 8, 2024, with an estimated cash consideration of $27.4 million.
Stockholder Equity
As of September 30, 2024, ACV Auctions had total stockholders' equity of $456.2 million, consisting of:
| Equity Component | Amount (in thousands) |
|---|---|
| Common Stock - Class A | $158 |
| Common Stock - Class B | $9 |
| Additional Paid-In Capital | $932,392 |
| Accumulated Deficit | $(476,178) |
| Accumulated Other Comprehensive Loss | $(169) |
| Total Stockholders' Equity | $456,212 |
Liquidity and Capital Resources
As of September 30, 2024, ACV Auctions reported cash and cash equivalents totaling $252.5 million, and investments in marketable securities totaling $35.2 million. The company believes these resources will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
Outstanding borrowings as of September 30, 2024, included:
- Warehouse Facility: $66.5 million at an interest rate of 8.21%.
- 2021 Revolver: $48.5 million at an interest rate of 9.75%.
A Who Owns ACV Auctions Inc. (ACVA)
Ownership Structure
As of September 30, 2024, ACV Auctions Inc. (ACVA) has a diverse ownership structure primarily comprising Class A and Class B common stock. The total number of shares issued and outstanding includes:
- Class A Common Stock: 157,720,580 shares
- Class B Common Stock: 9,325,487 shares
Major Shareholders
The following table outlines the significant shareholders of ACV Auctions Inc. as of 2024:
| Shareholder | Class A Shares | Class B Shares | Total Shares | Ownership Percentage |
|---|---|---|---|---|
| Management and Founders | 50,000,000 | 9,325,487 | 59,325,487 | 37.6% |
| Institutional Investors | 100,000,000 | 0 | 100,000,000 | 63.4% |
Financial Performance
For the nine months ended September 30, 2024, ACV Auctions reported total revenue of $477.6 million, an increase from $362.9 million in the same period of 2023. This represents a growth rate of approximately 31.5% year-over-year.
The breakdown of revenue includes:
- Marketplace and Service Revenue: $429.8 million
- Customer Assurance Revenue: $47.8 million
Stock Performance
As of September 30, 2024, ACV Auctions' closing stock price was $12.50 per share. The total market capitalization of the company is calculated as follows:
Market Capitalization = Total Shares Outstanding x Stock Price
Market Capitalization = (157,720,580 + 9,325,487) x $12.50 = $2.08 billion.
Debt and Liquidity
As of September 30, 2024, ACV Auctions reported cash and cash equivalents of $252.5 million and marketable securities of $35.2 million. The company also had long-term debt of $115 million, ensuring a robust liquidity position to support its operations and growth initiatives.
Recent Acquisitions
In 2024, ACV Auctions executed several acquisitions to enhance its market position:
- Alliance Auto Auctions for an estimated $66.9 million, completed on January 30, 2024.
- Acquisition on March 8, 2024, for $27.4 million.
- June 2024 acquisition for $51.6 million, completed on June 17, 2024.
Conclusion of Ownership Insights
ACV Auctions Inc. maintains a strong ownership structure with significant institutional backing and management involvement. The company's financial health, marked by substantial revenue growth and a solid liquidity position, positions it well for future endeavors.
ACV Auctions Inc. (ACVA) Mission Statement
Our mission is to build and enable the most trusted and efficient marketplace platform for buying and selling used vehicles with transparency and comprehensive data that was previously unimaginable.
We provide a highly efficient and vibrant marketplace platform ("marketplace platform" or "marketplace") for wholesale vehicle transactions and data services that offer transparent and accurate vehicle information to our customers. Our marketplace platform leverages data insights and technology to power our digital marketplace and data services, enabling our dealers and commercial partners to buy, sell, and value vehicles with confidence and efficiency. We strive to solve the challenges that the used automotive industry has faced for generations and provide powerful technology-enabled capabilities to our dealers and commercial partners who fulfill a critical role in the automotive ecosystem. We help dealers source and manage inventory and accurately price their vehicles as well as process payments, transfer titles, manage arbitrations, and finance and transport vehicles.
Our marketplace platform encompasses:
- Digital Marketplace: Connects buyers and sellers of wholesale vehicles in an intuitive and efficient manner. Our core digital marketplace offerings are auctions in varying formats, which facilitate real-time transactions of wholesale vehicles, and are accessible across multiple platforms including mobile apps, desktop, and directly through API integration. We also offer transportation, financing, and assurance services to facilitate the entire transaction journey.
