Good day, and thank you for standing by. Welcome to the ACV Auctions third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Fox, Vice President of Investor Relations. Please go ahead. Thank you, operator. Good afternoon, and thank you for joining ACV's conference call to discuss our third quarter 2023 financial results. With me on the call today are George Chamoun, Chief Executive Officer, and Bill Zerella, Chief Financial Officer. Before we get started, please note that today's comments include forward-looking statements, including statements regarding future financial guidance. These forward-looking statements are subject to risks and uncertainties and involve factors that could cause actual results to differ materially from those expressed or implied by such statements. A discussion of the risks and uncertainties related to our business can be found in our SEC filings and in today's press release, both of which can be found on our investor relations website. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's earnings materials, which can also be found on our investor relations website. With that, let me turn the call over to George. Thanks, Tim. Good afternoon, everyone, and thank you for joining us. ACV's momentum continued in the third quarter, with revenue at the high end of guidance and adjusted EBITDA once again exceeding our guidance. Our performance reflects another quarter of strong execution by the ACV team as we gain market share and launch new innovations that expand our TAM and drive operating efficiencies. Strong demand for ACV Transport and ACV Capital contributed to revenue growth and revenue margin expansion, and a continued focus on driving profitable growth resulted in our adjusted EBITDA margin expanding 800 basis points year-over-year. With that, let's turn to a brief recap of Q3 on slide 4. Third quarter revenue of $119 million increased 13% year-over-year, with growth accelerating sequentially. We sold 150,000 vehicles in the quarter, resulting in 13% year-over-year growth, reflecting further adoption of our marketplace solutions targeting dealer engagement. GMV of $2.1 billion was flat year over year, reflecting continued moderation of wholesale market prices. Despite this price moderation, ARPU once again increased year over year, reflecting the strength of ACV's core value proposition. On slide five, I will again frame the rest of today's discussion around the three pillars of our strategy to maximize long-term shareholder value: growth, innovation, and scale. I'll begin with growth. On slide seven, I'll share our observations about the broader automotive market as context for factors impacting the dealer wholesale market. In Q3, new vehicle retail units declined sequentially, but increased approximately 10% year- over- year from depressed levels. While volumes continue to lag pre-pandemic levels, inventories improved, which is key to supporting a sustained recovery in retail sales, trades, and dealer wholesale supply. Used vehicle retail units modestly increased sequentially and year-over-year, but also remained well below historical levels as affordability issues continued to pressure consumer demand. In terms of vehicle sourcing, our data indicates that dealers retained a higher than normal percentage of trades for retail inventory, creating a near-term headwind for wholesale supply. We believe the retail wholesale mix will begin to normalize as inventory levels for both new and used vehicles recover. While supply remains muted, price appreciation and conversion rates across the industry have generally been following normal seasonal patterns and have marginally improved in recent months. This is in stark contrast to industry trends in the back half of 2022, which resulted in challenging operating conditions in the wholesale market. On balance, we believe the end markets are showing early signs of improvement, giving us confidence to again raise guidance for the year. Turning now to slide eight. We estimate that the U.S. dealer wholesale market remained well below normalized volumes in Q3, but grew modestly quarter-over-quarter. Relative to Q3 2022, the market only declined about 2%, which was a significant improvement from the 14% year-over-year decline in Q2.... As the market begins to recover, our growth will benefit both from market expansion and from market share gains. In Q3, our 13% year-over-year unit growth and an estimated market contraction of 2% implies 15% market share growth for ACV. Next, I would like to wrap up the growth section with highlights on our value-added services. First, on slide nine, the ACV Transport team delivered another strong quarter and continues to scale ahead of schedule. Our strong carrier network and improving cycle times resulted in attach rate in the mid-50% range again this quarter. Our technology investments and expanded carrier coverage of AI-optimized pricing are driving both growth and operating efficiencies. This combination yielded record revenue margins in the high teens, an increase of approximately 500 basis points year-over-year. As a reminder, our 2026 financial targets assume transport revenue margins in the high teens. While margins may fluctuate modestly over time, the fact that we achieved our target last quarter speaks to the value we're delivering to our dealer partners and to the strong execution of our transport team. Turning to slide 10. Our ACV Capital team once again delivered strong results in Q3. Attach rates in the low double digits resulted in 40% loan volume growth year-over-year, and combined with strong ARPU expansion, delivered about 80% revenue growth year-over-year. In addition to our floor plan offerings, we are investing in new ACV Capital capabilities that will help our sellers source consumer vehicles, leveraging ClearCar. We remain confident that ACV Capital will be an important long-term growth and profit driver. Turning to the second element of our strategy, innovation. On slide 12, I'd like to touch on the formal launch of ClearCar, ACV's consumer sourcing solution that leverages AI and real-time market data to deliver highly accurate condition-based pricing. As a reminder, consumers looking to sell their vehicle is a very large market opportunity, including 10 million transactions that historically are sold peer-to-peer and