ACV Auctions Inc

Previous wording

The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as increases in revenue earned from arranging for the transportation of vehicles to buyers and an increase in revenue earned from the financing of vehicles sold on our marketplace. Revenue increases in the current quarter were primarily volume-driven. Additionally, buyer fee rates were higher for the three months ended June 30, 2024 compared to the prior year period. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, auction marketplace revenue increased to $75.4 million from $54.6 million and other marketplace revenue increased to $60.4 million from $46.5 million. The increase in other marketplace revenue was primarily related to an increase in the revenue earned from the transportation of vehicles due to an increase in the number of units transported.

Current wording

30, 2024 compared to the prior year period. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, auction marketplace revenue increased to $84.9 million from $51.5 million and other marketplace revenue increased to $62.7 million from $45.0 million. The increase in other marketplace revenue was primarily related to an increase in the revenue earned from the transportation of vehicles due to an increase in the number of units transported.

Previous wording

The customer assurance revenue increase was mainly driven by an increase in Go Green assurance revenue, which was driven by an increase in units where customers elected the Go Green offering and an increase in the fair value per unit sold where customers elected the Go Green offering year over year. For the three months ended June 30, 2024, Go Green assurance revenue increased to $14.6 million from $13.3 million in the three months ended June 30, 2023. Other assurance revenue increased to $1.9 million for the three months ended June 30, 2024 from $1.5 million for the three months ended June 30, 2023.

Current wording

The customer assurance revenue increase was mainly driven by an increase in Go Green assurance revenue, which was driven by an increase in units where customers elected the Go Green offering. For the three months ended September 30, 2024, Go Green assurance revenue increased to $13.5 million from $12.8 million in the three months ended September 30, 2023. Other assurance revenue increased to $1.9 million for the three months ended September 30, 2024 from $1.7 million for the three months ended September 30, 2023.

Previous wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace revenue. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, total cost attributed to generating auction marketplace revenue increased to $14.2 million from $9.0 million. The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace and costs associated with our acquired remarketing centers' delivery of auction marketplace revenue. Other marketplace cost of revenues increased to $44.9 million for the three months ended June 30, 2024, compared to $35.5 million for the three months ended June 30, 2023, primarily due to an increase in the units transported to buyers from sellers. Marketplace and service costs of revenues as a percentage of revenue remained consistent during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace revenue. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, total cost attributed to generating auction marketplace revenue increased to $15.8 million from $9.6 million. The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace and costs associated with our acquired remarketing centers' delivery of auction marketplace revenue. Other marketplace cost of revenues increased to $46.2 million for the three months ended September 30, 2024, compared to $33.3 million for the three months ended September 30, 2023, primarily due to an increase in the units transported to buyers from sellers. Marketplace and service costs of revenues as a percentage of revenue decreased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as we continued to grow revenue and scale our business.

Previous wording

The increase primarily consisted of costs attributable to our Go Green assurance offerings and was primarily driven by an increase in arbitration cost per unit sold where customers elected the Go Green offering and an increase in the number of completed auctions where customers elected the Go Green offering. For the three months ended June 30, 2024, Go Green assurance cost of revenue increased to $13.2 million from $12.0 million in the three months ended June 30, 2023. Other assurance cost of revenue decreased to $1.4 million from $1.5 million during the three months ended June 30, 2024 and 2023. Customer assurance cost of revenue as a percentage of revenue decreased during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as we continued to manage arbitration costs and grow revenue.

Current wording

The increase primarily consisted of costs attributable to our Go Green assurance offerings and was primarily driven by an increase in the number of arbitration claims, due to increased volume of completed auctions where the customer elected the Go Green offering and an increase in arbitration cost per unit sold. For the three months ended September 30, 2024 Go Green assurance cost of revenue increased to $12.9 million from $11.3 million in the three months ended September 30, 2023. Other assurance cost of revenue increased to $1.3 million for the three months ended September 30,

Previous wording

The increase is primarily due to higher personnel-related costs. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, personnel-related costs increased to $33.8 million from $29.4 million as a result of increased headcount and stock-based compensation in 2024. Software and technology costs decreased to $3.8 million from $4.2 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Other expenses increased to $2.1 million from $1.7 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Operations and technology expense as a percentage of revenue decreased during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, personnel-related costs increased to $36.3 million from $29.7 million as a result of headcount increases and stock-based compensation in 2024. Software and technology costs increased to $4.2 million from $3.7 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Other expenses increased to $2.0 million from $1.8 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Operations and technology expense as a percentage of revenue decreased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Previous wording

