Ooh, ooh, it's bright lights. Yeah. Bright lights and low seats. Yeah. Yeah. All right, I think we're on the clock. So welcome, everyone. Thanks for joining. I'm Ron Josey. I cover the internet sector here at Citi. And I'm always happy to share the stage with George Chamoun, ACV CEO, and Bill Zerella, ACVA's CFO. Lot to talk about, lot going on. Welcome. Thank you. Thanks for having us. I think most people know what ACVA is now. It's been a few years. We've gone through a few analyst days. But maybe, George, because we just had our analyst day back in March, we've had two quarters post that, just level set us on sort of ACV's product and tech strategy, because in our view, that is a key differentiator that what ACV offers to the market. Level set us on just product tech, maybe higher level, and then we'll dive a little deeper. Yes, certainly. So when you look at the customer base we're going after, franchise dealers being a key customer base for supply on our wholesale platform, independent dealers a key for demand on our platform. We've been able to broaden our products for both. On the supply, we've been able to broaden from not only helping them auction their cars faster, and we believe for more money, getting a national audience for buying these vehicles. But we've brought out pricing tools. We've brought out tools that help the franchise dealer and independent dealers buy cars from consumers. So a broader product set. In a way, we're helping every franchise dealer and every independent dealer compete against CarMax and Carvana. So that as the path for winning the consumer heightens with ACV, they can compete. And with that, we believe we'll win more and more wholesale at the end of the day as part of that journey. And in addition to investing, which we can go deeper into on this product suite for franchise and independent dealers, our value-added services like ACV Transportation, ACV Capital are really helping dealers buy vehicles, have them move, being confident on these moves, helping them fight against things like fraud with transportation. These are big, important categories that help dealers feel more comfortable. And then in parallel to that, we are in the early days of going after commercial customers. So we've invested in software and technology where we'll be leveraging the same ACV Auctions platform. But in addition, it'll allow us to have capabilities such as, let's say, for example, if a bank needs to recondition these assets, we now can take an assignment, we can potentially recondition the assets. So it's still leveraging the same demand engine and capabilities, so ACV Auctions, Transport, Capital, all those great things. But it's helping on the supply side because we're adding value-added services we didn't have before. So we can go deeper in any one of those, but we're definitely adding more value, whether it's on the supply or demand side. Let's talk about the core wholesale market today and the core auction market, because I think offering these new products and services just strengthens the overall opportunity set. And so talk to us about, I would love to hear your thoughts on the broader market today, A, but then B, the go-to-market strategy. So when you're going to meet with the franchise dealers, we start with auctions, but now we have ClearCar. Now we have these other products that can help them compete with others in the market. So go-to-market strategy, but then maybe just broadly the wholesale market today. Yeah, the go-to-market strategy is both working dealers at a per-store basis. There's a used car manager. There's a general manager who's responsible for making wholesale decisions. And then we also have a team going after the major accounts where you're dealing with, let's say, regional presidents and other sort of C-level type executives. And we have a team bringing our value proposition to the major groups at more of a corporate level. So we're approaching it sort of both at a store level and group level. The value proposition, the core initial value proposition remains, which is instead of just selling your cars at physical auctions and getting a local buyer base, we're going to bring larger demand for your vehicles. We're going to bring buyers outside your market. But that value-add moat has increased quite substantially to your point. Now we're helping them with new products like our No-Reserve Guarantee Auction. We're helping them get, in most cases, three times more bidders per car. That's a big deal. Yeah, and that's something we're out there offering to sellers where if they want the largest audience for their car, if they want to make the most money, you're not going to have more bid activity anywhere else in the country, any other auction except for ACV, if you run a No-Reserve on our auction. So that's a new value-add. The other value-adds you're mentioning, oh, actually, let me stay on that value-add. The other great thing about that value-add is the buyers love it. So now on Tuesdays, Wednesdays, Thursdays, and Saturdays, buyers are lining up at noon till evening and bidding on these cars because they know they're for sale. They're not wasting time with sellers who are asking for too much money, and so we've got three times the bid activity. That value-add will, that's sort of one of these value-adds