Good afternoon, everyone. Thank you for being here, and welcome to the ACV Fourth Quarter and Full Year 2021 Conference Call. I will now hand the call over to Tim Fox, ACV’s Vice President of Investor Relations. Please proceed.

Thank you, operator. Good afternoon, everyone, and thank you for joining ACV’s conference call to discuss our fourth quarter and full year 2021 financial results. With me on the call today are George Chamoun, Chief Executive Officer; and Bill Zerella, Chief Financial Officer. Before we get started, please note that today’s comments include forward-looking statements, including statements regarding future financial guidance. These forward-looking statements are subject to risks and uncertainties and involve factors that could cause actual results to differ materially from those expressed or implied by such statements. A discussion of the risks and uncertainties related to our business can be found in our SEC filings and in today’s press release both of which can be found on our Investor Relations website. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today’s earnings material, which can also be found on our Investor Relations website. And with that, let me turn the call over to George.

Thanks, Tim. Good afternoon, everyone. And thank you for joining us. Let me begin by reflecting on ACV's first calendar year as a public company, which was capped off by strong performance in the fourth quarter. In 2021, we transacted nearly $8 billion of GMV on our marketplace, which is 140% year-over-year growth and pretty incredible when you consider ACV launched just six years ago. As I will discuss in more detail later, the automotive industry continues to experience competing cross currents with increased vehicle values, while also resulting in less ecosystem supply. Despite these cross currents, we delivered over $350 million of revenue in over 70% growth well above the targets we provided during our IPO last March. This was accomplished by having the broadest and most differentiated digital solutions in the market that are being delivered by the best team, enabling ACV to expand our dealer network and gain market share. As Bill will cover in more detail later our plan for 2022 is to continue investing in driving strong revenue growth, further differentiating our digital solutions and scaling our operations, all while delivering an adjusted EBITDA margin 600 basis points higher than our IPO model. We remain committed to achieving adjusted EBITDA breakeven exiting 2023. And we are excited to share details on our 2026 financial targets at our Analysts Day on March 1. With that, let me turn to fourth quarter highlights on slide 3. As you can see, our market momentum continued in the fourth quarter where we transacted $2.5 billion of GMV growth of nearly 170% year-over-year. We sold 139,000 vehicles on our digital marketplace, a 35% increase year-over-year and an increase of over 80% on a two-year basis. We delivered a record $100 million of revenue in the quarter, an important milestone for the ACV team, which was 86% year-over-year growth. Our revenue outperformance can be attributed to three factors. First, we executed our playbook to grow market share by attracting new dealers into our ecosystem and expanding dealer wallet share. Second, ARPU benefited from a higher mix of newer vehicles and strong used vehicle prices. And third, high attach rates for value-added services. Overall, we’re very pleased with the strong execution by the ACV team and continued customer adoption of our growing suite of services. To frame the rest of our discussion today, we will focus on the three top-level elements of our strategy to drive long-term shareholder value: marketplace growth, TAM and product expansion, and operating scale. Let me begin with marketplace growth. On slide 5, let’s cover more details on the quarter. We transacted 139,000 units in Q4 which was 35% growth year-over-year and an 84% when compared with Q4, 2019. For the full year, we transacted over 560,000 units representing 43% growth year-over-year and 132% growth compared to 2019. The positive market trends I referenced earlier, related to vehicle values helped contribute to fourth quarter GMV growth of 170% year-over-year. Consistent with trends during the first three quarters of 2021, vehicle mix on our marketplace moved up market in Q4. In fact, since last year, the percentage of vehicles valued over $15,000 doubled to nearly 40% in 2021. Well, elevated vehicle values may normalize over time, we believe this higher mix of newer vehicles in ACV’s marketplace is sustainable, resulting in long-term tailwinds for ARPU. Moving to slide 6, we thought it’d be helpful again this quarter to provide some context on the dealer wholesale market in relation to the broader automotive market. As I mentioned earlier, this is a case of competing cross currents. The two charts in the top row highlight trends in the used vehicle market. Sales of used vehicles remain elevated, nearly 70% above pre-COVID levels, reflecting strong consumer demand and strong retail values. The chart on the right shows how this demand and environment translated to historically high prices for wholesale vehicles. Strong demand and pricing have been nice tailwinds for ACV, which you saw reflected in record level ARPU last year. The two charts on the bottom highlight the trends for new vehicles, which continue to paint a very different picture. The semiconductor chip shortages and other automotive supply chain issues resulted in a steep decline in new vehicle sales. The latest SAR reading of around 13 million units is down 30% from pre-COVID levels. Days' supply of light vehicles at franchised dealerships contracted to around 22 days versus historical levels in the 60s. As a reminder, this supply picture matters to ACV because consumer trade-ins for new vehicles are critical inputs into the dealer wholesale market, historically representing a significant portion of the annual supply. With new inventories at such acute levels, the volume of trades entering the wholesale market has declined, resulting in a temporary contraction in the market we serve. We continue to believe it’s