ACV Auctions Inc. (NASDAQ:ACVA) Q2 2023 Earnings Call Transcript

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We’ve got — over the last couple of months, we’ve got a healthy amount of new dealers signing up. We’re feeling really good about that. Clear Car helps dealers price the vehicle actually with consumers who start their journey in their own drive flow. So you’re at home, you want to decide what is the value of your vehicle. We put Clear Car on the dealer’s website or it can be its own website that says like a WeBuy car type of thing. So whether it’s a dedicated web page or within their dealer web page, the consumer answers a few questions. And then the new version also by leveraging the product month we acquired, consumer can go around, take some pictures and we leverage AI to understand condition. And from all that, we’re putting a number on a vehicle.

And so we love what we’re up to here. Dealers love it. We’re getting really positive signs, again, using the restaurant analogy, think like the grand openings coming so. But we like to get these products out there in market, kind of really see, okay, where are we in scaling it before we do like all the press and we’re really excited about where we’re at. But you’ll see probably from Analyst Day to now we now have a website up there. We’ve got some content up there. We’re making our ways. And similar to what I said before, between now and the end of the year, we’ll get more aggressive.

Operator: Our next question comes from the line of Bob Levick with CJS Securities.

Unidentified Analyst: Yes. Can you hear me? It’s Pete Lukas [ph] for Bob. One of the biggest areas of focus has always been inspections. We’ve talked about that a bit in terms of the technology that you’re looking to roll out. But can you tell us kind of expand on in terms of your 2026 numbers, remind us of inspections for VCI and efficiency built into those 26 numbers? .

Bill Zerella: Yes. It’s Bill. So we’re currently running around six inspections or so on average for inspector. And as we’ve talked about in the past, our best-performing inspectors are roughly double that. So we’ve got some inspectors obviously below the average in less mature territories. So what we’ve assumed is certainly greater efficiency by 2026, but not on average, at the maximum productivity of our best inspectors today. So assume high single digits up to inspections a day on average by 2026. So that directionally is what we baked into our modeling.

Unidentified Analyst: Extremely helpful. And then just one more. We know you’re always innovating, and you talked a lot about that on the call, which was very helpful. But in terms of next up and the ’26 goals, is there anything you need to add? Is it a build versus buy strategy? Is there a missing piece or something we should be thinking about there to get to those goals? .

George Chamoun: No. I think on the Analyst Day, we felt like we really laid out the plan, both on our expansion of our sort of product vision, making the inspection better and better. And without giving everyone exactly we’re up to, right, because you want to keep a little bit for our own patent protection and legally keeping ourselves protected on all things we’re building. I think we really leaned in said this is the future where we’re really leveraging AI to help us with vehicle condition and inspection. And I think it’s an area we’re way ahead of the industry. So I think just more just us continuing our path I think anything you have to believe there, to answer your question is you believe we’re going to keep executing like we’ve been. Territory expansion, just keep growing the way that we’ve been growing. On the commercial side, that would start to be a part of our TAM expansion. So that part, we started to also lay out. .

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