therefore do not end up at a dealership. As I discussed earlier, the below-normal supply of new and used inventory in the market, especially late-model used vehicles, is a challenge for our dealer partners. ACV is addressing this challenge with ClearCar, which has experienced strong early adoption with hundreds of dealer rooftops. Based on dealer feedback, consumer conversion rates are significantly higher than competitive sourcing tools. This speaks to both the power of the offering and its effectiveness in driving qualified leads. At its core, ClearCar helps decode how vehicle condition influences vehicle value, allowing ACV dealers and commercial clients to have more transparent conversations with consumers. Consumers benefit from having greater visibility into how their vehicle value is determined. The solution consists of ClearCar Price and ClearCar Capture. ClearCar Price is an estimation tool that resides in the dealer's website, providing consumers a precise value estimate for their vehicle. ClearCar Capture allows consumers to submit photos of their vehicles for further documentation of condition through our AI imaging and self-inspection tool, which we acquired from Monk. ClearCar Capture digitally detects exterior damage during the photo capture process, enabling dealers to update their condition-enhanced pricing estimate without an on-site inspection. We are very pleased with the early market momentum for this value-added solution and the opportunity to both expand our TAM and add another growth lever to our business. To wrap up on growth, we are also pleased with the early stages of our commercial market strategy. We are operating in a few markets where we have the services required by these customers. Even though it's early, we're very encouraged with our progress and believe we can scale and capture the market share outlined in our 2026 financial targets. On slide 13, we highlight examples of tech investments that extend into our operations, delivering customer success while reducing costs. As we discussed last quarter, reducing arbitration remains a key focus for both customer satisfaction and optimizing margins. One of the key drivers is inspection accuracy. Our field team is equipped with Co-Pilot, ArbGuard, APEX, and our AI-powered imaging apps to deliver high-quality inspections. Co-Pilot and ArbGuard leverage machine learning, predictive analytics, and sensor data to inform our VCIs on vehicle-specific issues before and after conducting an inspection. APEX delivers significant transparency into vehicle operating conditions, while also increasing the inspection productivity of our VCI teammates. We continue to expand our imaging AI capabilities to identify specific important conditions, like the presence of damage and rust. Together, these innovations have contributed to a low double-digit reduction in arbitration unit costs this year, which is a great performance in the current market. Our technology investments are also driving efficiency in our model, with APEX leverage increasing by over 200 basis points in Q3.... Up on innovation. ACV remains committed to delivering industry-leading technology to our dealer partners and to our own operations, driving both growth and scale. We look forward to sharing more details with you next quarter. With that, let me hand it over to Bill to take you through our financial results and how we're driving growth at scale. Thanks, George, and thank you everyone for joining us today. We are very pleased with our Q3 financial performance, with strong revenue growth and upside to adjusted EBITDA. We also continue to demonstrate the strength of our business model with meaningful revenue margin and adjusted EBITDA margin expansion versus Q3 2022. Turning to slide 15, I'll begin with a recap of our third quarter results. Revenue of $119 million was at the high end of our guidance range and grew 13% year over year. Adjusted EBITDA loss of $4 million beat our guidance range, and adjusted EBITDA margin improved approximately 800 basis points versus Q3 2022. This demonstrates both the inherent operating leverage in our model and continued strong OpEx management. Next, on slide 16, I will cover additional revenue details. Auction and assurance revenue, which was 55% of total revenue, increased 17% year-over-year. This revenue performance reflects 13% year-over-year unit growth and auction and assurance ARPU of $439, which grew 4% year-over-year. Note that ARPU grew year-over-year despite a 10% decline in GMV per unit, reflecting our price increases from last fall and this September, and we believe we still have pricing headroom going forward. Marketplace services revenue, which was 38% of total revenue, grew 11% year-over-year. Results were driven by strong ACV Transport performance and another record revenue quarter for ACV Capital. Our SaaS and data services products comprise 7% of total revenue and declined 6% year-over-year. The decline was primarily related to our standalone inspection offerings, which continue to be impacted by the weak off-lease market. While MAX Digital revenue grew modestly year-over-year, recall that we continue to take a measured approach to customer acquisition while making significant improvements to the MAX Digital platform. We're confident these improvements position MAX for long-term growth. Turning now to slide 17, I will cover costs in the quarter. Q3 cost of revenue as a percentage of revenue decreased approximately 500 basis points year-over-year. The improvement was driven by both strong auction and assurance results and by ACV Transport. As George mentioned, we delivered high teens transport revenue margins in Q3, which is in line with our 2026 target. We continue to focus on expense discipline as we optimize and scale our business. Non-GAAP operating expense, excluding cost of revenue, increased 9% year-over-year in Q3 versus 18% year-over-year growth the prior- year. This reflects a more metered approach to growing OpEx relative to our revenue and margin growth to deliver higher operating margins as we march towards profitability. Moving to slide 18, let me frame our investment strategy and path to profitability. Our focus on spending discipline and operating efficiency is expected to result in a material decrease in OpEx growth this year, resulting in our