Online used car auction platform ACV Auctions (NASDAQ: ACVA) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 25.4% year on year to $182.7 million. The company expects next quarter’s revenue to be around $195.5 million, close to analysts’ estimates. Its GAAP loss of $0.09 per share was 22.4% above analysts’ consensus estimates.
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ACV Auctions (ACVA) Q1 CY2025 Highlights:
- Revenue: $182.7 million vs analyst estimates of $182.3 million (25.4% year-on-year growth, in line)
- EPS (GAAP): -$0.09 vs analyst estimates of -$0.12 (22.4% beat)
- Adjusted EBITDA: $13.91 million vs analyst estimates of $10.5 million (7.6% margin, 32.4% beat)
- The company reconfirmed its revenue guidance for the full year of $775 million at the midpoint
- EBITDA guidance for the full year is $70 million at the midpoint, in line with analyst expectations
- Operating Margin: -7.9%, up from -15.5% in the same quarter last year
- Free Cash Flow was $56.55 million, up from -$11.19 million in the previous quarter
- Marketplace Units: 208,025, up 33,394 year on year
- Market Capitalization: $2.68 billion
“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. ACV's 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,” said George Chamoun, CEO of ACV.
Company Overview
Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, ACV Auctions’s sales grew at an impressive 19.8% compounded annual growth rate over the last three years. Its growth beat the average consumer internet company and shows its offerings resonate with customers, a helpful starting point for our analysis.
This quarter, ACV Auctions’s year-on-year revenue growth of 25.4% was excellent, and its $182.7 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 21.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 21.5% over the next 12 months, an acceleration versus the last three years. This projection is admirable and implies its newer products and services will spur better top-line performance.
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Marketplace Units
Unit Growth
As an online marketplace, ACV Auctions generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, ACV Auctions’s marketplace units, a key performance metric for the company, increased by 18.4% annually to 208,025 in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q1, ACV Auctions added 33,394 marketplace units, leading to 19.1% year-on-year growth. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating unit growth just yet.
Revenue Per Unit
Average revenue per unit (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each unit. ARPU also gives us unique insights into a user’s average order size and ACV Auctions’s take rate, or "cut", on each order.
ACV Auctions’s ARPU growth has been decent over the last two years, averaging 5.1%. Its ability to increase monetization while effectively growing its marketplace units demonstrates the value of its platform. 
This quarter, ACV Auctions’s ARPU clocked in at $878.25. It grew by 5.3% year on year, slower than its unit growth.
Key Takeaways from ACV Auctions’s Q1 Results
We were impressed by how significantly ACV Auctions blew past analysts’ EBITDA expectations this quarter. We were also glad it expanded its number of units. On the other hand, its EBITDA guidance for next quarter missed and its number of marketplace units was in line with Wall Street’s estimates. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The stock remained flat at $15.71 immediately following the results.
So should you invest in ACV Auctions right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
