ACV Auctions Inc.

Previous wording

The increase was primarily driven by an increase in other marketplace revenue which is earned from providing transportation and financing services. Auction marketplace revenue from our Marketplace Buyers and Marketplace Sellers increased as well. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, other marketplace revenue increased to $80.4 million from $67.7 million and auction marketplace revenue increased to $93.8 million from $90.0 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. The increase in auction marketplace revenue was primarily volume driven. The volume of Marketplace Units sold on the marketplace platform increased to 213,492 for the three months ended March 31, 2026 from 208,025 for the comparable prior year period which is an indicator of increased overall customer engage ment. The wholesale automotive industry continues to transition to digital transactions, with an increasing amount of cust omers 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, 2026 compared to the three months ended March 31, 2025 due to 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.

Current wording

The increase was primarily driven by an increase in other marketplace revenue which is earned from providing transportation and financing services. For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, other marketplace revenue increased to $88.3 million from $75.4 million and auction marketplace revenue increased to $92.4 million from $92.3 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 transportation revenue per mile and an increase in the number of units transported. Increases in revenue per mile were driven by rising fuel costs being passed on to customers. The increase in auction marketplace revenue was driven by buy fee rate increases and volume increases. The volume of Marketplace Units sold on the marketplace platform increased to 211,472 for the three months ended June 30, 2026 from 210,429 for the comparable prior year period which is an indicator of increased overall customer engage ment. 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, 2026 compared to the three months ended June 30, 2025 due to 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.

Previous wording

The increase was primarily driven by an increase in other customer assurance revenue due to an increase in units sold through our price guarantee sales. Other customer assurance revenue increased to $4.8 million for the three months ended March 31, 2026 from $1.8 million for the three months ended March 31, 2025 due to the aforementioned increase in units sold through the guarantee sales. Go Green assurance revenue also increased, driven by an increase in units that elected the Go Green offering. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, Go Green assurance revenue increased to $17.2 million from $15.0 million.

Current wording

The increase was primarily driven by an increase in other customer assurance revenue due to an increase in units sold through our price guarantee sales and an increase in the estimated fair value per unit sold through the guarantee sale. Other customer assurance revenue increased to $6.3 million for the three months ended June 30, 2026 from $1.5 million for the three months ended June 30, 2025. Go Green assurance revenue also increased, driven by an increase in units that elected the Go Green offering. For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, Go Green assurance revenue increased to $18.4 million from $16.2 million.

Previous wording

The increase primarily consisted of higher costs related to generating other marketplace revenue. Other marketplace cost of revenues increased to $57.4 million for the three months ended March 31, 2026, compared to $47.7 million for the three months ended March 31, 2025, primarily due to an increase in units transported. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, total cost attributed to generating auction marketplace revenue increased to $17.8 million from $16.6 million. The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace. For the three months ended March 31, 2026 data services cost of revenue was $4.6 million, compared to $5.1 million in the comparable prior year period. Marketplace and service costs of revenues as a percentage of revenue increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to a decrease in units sold at our physical auction locations which resulted in lower margins on these units. Higher fuel costs associated with transporting vehicles to customers also contributed to the increase.

Current wording

The increase primarily consisted of higher costs related to generating other marketplace revenue. Other marketplace cost of revenues increased to $63.5 million for the three months ended June 30, 2026, compared to $52.3 million for the three months ended June 30, 2025, due to an increase in the average cost per mile transported and an increase in units transported. Higher fuel costs drove the increase in the average cost per mile transported. For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, total cost attributed to generating auction marketplace revenue increased to $17.0 million from $16.6 million. For the three months ended June 30, 2026, data services cost of revenue was $5.1 million, compared to $5.4 million in the comparable prior year period. Marketplace and service costs of revenues as a percentage of revenue increased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to a decrease in units sold at our physical auction locations which resulted in higher cost of revenue as a percentage of revenue on these units. Higher fuel costs associated with transporting vehicles to customers also contributed to the increase.

