ACV Auctions Inc. (ACVA) Earnings Call Transcript & Summary

I think we're good here. Well, good afternoon, everybody. Welcome to ACV's Analyst Day. My name is Tim Fox. For those of you I haven't met, I run Investor Relations here at ACV, the past 10 months, but been a fun 10 months. On behalf of the entire executive team here, I would like to thank you for joining us, especially live with no masks. This is -- it's great to be back in New York and live from New York. We've got a great agenda here planned out for the next few hours. Our CEO, George Chamoun, is going to walk through the attractive market opportunities that we have in front of us and our expanding product portfolio. Mike Waterman and Kate Clegg are going to share how ACV is taking our products and services to market through a proven playbook to help drive long-term growth. Our COO, Vikas Mehta, is going to host a tech panel. It's going to be the bulk of the show today, with some leaders from ACV, are going to show you some amazing technology the team has been working on delivering and plan to roll out going forward. From there, Bill will take us through the details of our business model. We obviously shared some long-term targets with you recently. We're going to have a fairly detailed path to achieve those targets. And then we'll end with a Q&A session. We are going to do a break after the tech panel and before Bill. And lastly, I understand there's some power that's out on some of the tables. The team here is working on that. So before I turn it over to George, I want to run through a little video that describes -- actually, I got to do the legal thing first. Sorry. We will be making forward-looking statements. And we're also going to be discussing GAAP and non-GAAP financial measures, and you can find this information and the reconciliation for GAAP to non-GAAP in our SEC filings as well in today's presentation. Now before I turn it over to George, we have a video showing how ACV was conceived, the mission around the company and how we plan to transform the automotive industry. [Presentation]

And so we're happy to have you all here today. We thought it would be a fun way to start [ with a vision and story overall, like with folks like Brian Hirsch, when we were private, stuck -- doing this mission ]. If any of you had met us -- I think this was clicked in. If any of you had met us 5 years ago, we told this ACV vision and story. And the thought is, let's always keep going back to why are we here, where we're going. So I'm really thrilled to have you all here today. Appreciate you all taking the time. It's so nice to have us all back and spending time in person. Now I'll give you all a little bit of why we wanted to do this. Bob, and a few of the investors here, came to Buffalo, I don't know, about a month or so ago. I can't remember exactly when. We had folks in town. And actually, some of the folks, I'm looking at some faces here in the room, a couple of folks here in the room came to Buffalo and spent half a day with our technology team and really spent some time getting to know ACV. And so when you think about our objective for today, it wasn't just for me to get up here and like you're all going to see me, right, pretty often, but really to meet my amazing team, meet some of my leaders here and really talk about what we're building, where we're going and why we're going to win the market we're going after. So that's our goal. So again, thanks so much for joining us. As you all know, we operate in this massive industry. It's complex. There's a lot of players in this market. I'm sure for all of you trying to understand the market every single day, it's okay. What's happening next, it's more in the news than ever. But the biggest thing, that I think, a takeaway, it's highly complicated, highly fragmented. And with that, used vehicles, each one having its own story, each one having its own imperfections, it allows us to really try to, better than anybody else in the world, to understand the value of every single asset. And our mission is to build the most trusted way to understand the value of an asset by building the platform, the technology and scale the teams require. And that's a really -- when you look at the ACV, the actual cash value, that's what we're here to deliver. So first, before we talk about the future, what an incredible journey it's been. We generated $1 million in revenue in 2016. 5 years later, we achieved over $350 million in revenue and $8 billion in GMV in our marketplace. We delivered significant growth in the consumer source segment, which we'll talk about today. You'll see Kate and others dive deeper on the consumer source segment. We achieved nationwide territory coverage, and we also expanded our data offerings with some key acquisitions. With approximately $14 billion spent on fees and services in the U.S., we have a significant untapped opportunity. The majority of our current share is what we're starting to call today retail dealer wholesale market. And we're separating that from the consumer source dealer wholesale market, helping us all think about the different channels. When we say retail dealer wholesale market, we took a panel of over 1,000 franchise dealers and some independent dealers. And we looked at how many cars they're retailing versus wholesaling, to help us come up with that number. Consumer-sourced, we looked at peer-to-peer in other areas, and we believe that market is changing. And we said if a significant portion of that, let's say, around half, gets bought by a dealer versus a consumer, how does that then actually create the entire dealer wholesale category. Commercial wholesale is going to continue to change as well, whether it be off-lease, off-rental, repos, fleet, which are company-owned cars, this category, every single category, you're going to see digital have a massive impact -- we're earlier in our cycle on commercial compared to some of these other areas, but the platform we're building, the things we're learning will help us grow into commercial over the next few years. SaaS and data services, when you look at dealers and commercial companies, they need data, they need platforms, they need tools. And when you look at both dealers and commercial accounts, they're spending around $1 billion a year in the U.S. on data services, tools, et cetera. So those are, let's call them, those are really the more immediate opportunities. Longer-term, we'll start to look at international. And you'll start to see our marketplace grow beyond used cars, to all things then. So that's the way we look at the ACV opportunity. Let's start getting into some of the data by looking at 2021. And really, the best way we think about 2021 is it was a year of 2 crosscurrents. So one, the unprecedented times. New vehicle production, as you all know, had significant issues, COVID and other related issues. So the number of new cars being delivered had a significant impact on retail sales, which then had a significant impact on trades. Consumer trades in '21, meaning the number of cars being traded into a dealer, was significantly lower and also dealers had to keep more of this inventory. When you don't have anything to sell, you need to keep something. So the supply picture for '21 was obviously very challenged. We believe by the end of '22, it's going to get significantly better, and we're starting to see very small early signs of positivity. We've got small packets of dealers across the country where new cars are starting to show up. So that gives us a lot of confidence standing up in front of you all going, I can see the world starting to change, even though it's a little early. I think what we're articulating, by the back half of this year, and I'm sure many of you are hearing this from all the research and other things you're seeing out there, so that could be a nice tailwind for us. So when you look at last year, the lack of new inventory created a massive, massive shortage of vehicles, which obviously increased the price of used cars. So the tailwind on price, which led to a higher ARPU, was positive for us. But the challenges were, for a dealer, what is the value of a vehicle, right? They had that same challenge all last year, but with obviously massive consumer demand. This year, we believe the importance of our platform could be even more significant because these used car values are going to start to slowly decline. And you're not going to just be able to look at your data to understand the value because what that car or a similar car sold for, for last month, may not be what it's going to sell for this month. So we believe the power of our platform is going to help our dealers understand the ACV, the actual cash value. So we think just when you look at these crosscurrents happening and how that positions, another way to look at it is, last year, it was easier to sell a wholesale car. It's going to get a little harder. And we think that's a good thing for ACV. So you got these 2 crosscurrents. But as far as we're concerned, we executed extremely well last year, and we continue to gain share. The dealer wholesale market grew modestly, about 5%. We delivered 43% unit growth. So that implies a 38% year-over-year growth. So incredible growth, testament to not only the value we're providing to our dealers, but the incredible team we're building. So with that as a backdrop, why are we winning and why do we continue to win? I like being consistent. During IPO, and some of the folks are smiling here because they've seen me say that for 5-plus years, why are you going to win? And really, from day 1, I've been talking about the power of a marketplace in data services. But the 2 combined will create these self-reinforcing network effects that will be truly differentiated. Growing the number of buyers and sellers in the platform creates greater liquidity and ultimately a better experience, which in turn drives greater scale for our business model. The amount of scale also creates more and more data insights. The data insights allow us to have the fuel for new product development. As you're hearing my team talk today, we're going to go through -- I think you're going to get a little bit more tech than you do at a typical Analyst Day. This is really the key thing I'm having you all to really zone in on here, is what could data mean, what could granular data mean, what could structure data mean for this industry, what could it mean for the consumer trying to trade in their car at a dealership, what could it mean for a dealer, what could it mean for a commercial account. So let's dive into that a little bit. Our SaaS and data services help dealers appraise, buy and sell vehicles. This informs them to either -- whether they should retail or wholesale a vehicle. To complement our live appraisal offering, we recently announced a consumer trade widget and a self-inspection app, where consumers can go outside themselves and appraise their own vehicle. Those are 2 recent acquisitions. Private Marketplace enables large dealers to take their inventory and before deciding to wholesale it, make sure their group doesn't need that car. It's really important. You're going to see one of the videos today played by one of the largest dealer groups in the country on why Private Marketplace is important to that. Programmatic buying is enabling us now to have persistent demand, not just demand during a 20-minute auction, but we now are starting to understand what dealers are willing to pay for a car before we even run the action. Of course, that's going to help us sell more cars, but think again, what is that back -- going back and helping us on a data perspective. So our innovation continues, and our moat is continually -- from our perspective, a differentiated moat is being built. So my teammates will do a deeper dive on products and go to market. But I want to just highlight a little bit from a consumer perspective. I know a lot of you [ are keeping our ] thoughts from a consumer perspective and where do we fit in the ecosystem. Dealers are the largest advertisers in every DMA. They need the tools. They need the tools to appraise. They need the tools to create transparency because consumers want transparency. Consumers want a seamless way to transact. Consumers want to know what the value of their vehicles are. We, with our full range of services now, will enable consistency of whether the consumer is at the dealership or at their home. So now, and if any one of you, and it will take us a few more months here to get this across the whole country, but if anybody here wanted to go to a franchise dealer and say, okay, I go to their website, what's the value of my car; I go to their store, what's the value of my car, we will have the platform to help these dealers compete. And so whether they want to market a live appraisal, you'll see some of that today. They want to market a self-inspection app, we'll have that. So the tools these dealers need to win, we will have it. We are their partner. We are their enabler. And we like that position. Our core marketplace then, when you think about our backstop and what do we have in addition to these tools, is we've got this core marketplace, the strength of knowing what these assets are going to sell for, and we've got inspectors who are highly trained that can either show up at a dealership or at the consumer's home if our dealer needs them to go there. That is a very unique position, and I feel incredible at our opportunity to win with this as the backdrop. So today, we structured today around 3 pillars, the same 3 pillars that I talk about every earnings call: one, driving growth through taking share and how we believe this industry transforms to digital; second, leveraging innovation to grow our competitive moat; third, to drive scale with a proven business model and we believe, proven unit economics, that will allow us to hit the goals we've laid out for you all. And Bill will go through that in more granularity than we have in the past. So by executing on these 3 pillars, we plan to deliver over $1 billion in revenue and $325 million in EBITDA by 2026. Why do I feel good about that? If you look at our last 5 years, I'm sure a couple of folks said, well, that seems a little ambitious, all right? When you've got just a direct path and you feel really good about where you're going, I feel we're in a great spot over the next 5 years to have the same significant growth, the same opportunity to go out there and transform this marketplace. So with that, we plan to drive significant shareholder value. So before turning it over to Mike and Kate, we wanted to bring back again, for the sake of consistency, here the ACV vision and mission through one of our dealers' own interpretation. A couple of us were just talking in the hallway about how this -- each time you go in, you're starting to realize how fragmented and challenged is this marketplace. I was just having this conversation with 2 of you all in the hallway. I think it's so helpful because we're all looking at it, there's all these different moves, all these recent acquisitions, all this stuff going on, right? So key in on Bob Tasca's words here because he owns dealerships in Rhode Island, he owns dealerships in Chicago, he owns dealerships in Florida, he's been doing this for a long time, so key in on how he describes the ACV value proposition. My team will go through, present a lot of great stuff. Towards the end, I'll be back up here for Q&A and really look forward to spending time with you all in the Q&A. And the part that I'm most excited about is for us to spend a little social time, all right? So with that, let's hear from Bob.

ACV has taken an old model that's totally archaic and then bringing it into the 21st century, putting the dealers and the customers in control. So now, we're able to bid on all makes and models all over the country and ship them conveniently to a dealership of our choice. So it's been a game-changing event. And for us, it's been a real win-win. I think one of the best parts of ACV is the transparency. In some cases, you're buying 100,000-odd cars online, and you're making big decisions based on the information that they're presenting. And I can tell you that we bid with confidence, that the way the vehicle is represented by ACV is what we're going to see at the door. When you look at our whole group, it's become an integral part of our success. I mean we buy over 100 cars a month on ACV, and we're selling over 300 cars a month on ACV. They just got great technology. You want to see the undercarriage, you see a complete scan of it. You want to hear what the motor sounds like, you press a button and you can hear the engine. They keep enhancing the technology. And one of their latest versions is the filters. So we can really tailor the vehicles that we're looking at, the mileage, the year, the area that we want to buy in, and the vehicles just pop up. It's so easy, it's so intuitive, you can log in literally at night while you're in bed. It's a long-term relationship that we can really build and grow, and we're fortunate to have them in our group and looking forward to great things ahead.