The increase is primarily due to higher personnel-related costs. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, personnel-related costs increased to $42.2 million from $34.3 million, primarily as a result of headcount increases and increased stock-based compensation in 2024. Non-personnel expenses increased to $9.7 million from $6.9 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily as a result of increased investment in our business to support our growth. Selling, general, and administrative expenses decreased as a percentage of revenue during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, personnel-related costs increased to $46.0 million from $33.7 million, primarily as a result of headcount increases and increased stock-based compensation in 2024. Non-personnel expenses increased to $9.0 million from $7.0 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, as a result of increased facilities costs associated with our acquired remarketing centers and increased investment to support our future growth. Selling, general, and administrative expenses decreased as a percentage of revenue during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Previous wording

The increase is primarily due to an increase of $3.4 million in amortization of internal-use software costs along with an increase of $1.7 million in amortization related to acquired intangible assets. The increase in depreciation and amortization as a percentage of revenue is primarily due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense.

Current wording

The increase is primarily due to an increase of $2.6 million in amortization of internal-use software costs along with an increase of $2.1 million in amortization related to acquired intangible assets. The increase in depreciation and amortization as a percentage of revenue is primarily due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense as well as increased amortization costs related to intangible assets from recent acquisitions.

Previous wording

The decrease was primarily driven by a lower balance in our marketable securities portfolio during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Marketable securities were sold during the six months ended June 30, 2024 and the related proceeds were used to complete acquisitions.

Current wording

The decrease was primarily driven by a lower balance in our marketable securities portfolio during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Marketable securities were sold during the nine months ended September 30, 2024 and the related proceeds were used to complete acquisitions.

Previous wording

The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as increases in revenue earned from arranging for the transportation of vehicles to buyers and other service revenue. Revenue increases in the current quarter were primarily volume-driven. Additionally, buyer fee rates were higher for the six months ended June 30, 2024 compared to the prior year period. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, auction marketplace revenue increased to $142.8 million from $108.5 million and other marketplace revenue increased to $114.9 million from $89.2 million. The increase in other marketplace revenue was primarily related to an increase in the revenue earned from the transportation of vehicles due to an increase in the number of units transported.

Current wording

The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as increases in revenue earned from arranging for the transportation of vehicles to buyers. Revenue increases were primarily volume-driven and buyer fee rates were higher for the nine months ended September 30, 2024 compared to the prior year period. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, auction marketplace revenue increased to $227.7 million from $159.9 million and other marketplace revenue increased to $177.7 million from $134.3 million. The increase in other marketplace revenue was primarily related to an increase in the revenue earned from the transportation of vehicles due to an increase in the number of units transported.

Previous wording

The customer assurance revenue increase was primarily driven by an increase in Go Green assurance revenue. For the six months ended June 30, 2024, Go Green assurance revenue increased to $28.8 million from $26.5 million in the six months ended June 30, 2023 driven by an increase in units that elected the Go Green offering and an increase in the fair value per unit sold that elected the Go Green offering year over year. Other assurance revenue increased to $3.5 million for the six months ended June 30, 2024 from $3.2 million for the six months ended June 30, 2023.

Current wording

The customer assurance revenue increase was primarily driven by an increase in Go Green assurance revenue. For the nine months ended September 30, 2024, Go Green assurance revenue increased to $42.4 million from $39.3 million in the nine months ended September 30, 2023 driven by an increase in units that elected the Go Green offering and an increase in the fair value per unit sold that elected the Go Green offering year over year. Other assurance revenue increased to $5.4 million for the nine months ended September 30, 2024 from $4.8 million for the nine months ended September 30, 2023.

Previous wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace cost of revenue. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, total cost attributed to generating auction marketplace revenue increased to $23.9 million from $17.4 million. The increase in auction marketplace cost of revenue is primarily due to increased units sold through our marketplace and costs associated with our acquired remarketing centers' delivery of auction marketplace revenue. Other marketplace cost of revenues increased to $85.7 million for the six months ended June 30, 2024, compared to $69.0 million for the six months ended June 30, 2023, primarily due to an increase in the units transported to buyers from sellers. Marketplace and services costs of revenues as a percentage of revenue decreased during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as we continued to grow revenue and scale our business.