temporary because the chip supply picture will no doubt improve in the coming quarters. And given the investments we’re making about territory expansion and our differentiated product suite, ACV is very well positioned to benefit from the resulting recovery in the wholesale market. Turning to slide 7, and you got a finer point on the supply dynamics in the market. Based on our proprietary analysis, we estimate that the US dealer wholesale market contracted 12% quarter-over-quarter in Q4 and contracted about 5% from Q4, 2020. Despite these transient supply headwinds, we continue to gain market share and attract new dealers to our marketplace. Given our 35% year-over-year unit growth in Q4, 2021, and our estimate that the market contracted 5%, this implies ACV gained 40% share year-over-year. For all of 2021, we believe that the US dealer wholesale market grew modestly at about 5%, with the growth benefiting from a strong first half compared to 2020, where COVID had a significant impact. As such, we believe that ACV gained 38% market share in 2021. The takeaway here is that while our industry is facing temporary supply constraints, ACV is gaining market share, attracting new dealers at an impressive pace, and delivering strong revenue growth. Next on slide 8, we are pleased with the progress our ACV team made on territory expansion, and we are now positioned to engage with nearly all franchise dealers in the U.S. Following each territory launch we execute our proven go-to-market playbook by growing our inspection team, attracting dealers to the marketplace, and creating the powerful network effect that we’ve proven across the country. Moving on to slide 9, auction marketplace revenue growth was 73% year-over-year and nearly 200% growth for Q4, 2019. Full-year auction marketplace revenue of $164 million was up 66% year-over-year, driven primarily by 43% unit growth and, to a lesser extent, higher ARPU during the year. Turning now to slide 10, over the last few quarters, I’ve highlighted our consumer sourcing offering live appraisal that contributed to our strong unit growth in 2021. We were an early mover in this category, enabling our dealers to offer their customers a unique and effective way to sell their vehicles on ACV’s marketplace. Live appraisals gained significant market traction delivering over $200 million of GMV in Q4 alone. Live appraisal is being leveraged by dealers across the country with sales in 48 states last year. We continue to invest in this category, and look forward to detailing our vision to further penetrate this large market opportunity at our upcoming Analyst Day. Let me turn to the second element of our strategy to drive long-term shareholder value, TAM and product expansion. Moving to slide 12, let’s touch on two offerings that are creating incremental growth levers starting first for programmatic buying. We are very excited about the market traction of our programmatic buying offerings. It’s still early days, but this innovative way of enabling dealers to engage with our marketplace already contributed to a mid-single digit percentage of units in Q4. Our buying API is live with dealers who have technology platforms that integrate directly with ACV’s real-time APIs to generate bids in our marketplace. We’re engaging with a diverse set of customers that include large dealers, rental car companies, and a leading specialty auto parts supplier. In addition, our new programmatic buying user experience launched in Q4. This offering enables the rest of our dealer partners to leverage programmatic buying on our marketplace by creating inventory wish lists to automatically source their inventory needs. These programmatic buying capabilities, together with our nationwide inspection team enabled ACV to offer a highly efficient and trusted experience, which we believe delivers superior results for our dealer partners. Moving to our private marketplace offering. Recall that this private auction platform leverages ACV’s open marketplace technology to enable large dealer groups to optimize intra group trades. Private marketplaces provide ACV with another avenue to engage the largest dealer groups in the country who collectively own about 6,000 rooftops across the U.S. We are seeing strong initial demand and look forward to updating you on the adoption of private marketplaces in the coming quarters. Moving to slide 13. We’re very excited about the market traction we’re seeing with our MAX Digital SAS and data offerings. MAX Digital pricing guidance, merchandising and inventory management products are a natural complement to ACV’s data services that together create exciting growth synergies. In fact, the MAX Digital pipeline has grown by over 150% since the acquisition closed last July. We look forward to sharing updates on ACV’s broader vehicle intelligence strategy at our Analysts Day. Turning to slide 14, let me wrap up this section with an update on our value-added services. We are making significant investments in the technology and resources to scale ACV transportation and ACV capital. These investments are driving strong top-line growth by delivering highly differentiated services to the market while also creating efficiencies for both our partners and for ACV. ACV transport continues to be a key enabler of attracting new buyers to the platform. Our growing carrier partner network and fast cycle times resulted in attach rates exceeding 50% in Q4. This is a full year ahead of our original plan. A huge shout-out to the ACV transportation team for achieving this milestone in such short order. ACV capital continues to gain traction in the market. And like our transport business, it is tracking ahead of the milestones built into our long-term targets. Capital attach rates reached the mid-single digits in Q4 with 200% loan volume growth year-over-year. The new finance offerings we launched last June are translating into strong revenue per loan growth. We continue to be excited about the revenue and margin opportunities for our capital business as this business scales in the coming years. With that, let me hand it over to Bill to take you through our financial results and how we’re driving growth at scale.