All right. Good afternoon, everybody. Great to see everybody. Great to be here, as George said and Tim mentioned, in one room with no masks. So I'm going to share some stuff with you about our growth over the last few years. My name, again, is Mike Waterman. I'm fortunate enough to be the Chief Sales Officer here at ACV and handle pretty much all of our sales and field organizations. I've been here close to 6 years, after spending 25 years -- I know I'm dating myself down and all of you are probably thinking, I had to start when I was 12, and that's about right. But the best part is 25 years in the industry on all sides. I've been very fortunate. I started in retail, ran dealer groups, early part of my career, transitioned into the wholesale side, was fortunate enough to start a company with some other dealer partners called DealerWire, that was in the inventory management space, that was eventually acquired by Dealertrack, which is now a Cox company, as a lot of you probably know. And from there, when the phone call came from a fellow named George Chamoun, I was very impressed with the people, number one. Obviously, when you go into a situation like this, the people are very important. The platform, the product was very good. And I've been fortunate to be part of this journey, from a handful of people around a plastic table and an incubator in Buffalo, to where we are today, which is close to -- over, I should say, roughly about 1,100 teammates in our organization. And when you look at the makeup of that, a lot of that -- the customer-facing side really consists of our vehicle condition inspectors and our sales operations people. And our philosophy is very, very simple. It's all about hiring the best talent and giving them the products and the support to be successful. I'm fortunate enough to have an extremely experienced team, all of which have proven success across all areas of automotive and technology, really, really a good mix of retail, wholesale in software. Our talented team, every day, they deliver what we consider, and we're proud to say, really a best-in-class experience for our dealer partners. Our go-to-market, automotive is, it's a big space, right? There's roughly about 50,000 dealerships when you look at things from franchise dealerships, independent dealerships. And you have in there a lot of these major groups that are getting bigger, right? Every day, every week, you hear about more acquisitions of these groups acquiring these regional, local dealerships. In our direct sales, that org really focuses on that supply side and dealer acquisition. And the goal there is to get in and grow that wallet share in our existing partners over time. And again, our nationwide -- the vehicle inspection team is also on the frontlines every day, working with our dealer partners. And our VCIs, they really serve as an extension of dealer engagement, right, customer success. They're really partners because it's all about helping them get that vehicle sold, right? And they really become an intricate part of the dealers' everyday business. Our inside sales work, they partner with the marketing team to really focus on that buy-side, to make sure we have that demand to meet the dealers' need when they have inventory that they want to sell. The independents, they do represent a big part of our product and our platform. They serve about 80% of our buy-side activity today. But what's really interesting is, as George mentioned, these acquisitions and these things that we're building to become really an end-to-end solution for a lot of our dealer partners. In doing so, we're really giving our team multiple at-bats in every rooftop every day. It's just not about going in and talking about wholesale anymore, which is really important. Let's talk about our model, right? How did we get here? And it's really a proven strategy that we've developed, and it's all -- it's a land-and-expand kind of model, and it really is a ground game. The automotive industry, as a lot of you know, is a big -- relationships are a big part of the industry. When we enter a new territory, we'll try and find, again, the best talent, right? Hire those folks, and then we'll bring on multiple vehicle inspectors. And then it's all about building up that marketplace, getting that buy-side, that sell-side in place so we can start conducting business as soon as possible. And from there, we really focus on gaining more and more wallet share in each one of those rooftops as they come aboard. Now let's dig into a little bit on how we've expanded over -- it's hard to believe, 6 years. And we had a great year 2021. We ended with nationwide coverage, which was a big goal of ours coming out of the pandemic. Well, we're not out of it yet. I don't want to get myself in trouble. But again, after launching in 2015, you can see we'll have some great graphs and some maps, trying to give you a feel. And I think when you look at it this way, it really puts it into perspective the journey that we've been on. And it's been a lot of fun. It's been a lot of work, but it's been a lot of fun. And in 2015, launching here in our backyard, you all know we started in Buffalo, and we began to look where we are going to go next. And we went into the Northeast region, a little bit in Jersey, a little bit more into Eastern New York and outside of that Greater New York area. And then as we started to really ramp up, 2017 was an extremely busy year for us. We went out of the Northeast. We expanded into several new regions. And when I mention a region, keep in mind, that consisted, for us, 8 to 9 territories. So you have 8 to 9 territories and you have those vehicle inspectors underneath there. So it's a lot of people, right? It's not easy to build out a region, right? It's a lot of territories involved. But you can see, we cast it a little bit further south. In that year, we went into the tip of Florida and filled the markets in between. And it really helped us understand because, as a startup, you're always looking to understand that go-to-market -- you can't go in with one set of blueprints early on. You have to be nimble and you have to listen to your customers. You have to understand what that marketplace is going to allow you to do. So what we're able to do is come up with the strategy with -- and instead of just adjacent markets, let's go a little bit further, let's cast the rod out and then we'll fill in between, we'll squeeze in that gap from both sides. And it really proved successful for us. As we get into 2018, again, we made that first long cast down into Texas, the Panhandle areas. And the big part, always focusing on what we have behind, right? You don't want to get ahead of your skis, right? As you're looking to expand, you have to commit to those areas that you're already in. So as we started to go further, in 2019, we had a huge year of expansion here as well. And you can see we did another long cast, and we went into the West Coast, into California, the Rockies and the Pacific Northwest. As everyone knows, 2020, COVID slowed our progress a little bit as we hit the pause button on expansion. But we were very lucky. We were one of the very lucky ones. We were able to continue to really mature markets in volume and most importantly, in rooftop engagement. Both our volume and our client base continued to increase. And it really set us up for 2021, which we were able to get back to our aggressive growth, ramping up and opening up our expansion in a big way again. And even though the industry was facing, as George mentioned, a lot of these supply issues and challenges that were out there, we were able to invest really in the long game knowing that this market will rebound. It's not an if. It's a when, and everybody has their best guesses, right? And who's ever right, they will win. But the good thing is we were able to complete our nationwide footprint, which was very, very important to us. And we added teammates in the mature territories, that we started to see that rooftop count, the volume in splitting territories because we -- the one thing we don't want to lose is, as I mentioned very early on, the relationship is a big part of our success. So as these territories get bigger and these territory managers get spread a little thin, you bring more in, right? So we can maintain that high-touch, high-relationship engagement in the field. So let's take a deeper dive. I'm going to share with you, and I'll add a little color in here and I promise not too much, Bill and George. But -- because these are fun. And I would tell you, one of the first, as we started to expand, New Jersey is very close to my heart because that was kind of our first -- we're going to come out of New York, and having a lot of industry friends, having a lot of friends and colleagues that work at competitors, when we made the announcement and the press releases went out, my phone blew up. And I had so many good friends that were just trying to be good friends, to try and deter us from, "You really don't want to go into New Jersey, Mike. And I'm calling you as a friend. It has nothing to do with business. We have a lot of auctions there, big auctions. You guys, we're going to crush you." And of course, I appreciate that. Just trying to be good friends. But as you could see, this is New Jersey, and we started with 1 territory in New Jersey, 1 territory manager, 3 inspectors, and that was back in 2017. Today, we have 5 territories in New Jersey. We have over 80 inspectors. And this slide just represents one of those current territories, which did over 12,000 units. So the calm persistence in the way that we move about the country is a very, very big part of our success. So as we start to look at how do we duplicate that, right? New Jersey was a great success. So as we get down into Florida, right, Florida is a big wholesale market. Think about Florida is just a major metro, lots of wholesalers, lots of physical auctions, lots of competition, right? And I remember getting those same phone calls from my Florida pals, "Hey, you really don't want to come down here. You guys got lucky in New Jersey. You don't want to come to Florida." Well, we started with one, right? And you're seeing here in Miami, a great territory for us, has done extremely well. But Miami started as one, we had in Florida, it was basically a territory. And that was Miami, Fort Lauderdale, West Palm Beach. We have one territory manager. Well, those are all now 3 markets, all thriving very, very well, but Florida, as a whole, we now have 12 territories in Florida. Florida is its own region for us. So when you start to think about, okay, this was not too long ago, just a couple of years ago, so the growth has been exciting. And if you start to look at some of these slides, you'll notice down at the bottom, you'll see franchise rooftop penetration, you see wallet share. I'm just trying to give you an idea of how we get there because all of these markets are a little bit different. When we talk about it's a ground game and calm persistence and how important that is, when you go into whether it's a metro market, New York City, the boroughs, Long Island, which we're in all of those as well, we're crushing it here, too. But you get into some of the smaller markets or the suburbs. It's all about understanding the market you're going into. And when I mentioned hire really good people, if you hire really good people, they're going to know that market probably better than I am. And I'm okay with that. I don't want to be the smartest guy in the room ever. And you get those people in, and they usually come with a great Rolodex. And what are they going to do? They're going to hire great people as their inspectors. So having that type of model and having that flexibility, you may go in and we may do well in a market because we got 2 of the major groups in that market. Or it may be a collection of 20 to 30 single-point stores that traditionally didn't get great numbers at the auction that we're able to service. So having that flexibility and how we get there is really important. And being able to service and take care of each side of that kind of the marketplace, the big, the medium, the small type of dealers, is a very important thing for us to be able to go forward and just keep gaining that rooftop share and that market penetration. Detroit, very similar, big market, a lot of big players, a lot of auctions in Michigan, but same thing. We had the same type of success when we went in. Detroit has now 5 territories around that Greater Detroit area. And this is -- I love these. Rio Grande, right, tumbleweeds and wind, we joke about it. Who's ever been in this area, El Paso, Texas? Not a lot, right? 6,000 units last year. I mean that's incredible, right? When you start to think about how is that possible, the dealers, there's not that many dealers out there. But as I mentioned before, this is what we consider those suburb markets, right? They're not necessarily a major focus for some of our competition. These secondary markets can be extremely viable for us. And what's most interesting is there's not a lot of physical auctions there. So for these dealers, their past experience was they got to ship cars a long way. They got to drive to those auctions. Not only are they taking their assets and shipping them a few hundred miles away, but they got to take the time to go there. And they may not have any success. So for us to be able to go in, and the fact is these are usually smaller dealers. And all of you know, at a physical auction, there's only so many lanes that runs so long throughout the day. So when I -- I may reference what I call A lane, that's that first lane when you walk in the door at every physical auction, that you'll see every big group, where every fleet will start running about half an hour before the auction officially starts. And there will be all the bidders. That lane gets amazing attention. Whoever runs in that lane gets the benefit of that attention and they get good money for their cars. Well, the same doesn't always happen for the dealer that might only have 5 cars that week. He's going to be off in Lane 7 or 8. He's going to run about 1:30 in the afternoon. You're not going to do very well that time of day in that lane at an auction. So now, we can bring the digital A lane treatment and that exposure to every dealer. So when you think about whether it's a metro or a suburb market, it's a huge advantage for us. And this one is calm persistence at its finest. California, a huge market, right? We went out there, cast that long cast out. San Bernardino opened in 2019, right, shortly before COVID hit. It really didn't impact the growth of the territory. Same story here with San Bernie, it's now 3 territories. California, as a whole, we actually have 2 full regions that are -- the majority of the Northern California and Southern California, there's 16 territories in the state. So the long game, it's the same for us, this calm persistence. It may be a different way in which we get there, the mix of the dealers, the mix of that volume. But the playbook that we have and the strategy that we have and the way that we bring people in the platform into a market, it ends the same. We have success. It may take a little bit longer, in some cases, but we get there. The last part I want to talk about is just -- I'm sorry, the regional. I mentioned 8 or 9 territories in each one. The goal here was obviously expand quickly. But more importantly, I mentioned earlier, don't lose that momentum behind you, right? So how do you constantly go out, open new markets and continue to gain wallet share behind you? It's not easy. And a lot of startups make the mistake, maybe go a little too fast, a little too quick, and they start to lose what they had started. So our strategy first was to go that adjacent territory. Buffalo, well, Rochester, Syracuse. That makes sense. Binghamton, you've ever been to Binghamton? I used to ride around there. That was -- I have been to Sayre, Pennsylvania. Anybody been there? It's interesting. But then we started to realize, as we get more of these markets open, it really gave us the buyer base, the seller base, when we started to see cars would move 300, 400 miles and say, "You know what? Maybe we can go a little bit longer. And then we can just build it all in between." So let's take a look at the regional level on how we've been able to do this. So you could see, we started in the Northeast, as I mentioned, and by the end of '16, we had a footprint in these 3 regions. And again, remember, 3 regions consist of multiple territories, right? So as we started to go into 2017, we expanded further north. We got all the way up into New England. We got Maine, Vermont. But we started our march down to the south and started to move our way over to the west. And you'll notice the colors, right? So this is the percentage of franchise rooftops, so the penetration that you start to see. So you notice, as this map expands, you'll see some colors get darker. So -- and that's that model of "Let's open and grow behind us." Right? It's very important. You got to have the combination of those 2 things, okay? So at the same time we're expanding our footprint, we continue to grow in our home base in New York, in the Northern New York area and the surrounding areas. So in 2018, we gained really, really strong momentum while we moved further west into larger markets like Texas. And that was another one. I could tell you about the phone calls I used to get, a little more accent, but they would call me, "Hey, good bud, you sure you want to come to Texas?" But it was the same friends, being really good friends, trying to warn me, "You don't want to do that." So as you could see, 2019, we went out to the West Coast, added multiple regions in California, the Pacific Northwest, all great markets we're really excited about because we're just getting started. And you can see that we really started to grow rapidly in Northern California as those colors start to darken. In our earlier regions, you can see over on the right, all started to fill in and darken up, which is really exciting. And as I mentioned before, the pandemic 2020, it was -- it slowed the expansion, but it didn't stop our growth. You can see the shades of -- get deeper in every one of those regions. And in 2021, we finished that nationwide expansion. We ramped back up, adding new markets. And we continue to gain market share behind us. You can see the Northeast. You could start to see Florida, Texas, those areas getting deeper and darker in each one. And we've made a lot of progress in adding new dealers to our marketplace, but we have a lot of runway to continue to drive our growth going forward. So the final stage, let's talk about wallet share. That's kind of the third piece to our land-and-expand model. And we have a proven track record here. We leverage that ACV experience when we go into these dealerships to deepen our relationship with these dealers over time. And the value prop becomes clearer with every vehicle sold, and we eventually become the primary wholesale kind of channel for these dealers. They lean on us for both the buy- and the sell-side. So it's about doing that and then just do it again, rinse and repeat. And if you look at the U.S. as a whole, we've tripled our wallet share since 2016. On the right, you could see the graph, our wallet share broken into quartiles. In the top quartile, our more mature territories have around 50% of that wallet share on average. And that's great progress, but we still have plenty of room to grow, right? The other quartiles are those less mature markets you saw on those maps as we are expanding south and west, and we have a ton of wallet share still to go after. So as you saw in the territory examples, we start up by winning some initial business and then scale the wallet share over time. Some start with a few single-point, as I mentioned. Some go in and have success in the major groups, which I'll talk about here shortly as well. So let's not forget about the buyers, right, a very important piece of our marketplace, some may say the most important, right? That's always an argument. But the growth here has been very strong over the past 5 years. We had almost 15,000 buyers in our marketplace at the end of last year. That's continued to grow through 2021. In the early years, independent dealers were almost 100% of our buyer base. And what you're going to understand about that is where we started. The product itself was Joe and Dan and Jack, when they built this, and they won [ 43 North ], and Brian, you were around during those days, it was -- their idea was a great one. We're going to give franchise dealers a tool to real-time presell their trade-ins. What a brilliant idea, absolutely brilliant idea. But very quickly, we saw there's a lot more to this, there's a lot more opportunity here than just that franchise to Indy trade-in channel. So as we expanded, right, and we got outside of that cheaper trade-in, your normal consumer trade-in, that $3,000 to $4,000 to $5,000, $6,000 car, we started to get more and more frontline-ready, right, that really close to new nice stuff, as dealers got more comfortable with the ACV experience, saw the benefit in it. So as your inventory matures, guess what, your buyer base matures. So very quickly, we started to see more and more franchise dealers who were selling cars say, "Hey, I bought 4 yesterday." Good for you, that's fantastic. And what's really great about that is we've seen that expand. And now, the franchise dealers are buying almost 20%, and that happened quickly. And we're going to see that grow even more over the next couple of years. But the best part about that is that adds to our stickiness, as George mentioned, right, other products, other things, right? Well, now we do a lot on both sides, so our retention just gets better as that relationship expands in every one of these rooftops. So I did mention -- I want to talk about the major accounts. Initially, this department did not exist at our company. Over the past few years, we had some early success in some regional groups, and we're thinking this could be something here. So we went out over the past few years and we've added some of the strongest leadership in this area and the reps -- and the sales reps to facilitate and really focus on that top 350 dealer groups in the country. And from the first slide, those 350 make up over 6,000 rooftops. So you think about it, it's a big chunk, right, of what we consider major accounts. And it's only going to continue to grow. There is some that say, over the next 3 to 5 years, you won't see a single-point franchise dealer anymore. The groups will have bought them all. So everybody will be attached to some sort of group, whether it's 10 stores, 50 stores, 100 stores, whether it's a regional group or a national group. But that seems to be the way this is heading. So one thing that we've done, and has really paid off well, is providing these large groups with that white-glove type of concierge service that they've been accustomed to. These are the folks that the auctions give all the deals to, give all the attention to. So you would think, this is going to be really hard for us to crack through. It really hasn't. This particular area, providing that white-glove treatment, we've had major success here, and there's no pun intended there, in these major groups. And we've seen 20% of our volume now come from these major groups. And this is where we're seeing some of our largest growth rates with the programmatic buying and these other things that we're doing, both from our product and acquisition standpoint, that are going to service these major accounts at even higher levels as we go forward. So thank you so much. I now have the pleasure of turning this over to my friend and colleague, our Chief Marketing Officer, Kate Clegg. She's going to take you through some of the consumer-facing and other exciting things we have going on. Thank you.