Current wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace cost of revenue. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, total cost attributed to generating auction marketplace revenue increased to $39.6 million from $26.9 million. The increase in auction marketplace cost of revenue is primarily due to increased units sold through our marketplace and costs associated with our acquired remarketing centers' delivery of auction marketplace revenue. Other marketplace cost of revenues increased to $131.8 million for the nine months ended September 30, 2024, compared to $102.2 million for the nine months ended September 30, 2023, primarily due to an increase in the units transported to buyers from sellers. Marketplace and services cost of revenues as a percentage of revenue decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we continued to grow revenue and scale our business.

Previous wording

The increase primarily consisted of costs attributable to our Go Green assurance offerings and was primarily driven by an increase in arbitration cost per unit sold where customers elected the Go Green offering and an increase in the number of completed auctions where customers elected the Go Green offering, For the six months ended June 30, 2024, Go Green assurance cost of revenue increased to $24.9 million from $23.1 million in the six months ended June 30, 2023. Other assurance cost of revenue decreased to $2.5 million during the six months ended June 30, 2024 from $2.6 million during the six months ended June 30, 2023. Customer assurance cost of revenues as a percentage of revenue decreased during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as we continued to manage arbitration costs and grow revenue.

Current wording

The increase primarily consisted of costs attributable to our Go Green assurance offerings and was primarily driven by an increase in the number of arbitration claims, due to increased volume of completed auctions where the customer elected the Go Green offering. For the nine months ended September 30, 2024, Go Green assurance cost of revenue increased to $37.8 million from $34.3 million in the nine months ended September 30, 2023. Other assurance cost of revenue remained flat at $3.7 million during the nine months ended September 30, 2024 and the nine months ended September 30, 2023. Customer assurance cost of revenues as a percentage of revenue decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we continued to manage arbitration costs and grow revenue.

Previous wording

The increase primarily consisted of higher personnel expenses and related charges. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, personnel-related costs increased to $66.0 million from $60.1 million as a result of increased headcount and stock-based compensation in 2024. Software and technology expenses decreased to $7.8 million from $7.9 million. Other expenses increased to $3.9 million from $3.1 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Operations and technology expense as a percentage of revenue decreased during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Current wording

The increase primarily consisted of higher personnel expenses and related charges. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, personnel-related costs increased to $102.3 million from $89.7 million as a result of headcount increases and stock-based compensation in 2024. Software and technology expenses increased to $12.1 million from $11.6 million. Other expenses increased to $5.9 million from $4.9 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Operations and technology expense as a percentage of revenue decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Previous wording

The increase primarily consisted of higher personnel-related costs. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, personnel-related costs increased to $85.1 million from $69.5 million, primarily as a result of headcount increases and increased stock-based compensation in 2024. Non-personnel expenses increased to $20.7 million in the six months ended June 30, 2024 from $13.4 million in the six months ended June 30, 2023 as a result of increased investment in our operations to support our growth. Selling, general, and administrative expenses as a percentage of revenue remained consistent during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

The increase primarily consisted of higher personnel-related costs. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, personnel-related costs increased to $131.1 million from $103.2 million, primarily as a result of headcount increases and increased stock-based compensation in 2024. Non-personnel expenses increased to $29.6 million in the nine months ended September 30, 2024 from $20.5 million in the nine months ended September 30, 2023 as a result of increased facilities costs associated with our acquired remarketing centers and increased investment to support our future growth. Selling, general, and administrative expenses as a percentage of revenue decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we continued our efforts to effectively manage costs while growing revenue.

Previous wording

The increase is primarily due to an increase of $6.8 million in amortization of internal-use software costs along with an increase of $2.8 million in amortization related to acquired intangible assets.. The increase in depreciation and amortization as a percentage of revenue is primarily due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense.

Current wording

The increase is primarily due to an increase of $9.4 million in amortization of internal-use software costs along with an increase of $4.9 million in amortization related to acquired intangible assets. The increase in depreciation and amortization as a percentage of revenue is primarily due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense as well as increased amortization costs related to intangible assets from recent acquisitions.