Previous wording

The increase was primarily driven by an increase in other customer assurance cost of revenue due to an increase in units sold through our price guarantee sales. Other customer assurance cost of revenue increased to $4.8 million for the three months ended March 31, 2026, compared to $1.3 million for the three months ended March 31, 2025 due primarily to an increase in costs incurred on the Company's price guarantee sales driven by an increase in units sold through our price guarantee sales in the current year compared to the prior period. Go Green assurance cost of revenue also increased, 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 three months ended March 31, 2026 compared to the three months ended March 31, 2025, Go Green assurance cost of revenue increased to $14.1 million from $12.7 million. Customer assurance cost of revenue as a percentage of revenue increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to the higher proportion of units sold through our price guarantee sale during thethree months ended March 31, 2026 compared to the three months ended March 31, 2025. Units sold through the guarantee sale are generally lower margin than units sold without a guarantee but we believe the guarantee sale units are still accretive to revenue and net income.

Current wording

The increase was primarily driven by an increase in other customer assurance cost of revenue due to an increase in units sold through our price guarantee sales and an increase in the average cost per guarantee sale unit. Other customer assurance cost of revenue increased to $6.1 million for the three months ended June 30, 2026, compared to $2.2 million for the three months ended June 30, 2025 due primarily to an increase in costs incurred on the Company's price guarantee sales driven by an increase in units sold through our price guarantee sales and an increase in the average cost per guarantee sale unit in the current year compared to the prior period. Go Green assurance cost of revenue also increased, 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 three months ended June 30, 2026 compared to the three months ended June 30, 2025, Go Green assurance cost of revenue increased to $15.6 million from $14.7 million. Customer assurance cost of revenue as a percentage of revenue increased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to the higher proportion of units sold through our price guarantee sale. Units sold through the guarantee sale generally have a higher cost of revenue as a percentage of revenue than units sold without a guarantee but we believe the guarantee sale units are still accretive to revenue and net income.

Previous wording

The increase was primarily due to higher software and technology costs as we continue to invest in our technology and infrastructure amid ongoing business growth. Software and technology costs increased to $6.8 million from $4.9 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, personnel-related costs decreased to $37.0 million from $37.6 million. Other expenses increased to $2.7 million from $1.7 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Operations and technology expense as a percentage of revenue decreased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 as we continued our efforts to effectively manage costs while growing revenue.

Current wording

The increase was primarily due to higher software and technology costs as we continue to invest in our technology and infrastructure to enable future growth. Software and technology costs increased to $6.4 million from $5.1 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, personnel-related costs remained flat at $37.8 million. Other expenses decreased to $2.7 million from $2.9 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Operations and technology expense as a percentage of revenue decreased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as we continued our efforts to effectively manage costs while growing revenue.

Previous wording

As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents totaling $341.0 million. We believe that our existing cash and cash equivalents 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, 2026, our principal sources of liquidity were cash and cash equivalents totaling $242.3 million. We believe that our existing cash and cash equivalents 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, 2026, our principal commitments primarily consist of long-term debt and leases for facilities. We have $5.4 million of lease obligations due within a year, and an additional $40.6 million of lease obligations due at various dates through 2039.

Current wording

As of June 30, 2026, our principal commitments primarily consist of long-term debt and leases for facilities. We have $5.5 million of lease obligations due within a year, and an additional $39.2 million of lease obligations due at various dates through 2039.

Previous wording

As of March 31, 2026, $85.0 million was drawn under the 2021 Revolver with an interest rate of 8.50%, and there were outstanding letters of credit issued under the 2021 Revolver in the amount of $3.1 million. As of March 31, 2026, we had unused borrowing capacity of $161.9 million under the 2021 revolver.

Current wording

As of June 30, 2026, $80.0 million was drawn under the 2021 Revolver with an interest rate of 6.47%, and there were outstanding letters of credit issued under the 2021 Revolver in the amount of $3.1 million. As of June 30, 2026, we had unused borrowing capacity of $166.9 million under the 2021 revolver.

Previous wording

As of March 31, 2026 borrowings under the Warehouse Facility were $115.0 million with an interest rate of 6.53%. As of March 31, 2026, we had unused borrowing capacity of $85.0 million under our Warehouse Facility.

Current wording

As of June 30, 2026 borrowings under the Warehouse Facility were $125.0 million with an interest rate of 6.59%. As of June 30, 2026, we had unused borrowing capacity of $75.0 million under our Warehouse Facility.

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, sales and 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 costs of revenue, personnel expenses, sales and marketing expenses and overhead expenses.