that'll be a gift that'll keep giving for us. We'll take that pricing engine, that pricing engine. This investment we made allows us to price cars to a consumer, helps the dealer win more cars. We're pricing the cars in a way where we know what they're going to sell for in our auction. So now the dealer can lean in and buy more cars out of their service drive. They can lean in and buy a higher percentage of the trades coming in. They can compete against the CarMax and Carvana's of the world effectively because they have the right pricing to do that. So as a local dealer buys more cars, then they can optimize their inventory. And they don't have to keep, they don't have to start to retail some of these cars they should be wholesaling. So that's a way that at least as quick as I can tell you this, this pricing engine we've built, it's helped us build ClearCart. It's helped us build this No-Reserve auction. Our next product, Project Viper, which we'll maybe talk a little bit today, it's helping us build that product. So this pricing engine is our single largest investment within our product and tech suite, and it's sort of the heartbeat to all the other products. Tell us what goes into the pricing engine that allows you to do that heartbeat. Yeah, so it's quite complicated. I'll simplify it. The million cars here we're inspecting, it's all that condition data, scratches, dents, engine sounds, all that data. Then the dealers we provide ACV MAX for, which is somewhere around 6% or 7% of all retail data, we have all their retail data, we have what they took in for trades, we have all their recon data. That sample gives us what cars are retailing for and also what dealers are taking out as trades. So that's a pure data set to know both how much the dealer paid for the car, how much they reconned, and how much they sold the car for. Then, of course, we license data from third parties, and we have others who scrape data and blah, blah, blah. So when you look at that total data set, it's quite compelling. It's unique because you've got condition-adjusted pricing plus all this other market data. We're now predicting price within $300 of what a car sells for retail within 30 days. Last month, we were even better than that. We're now predicting price within $300. So a car comes in, dealer decides whether we're going to retail it or wholesale it. I've been saying within $300. Actually, last month, we were within $150. We were within $150 of what a car retailed for in the next 30 days, which is just incredible. Yeah, and we're within $100 of what the car wholesales for. So if you're a franchise dealer and you want to compete, a simple way to look at this is CarMax and Carvana has nothing on a franchise dealer that partners with ACV. And that's a bold statement to say. There's no competitive edge. Now, they still need to get in front of the consumer. They still need to market to the consumer. They need to get that consumer to show up, whether it's their service drive, whether it's the front of their store. But that's pretty compelling. And we now have three out of the top 10 groups in the U.S. using this product one way or another, whether it's an API on their website, whether it's their service drive, so ACV in time could become the standard of how dealers use data to price cars, and that could be a really big deal, and then to your point, how this helps on wholesale, as we also not only provide the data, we start to backstop these cars, then we're pricing the cars upstream. We're backstopping it. We ask for a certain percentage that has to go to our wholesale channel, and it should help us grow more over the next few years. So let's then talk about Project Viper. I'm trying to get this product set together because the product set is where everything else flows, right? Because at the end of the day, we want more rooftops. We want more adoption, which I think we did a good job at the analyst day highlighting. But when we hear about these products and the $150 or $100 on wholesale, that's pretty exotic. It's an incredible prediction. Yeah, and so we have all this data. We're using it and leveraging it on the pricing. Talk to us about Project Viper, what it is and. Sure. So Project Viper has an exceptional opportunity to help us both on our dealer business and commercial business. So the great thing is it's one investment that will help us in both growth engines. And for franchise dealers, for those of you that don't know what Project Viper is, it's these two towers that don't take up a lot of real estate. And then underneath it is Virtual Lift 2.0, which is a scanning device. It takes us within a few hours of showing up at a dealership to have this set up. All we need to do is literally, it's all in a way pre-assembled. It comes in a few boxes. We have it assembled within a few hours. That includes getting on the dealer's Wi-Fi network. Boom, you're up and running. So you drive through. It's got over 20 high-definition video cameras and also other technology over the years we've invented, like listening to an engine and other capabilities that our inspectors have been using. So it's got multiple different ways to read signals from a car beyond just the video technology. Basically, you're driving through. We see scratches, dents. We see undercarriage. We see rust. We see