Adjusted EBITDA loss declining by over 60% year-over-year. As you've seen reflected in our Q3 results, we have delivered margin expansion while preserving our go-to-market and technology investments to ensure ACV is in a strong position as market conditions improve. Next, I will highlight our strong capital structure on slide 19. We ended Q3 with $450 million in cash and equivalents in marketable securities and $105 million of debt on our revolver. Note that our cash balance includes $162 million of float in our auction business. The amount of float on our balance sheet will continue to fluctuate meaningfully based on business trends in the final two weeks of each quarter, which has a corresponding impact on operating cash flow. Year-to-date cash flow from operations was $9 million, a significant improvement from the $75 million dollar outflow in the same period of 2022. Now I'll turn to guidance on slide 20. For the fourth quarter of 2023, we are expecting revenue in the range of $116 million-$120 million. Adjusted EBITDA is expected to be a loss in the range of $7 million-$9 million. The sequential increase in adjusted EBITDA loss in Q4 reflects targeted investments to drive continued revenue growth in 2024. For the full year of 2023, we are raising our expected revenue to a range of $479 million-$483 million, representing growth of 14%-15% year-over-year. We are also reducing our expected adjusted EBITDA loss to a range of $20 million-$22 million, and remain committed to achieving adjusted EBITDA breakeven exiting this year, setting us up to deliver a full quarter of profitability in Q1 2024. As it relates to our guidance, we're assuming that new and used vehicle supplies remain lower than historical levels in the near term, then improve as production and inventory continue to recover. We are also assuming that conversion rates and wholesale price appreciation follow normal seasonal patterns for the balance of the year. Let me wrap up on slide 21 by reviewing our 2026 financial targets. We are very pleased with our continued execution in a challenging macro environment. ... and we made it committed to achieving $1.3 billion of revenue and $325 million of Adjusted EBITDA in 2026, with 25% Adjusted EBITDA margins. Our targets are underpinned by a number of factors, including sustained market share gains, dealer wholesale market recovery to historical volumes, TAM expansion into adjacent markets, technology innovation to drive growth and operating efficiency, and a commitment to balancing growth and investment as our business scales. And with that, let me turn it back to George. Thanks, Bill. Before we take your questions, I will summarize. We are very pleased with our strong execution in the third quarter. We are especially proud of our ACV teammates that delivered these results. We continue to gain market share by attracting new dealer and commercial partners to our marketplace, and by gaining wallet share, which positions ACV for attractive growth as market conditions improve. We are executing on our territory penetration plans and gaining traction with our expanding suite of offerings. We are delivering on an exciting product roadmap to further differentiate ACV and expand our addressable market. We are on track to achieve our near-term Adjusted EBITDA targets and over the medium term, generate over $1 billion in revenue with attractive margins that we believe will drive significant shareholder value. We are committed to achieving these results while building a world-class team to deliver on our goals. With that, I'll turn the call over to the operator to begin the Q&A. Thank you. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from Chris Pierce of Needham & Company. Hey, good afternoon, everybody. Hey, Chris. Hey, Chris. Can you just talk about your unit growth versus, you know, the used units we see year-over-year at the publicly traded dealer groups? I know you don't probably have that handy, but, you know, they averaged about down 5% year-over-year in their Q3, but you guys are up 13%. I think it's because of your leverage to independent dealers, but I'd love to kind of hear why you're able to grow versus them kind of shrinking or just kind of, just in general, how you're able to kind of differentiate yourself. Yeah, Chris, thanks. So there's a couple factors of why our units grew even though, to your point, the used car retail market shrunk. So one is that we did see new car sales, which is where our supplies comes from. So one is we are starting to see some of the health of the market come back, which is positive. Two, we are continually not only growing sellers, but getting more wallet share. So we're expanding our capabilities and growth within our footprint. So look at the two main reasons why being both customer wins, customer wallet share, and also the fact that new car sales is starting to come back. New car sales coming back is helping us have, you know, trades coming in to dealerships, which then creates the wholesale opportunity. Now, granted, we didn't see dealer wholesale grow year-over-year, but we are seeing the market at least incrementally get healthy, especially compared to last quarter. Okay, perfect. And then just, talking about normal seasonal depreciation to year-end, can you just speak to what gives you the confidence to say that, given what we saw last year, where... Is it just that dealer inventories were bloated last year and they're tighter this year, or is there something else to it? Yeah, Chris, the normalcy we were referring to on the call was both regarding thus far, I would say, listings and sell-through rate or conversion rate, I should say, where we're seeing a sense of normalcy as it relates to both. So, so far, we're feeling good. You know, we're both seeing the... And then actually last but not least, I think to your point, though, is the value of used cars. We do have in our plan used car values going down. So that is part of the plan. We do expect moderate moderation on GMV happening sort of month-over-month throughout the quarter. When you look at all the trends, listings, conversion rate, and also our expectations on GMV going down, it gets us comfortable for the plan we've outlined. Okay, thank you. Thank you. One moment for our next question. Our next question comes from Eric Sheridan