Thanks, George, and thank you everyone for joining us today. We are pleased with our Q4 financial performance, having again delivered upside to both our revenue and adjusted EBITDA guidance despite the challenging macro factors George outlined earlier on the call. Turning to slide 16, I’ll begin with a review of our fourth quarter results. Revenue of $100 million was above the high end of guidance and generated year-over-year growth of 86%. Adjusted EBITDA loss of $16 million, or 16% of revenue was also very favorable relative to our Q4 guidance. This performance was driven by our solid revenue results in the quarter, and underscores the inherent operating leverage in our business model. As expected, cost of revenue as a percentage of revenue increased year-over-year and was modestly above our expectations. The year-over-year increase was driven primarily by the mix of ACV transport revenue, which increased approximately 800 basis points year-over-year and exceeded our expectations. As a reminder, we believe through the scaling of ACV transport, we can deliver a better SLA to both sellers and buyers, while also scaling this offering to generate better economics over time. Total operating costs excluding cost of revenue as a percentage of revenue decreased by approximately 200 basis points year-over-year which demonstrates operating leverage in our model. This operating leverage was achieved despite investments across our technology portfolio, operations and go-to-market functions. Investments we are making to fuel our long-term growth strategy. Turning to slide 17, I will cover some additional detail on revenue. We have a diverse revenue mix with approximately 86% of revenue evenly split between auction marketplace and service revenue with the balancing customer assurance. Auction marketplace revenue increased modestly quarter-over-quarter, and was better than our expectations due to both higher ARPU and unit performance in the quarter. For 2021, auction marketplace revenues were up 66% versus 2020, reflecting strong dealership acquisition and continued penetration of the wholesale market. Profitability in our auction marketplace remained strong in the quarter and consistent with the high 80% historical rate. Our services business continued to outperform expectations with strong results in transportation and capital. Moving to slide 18, I would like to discuss the operating leverage in our business. Here we’re showing historical adjusted EBITDA margin along with results for 2021. As I mentioned earlier, 2021 was a year of significant investment for ACV and as you’ve heard throughout our discussion today, we’re delivering on our territory expansion plans, launching new digital offerings to drive additional market share, and investing in technology to scale our operations. These investments translated into a 56% year-over-year increase in operating expense, excluding cost of revenue. And despite this increase our adjusted EBITDA margin improved by 300 basis points year-over-year again highlighting the underlying operating leverage in our business model. Now I’ll turn to guidance on slide 19, for the first quarter of 2022 we are expecting revenue in the range of $100 million to $102 million, a growth rate of 45% to 48% year-over-year. Adjusted EBITDA is expected to be a loss in the range of $17 million to $18 million. For the full year 2022 we are expecting revenue in the range of $450 million to $460 million, a growth rate of 26% to 28% year-over-year and approximately $45 million or 10% above our IPO model. Adjusted EBITDA is expected to be a loss in the range of $53 million to $57 million, or 12% of revenue at the midpoint of guidance. Note that the 2022 adjusted EBITDA margin is expected to be an improvement of approximately 600 basis points relative to our IPO model, which puts us firmly on a path to achieve adjusted EBITDA breakeven exiting 2023. As it relates to our 2022 guidance, although the ongoing automotive supply chain issues have made it challenging to project both used vehicle values and vehicle trade volumes on our marketplace, we believe we have multiple levers in our business model and therefore multiple paths to achieve our 2022 revenue guidance. We are also providing newly established 2026 financial targets of $1.3 billion in revenue, 30% CAGR and $325 million in adjusted EBITDA at a 25% adjusted EBITDA margin. We look forward to providing you with more color on our path to achieve these targets at our upcoming Analyst Day in a few weeks. To wrap up my comments, let me highlight our strong capital structure on slide 20. We ended 2021 with $580 million in cash and equivalents and marketable securities, $164 million of which reflects the flow in our auction business. Note that we generated $85 million of cash flow from operations during the year due to an increase in the float on our marketplace since December 31, 2020. The amount of float on our balance sheet can fluctuate meaningfully driven by business trends in the final two weeks of each quarter. We ended 2021 with $500,000 of long-term debt associated with our ACV capital business. Given our strong cash position, we continue to optimize our cost of capital and our current levels are self-funding the ACV capital business. And with that, let me turn it back to George.