Previous wording

The decrease was primarily driven by a lower balance in our marketable securities portfolio during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Marketable securities were sold during the period, and the related proceeds were used to complete acquisitions.

Current wording

The decrease was primarily driven by a lower balance in our marketable securities portfolio during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Marketable securities were sold during the nine months ended September 30, 2024 and the related proceeds were used to complete acquisitions.

Previous wording

The increase was primarily driven by an increase in borrowings and interest rates on the borrowings during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Current wording

The increase was primarily driven by an increase in borrowings and debt issuance fees during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

Our effective tax rate was approximately (2%) and (1%) for the six months ended June 30, 2024 and 2023, respectively. The principal differences between the federal statutory rate and the effective tax rate are related to state taxes, foreign taxes and credits and the non-recognition of tax benefits for certain entities in a loss position for which a full valuation allowance has been recorded.

Current wording

Our effective tax rate was approximately (1%) and (1%) for the nine months ended September 30, 2024 and 2023, respectively. The principal differences between the federal statutory rate and the effective tax rate are related to state taxes, foreign taxes and credits and the non-recognition of tax benefits for certain entities in a loss position for which a full valuation allowance has been recorded.

Previous wording

As of June 30, 2024, our principal sources of liquidity were cash and cash equivalents totaling $215.0 million, and investments in marketable securities totaling $57.7 million. We believe that our existing cash and cash equivalents, marketable securities, and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months and for the long-term. Our future capital requirements over the long-term will depend on many factors, including volume of sales with existing customers, expansion of sales and marketing activities to acquire new customers, timing and extent of spending to support development efforts and introduction of new and enhanced services. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations and financial condition.

Current wording

As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents totaling $252.5 million, and investments in marketable securities totaling $35.2 million. We believe that our existing cash and cash equivalents, marketable securities, and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months and for the long-term. Our future capital requirements over the long-term will depend on many factors, including volume of sales with existing customers, expansion of sales and marketing activities to acquire new customers, timing and extent of spending to support development efforts and introduction of new and enhanced services. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations and financial condition.

Previous wording

As of June 30, 2024, our principal commitments primarily consist of long-term debt and leases for facilities. We have $3.3 million of lease obligations due within a year, and an additional $28.1 million of lease obligations due at various dates through 2038. Refer to Note 7, Leases, of our condensed consolidated financial statements.

Current wording

As of September 30, 2024, our principal commitments primarily consist of long-term debt and leases for facilities. We have $3.7 million of lease obligations due within a year, and an additional $37.8 million of lease obligations due at various dates through 2038. Refer to Note 7, Leases, of our condensed consolidated financial statements.

Previous wording

We entered into a revolving credit facility with JP Morgan Chase Bank, N.A., or the 2021 Revolver, on August 24, 2021. On June 1, 2023, we entered into an Amendment on the 2021 Revolver which modified the rate at which interest payments are indexed from LIBOR to Secured Overnight Financing Rate ("SOFR"). On June 20, 2024, we entered into a Second Amendment on the 2021 Revolver, pursuant to which we, ACV Capital and ACV Capital Funding II LLC ("ACV Funding"), a wholly owned, bankruptcy-remote, special-purpose subsidiary of ACV Capital, were permitted to enter into the transactions contemplated by the Warehouse Facility.

Current wording

We entered into a revolving credit facility with JP Morgan Chase Bank, N.A., or the 2021 Revolver, on August 24, 2021. On June 1, 2023, we entered into an Amendment on the 2021 Revolver which modified the rate at which interest payments are indexed from LIBOR to Secured Overnight Financing Rate ("SOFR"). On June 20, 2024, we entered into a Second Amendment on the 2021 Revolver, pursuant to which we, ACV Capital and ACV Capital Funding II LLC ("ACV Funding"), a wholly owned, bankruptcy-remote, special-purpose subsidiary of ACV Capital, were permitted to enter into the transactions contemplated by the Warehouse Facility. On October 7, 2024, we entered into Amendment No. 3 on the 2021 Revolver which allows us to make investments and other acquisitions (i) if Total Liquidity (as defined therein) immediately prior to the consummation of such investment or acquisition and after giving pro forma effect to such investment or acquisition is equal to or greater than $200.0 million, in an unlimited amount or (ii) if Total Liquidity immediately prior to the consummation of such investment or acquisition and after giving pro forma effect to such investment or acquisition is less than $200.0 million, in an amount not to exceed $25.0 million in the aggregate for any fiscal year of the Company.