Hello, everyone. Good to see you all. So I'm -- I have met some of you, but not all of you. I'm Kate Clegg. I'm the Chief Marketing Officer for ACV. I've been with ACV for a little over 2 years now. It's hard to believe. I -- my background, just for reference, I've had B2B and B2C in my background. I joined ACV from Arhaus, which is a leading home furnishings business. There, I led all of their marketing and branding and store sales support. That was -- if any of you know that brand, it was a brand that started as a little boutique furniture store and grew to a large, large national chain, coast-to-coast, 70 stores, 2 outlets. So it was a lot of fun building that brand over those years. Prior to that, I was with Brulant, which then became Rosetta. There's kind of a long story here. So Brulant was an e-commerce agency. We were then acquired by Rosetta, which was an interactive marketing firm. And then Publicis, which you all know, likes to gobble everybody up, so Publicis then gobbled us up, and we were part of the Publicis family of brands. So I've been in high-tech, high-growth tech, I've been in B2B, I've been in B2C, I've managed through many, many acquisitions and had a ton of fun just integrating all those brands over the time. So back here, I'm now back in B2B, and I really believe that the best B2B companies are those that lead with a B2C mindset. So that is the way we lead marketing at ACV. So today, I'm going to talk about what ACV is doing to help dealers source consumer inventory. So as George outlined earlier, the consumer peer-to-peer market is large. We estimate that the wholesale TAM is over $3 billion. So let's talk about the progress that we're making with helping our dealer partners source inventory directly from consumers through our initial offering, Live Appraisal. So Live Appraisal helps dealers appraise and value a consumer's vehicle. ACV leverages our industry-leading inspection, and dealers have real-time access to market pricing by launching that consumer vehicle into our 20-minute auction. So I'll break it down how it works. It's pretty simple. So the consumer will bring their car into the dealership. One of our amazing ACV inspectors will be on hand to perform that inspection. That car then immediately gets launched into the marketplace live as a Live Appraisal. And then dealers from across the country start bidding on that car. So the final bid is ultimately presented to the consumer. And the consumer has a choice at that point to either accept that bid or not. The process is fully transparent to the customer. This is the most important and I think differentiating aspect of this. So throughout that entire 20-minute auction, imagine you're the consumer, you have your car there, you're really proud of it, you think it's worth a lot, you get to see all the views from across the country just rolling in. Then you get to see the bids rolling in. And there's a lot of excitement. You're going to hear a little bit more from them in a little bit. But the thing that is most powerful about it is that full trust and transparency to the consumer. They get to see exactly where the bids are coming from, and they get to see that it's from dealers across the country. So our Live Appraisal program has experienced incredible growth. We have over 3,000 dealers using it today, both to acquire new inventory, but also to attract new customers. Last year alone, we transacted over $600 million in GMV just through Live Appraisal. Part of the Live Appraisal offering includes a marketing program, where we help our dealers drive traffic into their dealership through dedicated Live Appraisal events. So before I get into the details of the marketing, we have a great promo video that we actually created for our dealers to play in their showrooms and share across all their marketing channels. So I'll play it here for you now. [Presentation]

So pretty simple. Who's ready for Live Appraisal? We can do it at any dealership near you. Okay. So to set the stage a bit, franchise dealers spend $40 billion a year on advertising in their markets. I'm going to say that again, $40 billion, right? So we offer a Live Appraisal marketing program that allows us to tap into that spend that is already happening already out there. Our job is to arm our dealers with all of the marketing assets that they're going to need to promote events at their dealership. So we've created a comprehensive marketing toolkit. Here's just a few pieces of the creative, just to give you an idea of the branded pieces that we create. But this helps them either stand up an actual event at the dealership where some of these can be used on an evergreen basis. But we've given them e-mails. They can start pre-promoting through their CRM. We've designed a series of digital ads that they can capture. We have these standup banners that can be up in their dealership just for an event or they can be evergreen throughout the year. We have table tents and flyers. We've designed social media assets. We even wrote the post for them so they can just cut and paste and update it. And actually, we even have written internal comms for the dealers so they can educate their dealership on what's going to happen. We don't want any sales associates to be surprised by what's going to happen. So I mean we have made it as turnkey as possible for them. All they need to do is drop in their dealership information and the time regarding logistics for the event, and that's literally it. But I have to say that the coolest thing about this is we certainly wanted to arm them, right? We're going to make this super easy for you. Some dealers decide they're going to co-brand with us because they want their logo and our logo. So you'll see some of these assets that would have the ACV logo, along with the dealership logo. Other dealers really value that third-party endorsement. The fact that they're not the dealer saying, this is the value of the car. There's this third-party ACV. So that was actually a surprise of ours when we first launched the program. We assumed everybody would want to co-market and have 2 logos presented at the same time. So there's dealers that decide to promote it like this. But the best really is our dealers have personalities and they are known in their markets. I mean you all -- in all of your markets, you can think of the dealers that you know that have the personalities. Those dealers are taking Live Appraisal. And with their own marketing funds, they are promoting Live Appraisal events. They're promoting ACV. They're putting their spin on it, their personality, which is so important to them. And I mean we have so much fun seeing what our dealers are doing and the creativity that they bring to it, and we welcome all varieties. They can go ACV-branded, co-branded or represent the brand with your own personality. So we love it all. And when we talk to dealers and we ask them, what do you value most about the Live Appraisal offering, they share the following. It helps us sell more used cars. It helps us acquire new inventory. It helps us sell more new inventory. It brought people to the dealership who might not have otherwise visited, and it helps build awareness for our dealership. So we love hearing all of that. Dealers will also recognize the double-digit lift that Live Appraisal is bringing not only to dealership traffic but ultimately to their retail sales. Our mission here is to provide our dealer partners with the best platform and the best marketing support to expand in this category. And we are thrilled with the results that we're getting from dealers. And frankly, we are thrilled anytime we can help a dealer win. So to close this out, I think our dealers voice is the most powerful. So I'm going to play a little video here that will take you through their experiences with Live Appraisal. [Presentation]

So I mean there you have it. Those are the perfect words. So with Live Appraisal, MAX Digital, Drivably and now Monk, you see the powerful solutions that we're putting in place to help our dealers with sourcing consumer inventory. So I'm going to wrap up the entire section here, growth strategy, that Mike and I presented to you. You heard about the progress that we're making and growing team members with strong and deep expertise. You've heard about the momentum we are experiencing in our land and expand model. You've heard how we're engaging with larger dealer groups nationwide and, finally, the expansion of our TAM through this consumer sourcing. So really, really appreciate your time today. Thank you so much for coming. And with that, I'm going to pass it on to my dear friend and collaborator, Vikas Mehta, who is going to take you through an amazing innovation session. Thank you all.

What an exciting day. Good morning, everyone. My name is Vikas Mehta. I'm the Chief Operating Officer at ACV Auctions. For those of you I haven't met before, a little bit about myself. I'm, basically, an engineer by training. I've been in product and tech roles in the Bay Area for the last 20 years, moving from product and tech to ops, general management. More recently, I spent about a decade at eBay, scaling and running some of their international marketplaces. What brought me and drew me to ACV, the team and I will have the pleasure of showcasing to you guys over the next hour or so. So what exactly is it? It's an underserved market that was ripe for change and product, tech and data that's disrupting and leading the way. I have a strong team of panelists here with me, and we're going to spend the next 45 minutes or so walking you through some of the tech and data we have here. Okay. But first, we're going to have a little bit of fun. So shown here is a selection of vehicles that have recently transacted on the ACV platform. As Mike mentioned a few minutes ago, we typically started the journey with the traditional wholesale cars. These 2 Nissans are classic examples of what we call traditional wholesale, $5,000 to $15,000 ASPs, these cars typically get over 50 views on our platform before they transact. Over the last few years, we've been moving more and more upstream. So that's higher ASP cars. We typically call them off-lease fleet category. These 2 cars are, again, very good examples of these. This is a 2018 Tesla Model S. And the one on the bottom is a Mazda CX-5. The Tesla sold for $60,000. And interestingly enough, we sold thousands of EVs last year. Then moving up to the next level. These are the really fun cars. So that's a 2018 Maserati. That sold about 1.5 weeks ago for $250,000 on our platform, had 93 views and 40 bids. And then that's a Porsche. This one is an interesting one. It's sold to a buyer in Sacramento, all the way from Miami, 45 bids, and it essentially took 3,040-mile journey with ACV Transport. The last 2 categories are what we call our niche categories. So that RV had 96 bids and sold on our platform in 20 minutes. And then if you look at power sports and boats, we sold thousands of them last year. So the key takeaway here is we are a platform that serves more than just vehicles. And our -- the validation of the breadth of our platform is demonstrated by the selection that we sell today. Our investing and building is very purposefully to capture that growth opportunity in the future. So now a little bit of context setting. As you are undoubtedly familiar, we're digitizing an industry that's basically historically been very opaque and inefficient. The majority of wholesale transactions today still happen physically. These are time-consuming, inefficient and have an inherently high level of risk. Markets are local, fragmented and random. And further, there's both an explicit and an implicit cost of navigating an unpredictable paper-based buyer beware, high-risk, low-assurance market. Lack of standardization and assurance leads to a lot of subjectivity and volatility, which brings me to our mission. Our mission is to transform the wholesale industry. George shared this slide a little bit earlier. The core of our mission is really powered through technology and data. Our view is very simple. A trusted and efficient marketplace drives both buyer and seller success. We are reinventing the end-to-end experience starting from inventory management to marketplace transactions all the way to post-auction fulfillment, obsessing about predictability, efficiency and transparency along the way. Foundation for this innovation is really based on 3 pillars: the team, the philosophy as well as the platform. So our biggest competitive asset today is our team. We have hundreds of world-class software technologists in our platform, who we have purposefully sourced from automotive, automotive marketplace and consumer tech companies. Philosophy. Our philosophy is to really bring to life engaging and intelligent experiences. We operate with a customer-centric design and very much driven by data and decision-making through intelligence. And finally, our robust and scalable platform really underpins our series of products. Our continuous delivery, our domain architecture essentially has set us up for speed. As you will hear today, we're delivering at world-class levels, enabling us to move very fast. So shown here is a paradigm that illustrates where we are relative to the market. It also shows where we're heading. So ACV today is in the middle column. Our offering today has provided a trusted and efficient option to wholesale and retail cars. ACV today has the industry's best condition report, thanks to our well-trained inspectors and our phenomenal inspection platform. The future of inspection is enhancing and building on our current industry-leading platform with AI and intelligence. My teammates here will show you what exactly we're building in the next 12 months or so. Our buying experience brings to life the best practices of engagement, efficiency and success to buy. We recently introduced automated or programmatic buying, and we're seeing some very exciting traction with it. And our post-auction fulfillment, which George was mentioning typically tends to be the most complex, the most fragmented part of the transaction is leveraging automation and technology to basically add predictability, speed and efficiency in an otherwise fragmented and challenging landscape. Our platforms are enabling efficient transactions today and, more importantly, building the foundation for innovation and disruption tomorrow. These could be in how we are looking to digitize titles or how we're looking to uberize transport. I'll show a few highlights in some of these examples before I hand off to tech panel who'll go deeper. So we'll start off with our inspection capabilities. At ACV, our customers are both dealers who transact on our platform as well as our employees and our teammates that are inspecting the cars that they sell every single day. Over the past year or so, we've implemented a major upgrade in our already industry-leading condition report. This represents years of customer research and data insights to build a platform that's even more powerful. Our next-gen platform, which we rolled out over the last quarter, is extremely exciting. It gathers more information and more data point while making it easier to inspect, taking less of the -- putting less of a burden on our inspectors while adding much more efficiency in the process. By the end of the year, with some of the tech that we are building around it, we will be able to gather 5 to 10 more data points per inspection, organize and catalog in a structured format. This format will feed our algorithms and our buying experiences. Abou and Phil will talk about how we're leveraging machine learning and AI to enhance that platform. The other 2 things that get me really excited. So the first thing, this new platform is template-based. And what that means is we can roll out new inspection types with little or no code that unlocks the opportunities George was talking about earlier. And finally, the digital platform is, by design, enabled to work off of machine learning algorithms, which means we can customize an inspection on the car, the inspector or the dealer level. So let's have a look at what this platform looks like. [Presentation]

So this new platform today underpins 90% of the listings that are live on ACV today. So we're very late in the rollout. So our data-rich inspection enables confident buying. By leveraging a robust and structured data format, we've unlocked the ability for our buyers to buy programmatically, and I couldn't be happier with where we are today on the rollout. This has 3 broad benefits. For buyers, it's now easier than ever to buy on ACV. Buying rules and algorithms mean you never miss a listing on ACV. Second, for sellers and for ACV, it brings persistent demand to the platform, driving price realization and conversion for our sellers. And third, it informs our algorithms and market demand that can be optimized to source the right inventory at the local level. If you have demand, you can try to seek supply for it. We believe programmatic buying will be a big growth driver for us. A fun fact, we're also leveraging the programmatic approach in how we're dispatching cars on transport. We're looking at carrier demand, and we're looking at cars to be moved, and we're already matching them programmatically. Speaking of which, let's look at our Transportation business and tech. So 2021 was a phenomenal year for our Transport business. Underpinning the strong growth in transport over the past 12 months is a platform that optimizes matching, routing and supporting delivery for those who choose to use our optional transport offer. Our goal from day 1 has been to quickly and efficiently move vehicles. That drives natural network effects as we scale more and more vehicles transported on the ACV platform. Combined with a very strong carrier network and a data-driven ops, our transportation platform and team has propelled ACV to a top brokerage in the country. Two recent tech successes to highlight. First, we now automatically assign and dispatch over 40% of our transport loads. That means there's 0 manual intervention, allowing these to be moved faster and more cost effectively. And second, we recently launched our Carrier app, which has been very well received from our carriers. This app allows us to more seamlessly integrate transport details and provides visibility into transport or location and transport job status. This enables us to really fuel our next-gen transport platform. Transport is one of the bigger logistical fulfillment activities. The other one has to do with title transfer. So a little bit of context. Every car that sells on our platform requires a title transfer. The title transfer process, which tends to be very paper-based, is notoriously inefficient in the automotive space. This is aggravated primarily by a decentralized approach to titling cars in a very heavy fragmented state-specific way. So what have we done? We've deployed process optimization. We've rolled out RPA, or robotics process optimization (sic) [ automation ], and overlaid that with some of our machine learning algorithms to effectively read titles without necessarily having to touch them. And as we've rolled this out, we've brought scale and efficiency into a very cumbersome archaic process. Today, over 95% of our titles are processed in this way. And the best part about this is with every title we read, our algorithm gets smarter and more effective. Teammates get happier, and our customers are more pleased with the reduced cycle times. We believe we're today at industry-leading cycle times and efficiencies. However, there's a lot of room for this aspect or this category to scale, and we're positioned to continue to disrupt here. So the products I just discussed that we've implemented, along with the road map that you will see, has built a significant tech and data moat. Every inspection, every listing, every bid, every price for a marketplace transaction generates a large amount of data. We learn about broad marketplace, supply and demand dynamics. This data repository creates a flywheel effect, benefiting marketplace, powering personalization and unlocking efficiencies. This underpins and unlocks intelligence capabilities for all marketplace stakeholders, bringing more to the ACV platforms. We recognize the power of this data and have built our platforms to harness this opportunity. So now it's my pleasure to introduce the technology panel with leaders who will do a deep dive in specific areas of product and tech. I'll join again at closing to wrap up before we take a small break. First up is Greg Borowski, my friend, who is our VP of Product Solutions, who will showcase our marketplace capabilities.

