ACV Auctions 2025 Q1 Earnings Narrowed Losses and Strong Revenue Growth

ACV Auctions (ACVA) reported its fiscal 2025 Q1 earnings on May 07th, 2025. ACV Auctions exceeded revenue expectations for Q1 2025, reporting $183 million compared to analyst estimates of $182.21 million. The company maintained its guidance for full-year revenue growth of 20% to 23% year-over-year, projecting $765-785 million in revenue. Despite ongoing challenges such as the shortage of used vehicle inventory, ACV achieved a GAAP net loss reduction and a significant improvement in non-GAAP net income.

Revenue
ACV Auctions experienced a substantial 25.4% revenue increase, reporting $182.70 million in 2025 Q1 compared to $145.69 million in 2024 Q1. The Marketplace and Service segment contributed $165.94 million, marking a robust performance, while the Customer Assurance segment added $16.76 million. Together, these segments propelled total revenue to $182.70 million.

Earnings/Net Income
ACV Auctions narrowed its losses to $0.09 per share in 2025 Q1 from $0.13 per share in 2024 Q1, a 30.8% improvement. The net loss was reduced to $-14.82 million, an improvement of 27.6% compared to the previous year. Despite narrowing losses, the EPS reflects ongoing challenges for the company.

Post Earnings Price Action Review
ACV Auctions' strategy of buying shares after quarterly revenue increases and holding for 30 days has yielded moderate returns over the past five years, primarily due to its focus on identifying favorable entry points aligned with revenue growth. The company demonstrated strong revenue growth with a reported 32.4% year-on-year increase attributed to expansion in the dealer wholesale market and robust performance in ACV Transport and Capital services. The 30-day holding period allows investors to capture short-term gains following revenue announcements, although the stock price closed at $15.71, down 25.79% over the last three months and 10.07% over the last 12 months. With an average target price of $23.92, ACV presents a potential upside of 52.28% from the current price, suggesting that despite recent declines, there may be room for growth. However, investors should account for potential market corrections and the company's ability to sustain revenue growth. This strategy might not fully capture long-term stock potential, highlighting the importance of considering broader market conditions.

CEO Commentary
"We are very pleased with our first quarter results. We delivered strong revenue growth and Adjusted EBITDA above the high-end of our guidance range, along with continued margin expansion," said George Chamoun, CEO of ACV. "Our leading market position resulted in additional share gains, our suite of dealer solutions gained further market traction, and we executed on initiatives to support our commercial wholesale strategy. While the dealer wholesale market grew modestly year-over-year during the quarter, it remained well below historical levels primarily due to the ongoing shortage of used vehicle inventory and challenging market conditions in February."

Guidance
ACV expects second quarter 2025 revenue between $193 million and $198 million, representing a year-over-year increase of 20% to 23%. GAAP net loss is anticipated between $11 million and $13 million, non-GAAP net income projected at $11 million to $13 million, and Adjusted EBITDA expected to range from $18 million to $20 million. Full-year 2025 revenue guidance is set at $765 million to $785 million, with a GAAP net loss of $60 million to $50 million, non-GAAP net income of $33 million to $43 million, and Adjusted EBITDA forecasted between $65 million and $75 million.

Additional News
In recent weeks, ACV Auctions has made strides in expanding its strategic partnerships and enhancing its technology offerings. The company announced a collaboration with a leading automotive data analytics firm to further improve its vehicle inspection and valuation services. Additionally, ACV Auctions appointed a new Chief Technology Officer to spearhead its innovation initiatives, focusing on developing next-generation digital solutions for the automotive marketplace. These strategic moves are aimed at reinforcing ACV's position as a leader in digital automotive platforms, allowing the company to better serve its dealer and commercial clients with advanced data insights and operational efficiencies.