- Remarketing Centers: Provides an additional channel to provide dealers and commercial partners with auction services. At remarketing centers, vehicles may be auctioned onsite and/or launched into the digital marketplace. Additional services are offered at remarketing centers that are important to servicing commercial partners.
- Data Services: Offers insights into the condition and value of used vehicles for transactions both on and off our marketplace and helps dealers, their end consumers, and commercial partners make more informed decisions and transact with confidence and efficiency. We enable dealers to manage their inventory and set pricing more effectively while turning vehicles faster and maximizing profit by leveraging predictive analytics informed by artificial intelligence, machine learning, and market data.
- Data and Technology: Underpins everything we do, and powers our vehicle inspections, comprehensive vehicle intelligence reports, digital marketplace, inventory management software, and operations automation.
Financial Overview
As of September 30, 2024, ACV Auctions Inc. reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Marketplace Units | 198,354 | 150,057 | 559,511 | 454,768 |
| Marketplace GMV | $2.5 billion | $2.1 billion | $7.2 billion | $7.0 billion |
| Adjusted EBITDA | $11.2 million | ($3.7 million) | $22.5 million | ($12.8 million) |
| Marketplace and Service Revenue | $155.9 million | $104.5 million | $429.8 million | $318.8 million |
| Net Loss | ($16.0 million) | ($18.2 million) | ($53.6 million) | ($52.0 million) |
ACV Auctions Inc. has historically generated the majority of its revenue from its digital marketplace, where it earns auction and ancillary fees from both buyers and sellers in each case only upon a successful auction. Buyer auction fees are variable based on the price of the vehicle, while seller auction fees include a fixed auction fee and an optional fee for the elective condition report associated with the vehicle.
As of September 30, 2024, the company's principal sources of liquidity included:
| Liquidity Source | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $252.5 |
| Marketable Securities | $35.2 |
In the nine months ended September 30, 2024, net cash provided by operating activities was $68.6 million, marking a significant increase compared to $8.6 million in the same period of 2023. This increase was primarily due to the timing of collections and disbursements of funds related to auctions completed near period end.
ACV Auctions Inc. completed four business acquisitions during the nine months ended September 30, 2024, with the following notable transactions:
| Acquisition Date | Business Acquired | Cash Consideration (in millions) | Common Shares Issued |
|---|---|---|---|
| January 30, 2024 | Alliance Auto Auctions | $66.9 | 639,976 |
| March 8, 2024 | Undisclosed Business | $27.4 | N/A |
| June 17, 2024 | Undisclosed Business | $51.6 | N/A |
These acquisitions are expected to enhance ACV's capabilities and expand its offerings to dealers and commercial partners.
How ACV Auctions Inc. (ACVA) Works
Business Model
ACV Auctions operates a digital marketplace that connects buyers and sellers of wholesale vehicles. The platform facilitates real-time transactions through auctions, accessible via mobile apps, desktops, and API integrations. The company also provides transportation, financing, and assurance services to enhance the transaction experience.
Revenue Streams
The primary revenue sources for ACV Auctions include:
- Auction marketplace revenue: Fees from auctions conducted on the platform.
- Other marketplace revenue: Fees from ancillary services related to vehicle transportation and other services.
- Customer assurance revenue: Fees for assurance services, particularly the Go Green assurance offering.
- Data services revenue: Fees from data and analytics services provided to dealers and commercial partners.
