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Highlights

  • ACV reported Q4 EPS of (USD 0.11), below market expectations.
  • Revenue rose 15% YoY to USD 184 million, while shares fell sharply.
  • 2026 guidance signals double-digit revenue growth and higher EBITDA targets.

Shares of ACV Auctions (NYSE:ACVA) declined sharply after the company reported fourth-quarter earnings that came in below expectations. The stock closed at USD 5.68 on February 23, down USD 0.98 or 14.71% for the day. The weakness extends across longer time frames, with the stock down 33.18% over the past month, 50.99% over six months, 31.48% year to date, and 67.21% over the past year.

Earnings Snapshot
ACV reported Q4 EPS of (USD 0.11), compared with (USD 0.16) in the same quarter last year. Revenue for the quarter increased 15.2% YoY to USD 184 million, supported by 193,000 vehicles sold during the period.

Adjusted EBITDA came in at USD 8 million, up 36% YoY, while the company recorded a non-GAAP net loss of USD 1 million. Despite revenue growth and improved adjusted EBITDA, the earnings result weighed on investor sentiment.

The company posted a negative net margin of 12.51% and a negative return on equity of 12.94%, reflecting ongoing profitability pressures.

Cost Pressures and Arbitration Risk
Non-GAAP cost of revenue rose approximately 400 basis points YoY, driven by elevated arbitration costs tied to a specific customer cohort. Management indicated that litigation and operational measures have been implemented, with early signs of improvement in 2026. However, arbitration expenses remain a near-term risk factor.

2026 Outlook and Investment Plans
For 2026, ACV expects revenue between USD 845 million and USD 855 million, representing projected growth of 11% to 13%. Adjusted EBITDA is forecast in the range of USD 73 million to USD 77 million, implying growth of about 28%.

The company plans incremental investments approaching USD 20 million, including around USD 11 million in go-to-market spending and additional capital expenditures related to VIPER deployment. Adjusted EBITDA margin is expected to expand by approximately 100 basis points.

Platform Expansion and Operating Trends
Product adoption trends were highlighted during the quarter. ACV Guarantee mix increased to 19% in Q4, while ClearCar customers expanded wholesale volumes by more than 50% after launch. ACV MAX cohorts recorded roughly 40% wholesale growth in one quarter, and VIPER has over 200 hand-raisers, with plans to deploy 100–200 early units.

ACV Transportation revenue grew 20% in Q4, with margins in the midterm low-20% range. ACV Capital expanded 48% during the quarter. The company continues to add inspectors and territory managers to support regional operations.

Broker Consensus Reflects Strong Upside with Buy Rating
According to EODHD/Others data as of 24 Feb 2026, Analysts maintain a positive outlook on ACV Auctions Inc, with the current consensus recommendation standing at 2.36 (BUY). The average target price of USD 10.79 implies a substantial upside potential of approximately 89.96% from current levels.

Despite recent share price weakness, broker sentiment suggests confidence in the company’s long-term growth trajectory and digital marketplace expansion. Overall, consensus signals meaningful re-rating potential if execution remains on track.

With shares under pressure following earnings miss and arbitration-related cost increases, ACV Auctions is entering 2026 with revenue growth targets and expanded investment plans. Market participants are tracking margin trends, arbitration exposure, and execution against full-year guidance as the company works toward improved adjusted EBITDA performance.

FAQs

Q1. What were ACV Auctions’ Q4 results?
ACV reported Q4 revenue of USD 184 million, adjusted EBITDA of USD 8 million, and EPS of (USD 0.11), with 193,000 vehicles sold during the quarter.

Q2. What is ACV’s guidance for 2026?
The company expects 2026 revenue between USD 845 million and USD 855 million and adjusted EBITDA in the range of USD 73 million to USD 77 million.

Q3. What factors affected profitability in Q4?
Non-GAAP cost of revenue increased about 400 basis points YoY due to elevated arbitration costs related to a specific customer cohort, impacting margins.