After lowering its 2022 end-of-the-year predictions during its Q3 earnings call, ACV Auctions did hit its revenue target for last year.
The online marketplace business for automotive dealers saw $422 million in revenue in 2022, an 18% increase year over year. ACV (NASDAQ: ACVA) previously lowered its end-of-year projections from $427 million to $432 million, which was predicted in August, to $421 million to $424 million in November due to the auto industry's market conditions.
The business hit $98 million in revenue in Q4 2022, a 2% decrease compared to Q4 2021.
“We are very pleased with our strong execution during a challenging times in our industry,” said CEO George Chamoun during the Q4 earnings call.
The company’s net income loss, however, was $102.2 million last year, a bigger hit than its $78.2 million net income loss last year.
That’s largely due to increased operating expenses, which reached about $527.7 million in 2022, a jump from $435.2 million in 2021. The biggest year-over-year increases came from operations and technology; marketplace and service cost of revenue; and selling, general and administrative.
ACV’s latest earnings call pointed to improving industry trends as bright signs and reiterated its 2026 financial targets, which include reaching $1.3 billion in revenue and $325 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
Used vehicle supply has been overall increasing since mid-2022, and new vehicle supply dipped at the end of last year, which is good news for ACV. The wholesale market benefits from used car sales and trades on new vehicle sales.
When asked where he sees the greatest opportunities for growth, Chamoun said adding dealerships and gaining walletshare from existing dealership customers.
The latter goes back to ACV’s strategy of continuing to add products and services, which offers dealers more value and could lead to the company getting more of the dealers’ wholesale business.
“We are delivering on an exciting product roadmap, further differentiating ACV,” he said during the earnings call.