of Goldman Sachs. Thanks so much for taking the questions. Hope everyone on the team is well. Maybe two, if I could. First, longer-term question about pricing. You know, when you think about your long-term plan and where you are relative to competitors today, how should we be thinking as pricing as a lever to either gain more market share versus gather more unit economics and compound more revenue growth? So that would be number one, just a refresh on pricing versus competition. And then second, just in terms of the Adjusted EBITDA guide for Q4. Just want to make sure that is maybe year-end one-timer type technology investments, as opposed to maybe a new run rate or thought we should be taking in on incremental margins going into next year. I know it's a little early to talk about 2024, but just want to understand the context around those investments that have some of the margin reversal in Q4. Thanks. Yeah, certainly, Eric. Thanks. I'll this is George. I'll go first, and then we'll have Bill chime in on your second question. So on your first question, our long-term targets, at least, I would say at least in 2026 model, is about $500 in combined buy/sell fees. We've been averaging around $450 this year. So when you look at the fact that we're. That's only about $50 more. Now, assuming GMV does decline a bit from time to time, we feel very comfortable that we've got the room. So instead of just giving you the gap, there is - the gap's larger than that $50, between us and some of our competitors. I think the way to look at, at least for now, is we feel very good about where we've got our what we've got in the model between now and 2026, knowing that the buy and sell fees at the majority of traditional auctions is, you know, pretty significantly higher than that. Think definitely well over $100 in room today, and that's not where the competitors may go in the future. So that goes to your first question. Bill, you want the second one? Yeah. Hey, Eric. So in terms of your second question, the short answer is, there's really no change in terms of our operating model going forward. But to give you a little bit of context, so, you know, even with, even with the Q4 guidance, we're reducing our OpEx guidance for the year by about $2 million. So if anything, we're actually in a better position, in terms of heading into next year, to achieve our, our, our EBITDA breakeven, if not EBITDA profitability in Q1. But, you know, there is an opportunity for us to make some targeted investments, to drive growth next year, and we're taking an opportunity to, to bake that into our Q4 OpEx. So, you know, again, these are pretty targeted. You know, we still have a lot of growth opportunities ahead of us, not just in dealer wholesale, but commercial, peer-to-peer. And our focus is basically setting ourselves up as best we can for next year's targets, while still, again, lowering our total OpEx, you know, for the year by about $2 million. So hopefully that gives you a little bit of context, but there certainly isn't anything, you know, beyond that or anything you should adjust your models to reflect. Helpful on both fronts. Thanks. Yeah. Thank you, Eric. Thank you. One moment for our next question. Our next question comes from Nick Jones of JMP Securities. Great. Thanks for taking the questions. I guess just maybe back on the normalization or timeline to normalization. I think back in the analyst day, you said in 2025, give or take, you expect kind of the industry to normalize. How are you guys monitoring what can kind of dislocate or change that timeline, as we see various data points come out, whether it be industry specific or maybe more specifically, kind of affordability or consumer challenges may be causing an overcorrection and supply starts to build as consumers struggle to afford auto? So any color on kind of any. I guess, to boil it down, are there any changes in your timeline to normalization from here? Then the kind of the second question is, how are you thinking about consumer challenges, you know, auto affordability, playing into that? Thanks. Yeah. Thanks, Nick. So a way to think about this is we have in our planning that the market returns by 2026, okay? And that's really how we've been thinking about it. And so we, yes, it's 2023, late in the year here, but we do have some time, right, for us to kind of... for the world to keep evolving. You know, if you look at, like, dealer wholesale, you know, units, even over the last few years, just in 2021 alone, it was over 10, 2022 is likely over eight. This year, it might end up being under eight. So we've seen these changes. We're pretty comfortable in the fact that we will see improvements over the next couple of years, the rate of improvement we should all see. But let me walk you through on why I feel good saying we should see improvements. So one is new car sales are getting incentives, and these new car sales incentives are important. They help drive affordability. We're starting to see incentives even for across almost all OEMs right now. That's a great thing for us, okay? So we're starting to see interest rate incentives, lease incentives. So as you think about our primary source of supply today, being franchise dealers, is where the primary source of supply comes from. As they drive, as they drive, more new sales, we get more trades. So that's one. Two, the other part of what you mentioned is dealers are going to want to be careful of what's on their lots. Up until recently, you've heard us say, dealer wholesale contracted for two reasons: sales went down, new car sales went down, and also dealers kept a higher percentage of cars. You've heard us talk about that. I mentioned it earlier on the call. The latter part of that becomes really important. As used car inventory starts to add up, we believe dealers will start to wholesale a slightly higher percentage throughout the next few years and return back to normal levels. Dealers are still keeping an elevated number of these trades even today. So when you look at those two factors, we feel pretty good that over the next few years, we should see improvements. How much of an improvement? I've got till February to give you an opinion on next year, at least. So I'll use those couple of months to wait on our exact thoughts. But I'm feeling pretty good on some