ACV Auctions Inc. (ACVA) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, and thank you for standing by. Welcome to the ACV First Quarter 2021 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Fox, Vice President of Investor Relations. Please go ahead.
Tim Fox: Good afternoon, everyone, and thank you for joining ACV's conference call to discuss our first quarter 2021 financial results. On the call today are George Chamoun, Chief Executive Officer; and Bill Zerella, Chief Financial Officer.
George Chamoun: Thanks, Tim. Good afternoon, everyone, and thank you for joining us on our first earnings call. It's great to talk to all of you again now as a public company. ACV's IPO was a significant step in our journey to build the most trusted and efficient digital marketplace for used vehicles, and we accomplished this through a lot of hard work by many people. I want to thank my ACV teammates for achieving this milestone. We are very proud of how far we've come since ACV was launched in 2015, and we look forward to building on our success in the years ahead. For our call today, let me begin by providing some context on the ACV story by briefly recapping our 2020 results then touch on first quarter highlights, and finally, discuss our strategy to deliver long-term shareholder value. In 2020, we transacted over $3 billion of GMV and nearly 400,000 vehicles on our digital marketplace. This produced over $200 million in revenue, a 95% year-over-year growth. As you can see, our momentum continued in the first quarter of 2021, where we transacted over $1.3 billion of GMV and nearly 130,000 vehicles on our digital marketplace. And we delivered strong revenue of $69 million, which generated 64% year-over-year growth.
William Zerella: Thanks, George. And let me also extend my welcome to our first earnings call. I'll begin with a review of our first quarter results. We are very pleased with our performance in the quarter. We delivered strong revenue of $69 million, which generated year-over-year growth of 64%. Adjusted EBITDA loss of $12 million, or 18% of revenue, was a significant improvement over our Q1 '20 results. This performance was driven by our strong revenue growth, significantly outpacing our total operating expense growth, which underscores the inherent leverage in our business model.
George Chamoun: Thanks, Bill. Before we take your questions, let me summarize. We are extremely pleased with our execution in the first quarter, which illustrates the momentum we're seeing in the market for our leading digital platform. We've made significant progress in redefining the wholesale vehicle market, but we're still in the early innings. And we have a number of exciting growth opportunities that we believe can meaningfully expand our addressable market. Data and technology is core to our advantage and will remain a strategic priority as we deliver new and enhanced services to the market. We have a proven business model that can deliver scalable growth with attractive unit economics and structural 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.
Operator: Our first question comes from Ron Josey with JMP Securities. Ron, if your line is muted, please unmute. And the next question will come from Michael Graham with Canaccord.
Michael Graham: I appreciate all the color on the call and congrats on the quarter. I wanted to ask 2 questions, if I could. One is your territory expansion is tracking well, and you have improving economics in your more mature territories, but then that has to be balanced, I guess, against -- when you go into new territories, the economics are a little bit kind of compressed. So can you just talk about the balance between those 2 factors? And then the second thing I just wanted to ask is any plans you could share regarding ACV Capital and just sort of like milestones to expect there?
George Chamoun: Yes. Thanks, Michael. Appreciate the kind remarks. First, on the territory expansion and how it relates to building up the teams. So first, keep in mind, we've been at this, as you know, for over 4 years, and we have a playbook. When we first opened up a territory, we are -- obviously, we don't have any customers but we hire our vehicle condition inspectors. So at that point in time, you've got the cost, in essence, and you're building up your customer base while you're opening up the market. When you fast forward, let's say, 4 years later, Michael, as you know, at that point, all of a sudden, just for example purposes, you're selling 1,000 cars or plus a month and your inspectors are getting very efficient. You're getting quite a few vehicles per dealer per stop. And that's why you see when we went through the road show and we described our model and described how the model scales. We really go from a territory -- it's early days, where you're basically less efficient until -- once you're 3, 4 years out, you become extremely efficient in the model. Hopefully, that answers your first question. On your second question, from an ACV Capital -- we achieved our goals in the first quarter with pretty -- with significant dealer adoption attach rates. We're very excited about ACV Capital. We're focusing the product on bringing transparency to the fintech side of this sort of business, if you would, meaning while a dealer is transacting and buying a used vehicle, they know what it's going to cost them for capital and dealers love that. The traditional models were a little complicated trying to determine between all the various fees what it actually cost for capital. Our model is very transparent. While you're bidding and while you're buying a car, you know what it's costing you. You also get the broader ACV service model. So, so far, so good, and we achieved or actually exceeded our goals as it related to ACV Capital for Q1 and very excited about what's coming up next. Hopefully, Michael, I answered both questions.