Thanks, Bill. Before we take your questions, let’s summarize. We are very pleased with our continued strong execution on navigating through unprecedented times in our industry. We are especially proud of our ACV team for delivering these results while also navigating the challenges created by the global pandemic. We continue to gain market share by attracting new dealers to our marketplace and by gaining wallet share within our existing customer base, which positions ACV for strong growth going forward. We are executing on our territory expansion plans, our marketplace offerings are gaining traction in the market, and we see some very promising growth synergies emerging from our SAS and data services such as MAX Digital. Lastly, we are on track to generate over $1 billion in revenue with attractive margins through a proven business model that delivers scalable growth with strong unit economics and operating leverage that we believe will drive significant shareholder value. With that, I’ll turn the call over to the operator to begin the Q&A.

Thank you. Our first question comes from Andrew Drew with JMP Securities. You may proceed with your question.

Hi guys. Thanks for taking my questions. Just to start off given the volatility that we’ve seen within vehicle pricing, can you just talk about the puts and takes for that as we think about 2022? And then secondly on programmatic buying and your private marketplace are you seeing traction there with dealers that are newer to the platform? In other words, is this kind of the tip of the spear in terms of go-to-market? Or is this gaining traction with older customers where you guys have more trust there? Thanks so much.

Thanks, Andrew. I’ll kick this off. And then Bill if you want to add some more context, please do. So first, we’ll look at what’s going on as far as TMB prices in Q4—it was definitely could possibly be a peak for the industry, Andrew. None of us know. But without a doubt, Q4 GMV was high. If you look at some of the industry data, and that’s coming out both retail data of consumers starting to show some softening to consumers willing to pay certain retail values a little bit of data out there on the wholesale from various folks. I think so far we’re seeing a very slow but small change in GMV but nothing radical yet. So I think we’ll start to see that happen throughout the year—a moderation on GMV. So that helps you think, but as you know the other puts and takes as we think about 2022 is volume. We do think volume will also start to slowly come back. So when you think about our sort of puts and takes about ARPU first units, they do kind of go hand in hand. And so if we do see GMV start to go down in a way that we could start to see volume start to come up. So hopefully that gives you a little context. Bill if you want to add any more please do.

Yes, what I would add, Andrew is George just described the levers which basically gives us multiple ways to kind of get to the same results. What we observed last year, obviously record ARPU is because of record GMV. Although units, especially in the second half were more challenging. But those two factors more than actually the higher ARPU more than offset the lower units. So in this coming year, it’ll all depend on how the supply situation changes and evolves through the year. If it continues to be more challenging, we would expect that our ARPU would be higher and conversely. So again, multiple paths to get potentially the same result depending upon what happens with the supply of new vehicles.

And then Andrew on your second question relating to programmatic buying. Some of the early participants were existing buyers, large buyers who have now adopted programmatic and some of the buyers who are now leveraging programmatic had never participated previously with ACV. So we do have both constituents of buyers who are buying more in a way—we’re getting more wallet share out of that buyer because they now have a programmatic or look at us as persistent demand on ACV. And we also have new participants who are now buying on ACV, while this was our opportunity to win them over. And that they now can set it up. Look at the way they’re buying, change it however many times they would like a week, but they’ve got a very simple and efficient way to buy initially on ACV we were saying initially, and then in the future that might be beyond ACV. I hope that answers your two questions.

Thank you. Our next question comes from Robert Labick with CJS Securities. You may proceed with your question.

Hi, thanks, congratulations on some very strong operations. I want to start with Live appraisal, you highlighted it in the slide deck and presentation a little bit. Maybe we could dig a little bit deeper. It’s co-branded with dealers, how do you market it to the dealers? And how penetrated is it now versus where do you see it going over time in terms of the numbers of dealers that you’re penetrated with? So that’s kind of the first part of the question. And then the second part is, where are those, where would those cars otherwise go? Are those like peer-to-peer cars before and coming now into the dealer market? Or were they going to go to a different avenue? Or where do you think the cars are coming from that are going through Live appraisal?

