ACV Auctions(US:ACVA)2022-08-09 16:00Financial Performance - For the three months ended June 30, 2022, 148,047 Marketplace Units were sold, representing a Marketplace GMV of $2.7 billion, an increase of 27% from the same period in 2021[101]. - Total revenue for the six months ended June 30, 2022, was $218.1 million, reflecting a 31% increase compared to the same period in 2021[101]. - The company reported a net loss of $54.0 million for the six months ended June 30, 2022, compared to a net loss of $27.1 million for the same period in 2021[101]. - Adjusted EBITDA for the three months ended June 30, 2022, was $(14.1) million, compared to $(3.7) million for the same period in 2021[101]. - Total revenue for Q2 2022 was $115,072, a 18% increase from $97,374 in Q2 2021[138]. - Marketplace and service revenue reached $97,752 in Q2 2022, up from $83,934 in Q2 2021, reflecting a 16% growth[138]. - Customer assurance revenue increased to $17,320 in Q2 2022, compared to $13,440 in Q2 2021, marking a 29% rise[138]. - Net loss for the first half of 2022 was $(54,010), compared to $(27,067) in the first half of 2021, indicating a worsening financial position[141]. - Marketplace and service revenue for the three months ended June 30, 2022, was $97.8 million, an increase of $13.8 million or 16% compared to $83.9 million for the same period in 2021[147]. - Customer assurance revenue reached $17.3 million for the three months ended June 30, 2022, up $3.9 million or 29% from $13.4 million in the prior year[149]. - Total revenue for the six months ended June 30, 2022, was $218.1 million, up from $166.5 million in the same period of 2021[146]. - Net loss for the three months ended June 30, 2022, was $(24.5) million, compared to $(9.7) million in the same period of 2021[150]. - Non-GAAP Net loss for the six months ended June 30, 2022, was $(34.8) million, compared to $(18.8) million for the same period in 2021[187]. Operating Expenses - Total operating expenses for Q2 2022 were $139,811, up 31% from $106,704 in Q2 2021[138]. - Loss from operations for Q2 2022 was $(24,739), compared to $(9,330) in Q2 2021, indicating a significant increase in losses[138]. - Customer assurance cost of revenue was $14,575 in Q2 2022, up from $11,129 in Q2 2021, reflecting a 31% increase[138]. - Operations and technology expenses rose to $36,720 in Q2 2022, compared to $23,513 in Q2 2021, a 56% increase[138]. - Selling, general, and administrative expenses were $36,144 in Q2 2022, up from $27,513 in Q2 2021, representing a 31% increase[138]. - Total operating expenses for the three months ended June 30, 2022, were $139.8 million, representing 121% of revenue, compared to $106.7 million or 110% of revenue in the same period of 2021[150]. - Loss from operations for the three months ended June 30, 2022, was $(24.7) million, which is (21%) of revenue, compared to $(9.3) million or (10%) of revenue in the prior year[150]. - Marketplace and service cost of revenue (excluding depreciation & amortization) was $49.9 million for the three months ended June 30, 2022, an increase of $7.1 million or 17% from $42.8 million in the same period of 2021[150]. - Operations and technology expenses increased to $36.7 million for the three months ended June 30, 2022, a rise of $13.2 million or 56% compared to $23.5 million in the prior year[153]. - Marketplace and service cost of revenue was $97.1 million for the six months ended June 30, 2022, compared to $72.3 million for the same period in 2021, an increase of 34%[165]. - Operations and technology expenses totaled $69.5 million for the six months ended June 30, 2022, up from $45.1 million in the same period of 2021, a 54% increase[168]. - Selling, general, and administrative expenses for the six months ended June 30, 2022, were $72.2 million, compared to $51.5 million in the same period of 2021, a 40% increase[169]. - Depreciation and amortization costs were $4.9 million for the six months ended June 30, 2022, compared to $3.5 million for the same period in 2021, a 38% increase[170]. Cash Flow and Financing - As of June 30, 2022, cash and cash equivalents totaled $303.9 million, with investments in marketable securities amounting to $208.0 million[189]. - The company completed its IPO in March 2021, resulting in net proceeds of $388.9 million[188]. - The company has a revolving credit facility with a borrowing limit of up to $50.0 million, secured by eligible receivables[196]. - Lease obligations due within a year amount to $1.7 million, with an additional $4.7 million due at various dates through 2032[190]. - The company has a revolving line of credit under the 2021 Revolver with an aggregate principal amount of up to $160.0 million, including a sub-facility for letters of credit up to $20.0 million[197]. - As of June 30, 2022, the company had $70.0 million drawn under the 2021 Revolver and $0.5 million drawn under the 2019 Revolver, with an outstanding letter of credit of $1.1 million[198]. - For the six months ended June 30, 2022, net cash used in operating activities was $72.6 million, primarily due to a net loss of $54.0 million and cash outflows of $44.4 million from changes in operating assets and liabilities[203]. - The company reported net cash used in investing activities of $258.6 million for the six months ended June 30, 2022, mainly for marketable securities and the acquisition of Monk SAS[205]. - Net cash provided by financing activities was $69.1 million for the six months ended June 30, 2022, primarily from borrowings on the 2021 Revolver[207]. - The company experienced a decrease in marketplace float of $39.6 million during the six months ended June 30, 2022, due to a compression of the timing between incoming payments from buyers and outgoing payments to sellers[203]. - The company had a net cash inflow of $382.2 million from financing activities for the six months ended June 30, 2021, primarily from the issuance of Class A common stock during its IPO[207]. Strategic Initiatives - The company aims to increase Marketplace Units, which are critical for revenue growth and overall marketplace health[114]. - The company plans to grow its share of wholesale transactions from existing customers, enhancing engagement and spend on the platform[115]. - New product offerings include ACV Capital and MAX Digital's inventory management system, aimed at driving customer adoption and revenue growth[121]. - The company is actively investing in growth, anticipating increased operating expenses to support sales, marketing, and technology development[122]. - The company expects marketplace and service cost of revenue to continue increasing as it scales its business and introduces new offerings[129]. - The acquisition of Monk SAS for approximately $19.1 million was completed in Q1 2022, enhancing the company's position in the used vehicle industry[208]. - The company plans to evaluate spending aspects, including capital expenditures and strategic investments, in light of the COVID-19 pandemic[193]. Market Conditions - The company continues to monitor the impact of COVID-19 and semiconductor supply chain disruptions on its business operations and market conditions[105]. - Marketplace GMV is expected to grow as Marketplace Units increase, although it may be impacted by the value of vehicles transacted[110]. - The company is classified as an emerging growth company and will remain so until the end of the fiscal year ending December 31, 2022[212].