ACV Auctions' earnings report shows fast growth in Q4

ACV Auctions posted a strong earnings report Feb. 16, beating analyst expectations and posting rapid growth in key metrics.

The Buffalo-based tech company, which serves the used-vehicle dealer market, went public in March 2021 at $25 a share. The company's public market valuation has gone down since then, though shares inched back up to $11.50 apiece after the earnings were posted.

Here are three important numbers from the company's Q4 earnings:

86%

In Buffalo Business First's earnings preview, we stated that analysts were looking at ACV's year-over-year growth as a key metric. That was especially true after ACV revenue growth slowed from 117% in the second quarter to 36% in the third quarter.

The company got back on track in its most recent three-month span, reporting revenue growth of 86%, up to $100.2 million, compared to the same period last year.

“We are very pleased with our strong results in the fourth quarter, which once again exceeded expectations, despite the ongoing crosscurrents impacting the automotive industry," ACV Auctions CEO George Chamoun said. "Our growth is driven by continued market share gains, strong adoption of ACV’s value-added services, and traction of new data and (software-as-a-service) products."

$450 million

So what's next? ACV noted that it expects revenue to reach the $450 million to $460 million range this year, which would be a 26% to 28% increase.

Expected losses are again expected to increase, from $30.8 million in 2020 to $44.1 million last year to $53.57 million in the current year.

Operating losses are part of the premise of a growth-minded tech company such as ACV, which is spending to establish itself in new territories and to build new digital products for customers. But keeping losses in line with expectations and improving margins above that threshold would go a long way on Wall Street this year.

"We reached our goal of achieving nationwide coverage on ACV’s marketplace, while successfully launching new offerings that we believe position ACV to deliver sustainable long-term growth within the large market opportunity ahead of us,” Chamoun stated in the earnings news release.

$1.3 billion

ACV Auctions used the occasion to point out its long-term roadmap.

In short, the company expects revenue to reach $1.3 billion, more than triple the current number.

How does it get there? ACV plans to lay out its plans in detail March 1 in an analyst meeting at Nasdaq's Times Square headquarters in Manhattan.

A live webcast of the 1 p.m. event will be available at https://investors.acvauto.com.