Yes. Thanks, Bob. And your first part of the question there. So one, we’re thrilled with our growth in our traction of Live Appraisal. The way dealers are using the product does vary. So in our slides, we showed some images there. One of the images with, was like a 10 event, where the dealer is marketing to consumers in their market. It could be via radio, it could be via television, billboards, come auction your car. Some of them are using the ACV brand some of them, some of them don’t, some of them just market the function of auctioning their vehicle. And we don’t today prescribe exactly how to go to market with the dealers who are participating. But the commonality here is Live Appraisal enables a dealer to market transparency to their consumers. And as you know, this is a hot topic and it’s a topic that why just have what one dealer is willing to pay for your car why not have what the market is willing to pay. And so a lot of research we’ve been doing—our own research will start to circulate this in the coming quarters is consumers love the idea of transparency. Consumers love the idea of fair, consumers love the idea of knowing something markets determining the value of not just one dealer. So hopefully, there’s a little bit of like this various way they’re going to market, various ways they’re leveraging our brand. But there’s a consistency in this whole transparency. The second part of your question, related to where’s the noise—where the share is coming from. And I’ll put it under, really two buckets. And it’s hard for us to tell at this point, in our journey, what percent comes from bucket A, and what percent from bucket B, Bill describe the two buckets. So the first bucket would be a consumer wants to trade-in their car and buy a car, a consumer would like to understand the value of their car. And they’re looking to buy, they’re looking to understand the value in Live Appraisal is an incredible way. So if you look at the overall dealer wholesale market retailing dealers is one segment of overall TAM. That’s one segment. And then to your point, another segment, that final strew into dealer wholesale, is some portion of peer-to-peer, which in any calendar might be 9 million to 11 million vehicles. Why would a consumer sell a car to another consumer, if dealers are willing to pay more—they’re willing to pay in a fair way, it’s easy, it’s no hassle, you don’t have to worry about sending a title to another consumer, dealing with fraud, dealing with everything. And our research is showing—and again, over time, we’ll start to share research that consumers—many consumers would favor getting a fair price and no friction. So what portion is coming from bucket A, let’s call that dealer wholesale that comes from the trade portion. Or B, which is the portion that rolls up into dealer wholesale that traditionally, when it came from peer-to-peer we don’t have a great fit breakdown just yet Bob where the share is coming from but without a doubt it’s coming from both.

That’s great. Appreciate the detail very much. I would like to ask one more question. I would just since the IPO, obviously, there’s been a lot of change in the marketplace and there’s been some new entrants and new announced entrants in CDK's DMS offering and things like that. So could you just tell us how you stack up? How you think the competitive landscape may have changed and your differentiation versus some of these new entrants even in the last year?

Yes, certainly. So Bob, as you know, you’ve been doing research on this market for a long time. We’ve had hundreds of competitors from day one, hundreds and that’s not—there’s nothing new about us having competitors. This is not an industry where there was one or two players. This is an industry where there were national players, local players. National players that have physical and digital, there’s been a lot of different participants in this ecosystem. So we look at our Q4 results and you look at the fact that quarter-over-quarter, the market dealer wholesale might have shrunk as much as 12% according to our proprietary analysis. Even among all of these new competitors, former competitors we are taking share. So there will be new entrants, there will always be new entrants. I’ll now kind of give you another way of looking at this. There’s different types of wholesale and when you look at different types of wholesale, we started our journey with the lower priced assets that were the typical trade and these were the higher mileage lower price you saw our GMV in the early years was lower. You saw that if any of you were watching our auctions, you decide the typical car had 80,000 to 100,000 miles on it. You might even know—you might have heard us even call it the typical wholesale car. That was early years and we did a fantastic job of bringing the best condition report. We made digital happen because we brought transparency and trust to these vehicles that really needed a strong condition report to sort of come to life and be something that’d be contracted simply over the internet, we made that happen. Over the last couple of years, you’ve seen us grow. We now are no longer just a marketplace for lower price cars, the high mileage, lots of issues. The participants have changed both sellers and buyers. The trust in ACV has changed. If any, some of you’ve done research on this your say, I have heard, I read some of your research that said, we wish ACV inspection was on every car. And so look at as we grow, and we grow the use cases, we can broaden our share of the overall wholesale sector. So we went from an early lead in one category and we definitely now started to grow our share, and as we continue to invest in our platform, and we continue to add more and more trust, and we add the additional elements like programmatic and making things simple. We think we’re in a great spot.

That’s great. Thank you, George.

Thanks, Bob.

Thank you. Our next question comes from Eric Sheridan with Goldman Sachs. You may proceed with your question.

Thanks so much. And thanks for all the detail on the presentation. I wanted to go back to slides 12 to 14, where you sort of laying out TAM and product expansion and the drivers in the services business of the long-term. How much of what’s ahead of you, in the years forward are elements where you still need to invest to build scale and services and to tackle this product expansion opportunity versus it’s already been built and you’re now in execution mode? So we can better understand the mix of investments that are needed versus pure sort of execution, that’s going to drive mix in the business in the years ahead. Thanks guys.