of the signs we're seeing. We even saw a slight quarter-over-quarter improvements in the market of dealer wholesale, although really, really small. Any type of improvement is a good thing. It feels like we're in that trough, and even if interest rates stay high and consumer affordability for used cars stay challenged for next year, I think new cars, we're going to see incentives coming out. OEMs are going to want to move that inventory. That's going to be more trade, and I think franchise dealers should be careful on the cars they keep. Long-winded answer, I thought it was an important question, so I leaned in a little bit more. Great. Thanks, George. Certainly. Thank you. One moment for our next question. Our next question comes from Ron Josey of Citi. Great, thanks for taking the question. George, I want to ask about conversion rates. I think you said we're seeing a sense of normalcy here, and I'm wondering if conversion rates are getting back to call it to 2021 levels or before? And if that's to say, if that's the case, maybe talk to us on one of the drivers here in the past. We've talked about, you know, newer auction formats to two-hour auctions, et cetera. And I have a quick follow-up. Yeah, certainly. We think we did a little bit better than the market on conversion rates. I would say a couple parties out there provide data on conversion rates. When I say it's, I would say we were marginally better than the market, but being better is always a good thing. Probably two reasons. One is, we are benefiting, to your point, from some of these innovations that we've been doing, whether it be product enhancements, timed auctions, enhances we're making to our, our condition report. All those things are also helping us sort of incrementally, you know, I would say, manage seasonality well. We always plan to go in the fourth quarter, conversion rates are going to go down a little bit. That's, that's always the plan, and that's the case every year. But I would say we're doing a good job. In Q3 represented also a good job. The second is we went to market this year being a little bit more careful on pressing our sales team and our inspectors for listings and customers, and we pressed for a better conversion as part of the overall success story. And so think about that as being a little bit more selective. And typical, I would say growing up, right, as you're getting bigger, is we're dealing with more and more sellers, more and more listings. You just really want to make sure we being prudent. If we've got certain sellers that have a very low conversion, we're more careful in that. So those would be the two reasons that we are doing, well from a conversion rate perspective, both as product and tech, and also from a operating policy perspective, we're definitely more careful on sellers who remain low with their conversion rate. Got it. That's very helpful in conversion rates. I just wanted to clarify maybe something you said on the call. Now that we're seeing, you know, the units reaccelerate growth, and I understand your point on incentives and supply. Just can you repeat or talk just a little bit more on pricing? You know, we've seen high singles, low doubles down this year, and do you expect that to continue as supply improves? Thank you. Yeah. When you speak to pricing, you're really saying the GMV, meaning, you know, what's selling- on our platform, right? Yes. So, yeah, we're, we have in our plan, low single digits, things like 2019, like 1-ish%- 2-ish% based on the month, depreciation rate, as part of the plan. So we go into the quarter planning for that to be the case, which is, which we're finding prudent, right? Because you so one is expected. So far, I feel really good about the team's ability here to predict what we think is going to happen. And the plan we've outlined seems we're confident with it. Yeah, I think. Hey, Ron, it's Bill. So just maybe a little more context here. So, you know, last quarter, our GMV per unit, you know, was down year-over-year 10%, down quarter-over-quarter 11%, except, you know, we managed to drive year-over-year actually a 4% increase in our ARPU. Quarter-over-quarter was down a few points, down about 3%. So, you know, one of the strategies, and we've talked about this in the past, is, you know, with the pricing power that we have, as prices do decline, because that's what we're assuming, and that's what we've baked into our forward-looking models, you know, we believe, you know, over time, we can offset any of that downside in terms of our buy fees. Been able to do that thus far. And then, you know, maybe one more level of clarity. So if you look at, in our example, our GMV per unit, about half of that is due to a modest shift in mix to less expensive vehicles in response to consumer affordability issues. And the rest of that is just the overall market decline in prices. So you've got a few, you know, kind of dynamics driving it, but at the end of the day, we're able to... at least so far, we've been able to protect our financial model from any of that volatility. Super helpful. Thank you, guys. Absolutely. Thanks. Thank you. One moment for our next question. Our next question comes from John Colantuoni of Jefferies. Hey, thanks for taking my questions, two for me. Starting with the September price increase, can you help size how it contributed to 3Q and 4Q revenue and how it will contribute to 3Q- 4Q revenue? And second, turning to your 2026 revenue target, I think your outlook assumes 17% outperformance relative to the market, and, you know, that's a bit above the 15% you saw this past quarter, which was down somewhat from recent quarters, despite the conversion tailwind from longer auction formats. So just talk about what drives, helps drive the improvement in market share trends over time. Thanks. Yeah. Hey, John, it's George. I'll go with your second question first, and Bill can go to your first question. So yeah, we've, we've been, you know, if you look at our last six quarters, we've been between, you know, 16% and 17% average. So 15% is pretty consistent with that range. And keep in mind, how you even do this math is, you know, math where, you know, it's not perfect, right? Talking about this. So number two, if you do a little homework on our, on the competitive environment, I think you're going to