ACV Auctions Inc.

Previous wording

Other income (expense) consists primarily of interest income earned on our marketable securities and cash and cash equivalents. Other income (expense) also includes interest expense on our borrowings.

Current wording

Other income (expense) consists primarily of interest expense on our borrowings and interest earned on our marketable securities and cash and cash equivalents.

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. 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.

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 June 30, 2025 compared to the three months ended June 30, 2024, auction marketplace revenue increased to $92.3 million from $75.4 million and other marketplace revenue increased to $75.4 million from $60.4 million. Revenue increases in the current quarter were primarily volume-driven and also impacted by higher buyer fee rates for the three months ended June 30, 2025 compared to the prior year period. The volume of Marketplace Units sold on the Marketplace Platform increased to 210,429 for the three months ended June 30, 2025 from 186,526 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 June 30, 2025 compared to the three months ended June 30, 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 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.

Current wording

The customer assurance revenue increase was mainly driven by an increase in Go Green assurance revenue, resulting from an increase in units that elected the Go Green offering. Additionally, an increase in the estimated fair value on the Go Green offering per unit contributed to the year-over-year increase. For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, Go Green assurance revenue increased to $16.2 million from $14.6 million. Other assurance revenue decreased to $1.5 million for the three months ended June 30, 2025 from $1.9 million for the three months ended June 30, 2024.

Previous 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.

Current wording

The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace revenue. For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, total cost attributed to generating auction marketplace revenue increased to $16.6 million from $14.2 million. The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace and other costs of revenue associated with our prior year acquisitions. Other marketplace cost of revenues increased to $52.3 million for the three months ended June 30, 2025, compared to $44.9 million for the three months ended June 30, 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 decreased during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 as we continued our efforts to manage costs while growing our revenue.

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, 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.

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 June 30, 2025 compared to the three months ended June 30, 2024, Go Green assurance cost of revenue increased to $14.7 million from $13.2 million. Other assurance cost of revenue increased to $2.2 million for the three months ended June 30, 2025, compared to $1.4 million for the three months ended June 30, 2024. Customer assurance cost of revenue as a percentage of revenue remained flat during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous 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.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, personnel-related costs increased to $37.8 million from $33.8 million as a result of headcount increases from our prior year acquisitions. Software and technology costs increased to $5.1 million from $3.8 million in the three months ended June 30, 2025 compared to the three months ended June 30, 2024 as a result of continued investment in our technology and infrastructure amid ongoing business growth. Other expenses increased to $2.9 million from $2.1 million in the three months ended June 30, 2025 compared to June 30, 2024. Operations and technology expense as a percentage of revenue decreased during the three months ended June 30, 2025 compared to the three months ended June 30, 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 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.

Current wording

The increase is primarily due to higher personnel-related costs. For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, personnel-related costs increased to $45.1 million from $42.2 million, primarily as a result of headcount increases from our prior year acquisitions. Non-personnel expenses in the three months ended June 30, 2025 compared to the three months ended June 30, 2024 decreased to $7.9 million from $9.7 million primarily due to lower bad debt expense resulting from our improved collections experience on receivables due from Marketplace Buyers. Selling, general, and administrative expenses decreased as a percentage of revenue during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 as we continued our efforts to effectively manage costs while growing revenue.

Previous 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.

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. Also, a lower average interest rate during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 contributed to the decrease.

Previous wording

The increase during the three months ended March 31, 2025 was primarily driven by the interest and fees related to the Warehouse facility which was entered into on June 20, 2024. Such interest and fees were not present in the three months ended March 31, 2024 due to the line of credit not yet being established at that time.

Current wording

The increase during the three months ended June 30, 2025 was primarily driven by the interest and fees related to the Warehouse facility which was entered into on June 20, 2024. There was no interest expense on the Warehouse facility in the three months ended June 30, 2024 as we had no borrowings outstanding on the Warehouse facility during the period.

Previous 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.

Current wording

Our effective tax rate was approximately 0% and (1)% for the three months ended June 30, 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

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.

Current wording

The increase is primarily due to an increase of $4.4 million in amortization of internal-use software costs. 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.

Previous 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.

Current wording

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents totaling $258.4 million, and investments in marketable securities totaling $46.4 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 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.

Current wording

As of June 30, 2025, our principal commitments primarily consist of long-term debt and leases for facilities. We have $4.2 million of lease obligations due within a year, and an additional $37.4 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 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.

Current wording

On August 24, 2021, ACV entered into a revolving credit facility (the “2021 Revolver”). The Revolver was established to provide general financing to us and is secured by substantially all of our assets except for certain finance receivables. As of June 30, 2025, the maximum borrowing capacity under the Revolver is $250.0 million and includes a sub facility that provides for the issuance of letters of credit up to $20.0 million outstanding at any time. Through June 26, 2025, the interest rate on the Revolver was, at our option, either (a) the Secured Overnight Financing Rate (“SOFR”) (or a replacement rate established in accordance with the terms of the credit agreement for the 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 was defined as the highest of (a) the Wall Street Journal prime rate, (b) the NYFRB rate plus 0.5% and (c) 1.00% plus the adjusted SOFR rate for a one-month interest period.

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

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 June 30, 2025 borrowings under the Warehouse Facility were $86.5 million with an interest rate of 7.40%.

Previous 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.

Current wording

In the six months ended June 30, 2025 and 2024, net cash provided by operating activities was $80.3 million and $47.5 million, respectively. Net cash provided by operating activities during the six months ended June 30, 2025 and 2024 consisted primarily of an increase in accounts payable to sellers and cash earnings partially offset by an increase in accounts receivable from buyers. The increase in cash provided by operating activities during the six months ended June 30, 2025 relative to the six months ended June 30, 2024 is primarily due to a higher volume of transactions and the timing of collections and disbursements of funds related to auctions completed near period end and increased cash earnings.

Previous 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.

Current wording

In the six months ended June 30, 2025 and 2024, net cash used in investing activities was $93.6 million and $4.0 million, respectively. Net cash used in investing activities during the six months ended June 30, 2025 was primarily related to the increase in finance receivables and capitalized software development. 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.

Previous wording

The increase in net cash used in investing activities during the three months ended March 31, 2025 relative to the three months ended March 31, 2024 was primarily driven by an increase in the finance receivables portfolio as well as an overall decrease in net marketable securities and acquisition activity.

Current wording

The increase in net cash used in investing activities during the six months ended June 30, 2025 relative to the six months ended June 30, 2024 was primarily driven by an increase in the finance receivables portfolio as well as an overall decrease in net marketable securities and acquisition activity.

Previous 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.

Current wording

In the six months ended June 30, 2025 and 2024, net cash provided by (used in) financing activities was $47.4 million and $(11.0) million, respectively. Net cash provided by financing activities during the six months ended June 30, 2025 relates to proceeds, net of repayments, from long term debt, partially offset by payments of RSU tax withholding in exchange for common shares surrendered by RSU holders. Net cash used in financing activities during the six months ended June 30, 2024 related to payments of RSU tax withholding in exchange for common shares surrendered by RSU holders as well as repayments, net of proceeds, of long term debt.

Previous 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.

Current wording

The increase during the six months ended June 30, 2025 relative to the six months ended June 30, 2024 was primarily the result of increased net borrowings of long-term debt during the period.