Operator: Our next question comes from Nat Schindler with Bank of America.
Nat Schindler: Congratulations on your first quarter as a public company. George, you alluded to macro concerns in the market. We've heard from your off-line competitors of the challenges of new dealers not wanting to sell off their used cars that come in because they just don't have enough new cars to replace them with. So they have space on their lot, and thus, fewer cars coming into the auction. Obviously, that's not really affecting you guys that much given your results but -- accelerating results. But can you walk us through what has been happening on the macro side and how you think this will evolve over the year? Just specifically, when we're hearing that the manufacturers aren't likely to even be up to previous production levels until Q4, so probably supply of new cars is not going to be up until later into 2022, so how would you see this evolving over the course of the year?
George Chamoun: Yes, certainly, Nat. Thank you. Thanks so much for the kind regards. Much appreciated. I'll try to describe this for you sort of in the way dealers are looking at this, obviously, which the majority of our supply today comes from dealers. This trend, I would say, started in really Q4 of last year. Generally, our franchise dealers, our new car dealers are selling less cars, selling less new cars. By selling less new cars, now they had less trades coming in for those new car sales. Some of that was made up by the increase in used cars for some dealers but not for others, meaning the total car sales with any one dealership. You look at new plus used, may have been lower for some of them because of the fact that they sold less new cars. Some made it up by the used car side. Either way, they've had less trades. So with less trades, to your point, some of them have decided to keep some of the cars that would have been traditionally wholesale. Now that mix was already happening to us in Q4 of last year. It was already happening in Q1 of this year. So you've seen us have tremendous growth while facing these -- this sort of change in the market of the franchise dealers really needing more inventory. And what we're also seeing is you've also seen our GMV increase. If you look at it ASP segment, that has increased partially because franchise dealers are also buying in our platform now because they need vehicles. So it's really interesting. I would say so on the first part of your question, yes, these have been challenges for dealers. We've been in a great spot because we're both on the supply and the demand side. So as these macro things are going, sometimes it helps in supply. Sometimes it helps in demand either way. We've been able to grow through this very significantly. When we look out, we -- what we're thinking is -- you'll hear trends of new car supplies will return back to normal by Q1 of next year. Whether it ends up being Q1 of next year, whether it ends up being Q4 of this year or sooner, we're going to be prudent on our -- on how we think about the year. And as we think about how the supply from having more new cars and overall more cars in the inventory, dealers will face pricing challenges as it relates to used cars. We think they should really consider using ACV Auctions because with ACV, you know the value of the vehicle. You're not making any guesses on the vehicle. So we think we're in a great spot to help them with these fluctuations with used car values. But in really each of these cases, we're in a really good spot to benefit from these macro changes. Does that answer your question, Nat?
Nat Schindler: Yes, partially. And also, well, though looking at it going forward, one of the things that's clear that these macro changes are causing kind of pricing to increase on used cars, as you alluded to as well. That helps your auction as well. But is your auction more levered to price or volume or neutral? So would it be better if you were getting more units than getting higher prices?
George Chamoun: It's -- being a marketplace, you basically become the equalizer, right? So having more supply obviously gives you an opportunity to also theoretically sell more cars. The benefit on less cars in the marketplace gets reflected currently by having a higher GMV because dealers really are expanding the types of cars they're buying and selling on ACV. So Nat, one of the things that's interesting benefit is, during the road show, we talked about our GMV getting to the $10,000 to $11,000 range a few years from now. And one of the things that's really fascinating about Q1 is we got a little glimpse of the future, where dealers are both buying and selling a broader amount of inventory on ACV. So I would say in the current term, by having less supply, we're benefiting. We're benefiting in effective rate or sell-through rate in the platform. We're benefiting in GMV and other factors. Whereas at the end of this year or early next year, if the used car supply starts to tick up, we'll benefit by having more cars inspected. So there's really pros and cons to both sides. Hopefully, that answers your question.
Nat Schindler: It does. And just one quick more for Bill just so he doesn't feel left out.
William Zerella: Thanks, Nat.
Nat Schindler: Bill, just looking at your guidance, it looks like you're incrementally about $4 million of revenue, but incrementally about $9 million more EBITDA losses. Obviously, you said something about increased investment. How much though of that difference from Q1 to Q2 in the spending side is going to be something more prosaic, like cost of being a public company?
