ACV Auctions Inc. (ACVA) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 delivered record revenue of $193.7M and adjusted EBITDA of $18.6M, with adjusted EBITDA margin rising to 9.6% from 4.4% a year ago, driven by market share gains and strong adoption of Marketplace Services .
Guidance was trimmed modestly: FY 2025 revenue range moved to $765–$775M (midpoint -$5M), while adjusted EBITDA was maintained at $68–$72M; Q3 2025 guide set at $198–$203M revenue and $18–$20M adjusted EBITDA .
Versus S&P Global consensus, Q2 revenue of $193.7M missed $196.0M*, and Primary EPS of $0.0719* missed $0.0750*, largely due to weaker conversion rates in May/June and higher trade retention rates at dealerships (≈300 bps YoY) .
Management emphasized profitable growth, AI-driven product differentiation (No Reserve/Guarantee, Transport pricing, Capital expansion), and early progress in the commercial wholesale strategy (first car sold on new platform; Houston greenfield) as medium-term catalysts .

What Went Well and What Went Wrong

What Went Well
- “Record revenue and continued cost discipline resulted in adjusted EBITDA margins more than doubling year over year, underscoring the scale in our business model.” – CEO George Chamoun .
- ACV Transportation set records for quarterly revenue and transports delivered; revenue margin expanded ~370 bps YoY and remained in the low-20s, supported by AI-optimized pricing .
- ACV Capital revenue grew over 60% YoY in Q2, third consecutive quarter of accelerated growth, expanding TAM via off-platform offerings (consumer-sourced vehicles) .
What Went Wrong
- Unit growth faced an approximate 500 bps headwind from lower-than-expected conversion rates in May/June despite listings being in line, pressuring revenue vs. consensus .
- Dealer trade retention rates increased ~300 bps YoY, reducing wholesale flow-through and contributing to the revenue trim for FY 2025 .
- Macro crosscurrents (tariff uncertainty, affordability) drove management to be more conservative on the back half outlook, trimming FY revenue guidance by $5M at the midpoint .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$160.624	$182.697	$193.703
GAAP Diluted EPS ($)	$(0.10)	$(0.09)	$(0.04)
Adjusted EBITDA ($USD Millions)	$7.078	$13.908	$18.577
Adjusted EBITDA Margin (%)	4.4%	7.6%	9.6%
Non-GAAP Net Income ($USD Millions)	$3.227	$7.496	$12.251

Segment revenue breakdown

Segment	Q2 2024 ($USD Millions)	Q1 2025 ($USD Millions)	Q2 2025 ($USD Millions)
Marketplace & Service Revenue	$144.126	$165.937	$175.995
Customer Assurance Revenue	$16.498	$16.760	$17.708
Total Revenue	$160.624	$182.697	$193.703

KPIs

KPI	Q1 2025	Q2 2025
Marketplace Units (vehicles)	208,025	210,429
Marketplace GMV ($USD Billions)	$2.6	$2.7
Auction & Assurance ARPU ($USD)	$500	$523

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	$765M–$785M	$765M–$775M	Lowered (midpoint -$5M)
GAAP Net Income (Loss)	FY 2025	$(60)M–$(50)M	$(51)M–$(47)M	Raised (less negative)
Non-GAAP Net Income	FY 2025	$33M–$43M	$38M–$42M	Raised at low end
Adjusted EBITDA	FY 2025	$65M–$75M	$68M–$72M	Maintained midpoint focus
Non-GAAP OpEx Growth (ex-COGS)	FY 2025	~18%	~11%	Lowered
Total Revenue	Q3 2025	N/A	$198M–$203M	New
GAAP Net Income (Loss)	Q3 2025	N/A	$(13)M–$(11)M	New
Non-GAAP Net Income	Q3 2025	N/A	$11M–$13M	New
Adjusted EBITDA	Q3 2025	N/A	$18M–$20M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology initiatives	AI-enabled pricing, inspection data moat; Virtual Lift 2.0/Viper; retail/wholesale price prediction within $100–$300	AI recommendations, No Reserve/Guarantee acceleration (~11% full-quarter volume; ~15% exit); Viper pilots; pricing-as-a-service	Strengthening
Dealer conversion/macro/tariffs	Flattish dealer wholesale outlook; January strong, February mixed; affordability concerns	Conversion softness in late Q2 (≈500 bps unit headwind); trade retention +300 bps YoY; cautious FY revenue trim	Mixed headwinds
ACV Transportation	High-teens margins exceeded in 2024; bundling benefits	Record revenue; margin +370 bps YoY, low-20s; off-platform traction	Improving
ACV Capital	26–30% growth with risk discipline	>60% growth; off-platform financing expansion; bad debt management highlighted	Accelerating
Commercial wholesale strategy	Greenfield rollout planned; lower capital intensity vs M&A	First car sold; Houston greenfield opening; second site planned for early 2026	Early execution
Pricing/ARPU	Fee increases driving ARPU; auctions ARPU $500 in Q1	ARPU $523; no major pushback; further assurance products adoption	Stable to modestly up

