Reduced sales projections by ACV Auctions due to challenges in the automotive sector
ACV Auctions Lowers FY25 Revenue and EBITDA Guidance
ACV Auctions (NYSE: ACVA) has revised its financial outlook for FY25, with a slight lowering of sales guidance to $770 million and adjusted EBITDA guidance to between $68 million and $72 million. This revision reflects weakening retail demand and broader macroeconomic challenges affecting the auto industry.
In the second quarter of 2025, ACV Auctions reported a loss of $0.04 per share, missing Wall Street's expectations of a $0.07 profit. The company's total revenue for the quarter was $193.7 million, $2.3 million below expectations. The revised FY25 EPS guidance also came in below expectations.
Despite these challenges, ACV Auctions demonstrated a 20% increase in sales compared to the same quarter last year. The company's CEO expressed confidence in the company's ability to deliver sustainable growth in dealer wholesale and to scale the business model.
The CEO also announced a revision of the company's revenue guidance, with the new FY25 revenue guidance at $770 million. This is down 0.6% from the prior projection of $775 million. The CEO remains committed to delivering on the company's profitability objectives.
In response to the revised guidance, shares of ACV Auctions last traded more than 11% lower in Monday's late trading. The company's adjusted EBITDA guidance for FY25 at the midpoint is slightly below Wall Street's estimate of around $71.18 million.
Analyst consensus remains optimistic with a strong buy rating and an average price target of $19.54, implying confidence in long-term growth despite near-term headwinds.
[1] ACV Auctions' Q2 2025 Earnings Release [2] FactSet Earnings Estimates [3] Yahoo Finance Analyst Estimates [4] Seeking Alpha Transcripts [5] MarketWatch Stock Ratings
- The revised financial outlook for the automotive industry, specifically for ACV Auctions in FY25, indicates a potential impact on transportation and the environment, as lower sales and EBITDA may affect the company's investments in greener technologies.
- Despite the lower FY25 revenue and EBITDA guidance for ACV Auctions, the finance sector (Wall Street analysts) remains optimistic about the company's long-term growth potential in the automotive industry, reflecting confidence in its ability to navigate near-term challenges.