Yes, thanks Eric. Obviously great question. In broad, so I’ll try to get in there. If you want to ask the follow up, please go right ahead. So when you look at the journey from a technology perspective. Some of the elements of slide 12, 13, and 14, some of these are early parts of the journey in some are endeavors that we were many years in. So we look at something like programmatic obviously, we just launched that last year, we’re really but this isn’t like an R&D gun core, we’ve got big some largest dealers in the country behind lots of cars, and other types of constituents. So yes, there is an investment here to keep it going. But it’s in market, it’s going, it’s working, same thing with private marketplace. We’ve got some of the largest dealers in the country already using private marketplace. And of course, they’ve got requirements. The beauty about tech is you get in the hands of your customers, and they would like go a little more of it, a little more of that. So there’s definitely continued investment. But with that investment has with it the exact requirements we’re hearing from dealers is saying we’ll do more with you if you do the following. And we look at products like MAX. MAX Digital was already in the leader in a category for some of the items like merchandising and really understanding a car by car how they’re unique and how that relates to pricing. So we had a fantastic base to work from. But with our national sales force, and now we’re starting to integrate it into the core here what you’re seeing there, we’re getting leverage of the pipeline there from when we bought it to now and look at it like the growth from adjoining ACV has been fantastic. Whereas products like transportation and capital when we went public, we were pretty open. We said we had two engineers and transport in public because we didn’t yet have the resources to go invest in all the things we wanted. I was very transparent on that. Now fast forward, we’ve got a dozen or so or more folks just focused on transport. Look at how well we’re doing on taking transport what was a losing business from a margin perspective to now we’re showcasing confidence that this is a business we are going to hit our long-term targets. We are investing in the tech. Our team feels great about it. So something like that when we were public we had a couple engineers and now at least we’ve got a small team who are going and we are at attach rates on transport at 50%. It’s because we can optimize lanes. We can be scientific about our pricing. So all you’re really hearing me say whether it be capital we’re seeing our tax rates grow. Our tech investments have been incredible. Our acquisitions are getting us more and more about this broader product suite. So we're feeling good. And at the end of the day when we look at what we're doing for our investors the shareholder value we're getting out of the several hundred folks we have in product and engineering is paying off.

Great. Thanks, so much. Really appreciate the framing and look forward to the Analysts Day in a couple of weeks, guys.

Yes, thanks so much, Eric.

Thank you. Our next question comes from Ali Faghri with Guggenheim. You may proceed with your question.

Hi everyone thanks for taking my questions. So I've recognized there's a lot of different ways which can play out in terms of volume and revenue per unit in 2022. But maybe you can help us understand what volume growth assumption right now is embedded in your 1Q and 2022 full-year guidance. I also have the same question about the volume assumption that's embedded in your 2026 $1.3 billion revenue guidance?

Hi Ali, it's Bill. So Ali we really don’t get to that level of fidelity. And the reason why is because again, the multiple ways that we could get to the same results. Right, so we know obviously we still end up challenging environments in terms of supply. We believe that we'll start to abate by the time we get to the second half and that supply will start to increase as new car production improves. And that obviously as mentioned earlier sort of there's a play between ARPU and units, right. And that they're both related to each other. With supply challenges, used car prices are typically higher which generates higher ARPU and then conversely vice-versa. So we purposely don’t get to that level of fidelity since again we can model our business in a few different ways and see that there's multiple paths to get to the same result. And that's why we don’t get to that level of fidelity, Ali.

Okay. That makes sense, thanks Bill. And just as a quick follow-up here. In terms of your GMV outlook, so that makes sense that it would gradually normalize through the year but it does look like you took your feet higher in the fourth quarter. So is there a potential that we could see GMV normalize what your revenue per unit actually remains at elevated levels and those fee adjustments kind of offset that underlying price normalization? And then on top of that, I guess what is the opportunity here going forward for further fee adjustments upward, again it seems like in May, in December. I'm curious how you think about your pricing power longer terms?

So I'll take the first question and George you could take the second question. So the way we've modeled the business the rest of the year Ali is to look at the adjustment we made in prices in December has really—which potentially mitigate any downdraft in ARPU as a result of lower used car prices, right. So how much it mitigates, again all depends on this dynamic in terms of supply and used car prices that customers are willing to pay. So it clearly is a factor that we bake into our modeling but again we're assuming that the GMV per unit will certainly come down through the year. And we're already starting to see some of that. We're already starting to see that buyers are a little more alternative in terms of the buyer fees that they've been paying understanding that the consumers are reaching a point where potentially they will not—they are not going to pay more for used car and that will adjust over time. So yes, it plays a role whether or not it would fully mitigate any reduction in buy fees as a result of reduction in used car prices, I think it's too soon for us to say. And again, I think would repeat myself and sort of get back to these multiple levers that we've got.