William Zerella: Nat, so a couple of things. So first, just to get back to your previous question to give you a little more context on pricing versus unit volume. So if we look at our auction plus assurance revenue in total, about 3/4 of the increase in revenues is volume-based and 1/4 is pricing-based. So that gives you a little bit of context on the pricing side versus the unit volume. So obviously, the vast majority of our revenue growth is being driven by unit volume growth, right? So I just want to cover that, okay? So in terms of our investments going forward, so we increased quarter-on-quarter in Q1 our operating spend -- this is excluding cost of revenue, a little north of $10 million sequentially, okay? And as you know, we're in investment mode across the business this year as we look to kind of drive long-term value and market share gains. So in Q2, we're basically directionally looking at a similar absolute increase in OpEx spend, okay, slightly tilted towards SG&A but for the most part evenly distributed. We've talked in the past about continuing to make investments in product and tech, which we're continuing to do and again increasing our footprint on the go-to-market side. There, of course, is some increase in public company spend, but I wouldn't consider that, frankly, to be a significant driver. All those costs were previously anticipated. So if we think about Q2 and the rest of the year in terms of the OpEx envelope, it's pretty consistent with what we expected previously. There's no dramatic changes. Obviously, for our full year guidance, we're flowing through the benefit from Q1 since our OpEx was about $7 million lower than we expected even though we're ramping internal resources and talent acquisition as fast as possible and we're tracking really well there. But hopefully, that gives you a little bit of color in terms of the go-forward view in terms of what we baked into our guidance.
Operator: Our next question comes from Ali Faghri with Guggenheim.
Ali-Ahmad Faghri: So I guess as a follow-up to the last question on the market trends, it sounds like the dynamics you're describing on the supply side were a headwind to your volumes in the quarter but a tailwind to GMV. So when in your guidance, you talked about favorable market dynamics continuing in the near term before normalizing later this year. Are you specifically talking about tailwinds to GMV and revenue per unit?
George Chamoun: I would say that would be one of the primary differences as we look right now at Q2, first, thinking about Q3 and Q4 is -- we are ahead of schedule as it relates to revenue per unit, and we're ahead of schedule as it relates to GMV. So we're, yes, at this moment, being prudent. Whether it lasts longer or not, at this point, it really seems like it makes sense for us to just stay prudent on it. Bill, I don't know if you want to add a little more to that.
William Zerella: No. I mean what I would say, Ali, is we're trying to be just balanced in terms of how we guide you guys for Q2 and the rest of the year. I mean you're right, in some sense in Q1, there was kind of both headwinds and tailwinds, but at the end of the day, we kind of came out on the positive side of that. The numbers kind of bear that out. So we're just trying to be balanced in terms of how we think about things from a guidance perspective.
Ali-Ahmad Faghri: Okay. That makes sense. And just a follow-up here. You've talked about investments on the commercial side of the market, which seems like a big and largely untapped opportunity for the company. Most of those cars, particularly the off-lease cars, are sold on private label, digital auction websites utilized by the OEM fincos. So it's a bit different than your current dealer wholesale business platform. Can you talk a bit about the products you're developing to target that commercial market, specifically within the off-lease category and how you're hoping to maybe differentiate yourself from the incumbents given that market is already largely digital?
George Chamoun: Yes, certainly. I'll describe it maybe at a high level because we do have some upcoming announcements as it relates to our product strategy in this category over the next -- in the short term. But first, one of the major investment areas is our inspection platform. Within our inspection platform, as you know, we acquired an off-lease inspection business and we also acquired another business that was helping to understand the integrity of the vehicle frame, structural, other elements. So we're hard at work, creating what we believe is the #1 inspection platform for commercial partners, and that product will be released towards the end of this year. And we're very excited about that investment. It will help us and help commercial partners understand their assets, understand the condition and help them really decide what they want to do from a pricing perspective with that specific asset. So that's on the inspection side. On the marketplace side of things, we've we mentioned in the S-1 that we have private marketplace capabilities coming out later this year. There'll be more to come on that topic because we have not broadly sort of marketed what our upcoming products are, but we do have products coming out that will enable both dealer partners and commercial partners that would like to create a private marketplace for their own constituents. So more to come on that topic.
Operator: Our next question comes from Ron Josey with JMP Securities.
Ronald Josey: Apologies on earlier. Maybe 2 please, bigger picture, George. Clearly, a great quarter and you're seeing more dealer sign-ups. Can you just remind us or talk a little bit more as to what might be the #1 reason or a top reason or so why dealers wouldn't join the platform? Is it just inertia, things are working fine? Or maybe just walk through that, please. And then I don't know if I heard before, but you talked about the ramping investments, and Bill, I know you talked about that as well. Just if you could touch Canada. Just things seem to be going really well. And I wanted to see if there's any updates on Canada that I might have missed.