Previous wording

The 2021 Revolver, provides for a revolving line of credit in the aggregate principal amount of up to $160.0 million. The 2021 Revolver also includes a sub facility that provides for the issuance of letters of credit up to $20.0 million outstanding at any time. The 2021 Revolver is guaranteed by substantially all of our material domestic subsidiaries and is secured by substantially all of our and such subsidiaries’ assets except for ACV Capital receivables. The interest rate applicable to the 2021 Revolver is, at our option, either (a) SOFR (or a replacement rate established in accordance with the terms of the credit agreement for the 2021 Revolver) (subject to a 0.00% SOFR floor), plus a margin of 2.75% per annum plus an additional credit spread adjustment of 0.11% for daily and one-month terms, 0.26% for three-month terms and 0.43% for six-month terms or (b) the Alternate Base Rate plus a margin of 1.75% per annum. The Alternate Base Rate is the highest of (a) the Wall Street Journal prime rate, (b) the NYFRB rate plus 0.5% and (c)(i) 1.00% plus (ii) the adjusted SOFR rate for a one-month interest period. The 2021 Revolver has a maturity date of August 24, 2026. The 2021 Revolver contains customary covenants that limit our ability to enter into indebtedness, make distributions and make investments, among other restrictions. The 2021 Revolver also contains financial covenants that require us to maintain a minimum liquidity level and achieve specified trailing four quarter revenue targets.

Current wording

The 2021 Revolver provides for a revolving line of credit in the aggregate principal amount of up to $160.0 million. The 2021 Revolver also includes a sub facility that provides for the issuance of letters of credit up to $20.0 million outstanding at any time. The 2021 Revolver is guaranteed by substantially all of our material domestic subsidiaries and is secured by substantially all of our and such subsidiaries’ assets except for ACV Capital receivables. The interest rate applicable to the 2021 Revolver is, at our option, either (a) SOFR (or a replacement rate established in accordance with the terms of the credit agreement for the 2021 Revolver) (subject to a 0.00% SOFR floor), plus a margin of 2.75% per annum plus an additional credit spread adjustment of 0.11% for daily and one-month terms, 0.26% for three-month terms and 0.43% for six-month terms or (b) the Alternate Base Rate plus a margin of 1.75% per annum. The Alternate Base Rate is the highest of (a) the Wall Street Journal prime rate, (b) the NYFRB rate plus 0.5% and (c)(i) 1.00% plus (ii) the adjusted SOFR rate for a one-month interest period. The 2021 Revolver has a maturity date of August 24, 2026. The 2021 Revolver contains customary covenants that limit our ability to enter into indebtedness, make distributions and make investments, among other restrictions. The 2021 Revolver also contains financial covenants that require us to maintain a minimum liquidity level and achieve specified trailing four quarter revenue targets. As of September 30, 2024, $48.5 million was drawn under the 2021 Revolver, and there were outstanding letters of credit issued under the 2021 Revolver in the amount of $3.3 million.

Previous wording

Advances under the Warehouse Facility funded by asset-backed commercial paper conduit through the issuance of commercial paper notes will bear interest generally at a rate equivalent to the weighted average annual rate of all commercial paper notes issued by the commercial paper conduit to fund its advances, plus a margin of 3.00%. Advances funded by lenders that are not commercial paper conduits, or by commercial paper conduits funded through means other than the issuance of commercial paper notes, will bear interest generally at a rate equal to (i) Term SOFR for a period of one-month (subject to a 0.00% floor), plus 0.11448% or, in certain circumstances, the Alternate Base Rate, plus (ii) a margin of 3.00%. The Alternate Base Rate is the highest of (a) the prime rate quoted in the Wall Street Journal, (b) the NYFRB rate plus 0.50% and (c)(i) 1.00% plus (ii) the Term SOFR rate for a one-month interest period. The interest rate may be increased under certain circumstances, including upon the occurrence of an early amortization event or event of default under the warehouse documentation. ACV Funding must also pay upfront any unused fees in connection with the facility. As of June 30, 2024 there were no borrowings under the Warehouse Facility.