Great, thank you Bill.

Hi, Ali. Yes, and now then your other risk the follow-up to your question. We're not planning to increase fees again this year. That's not part of the current plan, but I guess the broader question Ali is there room to. And the answer is yes, there's room too. We are still priced in some of the price segments under market. At this point, where I'm sitting right now, I think there's no reason to raise at all where it could be long-term at this point. We just raised it, I think we're in a good spot right now. We feel good about our ARPU targets for the year. It's a great business. Strong unit economics even where we at right now. And we always ask ourselves that question Ali like when is the right time. You're not really hearing a sense like we need to do that any time right soon. It's not currently on our docket but we do always ask ourselves the question of how long should we keep our prices as well as they are. We're still good in what we're at.

That makes sense. Thanks, George.

Thanks, Ali.

Thank you. Our next question comes from Rajat Gupta with JPMorgan. You may proceed with your questions.

Thanks.

Hey, Rajat.

Hey, thanks for taking the questions. Maybe just a follow-up on Ali's question on revenue. You talked about multiple levers there in the event like pricing, amount rates faster than expected and more volume. Curious like what's embedded in terms of commercial opportunity or international expansion within that. Anything can frame around that. And then I have a follow-up.

Yes. So I'll start on commercial Bill and a tad in here actually and you could add. So today we have limited but some commercial partners using ACV. We've got some rental car companies selling an ACV which has been great. We've started our journey—we've been able to show them that ACV is a great place if they don’t sell it direct. As you know in the rental car category, many of them first try to sell it direct and they can sell it direct to dealers but then they traditionally will then send it our physical auction. That's kind of like the historic path, and we've been able to credit ACV in for being a few dozen places across the country. We've been able to put ACV as an alternative second lever for them, going from their direct efforts to digital before they just send it out to physical. So that's been one—not a huge number but at least we're getting started with them also some small fleet companies. These are companies that own assets. So very small though, the good news is at least I'm going to end the year with some case studies, I'm going to end the year with two four in the market. I'm excited about the long-term potential in commercial. And there's also products that we've— we're in a very early stages and on commercial specifically we've got a pilot going with a smaller regional fleet company on our private market place. Still very early but it's always great, we can get these products into market but we don’t have huge assumptions in our model right now on the commercial category. We still look at this year as getting out there case studies proving we're a player and in the out years we'll start to take more share because we think we're in a great spot and we're feeling good about where we're at. With international very little is assumed in the model at this point. We don’t have a big assumption on international at this point.

Got it, that's helpful. And maybe on the expense side, our expected maybe like a slower increase there given some of the volume challenges, the industry challenges but curious like is there some catch up happening there with respect to inspector hiring versus last year. And how much will we characterize inflation playing a role in that expense increase year-over-year. We need to just sort that out, thanks.

Yes, hey Rajat, it's Bill. Yes, you nailed it. So as you know last year, yes we got also a slow start in terms of ramping our product and tech resources. I think we did a pretty good job on the go-to-market side. We have a lot of focus in terms of building out that team. But on the product and tech side, it took us a while to really get started. So the good news is our recruiting team is really executing well now in terms of bringing in more-and-more talent on the product and tech side. So there is some catch up as a result of that but just to put it all in context though. If you look at our OpEx growth based on the midpoint of our guidance for the year, it's going to be above 33%. That said, that's still $10 million lower for the year when you do the math versus our IPO model on $45 million more on revenue. So yes we're kind of inline and I mean all of that results in about a 600 basis points improvement in EBITDA margins versus our IPO models. So kind of as I mentioned in my prepared remarks, well kind of firmly puts us on the path to exit next year breakeven. So but it's exactly what you thought it. It's just catching up and we're actually going to get to a lower run rate when we're done.

Got it. Great, thanks for the color and I'll get back in queue.

Thanks, Rajat.

Thank you. Our next question comes from John Colantuoni with Jefferies. You may proceed with your question.

Thank you for taking my questions. I wanted to start by noting that programmatic buying increased from low single digits in Q3 to mid-single digits as a percentage of units in Q4. Considering how new this product is, can you discuss what kind of contributions we can expect over the next few years? Additionally, are you beginning to notice any signs that integrating programmatic buying with your core auction marketplace has improved overall conversion rates? I also have a quick follow-up.