George Chamoun: Yes. Thank you, Ron. First, we we're really growing as planned. So when you think about why a dealer wouldn't be using us, you saw that we took even -- we took significant market share across the entire sector. Quarter-after-quarter, if you look back over the last 4 years, we've been growing very consistently. Dealers historically have ways to sell their wholesale, whether it be a wholesaler, whether it be the traditional auctions. And there's relationships. These are long-term relationships. And so what we do is we go into a market. We build relationships. We tend to get a few cars. We prove ourselves. And then we earn more and more wallet share. And we'll get to the point over a period of time where the dealer will end up giving us 100% of their wholesale. And what we're really seeing here, we really focus our metrics over the last 4 years, we've just been very consistent. We just keep growing quarter after quarter, and that growth is that dealer adoption out in the field helping them at their pace, right, at their pace, dealer by dealer, to sort of move from their traditional ways of buying and selling vehicles to this very transparent and trusted way on the ACV platform that becomes extremely efficient for these dealers. We show up at the dealership. We inspect the cars for them. We take care of any arbitration or any issues. They're not in the hook for any it as long as they buy our GO GREEN product, and it becomes very efficient for our dealer partners. So I think what you're seeing is we've been -- we've had really exceptional and consistent growth quarter after quarter. And we've done that sort of community after community across the country, building relationships, dealer by dealer. Does that answer your first question? Before I go to the Canada question.
Ronald Josey: Yes, yes. It is. I mean, I totally get the land-and-expand strategy, and it's helpful to hear that.
George Chamoun: Great. On Canada, really no updates yet on our plan. We alluded in the S-1 that we've come with a strategy before year-end of this year. So this would be a little early to come back to you all, obviously, we -- so more to come. Our goal is to come to market with a strategy for Canada by the end of the year. So I would say I'm sort of sticking with that for now.
Operator: Our next question comes from John Colantuoni with Jefferies.
John Colantuoni: I wanted to dig a little bit more into guidance. It looks like full year revenue guidance is primarily flowing through upside from the first 2 quarters, at least according to our numbers. So we're expecting pricing in the wholesale market to remain elevated until 2022. So maybe you can talk about the key puts and takes of your expectations for growth in the second half in the context of broader industry trends and how you envision ACV's market share progressing within the digital sphere. And I have a follow-up.
George Chamoun: Good. Bill, do you want to go first on this one? And then I'll go second.
William Zerella: Yes, I'll start and then you can add in, George. Yes. So John, yes, as I said in my prepared remarks, we're assuming in the near term, we continue to see the current dynamics play out in the market, right? And if you look at our Q2 guidance at the high end, we're talking about higher growth versus Q1 at 67% year-on-year. For the second half, we're -- again, we're just trying to be prudent in terms of how we model out the business. And we're assuming that these trends kind of moderate in the second half, right? Now obviously, we've already proven that -- to the extent the current market drivers persist, we're going to benefit, right? We're just not assuming that in our guidance, right? And obviously, if it does play out differently, then potentially, we can generate different results. But kind of the underlying assumptions for the second half were just more balanced. And again, I assume the market doesn't necessarily continue to persist with the same dynamics that we're seeing today. So George, I'll let you kind of add a little more color on that -- on top of that, if you like.
George Chamoun: Yes. John, I guess, first, thanks for the question. If you kind of learned the ACV culture and method, is we really look back at our last 4 years to help us think about out quarters. We've been this very predictable company. And when -- we don't know yet what's going to happen with all these moving parts. We tend to just look at our historical data. And that's what you see us always do. Now can the market be more favorable? And that seems like that's what your firm is predicting. That could be the case. But for now, we rely very much on our historical data to predict the future. And then we'll see what the market trends are at that point. Is that helpful on how we look out?
John Colantuoni: Yes. Absolutely. And I just wanted to turn to customer trends. Can you help compare retention and frequency of dealership customers that you've acquired since the wholesale market started to enter uncharted territory in the last 3 months? Maybe you could talk a little bit about engagement of those new customers and how that gives you confidence that you -- and what about that engagement gives you confidence you can retain them once the wholesale market starts to normalize in the second half?