Good afternoon. As Vikas said, I'm Greg Borowski, VP of Product Solutions at ACV Auctions. I joined ACV 4 years ago to lead product management and design. Previously, I had spent 10 years in product management and customer solutions focused on helping companies like AT&T, Verizon and HBO to kind of re-disrupt the pay TV and reimagine video experiences, a mobile-first and very personalized on-demand experience. And prior to that, I spent 10 years in broadcast, where I witnessed the transition from digital and the rapid rise of automation that's fueled by technology investments. And it was that technology disruption that kind of steered my career into product management. In 2018, I can see that the parallels with ACV and other technology disruptions in my career. And that's the primary reason why I joined. I saw an industry that was relatively underserved in a company that had early momentum and a ton of room to grow. At ACV, my team and I have greatly benefited from working with customers, both large and small, whose industry is undergoing a massive evolution. One of the most important things I've learned in my career is that successful products put the customer at the center of everything we do and ensure that those customers are not only listened to -- or excuse me, not only heard but also listened to. You'll hear a consistent theme around customer solutions and how the many benefit from the common needs of the few. ACV customers are some of the most entertaining and enthusiastic business partners you could ever hope for. And in that lies a beautiful opportunity. Every single one of them is a business owner, an entrepreneur, and each brings a unique point of view that we all can learn from. Dealers are generous with their time and insights. And all we've had to do is take time and listen to them. At ACV, our UX Research team, our teams of engineers and our teams of designers and product managers all engage continuously with customers to help define and to steer our innovation road map. We segment our customers knowing that a one-size-fits-all approach will not work. We borrow best practices from successful technology companies like Google, Facebook and Airbnb, particularly their 7-star customer experience approach, because when you aim for 7 stars, 5 stars is a layup. Our core principle is to build products that will help ACV scale, not only with current customers, but also for new customers, new markets and new use cases. We choose innovation over efficiency but always have the end customer experience in mind. We build platforms and products, not list of features. We measure our success in customer engagement. The ultimate goal in KPI, our experience is so innovative and such a step forward. Customers can't imagine going back to the way things were. And this approach has allowed ACV to disrupt the wholesale automotive industry and change the way dealerships across the U.S. operate. And I'd like to share some of those experiences, so those product experiences with you now. Let's start with our flagship product, ACV Auctions. We brought a mobile-first approach with the goal of finding and buying a car in ACV to be the most innovative dealer experience in the industry. For used car managers, time is literally money. There's a general formula that used car managers stick to, you acquire a car, recondition it, mark it up and sell it, rinse and repeat. The more times they can repeat that process, the more business and revenue they can generate for their store group. In the early days, our focus was on buying experiences for independent, small- to medium-sized dealerships. They can operate their business from their phone. We made it very easy for the dealers to see the details of a car, listen to diagnostics and spec photos and bid from literally anywhere. It was a great start on our mission of bringing demand broadly to our marketplace. Because of our inspections and our condition reports, dealers tell us they know more about a car bought on ACV than if they were standing right next to that same car at the physical auction. Our simple but robust buying capabilities have evolved as we've grown and engage different types of dealers on the demand side of our marketplace. For example, we spent the last few years really striving to better meet the needs of franchise dealers who are more regimented and they're used to things being in a certain way. So we built in things like our desktop experience, run list and new types of bidding capabilities to make sure we can bring the right demand for every car at every price point. While we've been making constant improvements to our multi-platform user experiences in parallel, we've been innovating on new technology focused on programmatic buying. Programmatic allows a dealership to set up filters and rules that will bid on cars without having to be present in the marketplace. This capability is only made possible by our detailed inspections that are collected by our field teams and the robust condition report data they help us collect. Today, programmatic is especially useful for larger dealer groups that have high-volume stocking lists for each late model, low mileage, make a model car they sell. ACV technology lets dealers decide how much is decided by an algorithm and how much is decided by the buying team. Picture a dial that allows a dealer to go in between fully manual and fully automatic. Going forward, we see the expanded use of programmatic across all customer segments, vehicle types and price points as meaningful sources of inventory. In our products, we aim for high resolution into the dealer -- into the activities of an auction that once customers experience, they won't want to buy a car without. Yes, it is. As you can see, the auction is a modern, clean experience that can be customized based on the dealers' inventory needs. Users can access our marketplace on the desktop or through an iOS or Android app on their mobile device. We look to search and discovery experiences like Airbnb and Zillow to help guide the user through the discovery process. We blend dealer feedback, vehicle data and product analytics to inform search and filtering capabilities. A big advancement in our next-gen product is the ability to set unlimited personalized safe searches. Some dealers are always looking for certain types of vehicles while most dealers are always looking for something very unique for a specific consumer. Once the user finds a car they're interested in, this is where the power of ACV condition reports can really help us differentiate. On the vehicle display page, the user can see all the photos, listen to the AMP and inform their purchase decision. When a dealer wants to buy a car, bids are collected in $100 increments or the dealer can set a proxy bid, which is essentially the maximum that they're willing to pay and the system will bid on their behalf. Auctions run for 20 minutes and the clock will reset if there's a bid with under 1 minute. A lot of our sold auctions run between 24 and 25 minutes, but we've seen some really hotly contested auctions run 30 to 40 minutes with multiple bidders in the action. The auction ends unsold, vehicle moves into our offer window and the product supports back and forth exclusive negotiation between the seller and the high bidder to settle on a price. This continued investment that we've made in innovation in our buying platform is already helping us to expand into new businesses by delivering on capabilities beyond ACV Auctions. Case in point, in 2020, right at the beginning of the pandemic, we stood up a team at ACV with a mission to build a private marketplace experience for dealers to meet a growing need in the industry. Just a few short months later, we launched our first customer and had been innovating on this platform ever since to allow further customization, and now we power dozens of marketplaces alongside ACV Auctions. These investments in platform capabilities allow us to meet unique audience, lane and bidding rules and business models to meet the needs of today's customers. And this investment is helping us towards the next use case like private label, commercial and international marketplaces. We've talked extensively about how important customers are in our product strategy and execution. So let's listen to one of our customers discussing how private marketplaces has helped their business. [Presentation]

So just 4 years ago, ACV Auctions was our only product. And now it's one of a suite of customer solutions. We've heard our customers talk about today from dealer groups like [ Taska ] and Lithia. Our focus is achieving outstanding business outcomes for our partners and for ACV and delivering products that delight and create stickiness. We all heard our customers say it. Once they experience ACV, they don't want to go back. Our proven marketplace platform, coupled with our inspection technology, Working hand in hand is a big part of the reason we believe we will continue to take both market share as well as dealer wallet share. I focus primarily on the buying experience at ACV, but now let's shift focus to our inspection technology. My colleague, Dr. Phil Schneider, will join us on stage to talk more about our investment in R&D. Thank you for your time.

Thanks, Greg. Perfect. Thank you. Hello, everyone. My name is Phil Schneider, and I'm the Director of Research and Development here at ACV Auctions. And my background is a little bit different. I'm not a sales guy. I'm not marketing. I'm not really an automotive guy either. I'm a man of science. I got my PhD in electrical engineering, where I focused on biometric identification and ultrasonics. And you're really going to hear a narrative for me about how we're leveraging science to really innovate, to push the narrative of technology really around inspections, valuation and just innovation as a whole. A little bit about my background. Prior to ACV, I worked at Qualcomm at their Biometric Center of Excellence. There, I helped pioneer the first ultrasonic fingerprint sensor in mobile smartphone devices. I think they're at about 100 million now they produce. So it's been a lot of fun here now applying the science of that to ACV's problems. We're going to start with some themes. You're going to see a couple of things as I go here, the first of which being a conversation about how we're spending our time doing innovative technology. You're going to see that centered around AMP. You're going to see that center around Virtual Lift as those stemmed out of R&D is core foundational technologies we developed. We're then going to talk about this multi-phases of value that we hold near and dear to our hearts and R&D. And that's really once we build it, how do we leverage it, how do we gain the most value out of that. I'm going to talk a little bit about what we're doing with that. But first, let me start with AMP, or Audio Motor Profile. Many of you are familiar with it. You'll see it on here, but it was really the first product we developed back in 2018 as R&D. AMP was simply a vehicle engine recording device. You pop the hood, you set this underneath it, you press record and it records a 30-second audio clip of the vehicle, which then our buyers can play back. Simple in design, this little orange piece of plastic had a resounding effect on the marketplace for both external users, our buyers as well as our internal operational efficiencies. Our dealers love AMP. Why? Because it helps take the guesswork out of the inspection process, out of the valuation process. It gives quantifiable data that they know that they're used to, right? These guys are experts in automotive, right? Much better than I'll ever be identifying what's wrong with the car. They can listen to it. They can make that assessment themselves, use that data and then price the car, accordingly. So from that standpoint, they love it. They can better value the car. Internally though, we also love it. It gives us better identification of our inventory. It gives us better insight of what's actually getting put on our platform, and it's allowing us to position our company and our operations to adjust accordingly for an efficiency standpoint. I'm going to play 2 samples here. Sample number one is a knock. Sample number two is a timing chain. Now those may have sounded very similar to you, they do to me. But in actuality, if you are a dealer, you know exactly what those mean. And you know exactly the price of how much that's going to detract from the car because it has that issue. So since we released AMP back in 2018, we have amassed over 1.75 million used car audio sounds of over 2,000 different vehicle types with a wide range of issues, different makes, models, years, different odometer values. Some have knocks, some have ticks. Some even have just belt squeals or just garbage sounding engines, right? So basically, what we have done is amass the world's largest used car audio database. The beauty of this is curated, meeting our inspectors label this data in real time when they're in the field inspecting this vehicle. So if you're familiar with the concept of AI and ML, everything I just said should have made you excited because this is the perfect storm centered for innovation when you take audio and you combine it with machine learning. And we're doing just that. Utilizing deep learning and convolutional neural networks, ACV is adding a level of never-before seen trust and transparency through AI in its inspection process. We've teamed up with scientists across the globe, subject matter experts, PhDs, universities, automotive experts, acoustics experts, all focusing on this one problem to try to make an automatic and AI intelligence centered around AMP, the result of which we have the actual equation in AI, a formula, if you will, that can listen to an audio sound and with a high degree of accuracy, tell you what's wrong with it. Does it have a knock? Does it have a tick? Did this car get driven to and from church on Sunday, and it sounds beautiful? Or was this driven into the ground across country multiple times. We fuse our AMP data labeled by our inspectors with our data-driven condition report and see a "1 plus 1 equals 3 type" thing. Same thing with Virtual Lift. Some of you are familiar with this. You saw some of our dealer partners talk about it. Virtual Lift was the second fast follow on to AMP as a piece of foundational technology for ACV. What we did here was created the first mobile undercarriage imaging system. If you're familiar with the industry, typically, in order to see what's underneath the vehicle, you, one, crawl on your back and look up underneath it; or two, you get on a Lift, both of which are unattractive processes in my opinion. With Virtual Lift, we don't do that anymore. Within 30 seconds in a drive over of a vehicle, you now get this nice resolution of an image that is on your cell phone in real time that you can use to better value the car. It's a new perspective for our buyers. They can see, hey, was there aftermarket modifications; is there rust; is there frame damage. I've seen garbage shoved up underneath vehicles. We can detect all of that. Every CR on our platform comes with AMP and Virtual Lift if the car is operable. It's a new standard. It's the gold standard. We're doing the same thing with AMP centered around Virtual Lift with automation and using AI technologies for this. We say a picture worth a thousand words. Well, a Virtual Lift, to me, is worth 1 million data points. And that statement couldn't be any truer here. I'm giving you 3 examples on -- from left to right here of some of the automated processes we're implementing here at ACV. Starting with the far left, we have developed a catalytic converter detection model. Simply put, if you're familiar with catalytic converters, it's a very expensive piece of the vehicle. In a matter of a couple of minutes, it can be stolen with a hacksaw and sold on aftermarket. And now you don't have a car that meets regulation. Our model can actually detect the presence or lack of a catalytic converter and does it with about a 97% accuracy. Oil leaks, rust, common issues on vehicles, if we take a second and focus in on the rust, I've learned more about rust than I've ever would like to, by the way. There's aspects of rust which we want to know more about. Is it structural rust? Is it penetrating rust? Is it surface rust? Those 3 different classifications absolutely determine the value or impact the value of that car. Our model can automatically are getting to the point where our model can automatically detect what type of rust it is, how much rest is on there. We say we want to get to the point, and we joke in R&D, where this inspection process is so easy that even Phil can do it. And we're not that far off yet, right? Because when you think about the level of automation we're seeing through technologies like AMP and Virtual Lift, we're getting closer to it. You no longer have to be a mechanic of 20 years now to diagnose what's wrong with your engine. No, you just take out your AMP, record it and let my machine learning algorithm that's listen to 1.75 million audio samples tell you exactly what's wrong with it and how much it's going to cost to fix. We're getting closer to that level. But I always get asked, what's next? It's never enough. Everyone wants more. Rightfully so, right? And so...

[indiscernible]

I had to add it to it. Yes. So it is my pleasure to introduce to you for the first time ever, the newest ACV inspection product, APEX. The pinnacle of data collection systems, APEX, is designed to be an extensible flexible platform that will enable never-before seen data insights, sensor readings and technology innovations all in the palm of your hand. From a technology standpoint, APEX has a number of really attractive features and sensors that sets it above the rest. I'm going to walk through a few of them. It's an IoT device. What does that mean? How does that translate back? It's wireless. It's a platform. It can be used as a central hub, if you will, to pair other devices. Say you want to take a Virtual Lift, an OBD2 sensor. Pair it with our CR, APEX can do that. You now start to get connections, more data connections, more insights on that vehicle. Machine learning feedback. This thing is robust. It can house models directly on the device. Think of this as real-time feedback. Think of this as, hey, put an APEX down underneath the hood, and if you see a red light, you know you got a problem. If you see a green light, it's clean. Knocks, ticks, belt squeal, a number of issues that can go wrong with a car, we're getting that level of intelligence to do that detection. On the far right here, you're going to see some of the sensors we've retrofitted APEX with, and they're fairly impressive, a microphone array. Our AMP is a single microphone very one-dimensional. APEX is an array, front, back, left, right, up, down. Why does that matter? Well, I want to hear what's happening inside the car as well as in front of it. I want to also know what kind of noise we're getting in the background so we can do some cool single processing with that. Audio quality-wise, superior. We're going to get cleaner signals. What does that mean? Cleaner data, better machine learning models, better intelligence associated with APEX. Vibration, on each inspection, we record not only audio but the vibration signal for the engine. These are complementary data streams, and I'm going to nerd out for a second, right? Because this is a concept where acoustics and vibration can be joined together and fused together to be a 1 plus 1 equals 3 to give more insights on the health of the vehicle. We actually published a white paper on this. We actually have a great team of researchers that created a world-class machine learning model for fusing audio and vibrational data together. Think of vibration as predictive failures. Think of vibration as more than just audible sound. Gas and odor, does your car smell? Does it smell like a new car? Was there water damage and mold? Was this an Uber car and someone threw up in the back seat? Is there smoke coming out from under the hood? All valid concerns. Ultrasonics. You heard my PhDs and sound and biometrics. We're actually going to start measuring nonaudible signals. It may not help our buyers directly, but it's going to give us a ton of insight on what's happening on the vehicle. Think about electric vehicles. They have to be treated differently than internal combustion engines. APEX is the first step for that. Now with more data becomes more complexities, right? And so what we're trying to do with APEX, what we're trying to do with our whole ecosystem of technologies is get to a 1 central point where we can get -- that we can leverage as an elegant solution to condition a vehicle. So we're creating what we call Condition IQ. It's an AI-based system for vehicle conditioning and modeling. Well, what does that mean? We take multiple data streams, technology, AMP, Virtual Lift, OBD2, paint meters, hardware technology, and we pair it with metadata. Was it raining that day? Where are they located? What's the temperature that day? Who's the inspector inspecting the vehicle? We then combine that with our subject matter experts. I think Mike said, 1,100 vehicle condition inspectors, we take their knowledge and we throw it in this model. And we say, "Oh, you've inspected 104 Foresters before." Tell me everything I need to know, so my machine learning model can learn what you know. Imaging, Virtual Lift. I'm about to pass this over to Abou shortly, who's going to just blow imaging out of the water, we're going to add all of this in one fine model. Condition reports and finally, APEX sensor data. So what can Condition IQ do? I'll give you an example here. I can take a CR, or condition report, on our platform and not look at any pictures. I can take the metadata, the condition report and maybe some subject matter experts. And I can tell you with a high degree of accuracy, hey, that car is probably going to have a hole in the front right rocker of that vehicle. Guess what? I'm usually right. We're taking the level of predictive analytics, AI, machine learning and putting into one elegant model. And we're just scratching the surface here. This is going to impact pricing. This is going to impact consumer technology. This is going to create new verticals of data insights and really set the standard of how we're doing digital inspections. And so I appreciate the time. I want to talk more about imaging here, but Abou really is the subject matter expert. And so I'm going to pass this over to him and he's just going to keep the ball rolling here. Thank you.

