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What changed in ACV Auctions Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ACV Auctions Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+319 added−303 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-19)

Top changes in ACV Auctions Inc.'s 2025 10-K

319 paragraphs added · 303 removed · 258 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeUtilizing and building upon our existing AMP advanced machine learning algorithms, we leverage our extensive vehicle database to provide guided insights on vehicle engine conditions at the time of inspection. The Apex sensor platforms are compatible with multiple of ACV's built applications and can be utilized using iOS and Android-powered devices. • Vehicle Intelligence .
Biggest changeThe Apex sensor platforms are compatible with multiple of ACV's built applications and can be utilized using iOS and Android-powered devices. 8 Table of Contents • Vehicle Intelligence . Our marketplace platform is fueled by the data we collect through our proprietary technology, inspections, and activity on our marketplace, as well as third-party market data.
Our core data and technology platform includes offerings such as inspection, vehicle intelligence, marketplace enablement, and operations automation. Digital Marketplace Our digital marketplace connects buyers and sellers of wholesale vehicles nationwide, enabling them to transact intuitively and efficiently. • Auction . Our core offering is our online auction, which facilitates real-time transactions of wholesale vehicles.
Our core data and technology platform includes offerings such as inspection, vehicle intelligence, marketplace enablement, and operations automation. Digital Marketplace Our digital marketplace connects buyers and sellers of wholesale vehicles nationwide, enabling them to transact intuitively and efficiently. • Auction . Our core offering is our online auction, which facilitates real-time transactions of wholesale vehicles between sellers and buyers.
The physical vehicle auction market in North America is largely consolidated, with Manheim and Adesa serving as large players in the market. Manheim has expanded into online wholesale marketplaces and auctions, and OPENLANE is also competing in the online wholesale auction market. However, we do compete with smaller chains of auctions and independent auctions in the physical market.
The physical vehicle auction market in North America is largely consolidated, with Manheim and Adesa serving as large players in the market. Manheim has expanded into online wholesale marketplaces and auctions, and OPENLANE is competing in the online wholesale auction market. However, we do compete with smaller chains of auctions and independent auctions in the physical market.
Our Marketplace Platform Our marketplace platform leverages data and technology to power our digital marketplace and data services, enabling our dealers and commercial partners to buy, sell, and value vehicles with confidence and efficiency. Our digital marketplace offerings include our core auction offering and value-added services, ACV Transportation, ACV Capital, and our Customer Assurance (Go Green).
Our Marketplace Platform Our marketplace platform leverages data and technology to power our digital marketplace and data services, enabling our dealers and commercial partners to buy, sell, and value vehicles with confidence and efficiency. Our digital marketplace offerings include our core auction offering and value-added services, ACV Transportation, ACV Capital, and our Customer Assurance offerings.
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.
This seasonality is caused by several factors, including holidays, weather, the seasonality of the retail market for used vehicles and the timing 11 Table of Contents 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.
Our comprehensive suite of services includes ACV Transportation, ACV Capital, and our Customer Assurance (Go Green), which help create a seamless and frictionless buying and selling experience for our customers to further enhance our marketplace platform. We also provide data services to our customers for use outside of our marketplace.
Our comprehensive suite of services includes ACV Transportation, ACV Capital, and our Customer Assurance offerings, which help create a seamless and frictionless buying and selling experience for our customers to further enhance our marketplace platform. We also provide data services to our customers for use outside of our marketplace.
We believe our ability to build vibrant local and regional networks of Marketplace Buyers and Marketplace Sellers, combined with our nationwide coverage, creates a strong competitive advantage. Comprehensive Suite of Products and Services Deepening Relationships with Our Customers .
We believe our ability to build vibrant local and regional networks of Marketplace Buyers and Marketplace Sellers, combined with our nationwide coverage, creates a strong competitive advantage. 9 Table of Contents Comprehensive Suite of Products and Services Deepening Relationships with Our Customers .
Our financing product includes straightforward pricing with no hidden costs, allowing our customers to know their inventory costs upfront. • Customer Assurance (Go Green) .
Our financing product includes straightforward pricing with no hidden costs, allowing our customers to know their inventory costs upfront. • Customer Assurance .
As we continue to grow and offer more comprehensive and efficient services, our customers can further benefit from a more streamlined, simple, and consistent experience across the full used vehicle 6 Table of Conten t s lifecycle.
As we continue to grow and offer more comprehensive and efficient services, our customers can further benefit from a more streamlined, simple, and consistent experience across the full used vehicle 6 Table of Contents lifecycle.
After onboarding they are assigned a dedicated account manager or territory manager for on-going support. Engagement with our customers is driven by ongoing and regular communications from their account managers or territory managers and VCIs.
