Acv Auctions, Inc. ((ACVA)) has held its Q2 earnings call. Read on for the main highlights of the call.

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ACV Auctions, Inc. struck an upbeat tone in its latest earnings call, pairing record revenue and solid adjusted EBITDA with growing traction across new products and marketplace services. Management acknowledged real headwinds in dealer wholesale activity and conversion rates, but framed them as cyclical rather than structural and emphasized disciplined investment, cost control, and AI-enabled efficiency to support durable margin expansion.

Record Revenue and Unit Sales

ACV reported Q2 2026 revenue of $214 million, up 10% year over year and marking a new quarterly high for the business. The company also achieved record unit sales, moving 211,000 vehicles through its marketplace, underscoring ongoing share gains despite a contracting dealer wholesale backdrop.

Adjusted EBITDA Outperformance

Profitability outpaced expectations, with adjusted EBITDA reaching $21 million and exceeding the high end of guidance. Adjusted EBITDA per unit rose 11% year over year, and full-year guidance of $73 million to $77 million implies roughly 27% growth, signaling improving economics as scale builds.

Strong Marketplace Services Growth

Marketplace services remained a key growth engine, representing 41% of total revenue in the quarter and expanding 17% year over year. Performance in ACV Transport and ACV Capital drove this mix shift, helping diversify revenue beyond core auction fees and deepen customer engagement.

Transport Momentum and Efficiency

ACV Transport revenue climbed 19%, with 125,000 transports delivered in Q2 as logistics offerings gained adoption. Despite higher diesel prices, transport margins and attach rates stayed in line with mid-term targets, supported by AI-driven pricing optimization that helped offset inflationary cost pressure.

Customer and Product Traction

Newer products such as ViPR, ClearCar, and ACV MAX showed encouraging traction, particularly among large dealer groups. ViPR is now commercially available, with more than half of the top 50 dealer groups engaged and deployment targets above 100 units for 2026 and over 500 units for 2027, while top 100 ClearCar users doubled quarterly wholesale transactions on ACV.

Improving Operating Leverage

Operating discipline continues to enhance leverage, as non-GAAP operating expenses excluding cost of revenue fell about 300 basis points as a percentage of revenue year over year. Management expects OpEx growth of roughly 6% in 2026, down from 12% in 2025, alongside about 100 basis points of adjusted EBITDA margin expansion.

Capital Position and Shareholder Returns

The balance sheet remains a point of strength, with $242 million in cash and cash equivalents against $205 million in debt at quarter-end. ACV also initiated a $50 million accelerated share repurchase program, signaling confidence in long-term prospects while maintaining flexibility to fund strategic investments.

Commercial Wholesale and Partnerships

ACV is expanding deeper into commercial wholesale channels through new remarketing and integration deals. The company highlighted business from a top-five fleet consignor, a captive finance off-lease partner, and a top-four rental consignor, alongside product integrations such as AutoIMS that enable upstream inspections and new workflow options.

Dealer Market Contraction and Conversion Pressure

Management cautioned that broader dealer wholesale volumes declined around 6% year over year in Q2, with June and July also down mid-single digits. A roughly 600 basis point price disconnect between buyers and sellers compressed conversion rates, materially impacting unit growth despite ACV’s record volumes.

Gross Margin and Cost of Revenue Pressure

Non-GAAP cost of revenue as a percentage of revenue increased around 300 basis points year over year, driven mainly by a higher mix of no-reserve, or guaranteed, sales. While these sales carry modestly higher costs, the company noted they are accretive to adjusted EBITDA and support marketplace liquidity and customer satisfaction.

Short-Term Operating Cash Flow Volatility

Operating cash flow has been weaker year to date, largely due to movements in marketplace float embedded in ACV’s cash balance. The company reported that approximately $175 million of its cash reflects float and cautioned that this figure can swing meaningfully quarter to quarter, even as it expects operating cash flow to turn positive in the second half.

Conversion Rate and Unit Growth Uncertainty

Conversion rates contracted roughly 300 to 350 basis points in the quarter, creating a notable drag on unit growth despite robust supply and demand engagement. Management believes this pressure is temporary and tied to pricing expectations, but acknowledged that the timing and magnitude of a recovery in conversions remains uncertain.

Inflationary Input Pressures

Rising diesel costs during the quarter underscored ACV’s sensitivity to fuel prices through its transport operations. The company indicated that most of the impact was mitigated by pricing actions and AI optimization tools, yet the episode highlighted ongoing exposure to commodity volatility in its cost base.

Execution and Scale Risks for New Products

While ViPR and related products are central to ACV’s growth story, management flagged execution risk as these offerings scale. Demand, unit deployment levels, integration timelines, and production costs for 2027 are still being finalized, requiring careful planning to balance growth ambitions with margin discipline.

Outlook and Guidance

ACV reaffirmed its 2026 outlook, guiding Q3 revenue to $219 million to $225 million with adjusted EBITDA of $21 million to $24 million and margins around 10% to 11%. For the full year, the company expects $845 million to $855 million in revenue, adjusted EBITDA of $73 million to $77 million, modestly higher cost-of-revenue ratios, slower OpEx growth, back-half unit growth driven by go-to-market spending, and positive operating cash flow assuming dealer wholesale market stabilization.

ACV’s earnings call painted a picture of a company balancing near-term market friction with long-term structural advantages in data, logistics, and product innovation. Investors will watch whether conversion rates and dealer volumes stabilize as management anticipates, but for now the combination of record revenue, EBITDA upside, and disciplined capital deployment continues to support a constructive view on the stock.