Hi, everyone. Thank you very much. It's very impressive. So I'm Abou Laraki, Co-Founder and CEO of Monk. First, I'd like to say that I'm really excited to join officially ACV family, such an inspiring team that has completely disrupt an entire market in only a few years. With ACV, we share the same vision, same values and have highly complementary products. At the end of the day, we just feel at the right place at the right time with the right people. Concerning my background, so I'm Abou Laraki. I am an artificial intelligence engineer from École Polytechnique in France and from UC Berkeley in California. I'm actually still AI professor at École Polytechnique in France, and I have several years' experience in the venture capital industry as a venture analyst. I've been always fascinated by the way AI could bring more transparency and has an amazing impact in our life to fix and normalize, complex processes. This is why more than 2 years ago, have built and cofounded Monk in Paris, in France, as you can hear from my accent. And now 2 years after, we are a team of more than 20 people and have a dozen of clients all over the world. So to build a world-class AI platform, you need obviously a different ingredient right. First, a highly qualified data science team, which we are lucky to have now; and an ecosystem of world-class universities, with whom we have different partnerships to create state-of-the-art algorithm. Second, we need millions of structured data from old automotive value chain, very diversified and highly qualified. On top of this, you need a sophisticated AI labeling system with several teams in different geographies. Third, a renowned automotive partners who help to feed your algorithms with [indiscernible] and their business rules. We always say it's like taking the average opinion of thousands of inspectors for a single inspection. It just allows you to standardize and avoid all the mistakes. As you can easily guess, ACV will massively accelerate the advancement of our artificial intelligence platform. ACV uniquely brings thousands of trained and professional inspectors and the highly structured data, condition data and shared commitment to trust and transparency. You can see an illustration of our product in your right. It's very simple to understand. Everyone here has a smartphone. You can take different pictures of your car and soon video, and we run the analysis in 3 simple steps. First, at preprocessing checks where we make sure that the pictures are not too blurry, not too dark, that we can see all the car in this picture. Then we do part segmentation that allow us to have standards of the car. And then our artificial intelligence platform detect and classify at a pixel level all the scratches, dent and other damages that are visible on the car. Let me please now show you a demo of our product. [Presentation]

Impressive, right? The value proposition is quite simple and very powerful at the same time. It's extremely easy to integrate, completely hardware-free. You can put our system via API, SDK, web application, mobile application or even been behind a fixed system while, at the same time, entering a high level of accuracy, record and precision. And thanks to our continuous learning system, we keep feeding and improving our algorithm based on our clients' feedback. At the end, it results to a strong worldwide traction in only a few months and years. We won more than 15 RFP with different leaders all over the world, and we are in live production in Europe and in North America. Moving forward to the overall ACV and more partnership. As I mentioned earlier, we have a common vision on how an inspection should be done. Each time a car changes hands, its inspection and therefore, each car purchase should be done with the most transparency, efficiency and trust possible. Concurrently, this will be done obviously in several steps. Today, by combining Monk offer with all the power of ACV on the subject of the condition report, starting with ACV platform. Once the inspection is done, it will have a direct impact on a better prescreen filter developed by our ACV Teammates, and therefore, mechanically, disclose more and more damages. This will have a direct effect on lowering all the cost of arbitration, inspection time, and a better user satisfaction. In the long term, it will, of course, open up many more and more machine learning technology projects with our teammates as Phil could already show us and, of course, more opportunities in the whole automotive markets. Today, Monk is already working with several clients in different automotive verticals. For example, we work in the salvage industry, in the rental industry, consumer inspection, logistics and commercial vehicles. Earlier, Vikas talked about the next-generation platform. This is exactly where Monk integrates seamlessly with it. And this is why we believe that together with ACV, we just have everything to create this gold standard of inspection for the entire automotive industry. I'm very happy now to hand over to my new teammate, Ryan from the amazing MAX Digital team.

Thank you so much, Abou. It's amazing stuff that they've been putting together there with -- at Monk. My name is Ryan Walker. I've spent the last 15 years working leading digital product teams in the B2B and B2C spaces. I joined MAX in 2017, and since then, we've been immersed in digital automotive retail, building out MAX's dealer services ecosystem. I want to talk a little bit today about what is MAX Digital and how does it bring together all the innovations that our team has been showing today and how does it fit within ACV? MAX Digital is an inventory management system. We serve franchise dealers. We were started as a company called FirstLook in 2002. So we've been in the automotive space for over 20 years. We were one of the first inventory management providers in the space. So what is inventory management. Inventory management is a platform for dealers that allows them to bring together all of their retail and wholesale operations into a single command center. It's where they operate their retail and wholesale operations, and it's that central point for their business. Inventory management does a variety of jobs from appraising vehicles, both remotely and in person, from pricing, merchandising vehicles, and from recommending what to buy and sell. We take all of that inventory in. We enrich that data through hundreds of integrations and the dealers can manage that in a central platform, and then we syndicate it out to across all of the retail and wholesale channels. So why MAX? MAX joined ACV in 2021. We get asked a lot, why MAX Digital, what -- how does it fit into ACV? And we think there's really 2 core reasons why we're a perfect partnership for ACV. Firstly, MAX has a huge volume of retail data and services. Our history has been in retail automotive. ACV has a huge history in the retail or wholesale data and experience. And when you merge those together, all of that data, all of that intelligence that we're able to generate, gives us huge number of insights that can be provided across not just the MAX products, but all of the ACV products as well. Reason number two, MAX is an easy integration into a network of dealer services that help provide the ability for our dealers to drive more retail and wholesale transactions. MAX's where dealers make their decisions on what to buy and sell. ACV is where they execute those transactions and ultimately, whether they'll be able to be automated more and more. MAX and ACV are sharing a wealth of data in our centralized data platform, our data hub, and we use that to improve the intelligence across all of our products. Greg talked about how our marketplace generates a huge volume of wholesale transactions. Those wholesale transactions make MAX's valuations on vehicles better. Likewise, MAX generates a huge amount of retail history on what dealers are buying and selling. That data enables better personalization on the ACV marketplace and works together seamlessly to be able to provide more personalized recommendations for dealers on what to buy and sell. More data, more insights, more value for our dealer customers. We can recommend what to buy and sell based on personalized local data, as we get all of this data together. It's not just aggregated industry data. It's dealer-specific data. So because we have their retail, wholesale sales transaction history, we can make recommendations and feed data models that are personalized for that particular dealer. Dealers develop a lot of specialty and a lot of personalization as they sell vehicles that might not be the same as the dealer down the street or a dealer in the region or another, similar OEM franchise. So the ability to personalize that data is really key, and it drives better outcomes, makes all of our machine learning model smarter and fits together really seamlessly. So I want to talk a little bit about the sell side first. One of the core pillars of MAX is our ability to help dealers sell inventory. We do this in 2 ways. The first is through automated merchandising and the second is through data syndication. Automated merchandising. We've spent years collecting vehicle data, hundreds of thousands of data points. We have our own proprietary data extraction tools. We couple those with integrations with franchise OEMs, dealer DMSs, data aggregators, retail and wholesale marketplaces, and a lot more. All of that data about vehicles that we pull together enables us to automate the process, the manual, tedious process of merchandising a vehicle. So we use it to add package and equipment data automatically, correct errors and omissions that come out of the dealer's DMS. We use machine learning to label retail photos and automate the ordering and the processing of those to create automatic photo guides. And then ultimately, we take all of that data, and we generate unique descriptions that can be syndicated out to the web of those vehicles. George talked before about how every used car is unique. Every used car has its own value points. And when we take this unique data about those cars, and we're able to craft that different story, that different message for every car, we're selling or helping the dealers sell on differentiation, not just lower price. So ultimately, better outcomes for dealers. After we've compiled all of that data, we take it, we syndicate it out to all of their retail and wholesale channels. So we integrate with about 600 different integrations in the industry, pretty much everyone in automotive. We're connected to pulling data in and pulling data out. So think of MAX really as that central hub. And that's where all this comes together. Talking a little bit about the buy side. So MAX has a powerful toolkit to help dealers buy more vehicles, and most importantly, buy the right vehicles for them. Our acquisition tool, which we call MAX Appraisal, answers those questions of should I buy this car, how much should I buy this car for? Really, what's the ACV, the actual cash value? What is this car really worth? That's the kind of holy grail of what we're all trying to get to. What is that real actual cash value and our MAX Appraisal tool helps dealers find that. So we pull in a huge amount of data from a lot of different sources to help them determine the valuations on vehicles. We use retail sales history. We use local market data, buy and sell recommendations, reconditioning data, just a huge amount of data that we're pulling in there. But the marriage of MAX and ACV is where this gets really exciting, because of the things that my colleagues talked about today. As we -- like Greg talked about marketplace bids and how real-time valuations on the marketplace can be used to ultimately give real-time values for what a car can sell at for wholesale today. So if I'm a dealer and I'm appraising a vehicle that instant insight on the real-time auction value of that vehicle is hugely helpful, especially in today's market, where the volatility is so high with used car pricing, valuations that are based on data that's 30-, 60-, 90-days old, just doesn't hold the value as real-time data that we're able to provide. Abou talked about Monk and their AI damage detection. Obviously, a huge amount of value there to be able to put better reconditioning on a car, getting to that better number, better data for dealers, better valuations and ultimately, better profits for those dealers, because of it. Phil talked about the Apex device, which amazing, amazing stuff. Data that has never been available, we're able to collect and process and use machine learning to get better dealer recommendations. All of that being fed into our appraisal tools, ultimately just makes them more and more powerful. We're collecting more data. We're feeding it in. We're giving better valuations. We're getting that ACV and dealers are able to make more money and know more and more about a car. And this -- like I said, the intelligence being personalized to that specific dealer is really key in this case. So all of that working together just is an incredible amount of power. Also, with our recent acquisition of Drivably, we are able to take this even further on the consumer acquisition side. You heard Kate talk a little bit before about our live appraisal product, and how we're able to put real values on vehicles for consumers as they bring them in the dealership. Drivably is helping us take that even further. It's probably the biggest problem that dealers face today in the industry. MAX talks to a lot of dealers. And every time we ask them, what's the biggest problem in your business, more often than not, the top thing we hear is being able to acquire enough vehicles to fill my inventory, to fill my lot. And consumers are really a great channel that dealers are starting to turn to, to acquire more of that inventory. You've seen the commercials at the Super Bowl, I'm sure Carvana, Vroom, others seamless, easy ways, come sell your car, avoid the dealership. But combining that with the inventory shortage and dealers struggling to find cars, it's cutting into their margins. At MAX, as we talk to these dealers, that's just the absolute top thing that we hear. So Drivably is bringing a powerful consumer buying capability to our suite of products that we're integrating across MAX and all of ACV. Drivably is powered by the ACV pricing engine, which is our machine learning model for vehicle valuation. It's a condition-adjusted model, very, very powerful. And within MAX Appraisals, Drivably gives even more capability. As we integrate with our appraisal tool, we're able to provide an end-to-end consumer experience for selling your car. So it's not just an offer you get online and then taking it into a dealership and getting something else, you get a complete transparent process all the way through, which is key to a customer. And with our ability to give better valuations, because of our better data, we're able to give better offers to the customer, which means sourcing more customers for the dealership, which means more supply. And the nice bonus around that is as we're able to give a better customer experience, provides more repeat business for the dealer. So customers coming back, customers happier with the process, ultimately selling more vehicles to that dealer and helping address their supply concerns. So without a world-class technology team, none of this is really possible, though. So I'm going to turn it over to our CTO at ACV, Bahman Koohestani next, who's going to talk about how we built that team at ACV.