all these things. And a car literally driving several miles per hour, we can then predict the price for retail and wholesale just having the car drive through. So number one is appraisal, helping the dealers buy more cars. And we're already piloting with a handful of dealers in upstate New York right now. And it feels like we're really honing in on this appraisal capability. Second is this condition report will help the dealer upsell to their fixed ops groups. So whether if a consumer has mismatched tires or tire alignment, other needs, having this standardized condition report will help the dealer upsell fixed ops. In the dealer world, that's a big deal because over a third of their revenues today are fixed ops. So that's a really important division, and then third is this can also act as a quick way to get retail photos online instead of just paying a local photographer or somebody like $15-$25 a car, which their biggest issue is how quick they get these photos online. Within Project Viper, just driving through, you can immediately get your shots. You can still have somebody come back and backfill, interior, and whatnot, but dealers can go get their pictures online. Okay, so those are three big things that the dealer will get out of this. What we can get out of this as well is Project Viper will help expedite and create more efficiency on our wholesale inspections. And so having these towers and this undercarriage scan on a per-location basis could really help us not only ask for more share, win more share, but it also could make us all more efficient. We'll still need our inspectors to help us get this Green Light Inspection, which ACV has been known for, but our inspectors are going to be able to do more cars. And then for Red Light cars, we'll also be able to use a lot less of their time. So it'll be a slightly different use case. And for those that don't know what Green Light is, it's when we go on the hook for assurance from the buyer. But if a typical inspection day takes, let's say, 20–25 minutes, with Project Viper, we could probably get our typical inspection in five minutes. Is Viper a $26 potential, $27? What were the bears? I think 26. We do hundreds of these. I don't want to put a number around how many hundreds yet, and I think we don't get ahead of our skis until we know we've got distribution, manufacturing, support. I think we could have a great year next year with or without Project Viper, so I feel really good that we've got a, if you look at how we're doing with no reserve right now, how we're doing these other products, we're growing well. We feel really good about it. This will be additive, and then in addition, we're launching Project Viper in our remarketing centers, so when you go to, we're opening up this new one in Houston where you show up, cars go in, they're going to go through Project Viper. It's going to allow us to have this condition report back to the commercial consignors faster. They can make their decisions faster. It's going to help us be more efficient at these locations to create our condition report, so I feel really good that we'll start using Project Viper at our locations next year at our remarketing centers. We'll get, I think, Project Viper out to hundreds of rooftops next year, and that'll start to make a difference, and then we'll kind of go into the next year thinking, could we now do thousands? Hopefully, it's faster than what I'm saying today, but I'd rather set the expectations here until we prove it, but that's at least how we've been thinking about it thus far. I think that sets the stage for everything that ACV sort of stands for, which is data, product, improving dealer use cases. Let's talk about dealer adoption. Sure. So I think about a third of franchise rooftops are transacting on the platform. 10-ish% share retail dealer wholesale market, I believe, are the numbers that I remember going through. So what I would love to hear, and we talked a little bit about this upfront, but with all these new products, how is the go-to-market? You talked about the go-to-market. How talked about the go-to-market. How has it evolved over time? So we're not just talking to the wholesale guy. We're not talking to the service bay or the service team. We're talking to others. So we'd love to know just as these product launches, as these products launch, how the go-to-market has really sort of evolved. Yeah. I mean, we've got share in some parts of the Northeast where we're already like 30% market share, right? So we've been in a market for nine-ish years. We've built that brand. You can trust ACV. And we've got markets out there. We've got low single digits total market share. So look at what these products will help us do is both take even more share at these markets where we've got 30-plus% of the total dealer wholesale in that market, but it's also going to help us differentiate and break through some of the noise. I'll give you a couple of examples. There's a larger group that I can't say their name that wasn't doing a lot of wholesale with ACV. They had these two key auctions, physical auctions they worked with. They didn't have signed exclusivity, but it's basically an understood exclusivity. Now, the cars coming in from their consumer acquisition are primarily going to go to us. And they wanted beta Project