Earnings Sentiment

Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.

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Sentiment Distribution

   

Earnings Call Transcript Word Cloud

     

Bullish Statements during Earnings call

Statement
Attach rates in the low double digits resulted in 50% loan volume growth year-over-year, and combined with strong ARPU expansion, resulted in over 80% revenue growth year-over-year
We are especially proud of our ACV teammates that delivered these results
Adjusted EBITDA is expected to be in the range of $20 million to $25 million, reflecting operating improvements in our core business and integration investments in our remarketing centers
We don't have a huge ramp expectation for this year, you know, just so we don't get over our skies from like how fast that will be, but we think out over the next couple of years that we're investing now really for the next few years, and we're really excited about that TAM
We launched new innovations that expanded our competitive moat and drove operating efficiencies, resulting in approximately 70% year-over-year improvement in adjusted EBITDA
So, you know, it's all about continuing to gain scale, gain market share, increase our unit volume, and then getting that leverage in the model
We're confident that executing on this profitable growth strategy will result in creating long-term shareholder value
We sold 144,000 vehicles on our marketplace, growth of 15% year-over-year, reflecting solid listings growth and improved conversion rates
This demonstrates both the operating leverage in our model and continued strong OpEx management
Along with delivering accelerating revenue growth in the back half of the year, we had meaningful revenue margin and adjusted EBITDA margin expansion, which demonstrated the strength of our business model
We are very pleased with our Q4 and 2023 financial performance
For the full year, revenue of $481 million increased 14% as unit growth rebounded year-over-year, along with strong attach rates for ACV Transport and ACV Capital
Results were driven by strong ACV Transport performance and another record revenue quarter for ACV Capital
As George discussed earlier, we recently launched the upgraded ACV MAX suite and we're confident these improvements will drive long-term growth
The improvement was driven by strong auction and assurance results and by ACV Transport
That's been all the improvements we've done on our marketplace to keep including -- enhancing conversion rates
So that's one area where we're doing a fantastic job
If we're -- if I list a few and I think we're on track with really each of these, I just spoke a few minutes ago that our ability to inspect a car both deliver on buyer satisfaction, but also hit our medium-term arbitration objectives, we're really doing a great job
Now, I can go on and on, take the whole call, but if I had to pick one, that would probably be the one where generally our inspection capabilities are just improving dramatically and artificial intelligence is going to help
So we're really excited about that
First on slide nine, the ACV Transportation team delivered very strong results in 2023
Our tech investments yielded a greater than 20% improvement in cycle times, which is a key element of ACV's value proposition for our dealer partners
Given the strong adoption of ACV Transport in our marketplace, we are extending these services to vehicles transacted off-platform, enabling our dealer partners to further leverage our best-in-class Transport services
By leveraging AI, our Transport team drove growth and operating efficiency, resulting in a 900 basis point year-over-year increase in revenue margin, reaching the high-teens
While margins may fluctuate modestly over time, the fact that we already achieved our target speaks to the value we're delivering to our dealer partners and our strong execution
Our ACV Capital team also delivered very strong results in 2023
We delivered 21% revenue growth in Q4 and adjusted EBITDA have once again exceeded our guidance
We are pleased with our fourth quarter performance, which capped off another strong year of execution by the ACV team
We believe that this performance demonstrates the inherent leverage and scale of our business model as we continue to drive top line growth
Given ongoing inventory challenges facing our dealer partners, the peer-to-peer market is an attractive vehicle sourcing opportunity
       

Bearish Statements during earnings call

Statement
In terms of vehicle sourcing, dealers continued to retain a higher-than-normal percentage of trades for retail inventory, creating a headwind for dealer wholesale supply
Units declined 1% year-over-year in 2023, down from what was also a 10-year low in 2022 as affordability issues continued to pressure consumer demand
On conversion rates and what we're doing on our platform to keep improving conversion rates, if you look at what we're doing with selling vehicles on our platform, again, it's really a tough market
Obviously, with interest rates and everything, we're still seeing an environment still tough on used retail
GMV for the year declined modestly to $8.8 billion due to a 10% decrease in GMV per unit, largely offset by a 10% increase in unit growth to just under 600,000 units
Overall, cars on dealers' lots are about 30% lower than 2019
After declining 20% in 2022, we estimate that the dealer wholesale market declined 7% in 2023
As I mentioned earlier, while there are cross currents still impacting the broader automotive market, we continue to believe that 2023 will be the trough for the dealer wholesale market
But yes, that was as we predicted, if you look back last year, we had predicted used car values would continue to decline
You know, we've been seeing just like two years in a row overall used cars going down in value and you've been seeing a pretty consistent decline
And then, you know, in addition, there's a few other like commercial cars we're inspecting, but conversion is a little bit lower than that 60% range
When you look at the broad trends, we obviously saw even in Q4 another sort of year-over-year decline in overall wholesale supply, right
As we predicted, ASP's decline, you know, somewhat consistently with used car value is declining
Used car, year-over-year, retail is still a little lower
We had some comments earlier that we discussed that we believe '23 would be the trough on overall dealer wholesale supply
Q4 cost of revenue as a percentage of revenue decreased approximately 300 basis points year-over-year
The trade-to-wholesale mix is expected to normalize over time as new and used inventory recovers from depressed levels, which are currently about 30% below normal
Non-GAAP operating expense, excluding cost of revenue as a percentage of revenue decreased 4% year-over-year in Q4
We're not assuming, you know, a significant improvement
ACV is addressing this challenge with ClearCar
   

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