Current wording

Advances under the Warehouse Facility funded by asset-backed commercial paper conduit through the issuance of commercial paper notes will bear interest generally at a rate equivalent to the weighted average annual rate of all commercial paper notes issued by the commercial paper conduit to fund its advances, plus a margin of 3.00%. Advances funded by lenders that are not commercial paper conduits, or by commercial paper conduits funded through means other than the issuance of commercial paper notes, will bear interest generally at a rate equal to (i) Term SOFR for a period of one-month (subject to a 0.00% floor), plus 0.11448% or, in certain circumstances, the Alternate Base Rate, plus (ii) a margin of 3.00%. The Alternate Base Rate is the highest of (a) the prime rate quoted in the Wall Street Journal, (b) the NYFRB rate plus 0.50% and (c)(i) 1.00% plus (ii) the Term SOFR rate for a one-month interest period. The interest rate may be increased under certain circumstances, including upon the occurrence of an early amortization event or event of default under the warehouse documentation. ACV Funding must also pay upfront any unused fees in connection with the facility. As of September 30, 2024 borrowings under the Warehouse Facility were $66.5 million with an interest rate of 8.21%.

Previous wording

We were in compliance with all such applicable covenants as of June 30, 2024, and believe we are in compliance as of the date of this Quarterly Report on Form 10-Q. As of June 30, 2024, $110.0 million was drawn under the 2021 Revolver, and there were outstanding letters of credit issued under the 2021 Revolver in the amount of $3.1 million.

Current wording

We were in compliance with all such applicable covenants as of September 30, 2024, and believe we are in compliance as of the date of this Quarterly Report on Form 10-Q.

Previous wording

In the six months ended June 30, 2024 and 2023, net cash provided by operating activities was $47.5 million and $23.4 million, respectively. Net cash provided by operating activities during the six months ended June 30, 2024 consisted primarily of an increase in accounts payable to sellers offset by an increase in accounts receivable from buyers. In the six months ended June 30, 2023 net cash provided by operating activities consisted primarily of a decrease in accounts receivable from buyers offset by a decrease in accounts payable to sellers. This increase in operating cash flows is due to the timing of collections and disbursements of funds related to auctions completed near period end.

Current wording

In the nine months ended September 30, 2024 and 2023, net cash provided by operating activities was $68.6 million and $8.6 million, respectively. Net cash provided by operating activities during the nine months ended September 30, 2024 consisted primarily of an increase in accounts payable to sellers, offset by an increase in accounts receivable from buyers. In the nine months ended September 30, 2023 net cash provided by operating activities consisted primarily of an increase due to changes in our operating assets and liabilities and by non-cash charges, offset by our net loss. The increase in cash provided by operating activities during the nine months ended September 30, 2024 relative to the nine months ended September 30, 2023 is primarily due to the timing of collections and disbursements of funds related to auctions completed near period end.

Previous wording

In the six months ended June 30, 2024 and 2023, net cash used in investing activities was $(4.0) million and $(59.1) million, respectively. Net cash used in investing activities during the six months ended June 30, 2024 was primarily related to business acquisitions along with capitalized software development partially offset by the sales/maturities of a portion of our marketable securities portfolio to support our business acquisition transactions. Net cash used in investing activities during the six months ended June 30, 2023 was primarily due to the growth of our finance receivables portfolio, capitalized software development, and business acquisitions.

Current wording

In the nine months ended September 30, 2024 net cash provided by investing activities was $12.3 million and in the nine months ended September 30, 2023, net cash used in investing activities was $(86.2) million. Net cash provided by investing activities during the nine months ended September 30, 2024 was primarily related to the sales/maturities of a portion of our marketable securities portfolio to support our business acquisition transactions and proceeds received from the sale of real estate, partially offset by business acquisitions and capitalized software development. Net cash used in investing activities during the nine months ended September 30, 2023 was primarily due to growth in our finance receivables portfolio, capitalized software development, and business acquisitions.

Previous wording

The decrease in net cash used in investing activities during the six months ended June 30, 2024 relative to the six months ended June 30, 2023 was primarily driven by increased cash outflows for business acquisitions which was more than offset by greater cash inflows from maturities and sales of marketable securities.

