ACV Auctions Inc

Previous wording

Marketplace GMV is primarily driven by the volume and dollar value of Marketplace Unit transactions. We believe that Marketplace GMV acts as an indicator of our success, signaling satisfaction of dealers and buyers, and the health, scale, and growth of our business. We define Marketplace GMV as the total dollar value of vehicles transacted within the applicable period, excluding any auction and ancillary fees. Because our definition of Marketplace Units does not include vehicles inspected but not sold, and because the value of the vehicle sold is not recognized as revenue, GMV does not represent revenue earned by us. We expect that Marketplace GMV will continue to grow as Marketplace Units grow, though at a varying rate within a given applicable period, as Marketplace GMV is also impacted by the value of each vehicle transacted. In periods of declining used vehicle values, Marketplace GMV may decline even while Marketplace Units increase.

Current wording

Marketplace GMV is primarily driven by the volume and dollar value of Marketplace Units transactions. We believe that Marketplace GMV acts as an indicator of our success, signaling satisfaction of dealers and buyers, and the health, scale, and growth of our business. We define Marketplace GMV as the total dollar value of vehicles transacted within the applicable period, excluding any auction and ancillary fees. Because our definition of Marketplace Units does not include vehicles inspected but not sold, and because the value of the vehicle sold is not recognized as revenue, GMV does not represent revenue earned by us. We expect that Marketplace GMV will continue to grow as Marketplace Units grow, though at a varying rate within a given applicable period, as Marketplace GMV is also impacted by the value of each vehicle transacted. In periods of declining used vehicle values, Marketplace GMV may decline even while Marketplace Units increase.

Previous wording

•Deepen Relationships with Dealers and Commercial Partners. We have a team of VCIs who regularly interact with our customers, providing high-quality inspection services and developing strong customer relationships.

Current wording

•Deepen Relationships with Dealers and Commercial Partners. We have a team of VCIs that regularly interacts with our customers, providing high-quality inspection services and developing strong customer relationships.

Previous wording

We continue to drive customer adoption of our existing value-added and data services and introduce new and complementary products. Our ability to drive higher attachment rates of existing value-added services, such as ACV Transportation and ACV Capital, will help grow our revenue. In 2019 we launched our financing arm, ACV Capital. In 2021, we added ACV MAX (formerly doing business as MAX Digital) flagship inventory management system to our portfolio of data services offerings. We continue to drive customer adoption of our data services such as our True360 Reports that bring transparency and offer insights into the condition and value of used vehicles, as well as our inventory management system, which enables dealers to accurately price wholesale and retail inventory while maximizing profit by leveraging predictive analytics informed by artificial intelligence. These data services enable our customers to make more informed inventory management decisions both on and off our digital marketplace. In addition, we will continue to focus on developing new products and services that enhance our marketplace platform in areas including new data-powered products. Our ability to drive customer adoption of these products and services is dependent on the pricing of our products, the offerings of our competitors and the effectiveness of our marketing efforts.

Current wording

We continue to drive customer adoption of our existing value-added and data services and introduce new and complementary products. Our ability to drive higher attachment rates of existing value-added services, such as ACV Transportation, ACV Capital, and ACV Max will help grow our revenue. We continue to drive customer adoption of our data services such as our inventory management system, which enables dealers to accurately price wholesale and retail inventory while maximizing profit by leveraging predictive analytics informed by artificial intelligence. These data services enable our customers to make more informed inventory management decisions both on and off our digital marketplace. In addition, we will continue to focus on developing new products and services that enhance our marketplace platform in areas including new data-powered products. Our ability to drive customer adoption of these products and services is dependent on the pricing of our products, the offerings of our competitors and the effectiveness of our marketing efforts.

Previous wording

We are actively investing in our business. In order to support our future growth and expanded product offerings, we expect this investment to continue. We anticipate that our operating expenses will increase as we continue to build our sales and marketing efforts, expand our employee base and invest in our technology development. The investments we make in our marketplace platform are designed to grow our revenue opportunity and to improve our operating results in the long term, but these investments could also delay our ability to achieve sustained profitability or reduce our profitability in the near term. Our success is dependent on making value-generative investments that support our future growth.