see that 15% was really good. So one, I think compared to our competitors, we, we really did a great job. And two, I would say, I would call that rather consistent with the 16%-17% for the last 16, or it's last six quarters. So let's go to your... So I feel great on the fact that, you know, when you look at what we've been putting up there in any given quarter, which is generally say between 15%-17%, I feel really good about that. So no, change. Bill, you want to go to the first question? Yeah. So, yeah, so John, in terms of Q3, and the price increase, it was roughly about $25, in terms of sizing. So also relatively small, similar to the price adjustment we passed through last year. And that was only for one month in the quarter. So, you know, roughly one-third of that or about $8 worth of impact on our auction ARPU. And then, obviously, we would get the full quarter benefit of that in Q4. That's all other things being equal. Obviously, what ultimately impacts ARPU are the factors, including average car prices, right? So that's the biggest variable. But if you just wanted to isolate the price increase by itself, those would be, or those would be the numbers, that would be the math. Very helpful. Thank you so much. Yeah, thank you. Thank you. One moment for our next question. Our next question comes from Bob Labick of CJS Securities. Good afternoon, thanks for taking our questions. Sure, Bob. Sure. Yeah, no, I wanted to start with the exciting discussion earlier on ClearCar and self-inspection. And maybe tell us, expand a little bit on the uses. Is it right now just for, you know, dealers for consumer sourcing, or is there an opportunity to use this self-inspection for, you know, perhaps some more remote dealerships that a VCI can't get out to efficiently and therefore, you know, just have a dealer inspecting their own cars and uploading them on the network as well? Or how is it being used now, and what are the opportunities for this self-inspection that you're pioneering? Yeah, certainly, Bob. I would say so far, the what you heard us talking about is the first category you open up, which is dealer sourcing more consumer cars. We've been pressing that as a problem we want to solve. Number one, because it's the biggest complaint we hear from dealers, is they need more inventory, especially late model inventory, the cars that they would normally keep, and they need help, right? So they're keeping cars that they typically would wholesale primarily because they still need the right inventory. So we think by them sourcing more consumer cars, they'll actually wholesale more, right? So you're seeing us focus there. On the second part of your question, even today, dealers do self-inspect some cars. It's low today. Single-digit% of our cars today, dealers are inspecting and selling first, ACV is inspecting. These new tools we're doing will make it easier. Probably not ready to talk about that until somewhere around Q2 or Q3 of next year. Somewhere in that timing, we'll probably start talking about that a little bit more. But already something we support. So if a dealer does wanna inspect a car and launch it, that's already something we support. But the category would be dealers asking if we could make that a little bit more efficient and easier for them to do. So that would be the category that you're opening up here for the call, which is a good one. But something we would be probably, I'd be more comfortable to talk about sometime in maybe the first half of next year. Okay, very fair. Please remind me to ask you how much that'll increase your TAM at some point in the first half of next year, 'cause I- Certainly. So just for my other question then, if you could give us an update on your penetration into the large dealer groups. Obviously, that's another driver of your units and your opportunity and your growth, and just, you know, kind of where you stand now and where you wanna be. Yeah, no, it's a great question. I don't think we've been giving any data about our growth rate there, but I, but I will say this, is our growth rate with the major dealer groups has been materially higher, when you compare that compared to the growth rate we share with you all. The growth rate with the major dealer groups is a higher percentage. So, it's going well. We continue to focus on adding more value, whether it be ACV Private Marketplace, whether it be products like ClearCar. One of the large dealer groups out there, one of the top three or four, I would say, at least top - definitely top five, is using us for ACV Private Marketplace. They're using us for MAX Digital; now they're using us for ClearCar. So this is a top five dealer group using us, literally all of our value-added services, and we're starting to have a material piece of their overall wholesale share. Feeling really good, Bob. The strategy we're doing is working. Where our value-added service strategy is working, and we're able to build a relationship with several of these dealer groups. Super. Thanks so much. Yeah. Thank you, Bob. Thank you. One moment for our next question. Our next question comes from Michael Graham of Canaccord. Okay, thank you. I just wanted to ask two: the first one was on the transport attach rate and margin, you know, which is going great. Do you have any updated thoughts on, like, ultimately, where that transport margin can get to? And I just wanted to ask, you know, as we inch a little closer to the new year here, when you think about achieving your 2026 targets, any updated thoughts on whether, you know, over the course of, like, 2024, 2025 and 2026, any updated thoughts on whether you think that expansion on the margin side is expected to be linear or, you know, back-end loaded, or just, you know, any high-level thoughts you could share would be great. Yeah. Certainly, Michael, we obviously we're ecstatic about how well ACV Transport has been going. Both from take rate and margin, it's going really, really well. We'd really rather keep everyone's expectations about what we've been doing, for, you know, a couple reasons. One is, look at the addressable market as 70%, right? So when you look at the addressable market as 70, you know, hitting the, you know, the take rates we've been hitting is really incredible, right? Because there's always going to be a portion of your