ACV Auctions shares tumble as guidance disappoints

Investing.com -- ACV Auctions Inc (NASDAQ:ACVA) shares plunged 14.4% in after-hours trading Wednesday after the digital automotive marketplace missed earnings expectations and lowered its guidance amid deteriorating market conditions.

The company reported a third-quarter loss of -$0.14 per share, significantly missing analyst estimates of $0.06. Revenue reached a record $200 million, essentially in line with analyst expectations of $200.26 million and up 16% YoY. Despite the revenue growth, ACV lowered its outlook for both the fourth quarter and full year, citing weakening retail demand and elevated trade retention rates at dealerships.

For the fourth quarter, ACV now expects revenue of $180-184 million, well below the consensus estimate of $191.8 million. Full-year 2025 revenue guidance was reduced to $756-760 million, falling short of analyst expectations of $767.7 million.

"The dealer wholesale market was flat year-over-year with growth decelerating in the last two months of the quarter, reflecting weakening retail demand and elevated trade retention rates at dealerships," said George Chamoun, CEO of ACV. "While we continue to experience strong adoption across our growing marketplace, we believe it is prudent to update our guidance to reflect ongoing crosscurrents in the macroeconomic environment."

The company did report some positive metrics, including a 10% increase in marketplace units to 218,065 and a 9% rise in marketplace GMV to $2.7 billion. Adjusted EBITDA improved to $19 million from $11 million in the same quarter last year.

ACV now expects the dealer wholesale market to decline in the mid-single digits YoY in the fourth quarter, a steeper drop than previously anticipated. The company also warned that conversion rates are expected to be below normal seasonal patterns due to higher-than-normal wholesale price depreciation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.