Current wording

We are actively investing in our business. In order to support our future growth and expanded product offerings, we expect this investment to continue. We anticipate that our operating expenses will increase as we continue to build our sales and marketing efforts, expand our employee base and invest in our technology development. The investments we make in our marketplace platform are designed to grow our revenue opportunity and to improve our operating results in the long term, but these investments could also delay our ability to achieve or sustain profitability in the near term. Our success is dependent on making value-generative investments that support our future growth.

Previous wording

Our success depends in part on sufficient demand for used vehicles. Our growth over the last several years has coincided with a rising consumer demand for used vehicles. Since early 2020 demand for cars has outpaced supply. During this period, we have seen new car supply have a significant impact on the supply of wholesale vehicles available within our marketplace. More recently, new vehicle supply has begun to increase, although still below 2019 levels. However, this increase in new vehicle supply has been coupled with an increase in interest rates which has made both new and used vehicles more expensive for retail consumers utilizing financing. Used car demand will be in part dependent on the economic health of the retail consumer and their ability to afford a vehicle purchase.

Current wording

Our success depends in part on sufficient demand for used vehicles. Our growth over the last several years has coincided with a rising consumer demand for used vehicles. Since early 2020 demand for cars has outpaced supply. During this period, we have seen new car supply have a significant impact on the supply of wholesale vehicles available within our marketplace. More recently, new vehicle supply has begun to increase, although still below 2019 levels. However, this increase in new vehicle supply has been coupled with higher interest rates which has made both new and used vehicles more expensive for retail consumers utilizing financing. Used car demand will be in part dependent on the economic health of the retail consumer and their ability to afford a vehicle purchase, which may be impacted by macroeconomic and geopolitical conditions, including the impact of changes in trade policies.

Previous wording

The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as an increase in revenue earned from arranging for the transportation of vehicles to buyers. Revenue increases in the current quarter were primarily volume-driven and also buyer fee rates were higher for the three months ended September

Current wording

The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as an increase in revenue earned from arranging for the transportation of vehicles to buyers. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, auction marketplace revenue increased to $90.0 million from $67.3 million and other marketplace revenue increased to $67.7 million from $54.6 million. Revenue increases in the current quarter were primarily volume-driven and also buyer fee rates were higher for the three months ended March 31, 2025 compared to the prior year period. The volume of Marketplace Units sold on the marketplace platform increased to 208,025 for the three months ended March 31, 2025 from 174,631 for the comparable prior year period which is an indicator of increased overall customer engagement. The wholesale automotive industry continues to transition to digital transactions, with an increasing amount of customers transacting digitally versus at physical auction houses. This industry transition, and our position as a leader in the area of digital wholesale automotive auctions, continues to drive more business to our Marketplace Platform.The average total revenue per Marketplace Unit increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to the aforementioned higher buyer rates and customers adding more optional ancillary services to the auction such as transportation services and financing services which resulted in increase to both auction marketplace and other marketplace revenue. 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. To a lesser extent, acquisitions completed in 2024 drove increases in revenue in 2025 compared to 2024.

Previous 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.

Current wording

The customer assurance revenue increase was mainly driven by an increase in Go Green assurance revenue, 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. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, Go Green assurance revenue increased to $15.0 million from $14.2 million. Other assurance revenue increased to $1.8 million for the three months ended March 31, 2025 from $1.7 million for the three months ended March 31, 2024.

Previous 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.

Current wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace revenue. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, total cost attributed to generating auction marketplace revenue increased to $16.6 million from $9.7 million. The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace and costs associated with our prior year acquisitions. Other marketplace cost of revenues increased to $47.7 million for the three months ended March 31, 2025, compared to $40.9 million for the three months ended March 31, 2024, 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 the same during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous 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.