Management Commentary

“We are very pleased with our team’s execution… Record revenue and continued cost discipline resulted in adjusted EBITDA margins more than doubling year over year.” – George Chamoun, CEO .
“We are trimming our 2025 revenue guidance by $5,000,000 at the midpoint… We are maintaining the midpoint of adjusted EBITDA guidance with a range of $68M to $72M.” – William Zerella, CFO .
“We exited the quarter at about 15% of our unit volume was no reserve with these guaranteed sales… for the full quarter, about 11% of volume, 200 bps above Q1.” – William Zerella, CFO .
“ACV Capital… over 60% revenue growth in Q2… expanding its TAM with off-platform offerings.” – George Chamoun, CEO .
“We sold our first car at our Greenfield location in Houston… software trials completed; going live very soon.” – George Chamoun, CEO .

Q&A Highlights

Conversion dynamics: Listings in line, but lower-than-modeled conversion in May/June drove ~500 bps unit headwind; retention rates up ~300 bps YoY as dealers kept more trades .
No Reserve/Guarantee penetration: ~11% of Q2 units (full quarter), ~15% exiting Q2; strong buyer engagement and 100% conversion on guaranteed sales .
Amazon partnership and AI roadmap: Investments burden 2025 P&L; revenue contributions expected more in 2026 as platforms scale (Viper, Virtual Lift 2.0) .
Commercial wholesale: First sales executed; Houston greenfield near launch; second greenfield targeted for early next year; greenfields preferred for capital efficiency .
Pricing and ARPU: Buyer fee increase earlier in year; ARPU improving; no major customer pushback .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Outcome
Revenue ($USD Millions)	195.973*	193.703	Miss
Primary EPS ($)	0.0750*	0.0719*	Miss

*Values retrieved from S&P Global.

Management’s commentary points to conversion shortfalls in late Q2 and elevated trade retention rates as key drivers of the slight misses; narrative supports consensus reductions on revenue while maintaining adjusted EBITDA expectations .

Key Takeaways for Investors

Profitability scaling: Adjusted EBITDA margin expanded to 9.6% in Q2 (from 4.4% YoY), with FY adjusted EBITDA maintained at $68–$72M despite a modest revenue trim—reinforcing margin-over-growth discipline .
Macro prudence: Elevated trade retention and conversion volatility warrant conservative back-half assumptions; watch for July conversion improvements sustaining into Q3 .
Product differentiation: AI-enabled pricing (pricing-as-a-service), No Reserve/Guarantee expansion, Transport margin gains, and Capital growth are durable moats; adoption should underpin share gains .
Commercial optionality: Early proof points (first car sold; Houston greenfield opening) open a large TAM; greenfields offer lower capital intensity vs. M&A .
ARPU tailwinds: Fee actions and assurance mix support ARPU growth ($523 in Q2), with further monetization via bundled services and off-platform offerings .
Near-term trading lens: Slight revenue/EPS miss vs. consensus amid macro crosscurrents, but maintained EBITDA guidance and visible cost control may refocus investor attention on margin resilience .
Medium-term thesis: As Viper/Virtual Lift 2.0 scale and commercial sites ramp, incremental growth vectors can complement core dealer wholesale, improving revenue durability and operating leverage .

Appendix: Additional Data Points

Q2 2025 highlights: Marketplace Units 210,429 (+13% YoY); GMV $2.7B (+12% YoY); non-GAAP net income $12.3M .
Q1 2025 highlights for trend: Units 208,025 (+19% YoY); GMV $2.6B (+13% YoY); adjusted EBITDA $13.9M .
Press release events around Q2: Earnings date announcement (July 21); No Reserve Sale expanded to four days weekly (Aug 19) .