Hi, everyone. Good afternoon. I hope you're enjoying the presentation so far. Impressive team. I think you would agree. My name is Bahman Koohestani, I'm the Chief Technology Officer at ACV. I've been at ACV since September of 2021, which makes it about less than -- about 6 months. So I'm just going to give you a little bit of introduction about myself. I was one of the early leaders at Netscape in the mid-90s, if some of you may not remember Netscape, but some of you may, where we created and commercialized a lot of your web technologies. We created the first browser, we created SSL. We created JavaScript, we created cookies and many other technologies. I was -- let me just -- there's this white thing behind me. I was also the Chief Technology Officer and the Chief Product Officer at Orbitz, where we created one of the first online travel platforms. This is early 2000s and really grew the organization tenfold in about 3 years. I also led and grew the technology and product teams at PayPal globally on all of our payments, gateways, mobile and checkout products. I was also the Chief Technology Officer at Thomson Reuters, where we introduced the very first predictive analytics products and created the very first cloud-based cloud-native platform and services for the company. A number of different products in that organization is used what we created, especially patent products and financial products. The patent products are really difficult when it comes to analytics, if you're familiar with how patents are filed and -- anonymously filed and read and so on. My last role before joining ACV was at LendingClub, where I was the Chief Technology Officer and the Chief Product Officer for LendingClub. I let the -- and scaled our products and technologies such as loan and credit facilities, online deposit and investment accounts, and core equity loans -- loan accounts for consumers. And scaled the technology platform to manage loan marketplaces of about $12 billion per year and led the acquisition and integration of a bank, which was an interesting integration and acquisition process for me. I had never dealt with a bank before. So I've been at a few companies, and I will have some gray hair, except that I have no hair, so I can imagine that. But I'm very excited to be part of ACV leading the technology, product and analytics organization here. I believe there is an incredible opportunity to disrupt the auto marketplace industry through great products, analytics, insights and innovative technology. And I want to sort of take you and give you some of those highlights. So today, I want to take this opportunity to introduce to you the ACV technology platform and provide some of these highlights about its structure and how it operates to a certain extent. The platform is based on micro-services, cloud-native, cloud-agnostic, Kubernetes-based architecture that provide services and APIs for all of our business domains and products. The architecture is extremely modern. That's really that long sentence just relaying that the architecture is extremely modern, is leading edge. Our platform is also cloud-agnostic. We utilize both AWS and GCP, which is the Google Cloud Services today. We utilize the best services of those platforms. And we do that because we believe that there are certain services at Google and there are a number of different services at AWS that gives us the ability to combine and provide the best customer value. Our marketplace domain is where we provide the services for all of our buyers and sellers to effectively and efficiently engage in searching, bidding, communication and other activities with one another. And the purpose of that is to conduct transactions. Our transportation domain provides the capabilities to easily move cars from buyers, from sellers to buyers or point A to point B. It uses artificial intelligence and machine learning at its core to assess the most effective transport routes and the most effective and efficient transport providers. Capital domain is focused on providing funds and funding facilities to our customers where necessary and needed. I'm very familiar with the capital domain coming into the organization as you might expect. We are also providing dealer to consumer products. And I think you heard a little bit about Live Appraisal and other type of products today. And that empowers our dealers to have different ways of acquiring consumers and having a relationship with the consumers. Our services through our platform provide both predictive and descriptive analytics, which is based on machine learning and artificial intelligence. You heard Abou from Monk and you -- talk about their image AI capabilities. And you heard from Dr. Phil Schneider, who talked about our latest greatest innovation, that's all descriptive analytic capability. I'll touch a little bit, and I'll talk a little bit about predictive analytics in the next slide. But this provides the services that we can use across all of our domains and all of our technology to actually provide data insights. We also support robust APIs. You heard about programmatic selling, buying -- buying and selling, but programmatic buying today, offering our services and buying plans to our customers to utilize programmatic buying. Our APIs provide the plans to actually be utilized by our customers to activate programmatic buying. Our platform sits on top of our data infrastructure, which is not a data warehouse. Data warehouses create a lot of problems for organizations. We do not have a data warehouse here. And what I mean by data warehouse is that, that core data platform, it is not hundreds or thousands of tables. It is an ACV innovation. This is something that we have built, based on a number of very scalable technologies out there such as Kafka, if you're familiar with technologies out there. That provides very scalable data streaming and management platform that is based on a published subscribed model, where we can provide data to different domains or across domains where it makes sense to create customer value. So a domain can publish a certain topic or a certain data and another domain can pick that up based on that topic or that data. That makes sense for that domain. Capital can talk to transport. Marketplace transactions can talk to everyone else or a combination of all. This is -- I would say this is a huge competitive differentiator for us. And it's something that I think -- I'm actually very proud of this data platform that we have. So predictive analytics. Illustrating our predictive analytics capabilities, our Valuation Platform is an incredible core capability for our customers where we utilize all of our core artificial intelligence and machine learning and data to create our estimates. The way this works at a high level is that we have a number of different signals and data points that we acquire. So think of data the way this works is -- I should stay close to the microphone. The way this works is data acquisition, data ingestion, data distribution. So we acquire data points and signals, and these are some of the data points. We have a lot more data points. But to illustrate, retail data points, trending data points, third-party data points, marketplace transaction data points, inspection data, all kinds of data points and signals. They go into our algorithms and in here, we engage a perpetual cycle of digesting the data, understanding and applying the various learnings that we've had from the previous cycles, going through a predictive process and then coming up with our initial estimate. Then we have a calibration engine, which takes the initial estimate, applies a number of business plans and business rules depending on a number of different factors and comes up with the final estimate. In my opinion, that final estimate is the best in the industry. Our confidence score in that final estimate is more than 92%. It's significantly, in my opinion, the best estimate we can put out there that I've seen in any other -- from any other provider. Now I'd like to introduce you a little bit to the way that we operate, our technology approach in building and delivering our products. One of the most important technology building and operating metric for us is velocity. Why velocity? Because it is a productivity multiplier, much in the same way that an assembly line in a car industry is a productivity multiplier, velocity in software development is a productivity multiplier. Velocity of engineering and development, the teams, how many story points can be scored per day. We have a very agile organization. That's really important for us, and we measure it on a continuous basis. We have true continuous development and continuous deployment process, CICD. And that cycle, we average about changes to production every 2 hours. Our goal is to get to a point that we have continuous deployment and -- development and deployment, where we actually deploy as soon as things are ready. We don't necessarily -- it will be all the time. There is no 2 hours anymore. Our goal is to get a new developer productive enough that they can push code into production at the end of the first day. And that is nested in a lot of different automation in terms of quality control and making sure that all of our quality checks and metrics are checked, before it's pushed into production. We do that today. We are going to increase that automation from a testing perspective to make sure that, that continues to escalate and become better. A couple of metrics. Our MTTR, mean time to resolution, is half a day. What does that mean? Well, mean time to resolution, there are 4 metrics that we measure. There is repair, recovery, respond and resolve. When an incident happens, from the point that we detect that incident, all the way through understanding its root cause on an average, it takes us about half a day. The deployment frequency, I talked about this, it's about every 2 hours, and then our uptime is about 99.95% of the time. We are world-class based on these metrics, and I can confidently say that we are in the top 5% of technology organizations on this planet. Let me talk about our organization. I'm so proud of this organization. So we've gone from 30 people in 2019 to about 300 people in 2021 -- exiting 2021. We've done this despite the virus, COVID. We've done this despite the fact that there is significant pressure right now for technology talent in the market. Everybody is looking for talent. And the icing on the cake, we measure our attrition rate. And over the past 3 months, our attrition rate is less than 7%. I have never been at a technology company that has an attrition rate at that level, never. That really shows how excited, how engaged and how committed our people are to what we are doing and our mission as a company. Our plan is to scale our organization globally. We now have physical presence in Buffalo, Toronto, Chicago, Florida, Cincinnati and a few other places. This is product and technology organizations. I'm not talking about sales. Mike has a lot larger presence in different areas. We now, with the acquisition of Monk, we are proud to have a presence in Paris, France, which I'm looking forward to visiting soon. And we have presence in Argentina and a small team in India. We will grow our global teams and talent, increasing our presence in a more cost-effective regions significantly. That is part of our -- actually my mandate to do that. In closing, I'd like to say that I've been around a lot of technology companies and organizations in my career. I have never seen the level of excitement, engagement, innovation and drive anywhere else that I see at ACV. I'm so in love with Dr. Phil here, Dr. Phil Schneider and his products. When I was interviewing here, I told Phil, one of the impact that it had on me to actually come to ACV was that R&D team. They're fantastic. They're second to none in the world. You've seen some of the R&D innovations. You -- I just took you through a high level of what our platform looks like, its modern technology. And you've seen some of the analytics you see -- you've seen some of the stuff that Ryan talked about. All I can tell you is that we've been really, really busy. The organization has been really busy creating world-class innovative and amazing products that will absolutely change the industry forever. I can guarantee that. And with that, thank you very much for listening to me, and I want to turn it back over to Vikas.

So just a quick wrap up, and then we'll take a 15-minute break. I'm so glad today, you had an opportunity to see a demonstration of our product suites and offerings for our customers. As you can see, we are obsessed with delivering the next-generation technologies to help our customers be more successful. We have already today the industry's best condition report. With our latest investment in the NextGen platform, by the end of the year, we'll be having 5 to 10x more data in structured format than we do today, Augmented with some of the stuff that Phil and Abou talked about, this will only get better. Greg spent some time talking about our buying experiences and our marketplaces. This is an efficient, engaging automated buying platform we have today. Ryan talked about how we're bringing all of the data from a retail and a wholesale together, experiences are connected. Data is feed into getting more and more intelligence for our platform. And then Bahman talked about this world-class robust platform and an unbelievable team. Our mission is to disrupt the auto industry, and I feel great about where we are in terms of our ability to drive change to it. Thank you so much. I'm going to hand it back to Tim.

Thanks, Vikas. Thanks, team. So I'm going to be a little bit of a grinch here. We are running a bit behind. So if we could make it at 20 of, so call it, just under 10 minutes, quick break, and then we'll end with Bill's session and then jump into Q&A. Probably going to go a little bit over 4, but -- so we'll be back at 20 of. Thanks. [Break]

Yes. Hey, folks can we gather back to kick things off here, so we don't run too, too late. Thanks.