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 March 31, 2025 compared to the three months ended March 31, 2024, Go Green assurance cost of revenue increased to $12.7 million from $11.7 million. Other assurance cost of revenue increased to $1.3 million for the three months ended March 31, 2025, compared to $1.1 million for the three months ended March 31, 2024. Customer assurance cost of revenue as a percentage of revenue decreased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 as we continued to manage arbitration costs and grow revenue.

Previous 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.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, personnel-related costs increased to $37.6 million from $32.2 million as a result of headcount increases from our prior year acquisitions and stock-based compensation in 2025. Software and technology costs increased to $4.8 million from $4.0 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Other expenses decreased to $1.7 million from $1.9 million in the three months ended March 31, 2025 compared to March 31, 2024. Operations and technology expense as a percentage of revenue decreased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 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 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.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, personnel-related costs increased to $47.2 million from $42.9 million, primarily as a result of headcount increases from our prior year acquisitions and increased stock-based compensation in 2025. Non-personnel expenses in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 increased to $11.6 million from $11.0 million. Selling, general, and administrative expenses decreased as a percentage of revenue during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 as we continued our efforts to effectively manage costs while growing revenue.

Previous 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.

Current wording

The increase is primarily due to an increase of $2.0 million in amortization of internal-use software costs along with an increase of $0.6 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 acquisitions during 2024.

Previous 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.

Current wording

The decrease was primarily driven by a lower balance in our marketable securities portfolio as we used the proceeds from sales and maturities of marketable securities to support acquisition activity in the prior year and a lower average interest rate during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous wording

Our effective tax rate was approximately 1% and 0% for the three 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.

Current wording

Our effective tax rate was approximately (3)% and (2)% for the three months ended March 31, 2025 and 2024, 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

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of these limitations include that: (i) it does not properly reflect capital commitments to be paid in the future; (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (iii) it does not consider the impact of stock-based compensation expense; (iv) it does not reflect other non-operating income and expenses, including interest income and expense; (v) it does not consider the impact of any contingent consideration liability valuation adjustments; (vi) it does not reflect tax payments that may represent a reduction in cash available to us; and (vii) it does not reflect other one-time, non-recurring items, when applicable, such as acquisition-related and restructuring expenses. In addition, our use of Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net loss and other results stated in accordance with GAAP.

Current wording

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of these limitations include that: (i) it does not properly reflect capital commitments to be paid in the future; (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (iii) it does not consider the impact of stock-based compensation expense; (iv) it does not reflect other non-operating income and expenses, including interest income and expense; (v) it does not consider the impact of any contingent consideration liability valuation adjustments; (vi) it does not reflect tax payments that may represent a reduction in cash available to us; (vii) it does not include the amortization of acquired intangible assets but it does include the revenue that these acquired intangible assets contribute to the enterprise; and (viii) it does not reflect other one-time, non-recurring items, when applicable, such as acquisition-related and restructuring expenses. In addition, our use of Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net loss and other results stated in accordance with GAAP.

Previous wording

Non-GAAP Net income (loss) is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of these limitations include that: (i) it does not consider the impact of stock-based compensation expense; (ii) although amortization is a non-cash charge, the underlying assets may need to be replaced and Non-GAAP Net income (loss) does not reflect these capital expenditures; (iii) it does not consider the impact of any contingent consideration liability valuation adjustments; and (iv) it does not consider the impact of other one-time charges, such as acquisition-related and restructuring expenses, which could be material to the results of our operations. In addition, our use of Non-GAAP Net income (loss) may not be comparable to similarly titled measures of other companies because they may not calculate Non-GAAP Net income (loss) in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Non-GAAP Net income (loss) alongside other financial measures, including our net loss and other results stated in accordance with GAAP.