George Chamoun: Yes, certainly. We are seeing very high success in our new seller acquisition, bringing on dealers, both selling and buying cars. We're very excited about how our team is growing. In the new territories that we've opened, we're very excited with the results. We -- obviously, we're not -- at this point, we don't disclose all the data, but I'll say our internal expectations on the number of units for our newest territories, the territories we just opened. We just went into a state, for example, and we are ahead of plan from our internal plan. So that's very exciting. And obviously, it gives us the confidence to look out and be very confident in the model we're providing to you all because our seller acquisition and retention remains very, very strong and very predictable. So on the seller side, it's going very well. On the buyer side, our NPS continues to climb ahead of others in the sector. Buyers would prefer to buy in ACV. It's more transparent. Where we do -- we work very hard to ensure when a dealer buys a car in ACV, they're treated fairly, every single car, think car by car by car, whether it's transport, buying, et cetera. That not only reflects itself in our NPS and our increasing customer satisfaction, but then those buyers are willing to pay more for the car in ACV versus other platforms. So we're very pleased with our results so far both on -- from an acquisition perspective on new sellers as well as buyers. And we're also pleased with the number of sellers that became buyers over the last quarter, buying more of these -- you'll hear the term frontline-ready sort of vehicles that the franchise dealers are typically buying or selling. So all in all, we're very excited. And so we had a really exceptional Q1, and you're seeing us forecast out additional market share gains over the next several quarters.
Operator: Our next question comes from Rajat Gupta with JPMorgan.
Rajat Gupta: Great. Congrats on your first quarter as a public company. I just had a question. I just wanted to start off with the OpEx. The first quarter leverage was pretty strong. Probably on an absolute basis, it looks like the expenses were much better than what we had expected. Just curious as to -- if you're looking at the full year OpEx spend, the 63%, is that tracking in line with what you had probably thought before? I mean is there like some change to that plan? Or do you feel like you need to do less or maybe to spread that out over a couple of years? Just curious as to -- if the spending here in the first quarter tracked as per your expectations? And is there like this catch-up to happen like later? And I have a follow-up.
William Zerella: Yes. Rajat, it's Bill. So a couple of things. So yes, we did see a lot more leverage on the OpEx side in Q1. We basically came in at about $7 million less than we were originally modeling, and we've kind of flowed that through to the full year. So the full year OpEx ranges are -- actually incorporates that favorable performance in Q1. So what we're assuming is that we basically continue on the track that we had planned through the rest of the year. Even though we came in below -- well below kind of our model in Q1, we're still tracking to all of our internal targets. On the product and tech side, in terms of operational investments that we're making, the go-to-market side, we're kind of tracking really well and executing really well. And we brought in a lot of people in Q1, and we're continuing to ramp up our recruiting efforts to bring in more talent in Q2 and beyond. So I would just say we're pretty much on track. But at the end of the year -- at the end -- for the full year, we'll end up, based on our current expectations, below what we originally modeled for total OpEx. But despite that, we feel pretty good about executing against our internal objectives. So -- and as you know, just as a reminder, I mean this is an investment year for us. We believe now is the time for us to invest back into our business. And there'll be some deleveraging in our P&L as a result. But we believe it's going to set us up for kind of returning leverage next year and beyond as we continue to grow and get more scale and approach profitability and beyond.
Rajat Gupta: Got it. That's really helpful color. And then can you give us a sense of -- I know you don't plan to bring this out like every quarter, but any sense of what the penetration rates were in some of the ancillary stuff like transportation, capital? Any color you could provide on that front?
William Zerella: Well, in terms of attach rates, I would just say we're tracking as planned. Our kind of objectives are to grow our ACV Capital business by increasing our attach rates, which are -- have essentially been in the low single digits. So we're still in the early days there. But as George mentioned, we saw a nice improvement in Q1. So we're certainly tracking against our internal targets. Transport as well. We've talked during our IPO road show about increasing our attach rates on the transport side in order to gain more scale, which will -- which over time will give us or put us in a position to generate some margin improvement on that side. Plus ACV Transport, we believe, ultimately delivers a better SLA to our sellers. So it's very strategic. So I would say on both fronts, we're really tracking as planned, if not slightly ahead of plan.
Rajat Gupta: Got it. Got it. Just one last follow-up for George. Maybe just on the commercial side of the business. Like what's the -- I just trying to understand -- like you mentioned about like the private label brand opportunity there. Just -- once you like penetrate that channel and that test or drill, how does that change your auction ARPU versus what you have currently with the dealer-dealer channel? Because as we know, like in OPENLANE, I mean their auction revenue per unit is roughly like $100 or so. And then obviously, there's like ancillary services on top of that. So just curious as to once you penetrate more into those channels, like how does the ARPU change or just the economics change, if it is meaningful?
