ACV Auctions faced a challenging second quarter, with results coming in below Wall Street’s revenue expectations and an 11.9% drop in share price following the report. Management attributed the performance to softer conversion rates late in the quarter, driven by dealers retaining more vehicles due to ongoing industry supply constraints. CEO George Chamoun acknowledged these headwinds and emphasized that, despite market deceleration, the company delivered meaningful margin expansion and continued to gain market share through strong execution in its dealer wholesale and value-added services businesses.
Is now the time to buy ACVA? Find out in our full research report (it’s free).
ACV Auctions (ACVA) Q2 CY2025 Highlights:
- Revenue: $193.7 million vs analyst estimates of $196.1 million (20.6% year-on-year growth, 1.2% miss)
- Adjusted EPS: $0.07 vs analyst estimates of $0.08 (in line)
- Adjusted EBITDA: $18.58 million vs analyst estimates of $19.24 million (9.6% margin, 3.4% miss)
- The company dropped its revenue guidance for the full year to $770 million at the midpoint from $775 million, a 0.6% decrease
- EBITDA guidance for the full year is $70 million at the midpoint, below analyst estimates of $71.1 million
- Operating Margin: -3.7%, up from -11.6% in the same quarter last year
- Marketplace Units: 210,429, up 23,903 year on year
- Market Capitalization: $2.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ACV Auctions’s Q2 Earnings Call
- Christopher Alan Pierce (Needham & Company) asked about the impact of lower conversion rates and higher dealer retention on unit growth. CEO George Chamoun clarified these are related but separate factors, with both contributing to the quarter’s volume headwinds.
- Will Gildea (CJS Securities) questioned the progress of the pricing engine and its effect on auction liquidity. Chamoun and CFO Bill Zerella highlighted that guaranteed pricing now covers 15% of units sold and is expected to become a larger business driver.
- Eric James Sheridan (Goldman Sachs) pressed for details on the Amazon partnership and geographic expansion of AI products. Chamoun explained that while significant growth is possible, contributions from these initiatives are not expected in the current year.
- Rajat Gupta (JPMorgan) inquired about the balance between product and technology investment versus sales and marketing. Chamoun emphasized that R&D and inspector hiring are prioritized regardless of quarterly EBITDA targets, with future growth hinging on continued platform innovation.
- Alexander Eugene Potter (Piper Sandler) asked whether guidance changes reflected market-wide issues or internal execution. Zerella confirmed that guidance was lowered due to broader market uncertainty, not due to competitive share loss or product setbacks.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of adoption for ACV’s AI-powered initiatives such as Project Viper and guaranteed pricing, (2) progress on greenfield commercial remarketing centers and market entry milestones, and (3) stabilization of dealer auction volumes amid evolving trade retention and inventory trends. Execution against these priorities will be crucial for validating management’s growth and margin targets.
ACV Auctions currently trades at $11.71, down from $13.34 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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