Viper, but they've all said, "If anything that comes through this channel, we'll send to you." So it's allowed us to slice and dice. The dealers who are still feeling some loyalty to the physical auctions, whether it's because they've been doing business for 50-plus years or whatever the reason is, it's allowed us to come in and take share. Even if it's only 10% or 20% of the share of that dealer's wallet share, it's helped us break in. And another thing is you're usually coming in with these products at either the owner or C-level, or you're coming in through a different angle. Historically, we sold in through a used car manager. If some of you knew us during our IPO story, I would answer the question very simply. I would have said, "It's usually up to the used car manager." Dealer principals tend to not get involved with wholesale. This just wasn't even a conversation for the owners. But now that you're coming in and solving bigger problems for the dealership than wholesale. Meaning pricing. Pricing, buying cars from consumers, being more efficient. We're now at an ownership and C-level decision-making with these groups. And that's a big deal. So we're invited to their off-sites. I'm at one next week. I don't want to say which one I'm at next week, but I'm at one of these next week. They have a golf outing. They have this whole thing. Sounds exciting. Yes. And so you're now in the room participating on how is digital helping automotive, not just helping wholesale. And we're getting the mind share. And then with that, we'll continue to take share away from the legacy auctions. George, has this made its way into the C-level ownership levels, etc., has this happened this year, 2025, or this was building in 2024, and then these new products are coming on, and now it's 2025? Help us understand how quickly these conversations have shifted. Yeah. I mean, I would say it's been building. Meaning last year, those conversations might have led to, and I'm going to make up a number, 10% of our share gains last year of our share gains, right? And now it might be of 30% of our overall share gains. So I would say we're still winning at many rooftops across the country, let's call it our traditional way, which is going to the local used car manager and trying to convince that person, "You shouldn't be selling all your cars at the local physical auction." But year over year, I mean, we must be three to five times of our growth coming from these other relationships. I need to track that a little better so I can just say a number. And there's actually somebody in the audience who actually always asks me a similar question. But I don't have it on hand. I don't have what percentage is actually coming from these other services. Or else I would just tell you. We'll save that for next year. Or maybe 3Q. I don't know. I want to; we'll come back to this, but I do want to touch on. I hear about it all the time, just the broader macro environment, and 2Q had some noise because in April, I think we saw conversion rates pull forward a little bit. Maybe they went down a little bit as a quarter went on. So maybe, Bill, I'll turn to you. I think we saw, was it 500 basis points unit growth headwind in 2Q? Maybe you can help unpack that a little bit more, and then how has that sort of stabilized since then? Yeah, sure. So what happened in Q2, and I think many people are aware of this, there was a large amount of consumer demand that was pulled early into the quarter. So consumers were trying to avoid tariff increases. So what we saw was really strong conversion rates, really strong unit growth for us in the month of April, and then those conversion rates declined through the rest of the quarter, not just for us, but for the industry, and what we talked about on our last earnings call was that we saw about a 300 basis point increase or improvement going into July of this quarter, so the dynamic was in terms of what we saw in terms of our actual performance. We had assumed going into our Q1 earnings call in terms of Q2 guidance, we'd assumed that conversion rates were going to be stronger than they actually ended up being, which is why we landed at a place where, based on that difference in conversion rates in terms of what we assumed in our model versus what the actuals were, we ended up being at the lower end of our guidance scale for the quarter in terms of revenue. So that was the dynamic that occurred in Q2. So it was kind of a very unusual quarter in terms of since we've gone public. We never saw such a big pull-through of demand early into the quarter and a pretty significant drop-off through the balance of the quarter. The good news is we've seen a nice bounce back in terms of conversion rates on our platform in July. Bounce back, meaning back to somewhat of a normalization on seasonality and things along those lines. Correct. Yeah, I would say consistent with the message we left on our last earnings call that we felt good that conversion rates bounced back and now feel like we're at this typical seasonality. We feel really good about conversion rates, and also keep in mind that you never want to hope the market goes the wrong way, but I feel like if the market was to soften some more, it could be that our No-Reserve and other auctions, as they grow, it could make us look