Online used car auction platform ACV Auctions (NASDAQ:ACVA) reported Q2 CY2024 results exceeding Wall Street analysts' expectations , with revenue up 29.3% year on year to $160.6 million. Guidance for next quarter's revenue was also better than expected at $160 million at the midpoint, 1.3% above analysts' estimates. It made a GAAP loss of $0.10 per share, down from its loss of $0.10 per share in the same quarter last year.

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ACV Auctions (ACVA) Q2 CY2024 Highlights:

• Revenue: $160.6 million vs analyst estimates of $156.3 million (2.8% beat)

• EPS: -$0.10 vs analyst expectations of -$0.11 (in line)

• Revenue Guidance for Q3 CY2024 is $160 million at the midpoint, above analyst estimates of $158 million

• The company slightly lifted its revenue guidance for the full year from $617.5 million to $620 million at the midpoint

• EBITDA Margin: 4.4%, up from -2.8% in the same quarter last year

• Free Cash Flow was -$4.62 million, down from $34.39 million in the previous quarter

• Marketplace Units: 186,526, up 33,378 year on year

• Market Capitalization: $2.49 billion

“We are very pleased with our second quarter results, delivering revenue above the high-end of our guidance range, continued margin expansion, and strong sequential growth in Adjusted EBITDA,” said George Chamoun, CEO of ACV.

Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Online Marketplace

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.

Sales Growth

ACV Auctions's revenue growth over the last three years has been strong, averaging 25.9% annually. This quarter, ACV Auctions beat analysts' estimates and reported solid 29.3% year-on-year revenue growth.

Guidance for the next quarter indicates ACV Auctions is expecting revenue to grow 34.4% year on year to $160 million, improving from the 12.9% year-on-year increase it recorded in the comparable quarter last year. Ahead of the earnings results, analysts were projecting sales to grow 28.8% over the next 12 months.

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