Current wording

Non-GAAP Net income (loss) is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of these limitations include that: (i) it does not consider the impact of stock-based compensation expense; (ii) although amortization is a non-cash charge, the underlying assets may need to be replaced and Non-GAAP Net income (loss) does not reflect these capital expenditures; (iii) it does not consider the impact of any contingent consideration liability valuation adjustments; (iv) it does not include the amortization of acquired intangible assets but it does include the revenue that these acquired intangible assets contribute to the enterprise; and (v) it does not consider the impact of other one-time charges, such as acquisition-related and restructuring expenses, which could be material to the results of our operations. In addition, our use of Non-GAAP Net income (loss) may not be comparable to similarly titled measures of other companies because they may not calculate Non-GAAP Net income (loss) in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Non-GAAP Net income (loss) alongside other financial measures, including our net loss and other results stated in accordance with GAAP.

Previous 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.

Current wording

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $291.9 million, and investments in marketable securities totaling $49.9 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 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.

Current wording

As of March 31, 2025, our principal commitments primarily consist of long-term debt and leases for facilities. We have $3.9 million of lease obligations due within a year, and an additional $36.3 million of lease obligations due at various dates through 2039.

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. 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.

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 March 31, 2025, $100.0 million was drawn under the 2021 Revolver with an interest rate of 9.25%, and there were outstanding letters of credit issued under the 2021 Revolver in the amount of $3.3 million.

Previous wording

On June 20, 2024, we entered into a revolving credit and security agreement, providing for a revolving warehouse facility (the "Warehouse Facility") with a maximum principal amount of $125.0 million. The revolving feature on the facility ends on June 20, 2026 and the facility matures twelve months later, unless sooner terminated or extended in accordance with its terms. The revolving credit facility was established to provide liquidity to fund new originations of auto floorplan loans by ACV Capital. The facility is secured by all assets of ACV Funding, including the auto floorplan loans owned by it.

Current wording

On June 20, 2024, we entered into a revolving credit and security agreement with CitiBank, NA, providing for a revolving warehouse facility (the "Warehouse Facility") with a maximum principal amount of $125.0 million. The revolving feature on the facility ends on June 20, 2026 and the facility matures twelve months later, unless sooner terminated or extended in accordance with its terms. The revolving credit facility was established to provide liquidity to fund new originations of auto floorplan loans by ACV Capital. The facility is secured by all assets of ACV Funding, including the auto floorplan loans owned by it.

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 September 30, 2024 borrowings under the Warehouse Facility were $66.5 million with an interest rate of 8.21%.

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 March 31, 2025 borrowings under the Warehouse Facility were $66.5 million with an interest rate of 7.49%.

Previous wording

Our largest source of operating cash is cash collection from fees earned on our marketplace. Our primary uses of cash from operating activities are for personnel expenses, marketing expenses and overhead expenses.

Current wording

Our largest source of operating cash is cash collection from fees earned on our marketplace. Our primary uses of cash from operating activities are for personnel expenses, sales and marketing expenses and overhead expenses.

Previous 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.

Current wording

In the three months ended March 31, 2025 and 2024, net cash provided by operating activities was $66.6 million and $43.0 million, respectively. Net cash provided by operating activities during the three months ended March 31, 2025 and 2024 consisted primarily of an increase in accounts payable to sellers, partially offset by an increase in accounts receivable from buyers. The increase in cash provided by operating activities during the three months ended March 31, 2025 relative to the three months ended March 31, 2024 is primarily due a higher volume of transactions and the timing of collections and disbursements of funds related to auctions completed near period end.

Previous 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.

Current wording

In the three months ended March 31, 2025 net cash used in investing activities was $30.9 million and in the three months ended March 31, 2024, net cash used in investing activities was $20.9 million. Net cash used in investing activities during the three months ended March 31, 2025 was primarily related to the increase in finance receivables, capitalized software development and the net outflows from the purchases/maturities of marketable securities. Net cash used in investing activities during the three months ended March 31, 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.

Previous 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.

Current wording

In the three months ended March 31, 2025 and 2024, net cash provided by financing activities was $32.0 million and $5.3 million, respectively. Net cash provided by financing activities during the three months ended March 31, 2025 and the three months ended March 31, 2024 relates 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 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.

Current wording

The increase during the three months ended March 31, 2025 relative to the three months ended March 31, 2024 was primarily the result of higher proceeds from long term debt, net of repayments of long term debt during the period.