Previous wording

In the three months ended March 31, 2026 and 2025, net cash provided by operating activities was $76.5 million and $66.6 million, respectively. Net cash provided by operating activities during the three months ended March 31, 2026 and 2025 consisted primarily of cash earnings and an increase in accounts payable to sellers partially offset by an increase in accounts receivable due from buyers. The increase in cash provided by operating activities during the three months ended March 31, 2026 relative to the three months ended March 31, 2025 is primarily due to increased revenues 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, 2026 and 2025, net cash provided by operating activities was $41.0 million and $80.3 million, respectively. Net cash provided by operating activities during the six months ended June 30, 2026 and 2025 consisted primarily of cash earnings and an increase in accounts payable to sellers partially offset by an increase in accounts receivable due from buyers. The decrease in cash provided by operating activities during the six months ended June 30, 2026 relative to the six months ended June 30, 2025 is primarily due to the timing of collections and disbursements of funds related to auctions completed near period end.

Previous wording

In the three months ended March 31, 2026 and 2025, net cash used in investing activities was $14.8 million and $30.9 million, respectively. Net cash used in investing activities during the three months ended March 31, 2026 consisted of capitalized software development costs and an increase in finance receivables. 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.

Current wording

In the six months ended June 30, 2026 and 2025, net cash used in investing activities was $33.9 million and $93.6 million, respectively. Net cash used in investing activities during the six months ended June 30, 2026 consisted of capitalized software development costs and an increase in finance receivables. Net cash used in investing activities during the six months ended June 30, 2025 was primarily related to the increase in finance receivables as well as capitalized software development.

Previous wording

The decrease in net cash used in investing activities during the three months ended March 31, 2026 relative to the three months ended March 31, 2025 was primarily driven by a smaller increase in the finance receivables portfolio compared to the prior year.

Current wording

The decrease in net cash used in investing activities during the six months ended June 30, 2026 relative to the six months ended June 30, 2025 was primarily driven by a smaller increase in the finance receivables portfolio compared to the prior year.

Previous wording

In the three months ended March 31, 2026 and 2025, net cash provided by financing activities was $7.9 million and $32.0 million, respectively. Net cash provided by financing activities during the three months ended March 31, 2026 and 2025 relate 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.

Current wording

In the six months ended June 30, 2026 net cash used in financing activities was $36.1 million and in the six months ended June 30, 2025 net cash provided by financing activities was $47.4 million. Net cash used in financing activities during the six months ended June 30, 2026 relates to the repurchase of common stock offset by the proceeds, net of repayments, from long term debt. Net cash provided by financing activities during the six months ended June 30, 2025 relates to the 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.

Previous wording

The decrease in net cash provided by financing activities during the three months ended March 31, 2026 relative to the three months ended March 31, 2025 was primarily the result of decreased net borrowings of long-term debt during the period.

Current wording

The increase in net cash used in financing activities during the six months ended June 30, 2026 relative to the six months ended June 30, 2025 was primarily the result of the repurchase of common stock during the period and lower borrowings, net of repayments in the current period.

Previous wording

The volume of vehicles sold through our auctions generally fluctuates from quarter to quarter. This seasonality is caused by several factors, including holidays, weather, the seasonality of the retail market for used vehicles and the timing of federal tax returns, which affects the demand side of the auction industry. As a result, revenue and operating expenses related to volume will fluctuate accordingly on a quarterly basis. In the fourth quarter, we typically experience lower used vehicle auction volume as well as additional costs associated with the holidays. Seasonally depressed used vehicle auction volume typically continues during the winter months through the first quarter. Typical seasonality trends may not be observed in periods where other external factors more significantly impact the industry.

Current wording

The volume of vehicles sold through our auctions fluctuates from quarter to quarter. This seasonality is caused by several factors, including holidays, weather, the seasonality of the retail market for used vehicles and the timing of federal tax returns, which affects the demand side of the auction industry. As a result, revenue and operating expenses related to volume will fluctuate accordingly on a quarterly basis. In the fourth quarter, we typically experience lower used vehicle auction volume as well as additional costs associated with the holidays. Seasonally depressed used vehicle auction volume typically continues during the winter months through the first quarter. Typical seasonality trends may not be observed in periods where other external factors more significantly impact the industry.