Current wording

The increase in net cash provided by investing activities during the nine months ended September 30, 2024 relative to the nine months ended September 30, 2023 was primarily driven by greater cash inflows from maturities and sales of marketable securities and sales of real estate, offset by business acquisitions.

Previous wording

In the six months ended June 30, 2024 and 2023, net cash provided by (used in) financing activities was $(11.0) million and $27.0 million, respectively. Net cash provided by (used in) financing activities during the six months ended June 30, 2024 relates to repayments, net of proceeds, on long term debt in addition to payments of RSU tax withholding net of proceeds from other equity plan activity. Net cash provided by (used in) in financing activities during the six months ended June 30, 2023 related to proceeds, net of repayments, on long term debt partially offset by payments of RSU tax withholding in exchange for common shares surrendered by RSU holders.

Current wording

In the nine months ended September 30, 2024 and 2023, net cash provided by (used in) financing activities was $(10.9) million and $23.1 million, respectively. Net cash provided by (used in) financing activities during the nine months ended September 30, 2024 relates to payments of RSU tax withholding net of proceeds from other equity plan activity. Net cash provided by (used in) in financing activities during the nine months ended September 30, 2023 related to proceeds, net of repayments, on long term debt, partially offset by payments of RSU tax withholding in exchange for common shares surrendered by RSU holders.

Previous wording

The decrease during the six months ended June 30, 2024 relative to the six months ended June 30, 2023 was primarily the result of lower proceeds from long term debt, net of repayments of long term debt during the period.

Current wording

The decrease during the nine months ended September 30, 2024 relative to the nine months ended September 30, 2023 was primarily the result of lower proceeds from long term debt, net of repayments of long term debt during the period.

Previous wording

We completed four business acquisitions during the six months ended June 30, 2024. Purchase price allocations related to these acquisitions are subject to adjustments as they are finalized over the 12 month measurement period from the respective acquisition date. Goodwill acquired in connection with these acquisitions will be deductible for tax purposes in the United States and will be amortized on a straight-line basis over 15 years.

Current wording

We completed four business acquisitions during the nine months ended September 30, 2024. Purchase price allocations related to these acquisitions are subject to adjustments as they are finalized over the 12 month measurement period from the respective acquisition date. Goodwill acquired in connection with these acquisitions will be deductible for tax purposes in the United States and will be amortized on a straight-line basis over 15 years.

Previous wording

On January 30, 2024, we completed the acquisition of all of the ownership interests of Alliance Auto Auctions for estimated cash consideration of $66.9 million and 639,976 common shares of the Company's Class A common stock. The fair value of the consideration shares of $8.6 million was determined based upon the closing market price of the

Current wording

On January 30, 2024, we completed the acquisition of all of the ownership interests of Alliance Auto Auctions for estimated cash consideration of $66.9 million and 639,976 common shares of the Company's Class A common stock. The fair value of the consideration shares of $8.6 million was determined based upon the closing market price of the Company's Class A common shares on January 30, 2024. The aggregate purchase price was preliminarily allocated to $40.4 million of goodwill, $32.7 million of intangible assets, and $2.4 million of net assets assumed.

Previous wording

On March 8, 2024, we completed the acquisition of all of the ownership interests of a business (the "March 8, 2024 acquisition") for estimated cash consideration of $26.7 million. The aggregate purchase price was preliminarily allocated to $6.7 million of goodwill, $16.3 million of intangible assets, and $3.7 million of net assets assumed.

Current wording

On March 8, 2024, we completed the acquisition of all of the ownership interests of a business (the "March 8, 2024 acquisition") for estimated cash consideration of $27.4 million. The aggregate purchase price was preliminarily allocated to $7.4 million of goodwill, $16.3 million of intangible assets, and $3.6 million of net assets assumed.

Previous wording

On June 17, 2024, we completed the acquisition of all of the ownership interest of a business (the "June 2024 acquisition") for estimated cash consideration of $51.6 million. The aggregate purchase price was preliminarily allocated to $11.7 million of goodwill, $18.7 million of intangibles, and $21.1 million of net assets assumed.

Current wording

On June 17, 2024, we completed the acquisition of all of the ownership interest of a business (the "June 2024 acquisition") for estimated cash consideration of $51.6 million. The aggregate purchase price was preliminarily allocated to $11.4 million of goodwill, $18.7 million of intangibles, and $21.4 million of net assets assumed.