Online used car auction platform ACV Auctions (NASDAQ: ACVA) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 20.6% year on year to $193.7 million. Next quarter’s revenue guidance of $200.5 million underwhelmed, coming in 1.9% below analysts’ estimates. Its GAAP loss of $0.04 per share was $0.02 above analysts’ consensus estimates.
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ACV Auctions (ACVA) Q2 CY2025 Highlights:
- Revenue: $193.7 million vs analyst estimates of $196.1 million (20.6% year-on-year growth, 1.2% miss)
- EPS (GAAP): -$0.04 vs analyst estimates of -$0.06 ($0.02 beat)
- Adjusted EBITDA: $18.58 million vs analyst estimates of $19.24 million (9.6% margin, 3.4% miss)
- The company dropped its revenue guidance for the full year to $770 million at the midpoint from $775 million, a 0.6% decrease
- EBITDA guidance for the full year is $70 million at the midpoint, below analyst estimates of $71.18 million
- Operating Margin: -3.7%, up from -11.6% in the same quarter last year
- Free Cash Flow Margin: 0.9%, down from 31% in the previous quarter
- Marketplace Units: 210,429, up 23,903 year on year
- Market Capitalization: $2.33 billion
“We are pleased with our second quarter results, delivering record revenue and Adjusted EBITDA, despite challenging market conditions in the back half of the quarter. Results were driven by continued market share gains and strong adoption of our Marketplace Services. 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.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, ACV Auctions’s sales grew at an impressive 19.9% compounded annual growth rate over the last three years. Its growth beat the average consumer internet company and shows its offerings resonate with customers.
This quarter, ACV Auctions generated an excellent 20.6% year-on-year revenue growth rate, but its $193.7 million of revenue fell short of Wall Street’s high expectations. Company management is currently guiding for a 17% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 22.5% over the next 12 months, an acceleration versus the last three years. This projection is admirable and indicates 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 19.6% annually to 210,429 in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q2, ACV Auctions added 23,903 marketplace units, leading to 12.8% year-on-year growth. The quarterly print was lower than 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 5.4%. 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 $920.51. It grew by 6.9% year on year, slower than its unit growth.
Key Takeaways from ACV Auctions’s Q2 Results
It was great to see ACV Auctions increase its number of units this quarter. On the other hand, its number of marketplace units missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 7.9% to $12.29 immediately following the results.
The latest quarter from ACV Auctions’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