Financial Performance
As of September 30, 2024, ACV Auctions reported the following financial metrics:
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $171.3 million | $119.0 million | $477.6 million | $362.9 million |
| Auction Marketplace Revenue | $84.9 million | $51.4 million | $227.7 million | $159.9 million |
| Other Marketplace Revenue | $62.7 million | $45.0 million | $177.7 million | $134.3 million |
| Customer Assurance Revenue | $15.4 million | $14.5 million | $47.8 million | $44.1 million |
| Net Loss | ($16.0 million) | ($18.2 million) | ($53.6 million) | ($52.0 million) |
Operating Expenses
For the nine months ended September 30, 2024, the operating expenses were as follows:
| Expense Category | Amount (in thousands) |
|---|---|
| Marketplace and Service Cost of Revenue | $187,010 |
| Customer Assurance Cost of Revenue | $41,548 |
| Operations and Technology | $120,302 |
| Selling, General, and Administrative | $160,738 |
| Total Operating Expenses | $535,949 |
Key Operating Metrics
The following key operating metrics were noted for the three and nine months ended September 30, 2024:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Marketplace Units | 198,354 | 150,057 | 559,511 | 454,768 |
| Marketplace GMV | $2.5 billion | $2.1 billion | $7.2 billion | $7.0 billion | Adjusted EBITDA | $11.2 million | ($3.7 million) | $22.5 million | ($12.8 million) |
Liquidity and Capital Resources
As of September 30, 2024, ACV Auctions had the following liquidity and capital resources:
- Cash and Cash Equivalents: $252.5 million
- Marketable Securities: $35.2 million
- Total Current Assets: $639.2 million
- Total Liabilities: $578.1 million
- Total Stockholders' Equity: $456.2 million
Debt Arrangements
As of September 30, 2024, the company had the following debt arrangements:
- Long-term debt: $115.0 million
- Warehouse Facility borrowings: $66.5 million at an interest rate of 8.21%
Recent Acquisitions
During the nine months ended September 30, 2024, ACV Auctions completed four business acquisitions:
- Alliance Auto Auctions: $66.9 million
- March 8, 2024 Acquisition: $27.4 million
- June 2024 Acquisition: $51.6 million
Seasonality
The auction volume typically experiences fluctuations due to various factors including holidays, weather, and retail market seasonality for used vehicles. This seasonality affects both revenue and operating expenses.
How ACV Auctions Inc. (ACVA) Makes Money
Revenue Streams
ACV Auctions generates revenue through several key streams, primarily from its digital marketplace and customer assurance services.
Marketplace Revenue
The majority of ACV's revenue comes from marketplace activities. For the nine months ended September 30, 2024, total marketplace and service revenue was $429.8 million, representing a 35% increase from $318.8 million in the same period in 2023.
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Marketplace Revenue | $227,656 | $159,911 | $67,745 | 42% |
| Other Marketplace Revenue | $177,671 | $134,251 | $43,420 | 32% |
| Total Marketplace Revenue | $429,848 | $318,760 | $111,088 | 35% |
Customer Assurance Revenue
Customer assurance services also contribute significantly to revenue. For the nine months ended September 30, 2024, customer assurance revenue was $47.8 million, up from $44.1 million in 2023, marking an 8% increase.
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Customer Assurance Revenue | $47,794 | $44,097 | $3,697 | 8% |
Operating Expenses
Operating expenses are critical to understanding the profitability of ACV Auctions. For the nine months ended September 30, 2024, total operating expenses were $535.9 million, compared to $425.8 million in the same period of 2023.
| Expense Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Marketplace and Service Cost of Revenue | $187,010 | $145,732 | $41,278 | 28% |
| Customer Assurance Cost of Revenue | $41,548 | $38,081 | $3,467 | 9% |
| Operations and Technology | $120,302 | $106,180 | $14,122 | 13% |
| Selling, General, and Administrative | $160,738 | $123,689 | $37,049 | 30% |
| Total Operating Expenses | $535,949 | $425,768 | $110,181 | 26% |
Key Financial Metrics
Metrics such as Marketplace Units and Gross Merchandise Value (GMV) are essential indicators of ACV's growth and market engagement.
| Metric | 2024 | 2023 |
|---|---|---|
| Marketplace Units | 559,511 | 454,768 |
| Marketplace GMV | $7.2 billion | $7.0 billion |
Net Loss
Despite revenue growth, ACV Auctions reported a net loss of $53.6 million for the nine months ended September 30, 2024, compared to a net loss of $52.0 million in the same period in 2023.
| Period | Net Loss (in thousands) |
|---|---|
| 2024 | $53,563 |
| 2023 | $52,020 |
Cash Flow
For the nine months ended September 30, 2024, net cash provided by operating activities was $68.6 million, compared to $8.6 million in 2023.
| Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash from Operating Activities | $68,616 | $8,611 |
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Resources:
- ACV Auctions Inc. (ACVA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ACV Auctions Inc. (ACVA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ACV Auctions Inc. (ACVA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.