stronger than the competitors, but I would say overall conversion rates with us and the industry have stayed pretty strong, but this is an area where if we ever do see weakness again, the stronger we get in this category, the better. It's funny. We were talking with the team a year ago. I think we were sitting on stage. It was with Vikas, but we talked about auction windows increasing from like 20 minutes to two to four hours for more expensive vehicles, and now we have no reserve expanding to like four days a week, if I'm not mistaken, and so it brings up sort of how the evolution has been going from 20 minutes to four hours to now four days. Yeah. And just so we're clear, the cars only run typically for 20 minutes to two hours. So the four days, those are the four days of the week where we're going at risk. The Tuesday, Wednesday. Okay, got it. Correct. So So if the car runs at 12 o'clock, there's a buyer of that car by 2 o'clock. And so the buyers don't have to waste their time. We have other competitors out there where you're wasting your time for two, three, four days. I'm not a believer of that. I think if you do an NPS study on this, buyers hate that. They don't want to be on a hook forever. What buyers want is the shortest amount of time, right? So there's 20 minutes to, let's call it, a few hours. You're not on the hook forever, okay? We're putting some of our capital technically at risk, obviously, with our data. It's not material risk. And we're saying we're going to launch this car no reserve, and it's going to be sold to the highest bidder within a few hours of it launching. So I would say with what you and Vikas talked about last year, this is not a change to that. This is just more fuel to it, right? Because we now have more data to support this car's selling. And we now have to predict what the car's going to sell for. That's an important distinction to that. That's key. I want to maybe switch topics a little bit, commercial wholesale, so for us internet guys, it's a little bit of a newer market for us to learn exactly what it is, but we're getting close to launch, I think, in Houston, and you talked about it before with Project Viper, so just would love to understand more, dive a little bit deeper on the opportunity on what commercial wholesale is, the strategy behind it, and some of the feedback we get from clients is, are we going from an asset light model to a different sort of balance sheet risk model here? Sure. So it's still asset light, meaning you're not buying and selling assets. Right. Okay. And then as far as real estate, we're not buying real estate. We're just renting a few acres of land. And right now, 11 locations, soon 12, and eventually 40. And when you look at renting a few acres of land, this is really not a big deal. Look at it as if you just look at traditional unit economics, you're adding, let's say, on average, $60-$90 of cost per unit of land for snowplow or landscaping or taxes, blah, blah, blah. They're all in cost. Our efficiency for our inspectors will probably be two to five times what they are at a physical auction. And so our inspectors will be more efficient. We're getting cars that we, for example, with repos, we can't get these cars unless we have a place to park the car. So you got a higher ARPU because you're charging with a little bit of margin some of these other value-added services like recon. So you basically have a slightly higher ARPU, slightly higher cost, getting to a very similar EBITDA per unit. But yet you're opening up to your first question. It's a TAM of somewhere around 8 million units that's addressable through the strategy for us. I think our addressable TAM is somewhere in the 4-6 million units. So you're adding 4-6 million addressable market to us. That's a big deal. And the largest in the category, Manheim, sells about 2 million cars a year commercial and somewhere around 1.8-2 million in dealer. So they sell more commercial than they do dealer. They're the largest in the category by far. There's independent auctions throughout the country also selling these commercial cars. We believe we have the best demand engine. Our buyers want to buy these cars. We don't really have to go out there and build a demand engine. We just need to get the supply, and by adding supply, this will just help us not only get stronger in certain geos, right? You're just selling more cars. You're diversifying your supply. The buyers love it, so it's not as asset-heavy as other industries you're probably thinking. You've got massive costs. We're not talking about 500 locations. This is not Chipotle, right? This is a very easy strategy to go deliver on. 40-ish locations to get to 85% of the TAM. Really not a big deal. Very helpful. Very helpful. We've got about five minutes left for incoming questions in a little bit, so cue them up, I guess. I do have a few more I want to get through. One on margins. But before we get to margins, Bill, George, I got to ask about Amazon. So ACV is, I think, Amazon's data and technology partner for Amazon Autos, particularly for the consumer trading experience, I think. So would love to hear more about this partnership, how it came up, and how or where it can evolve too, particularly as Amazon scales up its autos vertical. Yeah. Amazon, like others who want to get to the point