Yes, certainly John. On these early days of I will say we're just getting started on the programmatic. You're really listening to the market of what else they would like to see what additional data, what additional capabilities, let's say for example they want XYZ more fields in there, they want certain things, they want to be able to leverage the capabilities to bid at specific vehicles hired and other. So we've been busy at work and we've got our not only in market but we're listening to our dealers and we're also hearing from them the next level of requirements they would like to buy and I think it'll create even a larger take rate here. So but John, I think this is going to take us several quarters before it's a very large percentage. And the great news is we started our journey, right. Great news is its part of the plan. The very news is whenever you get a product to market and you hear great feedback, you just keep going. So thanks, these are still early days with software, you need to go listen bills, release and will get to your question on how material. We'll get to a point where it becomes very material I think towards the end of this year early next year and that's just really software works. You listen, you grow, you invest, you keep going to market. And I think that puts us in a great spot for next year because we're not stopping here. As far as the contribution to a higher conversion rate, it's definitely helped us with a higher price yields. We add to that. I mean we are—we think about it in the back of your mind, we're not there yet, we're almost to the point, we're almost there. Well, we have a programmatic offer in almost every car above a certain price point, a certain type of mileage and that's going to be awesome. And we're getting there. And I think we'll hit that some time in next couple of quarters where now that price may not be what the seller going to sell it for but at least we're going to start getting what is the ACV. What is the actual cash value of that vehicle and this is what the market says. So John, I say you are a student of this whole category. Think about this isn’t just about selling cars. We should help us, it kind of has us go back to these sellers because their assets are going to be going down in value throughout the year. And as we should have sold it yesterday in our platform for what we got it like why are you what's going on here. No longer are used car prices going to appreciate. That didn’t make sense, right. This is really the message to all regulars. And so programmatic is going to become pretty significant not only to help us sell more cars but provide us the data that in a day help our sellers understand the actual cash value of their assets.

Great. And I just wanted to ask about customer acquisition. You have a strong customer acquisition in the first half, maybe you could just update sort of how that's trended in the second half and in Q4. Thanks.

Yes, certainly. So we—when you look at overall share and I repeat what I said earlier, when we look at our share gains in Q4, we really study that based on at least our proprietary analysis of the wholesale strengthen, Q4 we ended the year very, very strong. And so we continued and maybe just a little taste of Q1 and obviously just be careful on this. A number of sellers in listings are actually starting to—I would say are starting to come back in a way from a listings perspective as well. We now will also start to guide them on price. Okay. But what we're feeling John really good about not only our share gains in Q4 but we're feeling really good and how the year it's starting with number of sellers on the platform and it's like we got that dated help guide them now with these assets there were. So hope that gives you a little, we have been talking too much about Q1, a little colour.

Yes, I would add by the way John that at our Analysts Day March 1st, we'll provide more fidelity in terms of the specific seller and buyer accounts. So that's on the agenda.

Very helpful, thank you. Thanks for answering my questions.

Thanks, John.

Hi, Michael.

Hey guys, hey George and Bill. Just two quick ones. The one is congrats on getting to like basically a 100% territory coverage I guess in the U.S. And I just wonder if you could refresh any thinking around like the cohorts like sort of where are you with some of your best markets and then key metrics like share wallet or margins or whatever you think is appropriate relative to some of your newer markets. And then, I also just wanted to ask on the capital side like is there a volume level or some sort of size where you would think more critically about taking some of those loans off your balance sheet?

Yes, I'll start Michael and then Bill hand it over to you. The work when you look at as we mentioned on Analyst Day, we're going to go into cohorts, Mike and we're going to spend some time and so just absolutely great about where we're on. It'd be nice, have several hours with you all versus quick call. So our thought was that I know a week and a half from now or so. So we would spend some time then going through this and really walking you all through how we're doing from a color. But I would say a more generic answer is we're feeling good about the—not only the markets that are established and growing wallet share out of the current markets are established but also feeling great about opening up markets across the country and starting our journey. So feeling really good about what we're at and I would say more to come. But Bill, maybe on the capital side of things, you could take that one.

Yes, so Michael, yes we ended last year with $44 million on the balance sheet in ACV Capital receivables which again were kind of carrying that because of our strong cash position. So we are actually working now on looking at as we continue to grow that portfolio, the different options available to us to finance yes those are receivables. We got some pretty aggressive growth targets in place this year. So as we continue to execute, I would expect at some point, what I've said directionally is when we get to a $100 million in receivables portfolio level, then we would expect to not be financing that on our balance sheet. And we may decide to look at alternatives and do something different than what we're doing today even before we get to that point. So we're literally in the throes of working the alternatives as we speak today.

Okay. Thanks a lot guys and looking forward to your Analyst Day.

Thanks Michael.

Thank you, Josh. I'd like to thank everybody for joining us on the call today. Just note that the registration details for the Analyst Day are both in the press release within our IR website. And we look forward to see you live hopefully, if not you can still join virtually on March 1st. And lastly, thank you for your interest in ACV and have a great evening. Thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.