George Chamoun: Yes, certainly. So Rajat, I think the way to think about it is how we've guided you all doesn't, at this point, really include private marketplace revenue opportunity. I would look at this -- and you could see how we're kind of looking at the market as there's kind of the current marketplace growth. And then second is the sort of product and TAM expansion. And as we go to market on TAM and product extension, we'd come back and help everyone think about those new categories. But a way to think about it is in the commercial sector, the revenue per unit from an open auction or an open sale typically is the same as what we're making today on a revenue per unit. And some of our competitors, I would say, from an open auction where anyone can buy the car and not just a private constituent, the revenue per unit might even be higher than what we're getting today. From a private sale, as you know, the revenue per unit tends to look more like a cloud service, a very high-margin cloud service. So you're going to see very high gross margin. These are really fantastic products to be in. But we're just getting started. I mean we're almost done building the product. We'll have to roll that out. We'll start to go to market with that product. So look at products like that, our products for us to grow into over the next 2 to 5 years. Look at that as sort of like the Act 2 and Act 3 of the company where the Act 1 right now is we're going to go out there this year and next year and just continue to grow market share. We're going to -- we've proven. We've got -- we believe the best product in the marketplace. We're going to continue to take share. And then in addition, we're going to bring product and TAM expansion. And once those products are the market, once we're comfortable to start speaking to future attach rates and revenue or we'll come back around and start to -- maybe start to size up expectations in the future. But really, much of what we've guided you all for this year, how to think about the core business is related to our auction product, our transportation, ACV Capital, True360. And then there will be additional products and TAM expansion that will come out over the next few years.
Operator: Our next question comes from Alex Potter with Piper Sandler.
Alex Potter: Okay. Great. So I wanted to ask a question. I guess you're in 125 regions now. Obviously, there's varying levels of maturity within each of them. Some of them, you're just coming up the hiring curve now, hiring very aggressively, looking to get your first inspectors out there. And some of them are on the other end of the spectrum. I don't know if it's possible to quantify it in this way, but what percentage of those 125 regions would you say that you are sort of aggressively out there trying to add bodies? And then the follow-up to that would be in this sort of goofy employment environment that we're in right now, I mean it sounds like you're not having a difficult time finding people to do the work, at least if the revenue growth is any indication, but I'm just interested in any challenges the bottom line you might be having on the hiring front.
George Chamoun: Yes, Alex, thank you. As many of you know, leading our teammates is one of my -- one of the topics I love talking about the most. So I appreciate the question. We're hiring, I believe, across, if not all, the majority of our territories. None of our territories are fully mature. We're -- we still -- we've got a ways to go in hiring even in the territories that have been operational for 5 years and we're selling a lot of cars -- in some of these markets, we're the #1 provider in the dealer-to-dealer channel. But we're still hiring additional talented teammates. So I'm not sure if it's every territory this month, but I would say the far majority of our territory right now. We're hiring people. And that will continue. And so -- and the second part of your question, we really are modeling our company to be one of the best places to work in America. So yes, we want to be the most transparent and trusted way to buy used cars across wholesale, retail and then beyond. But in addition, we're really here to build a team of culture where we provide competitive salaries, sort of additional benefits, stock options. We provide health coverage because I think that's really important to take care of their team. We provide training and education to help them learn. I mean we're really over-the-top. And what happens when you take care of your team, the word gets out. So yes, I would say others out there are probably having a hard time recruiting talent. We get thousands and thousands of applicants. And we're doing our best to make sure we're getting in there and interviewing and recruiting the right ones, and then we're training those amazing teammates across the country. But we're doing well. We're doing well from a hiring perspective. We're doing well from a training -- and we're just getting better and better. So very proud of the team's efforts. Hopefully, that answers to your 2 questions.
Alex Potter: Yes, yes. That was perfect. Thanks and congrats.
George Chamoun: Thanks. Appreciate it.
Operator: Thank you. This concludes the question-and-answer session. I would now like to turn the call back over to Tim Fox for closing remarks.
Tim Fox: Thank you, and thank you, everybody, for joining us on the call today. So ACV will be participating in a number of virtual investor events coming up this quarter. So look on our IR website for details in the coming weeks. We look forward to seeing you on the conference circuit in the coming months. And again, thank you for your interest in ACV. I hope you have a great evening. Thank you.
George Chamoun: Thanks, all. Have a good night.
William Zerella: Thank you.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