and be able to retail cars to consumers where you can just buy a car online, you can't get to that sort of, you can't get to this ideal state of retailing cars online without being able to get to the right trade-in amount. And the trade-in is tricky. What's the condition of that car? The same make and model, same mileage. You could have a trade that could be $8,000 or $12,000. So you can't use averages. You have to have a condition-adjusted value, which is at the core of what we talked about earlier in the car conversation here about where we've spent our resources building the tech. So they did a global search. I believe it was dozens of companies were involved in their RFI, RFP type process where they went through and looked at who should they partner with. And they selected ACV because we had the ability to get to this price where, based on the way that the consumer describes their vehicle, we're going to give them a very fair value for that consumer. So it started out, as you know, their first distribution partner was Hyundai. Their second was Hertz. They're working on a third, fourth, fifth. They're going to grow this. There will be multiple partners for Amazon. And as they expand the types of cars they're retailing, their retail partners, they've got ACV pricing engine, which is an API. So while you're literally inside the Amazon app, you're basically getting the ACV price as you're trading in your vehicle. Then if the local dealers decide not to keep that car, let's say Hertz doesn't want to keep the car, then ACV wholesales it. And so we have, without getting into specifics, we have a fee side of the model, which kind of more hits our data services side. And then we have a wholesale opportunity where if they don't keep the car, we wholesale it. So it's really how they're using our API is not too dissimilar to how three of the top dealer groups in the country are using our API, or I would say starting to use our API. Amazon maybe is a little bit further on going all the way to e-commerce. But it's a need of Amazon. It's a need for all the dealer groups. Whether or not they say it yet, you've got to launch your e-commerce strategy with a firm trade-in. Do they all have to do it this year or no? I mean, consumers are going this direction, but in time, you'll see selling cars online just become kind of like, yeah, some percentage of consumers just want to buy it online, but whether that transaction happens on Amazon, whether it happens on the dealer's website, we're willing to partner with DMS companies. We're willing to partner with consumer marketplace companies. We're willing to, we're here to power the industry. What's the actual cash value? What's the ACV? Right? They should have an API into us, and we're helping to determine the price of that car. Oh, you can plug for ACV, by the way. That's really what the core of ACV becomes is we bring certainty on what to do with the vehicle, so. That's great. That's super helpful. We have about a minute or so left, but I want to see if there's any questions from the audience. Yeah. Just a basic question. Given how much you guys are now doing for the industry, you alluded to it before. Given how much you are doing for the industry now. One more time. Given how much you're doing for the industry, you guys are sort of the data platform. What's the thought about rebranding the company from ACV Auctions to maybe just ACV and bringing more attention to the value you provide? It's not just an auction company. It's much more. Yeah. And it's a great question. We're debating that. I think what we've started to do slowly is on a lot of our marketing, you'll just see it say ACV. It doesn't all say ACV Auctions anymore. We own the acvauto.com URL. We're starting to use that a little bit more. But I think your question obviously isn't just about branding. It's broader. It's really the recognition. I think we've got some more work to do. I think I get reminded every day. I talk to dealers every single week. Whether I talk to three or five or 10 dealers in a week, I still find many of them don't yet know that ACV can do more for them. So we've got more work to do. I mean, we've got all of this capability you're hearing me talking about. But to your point, if I did a poll right now, probably only seven out of 10 dealers really even know what we do on the auction side, and probably only two out of 10 know what we do with these other value-added services. So on the commercial side, our colleagues were with one of the big OEMs last week. They had no idea what we could do on pricing. No idea. And this is like a top five OEM. So I think your question is really to the heart of we've got more work to do, whether it's branding, marketing, product marketing. We've got all these great capabilities, and not enough people yet really know about it. But no, it's top of mind. I'm not sugarcoating that. There's still more of a, I would say, awareness. B ut as we get out there, the good news is once we get in front of them, we're doing a great job. But we've got more work to do to get this awareness that ACV can do more. That was great. Well, with that, Bill, anything to say on margins very quickly? Otherwise, we're in overtime. They're growing fast. All right. Good answer. Well, thank you very much, George, Bill. Very much appreciated.