ACV Auctions posted strong results three months ago in its first turn through the quarterly earnings process.
Shares proceeded to tumble downward, a reminder that public stocks sometimes don’t serve as analogs for actual companies. At least in the short-term.
[We spoke last month to an ACV analyst about what’s going with its lagging share prices]
The Buffalo-based firm hosts web-based vehicle auctions between automotive dealers, among other products. As the most successful software startup in Buffalo history, it has a lengthy catalog of local shareholders who are closely watching the stock’s performance.
The company will run it back Wednesday when it posts second-quarter earnings. Here are three storylines to watch.
Meeting its own expectations
ACV Auctions announced three months ago that its first-quarter revenue hit $69.1 million, a 64% year-over-year increase.
The company took the opportunity to set guidance for the second quarter, saying it expected total revenue of $72 million to $75 million and a full-year number that surpasses $300 million.
Each public company approaches the art of projecting numbers a little differently. This will be an early test of how ACV performs against its own benchmarks.
Marketshare
ACV Auctions is broadly understood to be a disruptive digital force in an industry that has always transacted at large, in-person auctions.
Its billion dollar competitors have taken plenty of notice, and most observers now view the web-based automotive auction industry as a race for marketshare.
That’s where “marketplace units” come in, which is ACV’s term for the number of vehicles successfully sold on its platform.
The data point “demonstrates the overall engagement of our customers on the ACV platform, the vibrancy of our digital marketplace and our market share of wholesale transactions in the United States,” according to the company.
ACV’s historical data on marketplace units is a little noisy because of the pandemic, but last quarter it reported 128,386 transactions, a 55% increase year-over-year.
Investors will be looking for this number to grow, and significantly, if ACV is to meet its long-term goals.
Impact of MAX Digital
ACV continued this summer to look for opportunities to acquire companies with complementary service and product offerings. In July it announced the $60 million acquisition of MAX Digital, adding it to a growing list of brands that includes ACV Transportation, ACV Capital and True360.
MAX Digital will operate as a separate business unit led by its former CEO, Robert Granados, and will now work within ACV.
ACV said in the deal announcement it would provide updated investor guidance on the acquisition as part of its second-quarter earnings release, and is also sure to add context about what the deal represents for the future of the company.