dealers who are local and who can just go and pick up the car. So one is, when I look at the overall take rate for transport, we'd rather not create higher expectations we've created. And even if we do in any one quarter, be a little higher than that, I'd rather you all keep the expectations where we've had it, okay? So that's one, is I think it's good to keep our expectations reasonable there. On margin, again, we're doing a really great job. I'd rather until we're significantly higher on units, we still, at the end of the day, we still deliver a margin profile and transport that's blended with both mature markets and less mature. So instead of getting into a tangent here, I'd rather just say that for at least the next few years, I'd like to keep our expectations where they are, and I think that gives us the opportunity to invest in the lanes that we wanna invest in and still take the revenue and margin we want in other lanes. So that's giving you a little bit behind the scenes of why I didn't seek to post 2026 in that dialogue. At least from now to 2026, I'd rather keep the expectations where they are, and then kind of go from there. Yeah, I think I would add- Just, you know, one of your questions was, you know, will the growth in EBITDA margins be linear? The answer to that question is no. I would not expect them to be linear. Obviously, we haven't provided 2024 guidance yet. We'll do that on our next call. But think in terms of the leverage of our model, which is very significant, and as we start to, you know, accelerate our growth due to continued share gains, market recovery over time, over the next several years, penetrating commercial, continuing to expand our ARPU, there'll be a lot of leverage that will flow through to the bottom line, in the out years, right? So think, you know, kinda acceleration through 2025 and potentially significant acceleration through 2026 as we get the benefit of that leverage. Again, we didn't, at our Analyst Day, break down what it would look like each year, obviously, but that's the overall concept and the reason why we're confident that we can execute on that path, assuming we can drive the top-line revenue growth that we articulated a few months ago at the Analyst Day. Okay, thanks. Those are helpful answers. Thank you both. Certainly. Thank you. One moment for our next question. Our next question comes from Rajat Gupta of JP Morgan Chase. Great. Thanks for taking the question, and congrats on the execution of the quarter. I just had one on, you know, just first one on, you know, you talked about, you know, the supply challenges getting a little better. You know, you talked about, you know, dealers maybe releasing more trades than what they're doing right now into next year. I mean, we're gonna see some challenges, like, from the off-lease, from the off-lease supply challenges hitting, you know, starting middle of next year, you know, from the low penetration in 2021 and then, then after that. How do you overcome that, in context of, you know, your market expectations? Or, maybe another way to ask is, you know, what is your expectation of just used car retail industry volumes improving next year that gives you comfort around the recovery in your market next year? And I have a follow-up. Thanks. Yeah, certainly, Rajat. You know, I mentioned some of this earlier, and not to be repetitive too much, but when you think about our primary supply today coming from franchise dealers, granted, we have new channels that we're also building, that we talked about in Investor Day. But just to focus first, your first question on our primary channel. I would, at least today, I would predict new car sales should at least marginally improve, if not improve more, better than marginally year-over-year. That would be like sitting here predicting next year, right? Just like the rest of us trying to predict all these, you know, macro things going on. We've got, you know, the actual OEMs aren't having the challenges, you know, building vehicles, so most of that's behind us. We have incentives starting to come out. I would say better expectations from OEMs. I mean, you know, we're not hearing you all ask questions like, "Maybe OEMs will never do incentives again." I mean, those, all those questions are all gone, right? We all know we're gonna go back to incentives. So to kind of go into next year saying, "Okay, consumers are gonna be incented to buy a new car." Meanwhile, cars, cars are aging. We have cars... Consumers are driving, you know, you know, at least from an age perspective, the oldest cars we've seen on record, and it's getting worse. And for the everyday consumer out there, that's not a good thing. It's getting more and more expensive to fix these cars. If any of you have friends or family, probably, that have gone through this, you're probably all hearing the stories every day right now. It's challenging. You know, when you go in there and you're getting a repair, that's $1,500, $2,500 for a repair, it's tough. I'd much rather get in there, do a $400 or $500 payment or a lease or something like that. You've seen most recently the TV commercials. I noticed, you know, even yesterday, watching television, Chevy was promoting their cars that are brand-new vehicles between $25,000 and $30,000. There was a reason why they were showcasing, right, that specific commercial right now. They're trying to tell consumers there are cars, there are new cars they can buy. It might not be the one they wanted, but there are cars. So anyways, when I think about next year, I think we'll see new cars come back in favor. I think we're gonna have consumers that can afford and have the credit and means to buy those new cars. And I think what that's gonna mean for the used cars that they're trading in, dealers are only gonna keep the ones they know they're gonna make money on. I think it's gonna dealers are gonna go into the year not saying, "We need to keep everything," like they have been the last couple of years, because they know interest rates might stay high. They, they're not gonna think they could, you know, not every single one of these used cars is gonna be the champion they bought the last couple of years. It's gonna be a much more realistic mindset, which I think will press these trades to end up at a dealer, an independent