Okay. So are we ready to go here. It's kind of hard coming back from a break so. All right, guys. Let's get going here. So Bill Zerella, CFO. So first, let me say that after a year of Zoom calls, it's great to start meeting with some of you guys in person. Kind of a 3-dimensional view versus a 2D view. So I'm kind of excited to do this today. Look, I think you guys have seen a lot of interesting things. Hopefully, you think is interesting in terms of what we're doing on not just the go-to-market side, but also the technology side. I'm going to walk through the financials here at the end. I'll try to get through this relatively quickly, since we're kind of running behind. But some of this, for those of you who know us really well, might be a little redundant at the beginning, but as we go through the materials here, I think you'll find some of this new information that we're providing and some of the new fidelity interesting. So I'll start out with the business model. And what you're going to see is that we're breaking this into a few different pillars and giving you guys a little more fidelity in terms of the revenue streams and the cost of revenue dynamics and profiles associated with those revenue streams. We'll talk about the growth vectors that we've been experiencing in those different lines of business, if you will, which are quite significant when you see the 3-year growth trajectory of these different revenue streams. We'll get into an update on the cohorts. So we presented the cohorts when we went public, which is coming up on a year ago actually in a few weeks, and we'll give you an updated view of those. And then we'll finish up with our 5-year path to the targets that we articulated in our last earnings call, the $1.3 billion and $325 million in EBITDA. So first starting with our business model, roughly 94% of our revenue last year occurred within the umbrella of our digital marketplace. So what we've done here is we've kind of divided this into 3 major pillars. Two of which are within our digital marketplace and the third is outside of our marketplace. So within our digital marketplace, about 2/3 of that revenue is from buy fees, sell fees and our customer assurance revenue streams, which is our GO GREEN product offering in which we protect sellers from arbitration costs from buyers. The other 1/3 is from our marketplace services that attach into the marketplace. These are transported in ACV Capital. And then outside of our marketplace representing 6% of revenue last year, are SaaS and data services. When we went public last year, basically, this was just a data services bucket. Since then, we bought MAX Digital, obviously, and we've now added SaaS revenue streams, which we're going to be leaning into a little more going forward. And I'll talk about that when we get to the 5-year targets. So I'm not sure if you guys can see everything here, but I'm going to kind of explore this out for these different pillars in the subsequent slides. But -- so again, just walking through these different pillars. So our buying fees and sell fees. Sell fees are relatively fixed. Those are negotiated seller by seller. Buy fees vary with the price of the vehicle. And again, I think most of you are aware that we did change our buy fee schedule in December of last year. What happened last year was we really didn't benefit as fully from the increase in used car prices and increase in GMV being transacted on our platform, since our buy fees capped out at $15,000. And frankly, we were pretty transparent in saying, our buy fees are below market. At some point, we will adjust those buy fees. I'll talk a little more about that later when we think about the 5-year model and some of the dynamics as the market readjusts in terms of used car prices kind of moderating over time. Our assurance product is basically a fixed fee. We charge $75 to our franchise dealers, $100 to independent dealers. Most of the buying happens from our franchise -- from our -- I'm sorry, most of the selling happens from our franchise dealerships. So this is a seller fee to, again, protect them from arbitration costs. In terms of the second pillar, Marketplace Services, again, this is Transport and ACV Capital. Transport is the one line of business here that we record on a gross basis. We're required to for GAAP purposes. Again, we have our own marketplace of thousands of transport providers that basically bid on our jobs in terms of when the buyer clicks that button and says, yes, I want ACV Transport Services. And then ACV Capital. And again, I'll talk about the different margin profiles and how that's -- how those are going to change over time when we get to the 5-year modeling. And then on the far right, our SaaS services and our data services. As you would expect, MAX Digital carries higher margins than some of the other businesses that we're in, especially our inspection services where we provide inspection for a fee. Those are not huge margin businesses today. But a lot of the technology that we're investing in will ultimately drive our cost of inspections down, which will improve that margin profile. Again, I'll talk about that a little more when we get into the 5-year outlook. Okay. So if we just look at some of these revenue trends. So first, at a high level, an 83% CAGR over the last several years. So phenomenal growth. Again, when we went public just a year ago, we were modeling about just over $290 million of revenue for last year. We hit almost $360 million of revenue. What you can see on the right-hand side are the growth rates for those 3 different lines of business that I just went through, starting with SaaS and Data Services, Marketplace Services, and Auction and Assurance. So now if we look at each one of these, starting with our Marketplace revenue. So buy fees, sell fees, customer assurance, 77% CAGR. And again, arguably, this growth would have been higher if our buy fees adjusted more so with the price of a vehicle, okay? So basically, we didn't reap as much of the benefit as we would have otherwise. That was somewhat deliberate and I'll get to why, when we get to the kind of the 5-year view. But either way you look at it, obviously, very strong growth, just under 60%. And that's in the context of a market that was highly volatile last year, right. GMV. So GMV exploded last year, grew 140%, almost $8 billion worth of transactions through our platform, which is more than the prior 2 years added together, right? There's really 3 components of this GMV growth. So first, unit growth, by definition, is going to drive GMV. We're just transacting more units. So 43% unit growth. So 43% of the 140%, which is due to unit growth. The rest of the growth is really evenly split between the increased breadth of transactions on our Marketplace and used car prices going up. Arguably, used car prices will come down. And really, this is where our buy fees will come into play as we think about kind of the future outlook. Transport and Capital. So we've talked a lot about increasing our Transport attach rate over time. When we went public, we spoke about a 2-year target to get to a 50% attach rate on Transport. Why was Transport important? For 2 reasons. Number one, it increases the SLA to both buyers and sellers. What we found over time was that, if we actually were in -- more in control of the Transport for our buyers and sellers that we could deliver a better time in terms of picking up the car and more reliability in terms of when the buyer would receive it. So that was very important just in terms of driving a better experience for both our buyers and sellers. Secondly, we wanted to drive an increase in attach rate, because we wanted to get more scale faster. Why is scale important? Scale is always important, because it drives better unit economics. And if you look at that increased attach rate and then overlay that with our growth rate that we're projecting over the next 5 years, we're going to have a very, very large Transport business, which will give us a lot more leverage as we drive towards better unit economics on the transport side. On the bottom and some of you in the back might not be able to see this. Actually, our Transport attach rate back in 2019 was over 50%. Why was that? That was because the company opened a lot of new territories back in 2019 and was subsidizing transport in order to import buyers into these new territories. That didn't generate great unit economics because we were actually losing a lot of money back then. But frankly, it was the right thing to do in terms of getting the flywheel going in these new territories. And then over time, based on the unit economics and the cohorts that some of you have seen that I'll update, we reduced that subsidization, as we create more vibrancy in the Marketplace. So that's why the attach rate was so high back then. We landed last year at 47% attach, but we frankly exited just over 50% attach. Our Capital Attach rate, which is -- guys, it's the very bottom, you guys probably can't see it, was 1% back in 2019, 2% in 2020 and then 4% in 2021. So it doubled -- it's been doubling every year. Our revenue for Capital, however, grew 300% year-on-year. So it wasn't just the attach rate. It's the value of the vehicles that we're financing as well as well as some new offerings that we've been incorporating into ACV Capital. So still a very nascent business, growing really rapidly. We expect that to continue. Most importantly, it's a very, very profitable line of business. Actually, it's our most profitable line of business. Okay. And SaaS and Data Services. So basically, a big part of the growth -- not maybe a big part, but a good part of the growth this past year has been having MAX Digital under our ownership. And frankly, Ryan took you through a lot of the dynamics there. So we talked about this on the last earnings call. We're really happy with the traction that we've seen after acquiring the company roughly 6 months ago, 150% increase in the pipeline. And frankly, there's opportunity for cross-selling on both sides of this. That's just the MAX Digital pipeline. So there's opportunities for us to continue to penetrate more franchise dealers through their relationships, and we're not even speaking to those dynamics yet. So this for us is an interesting opportunity, because obviously, again, SaaS revenues carry higher margins, more predictability and sustainability. So you're going to see us leaning more in on the SaaS side over time. And while it's a relatively small portion of our revenues today, was $23 million last year. There's some nice opportunities as we think about kind of continuing to build out our portfolio over time. Okay. So the unit economics. So this should be a familiar slide for a bunch of you guys. On the left-hand side basically reflects the land-and-expand construct that Mike Waterman has talked about. You were able to see some specific regions and territories and the growth that we're generating far beyond the Northeast. I think some investors have thought of us as being a Northeast-based company. And maybe we couldn't replicate the success we've seen in the Northeast elsewhere. That couldn't be further from the truth. The reality is we're seeing great success throughout the country. It just depends on what level of maturity we are in terms of each of those markets. But you can see from coast to coast, and we just gave you a few examples, there's really -- what we have observed is that we have a highly repeatable solution, okay? And you can see from the cohorts on the left-hand side here. This is a multiple of year 1 units. So by year 5, we're at 27x. These curves don't necessarily look much different than some of the curves that Mike Waterman showed you in some of those territories. On the right-hand side basically shows our unit economics by territory cohort or by annual cohort, if you will. So first, what this includes is all of the costs, including go-to-market costs, inspection costs, arbitration costs, operating costs for the marketplace. It basically is fully burdened, excluding R&D and G&A. So it's a fully burdened view of what our unit economics look like for each of our cohorts on an annual basis. So what I should mention is there is a little bit of distortion here from 2020, which is the second point from the left -- from the right for each of these arrows. Each of these arrows represents cost of revenue, because that's what we disclosed in our -- that's the way our financials are constructed. So in 2020, what happened was in response to COVID, the company made some pretty significant cost reductions. What that did was artificially improve the profitability actually for 2020 for those cohorts. So if you look at the following point on the curve, you won't necessarily see the same level of improvement from year-to-year, because of how much more profitable the 2020 cohort was because of this dynamic. So at the end of the day, all of these cohorts are moving in the right direction. And an interesting data point is if you look at our oldest cohort by year 5, costs are 59% of revenue, so call it roughly a 40% contribution margin. When we get to the 5-year model, you'll see that R&D and G&A, which is excluded from this, we expect to come in at around 12% of revenue in total. So if you do some quick math and subtract 12% from, call it, 40% contribution margins, you get very close to a 30% EBITDA margin, okay? That's without any improvements from anything that we are investing in across the board today. So just a little bit of context in terms of what gives us confidence when we get to the 5-year outlook and even beyond that in terms of hitting our target EBITDA margins. Okay. So we've extrapolated here. Obviously, we've just given you guys kind of the 5-year 2026 target in terms of revenue and EBITDA margins. Before I get into the numbers, I think hopefully, what you'll walk away from today is an understanding that ACV is a technology company. We are a technology company through and through as much a technology company as any company in Silicon Valley. Myself, Vikas, Bahman, okay, we all spent most of our careers in Silicon Valley, okay? There's a reason why we're at ACV. Because we see the same dynamics in terms of a technology company being able to disrupt the legacy industry through technology. And then technology flows through every part of our thinking in terms of running the business. So when we think about kind of growing our -- not just growing our revenue, but expanding our EBITDA margins, in the context of an online Marketplace, a 25% EBITDA margin or even greater is not out of the realm of possibilities for any online business frankly, okay. Yes, we're very much kind of in a sweet spot in terms of when we think about where we're going to be in 5 years. And again, I'll talk through the different pieces of this in terms of how we get there. But I think it's most important more than anything else today for you guys to kind of have that perspective. And we purposely spent a lot of time on the technology side to give you guys a glimpse of what are we spending all this money on? Because George and I have been talking about for the last year, how we're increasing our R&D spend. What are we spending it on? And we want to give you a glimpse of that today. Okay. So first, let's think about the cost of revenue side of the equation. And again, same 3 pillars. So Optera is basically what our cost of revenue, so margins would be the inverse for the different lines of business. Starting with Auction and Insurance, this is already a very profitable line of business for us. That said, we think there's opportunities to continue to expand our margins. What you're going to see is a common theme here in terms of, what are the main pillars and themes that will help us drive towards our target model. So first, it's basically the maturity of our territories, against this rinse-and-repeat model. And if you think about in context, the cohorts that we walked through, we have a proven path to generate improved unit economics as territories mature, okay. Secondly, it's investing in technology. And again, technology flows through everything that we do. A lot of the stuff that we talked about on the inspection side, a lot of the things operationally that Vikas has talked through. Now we're up to 40% of our transport dispatches completely automated, completely done with software. We're talking about programmatic buying, completely done by software. So there's a bunch of things that we're doing on the inspection side. I'll say it again in case anybody missed it. So we're generating 400 data points on inspections today. With all the things that we're doing, that Phil took you through, we're expecting to increase that 5 to 10x in terms of number of data points. Why is that important? Because that will allow us to give more transparency in terms of the condition of what's a very complex asset and, therefore, directly reduce our arbitration costs. Because if we miss an issue, we incur the arbitration costs, because we're protecting the seller against that. That's why it's very important in terms of margins, not to mention all the benefits you get from having a more transparent marketplace. The other major theme, as you would expect, is just scale economics, right? As we get bigger, there's going to be natural economic scaling benefits, especially when we get to OpEx. On the Marketplace side, basically, there's 2 different pieces to this. Our Transport business and our Capital business. I'll get into all of these on the next couple of slides. So I won't dig too deep right now. And then SaaS, we actually expect a pretty significant improvement on that side as well. So let me go through each one of these. So again, in terms of our unit economics with auction fees and GO GREEN. So I just spoke about arbitration costs. And as we reduce that, that will expand our margin profile. In terms of buy fees, this is very relevant when we think about our Unit economics and our ARPU. So again, we did not get the full benefit last year of further increases in our ARPU, because our buy fees were less than the market and didn't basically give us any more revenue streams above a price for $15,000 for a car. That's changed as of December 1. Clearly, as used car prices come down, okay, buy fees will, to the extent they scale with the cost of a car transacting, will naturally come down as well. What we believe is that by finally adjusting our buy fees to be closer to market, and we're still a little less than our physical competitors, basically, we can mitigate a lot of the downdraft on ARPU going forward. How much of it, depends on how quickly used car prices moderate. But our buy fee revenue streams will not go down as much as they would otherwise, because of the adjustment in our buy fees. That will protect our margin profile. And again, arb costs over time, we expect will allow us to make this an even more profitable business than it is today. Okay. So Marketplace Services cost of revenue, again, if we think about Transport and Capital. So Transport, we've talked a lot about. We're now operating at roughly breakeven in terms of margin versus losses previously. Since we've already achieved our attach rate targets, really our shift in focus is moving to margin expansion. The target that we've set is a 15% margin profile. That's what we said at the IPO, and we haven't changed that since. In our most mature territories, we're now approaching double-digit margins in terms of our Transport business. So again, we know we have another example of something that can be repeatable, but territory density plays a very large role in generating the unit economics that we need on the Transport side. So as our territories mature, we're going to see improvements naturally in our unit economics for Transport. And then again, as we introduce more automation, all those kinds of things on the technology front that just further enhances our ability to drive more margins. The other piece of this is ACV Capital. Very, very profitable line of business. Again, grew 300% last year. We're expecting very large growth again this year. As ACV Capital becomes a bigger portion of this line of business, it's going to be more accretive to our margin profile, right. We are updating our target attach rates for ACV Capital. When we went public a year ago, we had targeted a 20% attach rate at maturity. We now believe we can hit at least a 25% attach rate for maturity. Doesn't sound like a lot, but frankly, for a line of business that basically has a 5% cost of revenue that could be nicely accretive over time. So we're pretty excited about that. And then lastly, our SaaS and Data Services. So there's 2 drivers to our margin -- expected margin improvement here. And again, cost of revenue is 75% last year, we believe we can flip that the other way towards 35%. This year alone, we're expecting a 500 to 1,000 basis-point improvement in margin profile for this line of business. And if you really kind of peel the onion a little bit and think about the different layers of this, there's the inspections that we provide for a fee, and all the things that we're doing in terms of inspection technology, will allow us to expand our margin profile. That, combined with increased territory density, because increased territory density also allows us to basically lower our cost per unit for an inspection. Most of those inspections occur on the wholesale side of the business, but it's accretive to this side of the business as well. Because if we keep getting more scale and lowering our cost per unit, it accretes to the margin profile for our separate data services, which we perform an inspection, we get a fee. If our unit cost is going down, we're going to improve our margin profile. The SaaS piece is the side that we're going to lean a little more into. You could see us leaning more in over the coming years because this is an opportunity for us to, again, create recurring revenue streams that are higher margin that we think are pretty sticky. And we're just getting started with MAX Digital. There's a lot of opportunities to kind of go from here over the next 5 years. So we're just getting started. And as that increases as a mix of this total line of business between these 2 revenue streams, then we're going to naturally see accretion in terms of our margin profile. So we feel really good in 5 years getting to that projected target cost of revenue and related margin profile. Okay, operating leverage. So obviously, we've got -- if you think about our P&L, we've got marketplace inspections and operations. Technology and development on our P&L has actually collapsed within one line, including -- so both of those are combined on our P&L, and here, we'll take you through some of the numbers in terms of breaking them out separately. And then sales and marketing and G&A, which are also combined on our P&L, we'll break those out separately for you as well. Okay. So in terms of our inspections and operations costs. As you can see in the last few years, we've actually been generating some really nice leverage on a percent of revenue basis. We were 27% of revenue back a couple of years ago, have moved that down to 19% of revenue this past year. Our target model is to get down to 13% of revenue. So the way to think about this is in terms of, again, all the investments that we're making operationally and how that will flow through our P&L and scale, again, so kind of the same themes that just flow through all the modeling that we've done in terms of how do we get to our target model. So this -- again, this is a pretty discernible trend. And if you extrapolate it actually, you would get to a lower than 13% cost of revenue. If you just think about it in the last year alone, we've driven down our cost of revenue here -- or percent of revenue rather, 400 basis points in 1 year alone. So we're looking at basically driving another 600 basis points of improvement in 5 years. Okay, if we look at tech, our technology spend. This is an area we've been leaning into. We didn't actually spend as much money last year as we wanted to. Even though Bahman took you through some of the numbers, we've ramped up pretty significantly. But frankly, we wanted to build even a bigger engine, and we're playing a little bit of catch up this year. And keep in mind, our EBITDA burn last year was just a little over half of what we modeled when we went public on substantially greater revenues. But the product and tech side, even though we added a lot of resources, we felt that we really wanted to build a bigger engine. So we're playing catch up this year. But even with that, if you look at our 5-year model, we're only assuming that we get from 8% of revenue to 7% of revenue. And that's really basically tripling our spend. So we're going to have a big enough engine. And again, some of the geographic diversity that Bahman talked about is going to help us here in terms of kind of lowering our unit costs over time. So this has a pretty clear path. We won't need to increase our spend here on a linear basis with revenue, not at all. We're building a lot of great technology that we'll be able to leverage going forward. And basically, with incremental increases in spend over time, we'll be able to deliver all the kind of capabilities and beyond what we're talking about today. Then sales and marketing leverage. So again, here, another example where you can see we've generated a lot of leverage over the last several years. Here just last year alone, we actually had a 300 basis-point improvement on a percent to revenue basis. We spent $60 million. So this gets back to territory maturity. Again, another similar pillar. We hire a TM, we hire inspectors, right? We incurred these costs to start a new territory. Over time as we grow, unless the territory gets so big that we split it, we just got the same to you. Okay, generating a lot more revenue and a lot more leverage, right? And we have been splitting territories, but then we split territories and they keep growing and they keep getting more leverage. So it's a very repeatable model that we can observe through all the cohort data. And what we've modeled out basically in 5 years is doubling our sales and marketing spend on basically a 3.5x or 3.5x as much revenue. If you do the math, in terms of $1.3 billion versus roughly $360 million last year. So that basically cuts the percent of revenue in half, also very doable based on all the metrics that we look at. And then lastly on G&A. So last year, we saw a significant increase of our G&A that related to us taking the company public and kind of building out the team, the systems, the business processes, a lot of the IT stuff to support a newly public company and support a company that's growing really rapidly. So there's no question if you look at all the numbers here, we've been in a hyper-growth phase, and we need to support all that with all of our back-end infrastructure. That said, similar to sales and marketing, we're modeling that we're going to basically double our G&A spend over the next 5 years. We're really not assuming much in the way of international expansion, which sometimes can drive a lot of your G&A costs as you get into a lot of other geographies. That's not baked into our growth plans right now. Therefore, our business is going to look very similar with the exception of going into, for example, Canada, and really get a lot of leverage on the G&A side. We're not hiring another corporate controller. We're not hiring another payroll administrator that sort of thing, right? So hopefully, we're not hiring a new CFO. So as long as they do a good job, I think I'm okay. So here, again, another doubling of spend, which basically takes the percent of revenue and cuts it in half over 5 years. So all of this, when you add it up, basically gets us to the path in terms of what we articulated in our earnings call last -- couple of weeks ago. A $325 million of EBITDA or 25% EBITDA margins. I should mention, by the way, that in terms of this year, and I want to again reiterate our commitment to get to EBITDA breakeven exiting next year, okay. There have been some comments in terms of our EBITDA burn this year is actually more than it was last year. Actually, if you look at it in terms of our original modeling, percent of revenue were actually 600 basis points better than the path that we articulated when we went public, in which we were looking at the same goal. So we're actually ahead of kind of the path that we've articulated to get to that breakeven. Again, we control a lot of these expenses. If we wanted to meter back any spend at any particular point in time, we could. Frankly, we don't think that makes a lot of sense because of the growth opportunities. But even with that, again, I want to reiterate that commitment to get there by the end of next year. And then if we just kind of finish up here -- almost finish up with the long-term target model. So second from the right is basically that 25% EBITDA with all those P&L components that I just explained. And then to the far right, basically looks at, frankly, a 30% EBITDA target, which we still believe is very achievable. Based on all the modeling we've done, we think we'd get there anywhere between $1.7 billion and $2 billion of revenue, if we just extrapolate some of these trends. Hopefully, we'll do better, but that's the modeling that we've articulated at this point in time. Obviously, I think we've been a public company now for 4 quarters, the track record that we're trying to establish is one of credibility with all of the investors. We don't put out any targets that we don't think we can achieve with -- it doesn't mean it's not easy or -- it's hard work, but we feel really confident based on all the data we look at and all the trends that we look at that we can actually execute. And so far as a public company, we've been able to obviously exceed all of our guidance in the last 4 quarters. And we're hopeful to go -- to do our best to exceed that going forward. But these are all targets that we feel really comfortable with achieving for all the reasons that I just outlined. And then finishing up here in terms of the balance sheet. So $580 million in cash at the end of last year and that included financing $44 million receivables from ACV Capital, which we financed off our own balance sheet, which made a lot more financial sense versus us borrowing money. If we finance those, by the way, our cash position would not be that much different than it was when we went public after we raised money in the IPO. Why is that? It's because we have a negative working capital cycle, right? We benefit from cash flow in our marketplace, which is the difference between when we get paid by a buyer and when we remit funds to the seller. The seller isn't get paid until they pass clear title to us that we can then pass to the buyer, right? So there's typically on average, about a 6-day lag. That translated into $164 million of float on our marketplace at the end of last year. That's money that's in our bank account. It's not restricted cash. We have full use of those funds. But it is an important aspect of our model, if you think about cash flow generation going forward. Now this year, granted was a bit of an anomaly, because GMV grew so much, right? And as GMV moderates, we're going to see that kind of moderate the other way a little bit. But in normal times, without this kind of volatility, we would expect that our float will increase as our units grow and our scale grows. Based on the modeling we've done, we're projecting about a $350 million to $400 million float by 2026. Again, that's all other things being equal, there's always puts and takes. That's an accelerator on our cash flow generation from just naturally improving and getting to EBITDA positive and then growth from there. So it's a great business model, and we've benefited from it, obviously, in terms of cash flow, and we hope to do that going forward. With ACV Capital, we are looking at other financing alternatives. That said, what we've talked about is as that portfolio gets to $100 million, we would be reaching a level of critical mass that we could start to look at different ways to finance that business, including going into the debt markets. This is basically securitized debt, right, securitized by the asset. And we do audits, we can physically check to see if the assets are still there, for example. So it's -- our competitors basically do the same thing at a much larger scale in which they go to the debt markets and securitized debt carries more attractive interest. So we're not quite at that scale yet. And we are going to be looking to start financing that potentially in the near term just based on our existing debt facilities. We have a $50 million debt facility with Credit Suisse, and we have $160 million line of credit with a consortium led by JPMorgan. So we can draw on those lines at any time. We've just -- we've got $0.5 million outstanding on the Credit Suisse facility just to have a small balance outstanding. Otherwise, we've been financing it off of the balance sheet. Okay. So that pretty much wraps up my section. I'm sorry, I went through this pretty quickly because I wanted to make sure we had enough time for Q&A. So with that, I'm going to turn it back over to George. Put my micro that on.

