ACV Auctions outlines 20%–22% 2025 revenue growth target as greenfield commercial rollout advances

Earnings Call Insights: ACV Auctions Inc. (ACVA) Q2 2025

Management View

• CEO George G. Chamoun reported, "We are very pleased with our team's execution in the second quarter, delivering revenue and adjusted EBITDA within our guidance range, despite challenging market conditions in the back half of the quarter." Chamoun highlighted record revenue, expanded adjusted EBITDA margins, and strong performance in the dealer wholesale business, ACV Transport, and ACV Capital. He noted, "We further executed on an exciting product road map for our dealer and commercial partners, expanding our TAM and growing our competitive moat." The company also announced the opening of its first greenfield remarketing center in Houston, Texas, as part of its commercial platform expansion.
• CFO William R. Zerella stated, "Revenue of $194 million grew 21% year-over-year and was within our guidance range, despite challenging market conditions in the back half of the quarter. Adjusted EBITDA of $19 million was at the midpoint of guidance, with margin improving 520 basis points year-over-year." Zerella added, "Auction & Assurance revenue was 57% of total revenue and grew 20% year-over-year. Marketplace Services revenue was 39% of total revenue and grew 25% year-over-year reflecting record revenue for ACV Transport and ACV Capital."

Outlook

• The company trimmed its 2025 revenue guidance by $5 million at the midpoint, now expecting revenue in the range of $765 million to $775 million, which represents 20% to 22% year-over-year growth. Adjusted EBITDA guidance was maintained at a range of $68 million to $72 million. Zerella commented, "We are maintaining the midpoint of adjusted EBITDA guidance with a range of $68 million to $72 million, reflecting growth of approximately 150% year-over-year at the midpoint."
• For Q3, revenue is expected to be between $198 million and $203 million, with adjusted EBITDA guidance of $18 million to $20 million. The company is modeling flat to modestly down dealer wholesale volumes for 2025 amid elevated trade retention rates.

Financial Results

• ACV Auctions delivered Q2 revenue of $194 million, a 21% increase year-over-year. The company sold 210,000 vehicles, representing 13% year-over-year unit growth. Adjusted EBITDA reached $19 million, with margin improving 520 basis points year-over-year. Non-GAAP net income margin increased 430 basis points year-over-year.
• Auction & Assurance revenue accounted for 57% of total revenue, growing 20% year-over-year, while Marketplace Services revenue represented 39% of total revenue, increasing 25%. SaaS and data services comprised 4% of total revenue, remaining approximately flat. The company ended the quarter with $305 million in cash and cash equivalents and $187 million of debt. Cash balance included $198 million of marketplace float.

Q&A

• Christopher Alan Pierce, Needham & Company: Asked for clarification on the 500 basis point unit growth headwind and whether higher dealer retention rates were the cause. Chamoun responded, "One is dealers...keeping more used cars. They need this inventory. We're still overall as an industry...working ourselves from a several million unit gap." Zerella explained, "The difference in actual unit growth was attributable to lower conversion rates than we had initially anticipated and modeled through May and then especially in June."
• Will Gildea, CJS Securities: Inquired about progress on the pricing engine and benefits of guaranteed pricing. Chamoun said, "We're comfortable at the end of the day, putting a number on a vehicle that's really, let's call it, give or take, within $75 of what the vehicle sells for. That's incredible." Zerella added, "We exited the quarter at about 15% of our unit volume was no reserve, with these guaranteed sales. For the full quarter though, it worked out to about 11% of volume, which was 200 bps above Q1."
• Eric James Sheridan, Goldman Sachs: Asked about the Amazon partnership and scaling AI solutions. Chamoun replied, "We're not expecting a material contribution this year. But I think these are incredible medium- to long-term benefits that should flow through."
• Vincent Nugent Kardos, Jefferies: Questioned the deceleration in industry outperformance and commercial contributions. Chamoun noted, "We sold our first car at our greenfield location at Houston...We're ready to go live very soon." Zerella provided context around market assumptions and guidance.
• Rajat Gupta, JPMorgan: Asked about resource allocation between technology, sales, and EBITDA management. Chamoun explained, "We always protect in our annual budget a pretty significant product and technology spend...We're building the tech stack here. That's going to create less friction in the marketplace."
• Alexander Eugene Potter, Piper Sandler: Focused on revenue guidance adjustment and fee outlook. Zerella confirmed, "It's just a small trim in terms of adjusting the midpoint down for revenue by $5 million." Chamoun discussed ongoing evaluation of pricing but indicated no imminent changes.
• Naved Khan, B. Riley Securities: Asked about organic growth vs. acquisitions and commercial expansion. Zerella said, "If we look at the impact on the dealer unit growth, it added about 1% to the dealer unit growth in the quarter."

Sentiment Analysis

• Analysts posed questions that were primarily clarifying and occasionally skeptical, particularly around guidance changes, competitive dynamics, and macro headwinds. The tone was neutral to slightly cautious, with repeated focus on the sustainability of growth and market share gains.
• Management maintained a confident and measured tone in both prepared remarks and responses, emphasizing execution, cost discipline, and product differentiation. Chamoun repeatedly referenced long-term value creation and technological investment. Zerella used phrases like "we are maintaining" and "we're confident" to reinforce guidance stability.
• Compared to the previous quarter, analysts' tone was more focused on the impact of macroeconomic uncertainty and the implications for future growth, while management's tone remained consistently confident but with a more pronounced emphasis on prudence in guidance.

Quarter-over-Quarter Comparison

• The company trimmed its full-year revenue guidance in Q2 by $5 million at the midpoint, reflecting increased caution in response to macro uncertainties, while maintaining the adjusted EBITDA guidance midpoint. In Q1, the company reiterated a wider revenue range and slightly higher OpEx growth expectations.
• Strategic priorities in Q2 included advancing AI-based solutions, launching the first greenfield commercial remarketing center, and scaling guaranteed pricing, while in Q1 the focus was more on strengthening core marketplace and data services.
• Analysts in Q2 showed increased concern about industry volatility and competitive shifts, with greater scrutiny of guidance and growth drivers than in Q1, when the focus was more on execution and adoption of new products.
• Management's sentiment remained confident, but Q2 remarks reflected more caution and flexibility in modeling, while Q1 conveyed stronger optimism around continued outperformance.

Risks and Concerns

• Management cited challenging market conditions in the back half of Q2 and ongoing macro crosscurrents, leading to more cautious revenue guidance for the remainder of 2025.
• Elevated trade retention rates were highlighted as a headwind to wholesale volumes, and conversion rates were cited as a factor in unit growth variability.
• Analyst concerns centered on the predictability of growth, competitive pressures, and the material impact of new technology and commercial initiatives.
• Management's mitigation strategies include continued investment in AI, expansion of guaranteed pricing offerings, and operational discipline.

Final Takeaway

ACV Auctions delivered record revenue in Q2 2025 and maintained significant margin expansion, even as it trimmed full-year revenue guidance to a range of $765 million to $775 million due to macroeconomic headwinds and higher trade retention rates. Management emphasized ongoing investment in AI-driven solutions, the scaling of guaranteed pricing, and the commercial rollout of greenfield remarketing centers as key long-term growth levers. The company remains focused on capturing market share, expanding its product suite, and driving profitable growth while navigating industry volatility and evolving dealer behaviors.

Read the full Earnings Call Transcript