dealer, or someone else who's got a much lower cost of labor. They could fix these things cheaper than some of the franchise dealers. I think some of the old trends will come back again. So again, long-winded answer, I think important question, but I, I feel good that at least sitting here right now. Now, how much, whether or not, you know, next year is just marginally better than this year or materially better, I'm not ready to say. But it, it feels like we, we should at least improve year over year. That's at least my current professional guess. Got it. That, that's helpful. And then maybe just quickly on the price increases. You know, the September price increase a little faster than we had expected, you know, last year was December. Should we expect you to continue to do this at a higher frequency, or was it just more of a timing shift this year, and then you go back to, like, once, once a year next year? Just maybe any more color on that would be helpful. And that's all I had. Thanks. Yeah, I mean, our main goal is to hit the objectives we've shown you all and ourselves. That's get up to about $500 and buy and sell fees between now and 2026. The rate will always be determining how fast we do that. But our look at it as same goal, same goal we've been outlining. You know, $500 in 2026, again, will be lower than our typical traditional competitors are today. So, there's room here for us to increase fees incrementally. And we'll decide when the right time is between now and then. But, you know, as Bill told you, this last one was about $25. We'll just keep, you know, incrementally getting there until we have our pricing be competitive, because today it's really a bit lower than it should be. Got it. Thank you so much. Yep, certainly. Thank you. Thank you. One moment for our next question. Our next question comes from Daniel Imbro of Stephens Incorporated. Yep. Hey, good evening, everybody. Thanks for taking our questions. Certainly, Daniel. One, on the volume backdrop. Hey, guys. I'm just curious, with floor plan rates this high for your dealer customers, are you seeing dealers be more disciplined about moving aged inventory off the lot? And I think some of your peers maybe have tools to help with this, but do you have specific tools to maybe help dealers not only source cars, but determine, okay, like, this is how long to hold this car for, this car should be wholesaled now? How's that adoption going just as floor plan rates are 7%-8% now, not the 1%-3% we saw a few years ago? Yeah, Daniel, great question. Dealers are getting more and more disciplined. So we're seeing it, definitely with the larger groups. We're seeing dealers. You're all hearing this, that you're seeing discipline return in the ecosystem. For the last couple of years, dealers really, in a way, paused all their aging policies. And for those of you that are new to this concept that Daniel is bringing up, historically, if a car was on a dealer's lot for over 90 days, the owners of the dealership or the operators would push the dealer to then wholesale the vehicle, and they would deem it aged. That's the category Daniel's bringing up. So those policies are starting to become back in place. Some of them have been iterative, where like they said, "Hey, we'll give you $120 for now, but we're going to push to $90 by the end of this year." Some dealer groups have gone right back at it and gone right back to discipline. Your second part of your question, yes, we have tools. We have a product within our MAX Digital offering that helps dealers both know their sweet spot and also helps dealers manage what cars they're doing well, what cars they should really just be wholesaling right now. So that intelligence is currently in our MAX offering, and we're always brainstorming how we can get some of this out to all of our dealers sort of iteratively. But yes, part of what you're asking, we provide those services for somewhere around 1,000 rooftops out there today. So, but yeah, I think both great questions. We are starting to see the discipline come back. Great. And then maybe just one follow-up on Raj's question on pricing. Curious, how did your competitors respond? I think over the last 18 months, I think your large peers have raised fees with you each time fees have come up. How have you seen the market respond so far to your fee increases? Thanks. Yeah, as far as I can tell, we've been very fair to our end customers on our fee increases. I don't know if we're keeping up with everybody or not, honestly. If you went around and definitely looked at, like, the traditional physical auctions, these fees have gotten really high across the country. So, we've been fair, where our buyers think we're fair. We got really very little negative reaction and just as much positive reaction to the buy fee increase than we had negative. So, our objective right now is to not be a pig. Yes, our fees are low. We're trying to increase these incrementally over a long period of time, and just do this fair to our buyers. I mean, these guys and gals are all trying to build a business. They're all trying. They got their own struggles going on, and yes, our fees are low, but we're trying to do it incrementally to also be fair to our buyers. And so far, the team's recommendations to me and others have been spot on. The planning has been spot on. I'm just really, really proud of how we just keep doing the market intelligence. Where are we? Compare them to market. And you just know when you do these things, if you're doing it well, because your end customers even tell you, you're really handling this well. So I'm really proud of how the team's done this so far. Great. I appreciate all the color. Thanks a lot. Daniel, thank you. Thanks. Thank you. This concludes the question and answer session. I would now like to turn it back to Tim Fox for closing remarks. Thanks, Dee Dee. I'd like to thank everyone for joining us on the call today. Please note that we will be participating in several investor conferences in November here. You can find all the details on our IR website. We look forward to seeing you on the conference circuit, hopefully this quarter. And again, thank you for your interest in ACV, and have a great evening. This concludes today's conference call. Thank you for participating, and you may now disconnect.