Okay. I'll put my microphone back on. Listen, all of your time is very valuable. And as we thought about today, we -- I had spoken to several of you. And again, I mentioned almost a dozen of you all came to Buffalo. And today was purposely put together based on the feedback I heard from a number of you. We -- our goal today is very simple, was for you to all really walk away with what is our why here at ACV? What are we up to? What are you investing in? When you walk through these elements today, a company that's proven our growth through very crazy times. Mike Waterman and Kate said, really walked you through a proven playbook. We didn't say we're perfect. You never heard Waterman and Kate say everything we do is perfect. Not every market we went into is perfect. You can call 3 dealers. You're going to hear 3 different things, but it's proven over time. The amount we're investing in our product road map is significant. We know that. We don't take any of this for granted. But we really believe part of our why is by building the strongest data company and the strongest marketplace company, we'll have the best insights, the best decisions were made. We're here to support these dealers. They're not going anywhere. They're not going away. These commercial cuts. They're not going anywhere. And somebody needs to step up and help them, enable them to compete. And we feel really good about the data and technology we're investing in, to make this a better opportunity for all of our customers. We walked through -- Bill walked through our proven model. I mean, I remember when I got excited about this business. The first thing when I looked at the Unit economics, some of you saw me do a slide, one slide privately in the IPO. I was on this one side, if you remember my unit economic slide in the IPO. I never want to leave the slide. This is a fantastic business, right? I mean that's just a real benefit we have. You're seeing a lot of other companies kind of come and go. They don't, at the end of day, have a foundation of great unit economics, we really do. But what's the most important thing? At the end of the day, the most important thing, and many of you heard me say this, is the team and culture. And you all hear a lot of leaders say that. And we tried to give you a little sense today, those that have spent more time in ACV that is truly unique with us. We spent a lot of your time today, a lot of it, a lot of your precious time to go through the team. My whole upfront part, I think I was 9 minutes. Why was I trying to rush off the stage, I wanted you to hear from them. I wanted you to hear from like what we're building. If you can go to the next slide here real quick. Do I have the clicker? Yes, I got the clicker. All right. Here we go. You met Vikas and Mike and Kate and Bill, and you're going to hear Sallie in a minute, Leanne is new, Craig, for those who have meet is leading our corp dev and strategy, he's been very busy, okay? We've been very busy. And Joe was the founder, he's always out with dealers. We got this amazing team, but it's not just us. And before we get into Q&A, I was very purposeful starting out with the IPO video, because you all heard consistency. And I'm going to leave you with one more video and then we'll jump into Q&A. So Sallie does this, I felt like even better than I did. So Sallie will be a little blushing over there, but let's say it in her words. [Presentation]

Enjoyed today, and we'll jump into the Q&A, Tim. Is that up next?

Yes.

All right. Let's do this.

So we've got some mics that we'll be handing out.

Should we bring these up?

Yes, why don't you bring the chairs up there? Yes. We're obviously way behind. [Operator Instructions]

This is John Colantuoni, Jefferies. You spent a lot of the presentation talking about ACV's capabilities. But maybe you could go a step further by discussing how ACV's offerings and capabilities differentiate it from other digital players and just the other players in general in the wholesale space? And I guess, go through what you would consider to be kind of your key competitive moats? And then related to that, maybe talking long term, do you see the digital wholesale market evolving into there being 1 or 2 major players? Or is there room for 3 or 4 large players? Maybe you could just talk about that as well.

Yes, certainly. So on your first question, hopefully, what you're seeing today, there's not one data point of why you're going to go work with, let's say, an auction company or a platform company. We -- when you look at the key data points of why you're willing to work with a company, have them be your partner versus a vendor. A vendor is somebody just go send them a couple of cars, I might go use them, I go, might use somebody else. But our objective is, if you look at the buy side of things, will they buy at the end of the day with more transparency here. And you'll see this in some of your own research. You'll hear dealers say, I wish I can buy all my cars in ACV. Why are they saying that? Because they're making less mistakes. So the proof at the end of the day, why are the buyers choosing ACV is if you're making, let's say, on average, $300 to $400 less mistakes, less recon, you're going to buy more in ACV. On the sell side of things, there's 300 different auctions out there asking for cars every day. I've got different competitors out there, all asking for dealers' cars. Well, there's a lot of folks asking for the supply. But if you're out there and you're solving private marketplace as an example, if you're solving the buying and selling from inventory management, if you're helping them create a live appraisal event and having your best Saturday you've ever had, actually, I'll start doing that every single Saturday. There's not one thing there. We're helping them compete. You heard it in the dealers' words throughout the day today. That what you're really hearing them say is ACV is my partner. And by going out there and having the others, the them, like Waterman calls them, the them. He doesn't usually say their name. If they're all vendors, ones like a marketing portal vendor and ones like an auction vendor and they're all vendors. And we're their partner, whether they're starting their partnership journey today because of problem 1, 2 or 3, start your journey, they might start in a different way. So the wholesale opportunity will likely be our largest contributor of EBITDA long term, likely. I don't know unless we have our cloud services things like Amazon did. You never know, don't ever count out people like Dr. Phil or Abou or others. So I'll say for now, the wholesale will likely be the largest contributor. But how you get that business is by building these unbelievable partnerships, where you're embedded into that dealer's way of doing business. Now you're no longer a vendor. So that's how we look at. Your second question is easy to answer based on what I just said, right? I don't think there's going to be many players. I don't know if there's going to be 2, 3 or 4 or 5. I really -- I'm not an economist that really think they're all the math. But if you think, will we have likely several million units going through our platform, whatever that several is for now. We haven't -- we wouldn't put our neck on the road just yet. We wouldn't put a number out there. Bill and I tend to hit it. We're always being a little careful there. But we are the type of platform that should have several million units coming in it. And however many there are -- how many other competitors are at that point? I don't know. But I know we're going to go out there and over the next several years, we'll have our share, and we should and have the right to be the leader.

Bob Labick from CJS. Thanks for a great presentation, and your team is fantastic. Just kind of keeping with that theme of your differentiation and what you're bringing to the table, you're changing the industry, you're intending to, you have to an extent, but you obviously aspire to have multiples of units. How do you sell this -- how do you change the behavior of the customers in a big way as opposed to in a small way? It's kind of easy to start and get a few early adopters. But how do you change the behavior of the customers? And what's that selling process like to get into larger changing of behavior?

It really depends upon who you're speaking to at the dealership. So if you're -- and a little bit about what are the themes going on in the industry at any one point in time. Right now, there's a massive theme on consumer buying, right? And the dealer principle is so sick of hearing the big e-commerce brands out there on TV, they're sick of the portal companies, right? That if you talk to some of these dealer principles, they want their name out. And maybe you've talked with some of these folks, a lot of these regional dealer groups, these guys have their own planes. They're very successful. And there -- so when you're talking to that person, Bob, it's the product we had so far was Live Appraisal. That was our first solution, great solution. You heard some of the feedback. But for that person, it's -- I want to be the king of my market buying cars from consumers not them. And I'm going to go spend X million dollars doing it. If you're talking to the Director of wholesale operations for a major group, the theme there is, I don't want to go wholesale everything. I want to make sure I keep the things in my group, right? So if you call in that person, it's like, how do I become more efficient and keep the right assets everywhere. If you call on the buyer, right, the buyer at that group said, I want to buy cars smarter. I want to make less mistakes. So by the tense what we're talking about, right? And we saw that early on. I mean, some of the things I'm telling you, some of you have met me now for a handful of years. A couple of folks here in the room invest with us privately. We saw that. We were listening. And there are like common themes. By the way, and those things never go away. They just had another theme. And if you listen to your customers, and that's what Greg Borowski was talking about. We had -- happened to work together in our prior life. We say -- we just listen to our customers. They tend to tell you, hear the things you need. And if you have a humble team, but massively just intelligent smart folks, you size, I couldn't wait to get my team up here. You've got -- if you listen well and you've got the right culture, and you're focused on delivering, you solve the problems for A, for B, for C. This is not an overnight thing. I mean we're selling whatever it is, a few 10,000 units right now a year. It's great, but we're still humbled by there. We still have a long ways to go. We still have a lot more work to do, but we've got the team to do it.

I think I'm next. Stephanie Moore with Truist. I think continuing on the last question, I think today really demonstrated simply put, there's a lot going on and a lot to be excited about is, I think, as you said, continue to make the process for dealers more efficient or easier for them. But I'm curious what you're going to have to do over the next several years to get your sales team or whoever will be the ambassador to ACV for the dealers to fully understand all that you can bring to the market and all that you can do?

Yes. There's a combination when you're building a sales and product org, of having -- think about it as relationship managers and then product sales experts. And a lot of organizations have a hard time, especially -- I'm thinking, I've only done B2B. I'm not going to pretend that I have anymore. But B2B organizations, you need this combination of relationship management and then experts. And as part of this plan, we've given you all. We've got all that built into what we're doing. So not only do we have now over 150, whatever is 160 territory managers, who are out there building relationships every day. Not only is there 22 regional sales directors, who are really senior level. Some of them ran dealer groups and a bunch of banks. Not only do you have our 3 vice presidents, who are walking into dealerships, not only do we have a strategic accounts group, that's about 20 people now, who are out there talking to strategic accounts. Not only do we have over 50 people on the phone right now and inside sales, talking to dealers every single day, right? And by the way, we give you those numbers of marketplace participants, those are active. We don't tell you have 30,000 people registered for ACV. I know others like -- you've got these silly numbers. Now we're not talking about registrations. Yes, we have almost everybody registered. Great. Now these are active participants. And these conversations are folks that you're in a conversation, and then what you do is you go, hey, would love for you to take a second to have a quick demo. And then we are building these specialized teams, who then go in and walk you through some of the stuff you saw here today. And so think B2B, it's all about relationship management and then product sales experts. And if you just do those really, really well, right, then you see the magic of going, how do we -- how are we next to launch it with you? How are we the next to go live?

Great presentation. Thanks for all the info. It's Michael Graham from Canaccord. I just wanted to ask on your comment on the balance in the marketplace. It seems like supply is very much the bottleneck. And just maybe talk about the coverage on the demand side. And then you laid out a lot of great initiatives to increase supply into the marketplace from your dealer base and that seems like a good linear path. Are there anything you can do like commercial or other opportunities to make a step function in terms of bringing supply into the marketplace?

Certainly. On the commercial side of things, we're still early. We've got a few rental car companies just starting to use as I wouldn't say a rental car, for example, they have their own direct sales. They really try to sell the car themselves, right, it's the way rental works. But we've got a couple starting to use this. Always good to get in there. We've got a very small fleet companies starting to use us. I think, regional small fleet. And the -- the -- when you look at the 2 investments we had going on, look at us prior to Monk, okay? I just want to go like prior to our recent, to Abou and team coming on board. And is -- we had our single inspection app that is now complete. And so now we can have the requirement of a commercial company. And if they want the inspectional different, they want damage estimate different. They want to report back for whatever reason, we now can do that. And we're now -- 90-plus percent of our team now is using -- 92%. So we had to build the platform that had all this customization. And now we had to get it out and train all of our folks on this new platform. So that was one investment. So now at least I can sit down like we have this -- I don't want to oversell this, but we have a very high-end OEM that doesn't sell a lot of units a year, right? This is a high-end OEM, who will be doing their very few off-lease inspections, right? So how do you take like this high-end OEM, right, and how do you actually help them solve their problems? Private marketplace, as I mentioned, has been unbelievable for dealer groups. It's not yet there, I would say, for broadly all the commercial accounts. It's still got the -- it's still within ACV proper, okay? We do have, I would call it, in beta, a white label solution. It's not ready to go live yet. And I don't -- when I go out there and we sell things, we don't oversell anything. Some companies do that. We say, hey, we'll start to show them a white label product. That's step one. And we're just trying to tell the commercial folks, hey, by the end of this year, early next year. And if my team gets it done faster, wonderful. I won't have burned any bridges. But we're out there articulating that, in a way, more for like an extra thing on the private label. On the open marketplace, if you could build a relationship that just become a next step, okay? So think about it as, let's say, you work -- you have your own direct sales efforts, you work with X, Y and Z. Just give us a window. And we're starting, I mentioned with the rental cars. Just give us a window, give us a 20-minute window, and we're starting to get some add-backs there. But I would say the majority of the units in this year's forecast is dealer, right? We broke it down to those 2 groups, kind of like the retail dealer and then the consumer to dealer, which is like the Live Appraisal and those types of products. We gave you those segments earlier. Those -- that's a far majority of the units in this year's plan, unless some of these products give us a breakthrough faster than I'm articulating.

Great. Thanks. I guess we'll probably break there. And then if you've got any more, we'll...

We're here to talk some more. We're here to socialize. We're here to -- you've got some of my team, you can corner as well. But again, thank you so much for spending your entire day with us. We really appreciate it. So thanks so much.