After onboarding they are assigned a dedicated account manager or territory manager for on- 10 Table of Contents going support. Engagement with our customers is driven by ongoing and regular communications from their account managers or territory managers and VCIs.
Additionally, account managers and territory managers determine appropriate promotions to re-engage buyers and sellers, as well as an incentive for new customers to sign-up and engage. 10 Table of Conten t s Competition We mainly compete with large, national physical vehicle auction companies, such as Manheim, a subsidiary of Cox Enterprises, Inc., Adesa, a subsidiary of Carvana, and OPENLANE.
Additionally, account managers and territory managers determine appropriate promotions to re-engage buyers and sellers, as well as an incentive for new customers to sign-up and engage. Competition We mainly compete with large, national vehicle auction companies, such as Manheim, a subsidiary of Cox Enterprises, Inc., Adesa, a subsidiary of Carvana, and OPENLANE.
This application-driven device utilizes a multi-microphone array to capture higher quality engine sound recordings as compared to our previous data-gathering sensor AMP. This allows for real-time sharing of a vehicle’s engine sound and combines this data with information and inputs from a host of other sensors, including but not limited to non-audible range acoustics, vibration, atmospheric, VOC, and gyroscopic data.
This application-driven device utilizes a multi-microphone array to capture high quality engine sound recordings. This allows for real-time sharing of a vehicle’s engine sound and combines this data with information and inputs from a host of other sensors, including but not limited to non-audible range acoustics, vibration, atmospheric, VOC, and gyroscopic data.
As of December 31, 2024, we had over 2,900 teammates, including our more than 780 highly sophisticated VCIs that help support our relationships with our customers nationwide.
As of December 31, 2025, we had over 3,200 teammates, including our more than 800 highly sophisticated VCIs that help support our relationships with our customers nationwide.
The wholesale, financing and transportation of used vehicles are regulated by the states in which we operate and by the U.S. federal government. These laws can vary significantly from state to state.
Our Government Regulations The industry in which we operate is and will continue to be subject to extensive U.S. federal, state, local, and international laws and regulations. The wholesale, financing and transportation of used vehicles are regulated by the states in which we operate and by the U.S. federal government. These laws can vary significantly from state to state.
With a full picture of how previous vehicle sales have performed, our ACV Market Report gives dealers another tool to determine pricing and valuation strategies for used vehicles.
We provide transaction data and condition reports for comparable used vehicles, including pricing data from third-party sources. With a full picture of how previous vehicle sales have performed, our ACV Market Report gives dealers another tool to determine pricing and valuation strategies for used vehicles.
The enhanced audio signature is not only designed to give buyers the highest quality listening experience in the industry, but it is also customized to be compatible with our engine fault detection machine learning models.
The enhanced audio signature is not only designed to give buyers the highest quality listening experience in the industry, but it is also customized to be compatible with our engine fault detection machine learning models. We leverage our extensive vehicle database to provide guided insights on vehicle engine conditions at the time of inspection.
We have built a robust internal sales team that act as account managers, and partner with our customers. Account managers are often the first point of contact for customers seeking to join our marketplace platform, and they develop meaningful relationships with our dealers and commercial partners.
Account managers are often the first point of contact for customers seeking to join our marketplace platform, and they develop meaningful relationships with our dealers and commercial partners.
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 beginning of the first quarter.
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 beginning of the first quarter. Typical seasonality trends may not be observed in periods where other external factors more significantly impact the industry.
Data Services We offer data services for our dealer and commercial partners that bring transparency and offer insights into the condition and value of used vehicles, enabling them to make more informed wholesale and retail inventory management decisions both on and off our digital marketplace. • True360 Report .
Remarketing Centers Our remarketing centers offer expanded value-added services such as vehicle reconditioning and storage to facilitate auction business with commercial partners such as fleet, rental car, and financial sector consignors. 7 Table of Contents Data Services We offer data services for our dealer and commercial partners that bring transparency and offer insights into the condition and value of used vehicles, enabling them to make more informed wholesale and retail inventory management decisions both on and off our digital marketplace. • True360 Report .
In 2024, we had 20,975 active Marketplace Buyers and 14,377 active Marketplace Sellers generating $9.5 billion Marketplace GMV, which changed by 23%, 25%, and 8%, respectively, from the prior year.
In 2025, we had 22,062 active Marketplace Buyers and 14,905 active Marketplace Sellers generating $10.4 billion Marketplace GMV, which changed by 5%, 4%, and 9%, respectively, from the prior year.
We provide proprietary, vehicle-specific intelligence, including cosmetic and structural vehicle assessments that can be integrated into leading vehicle history report providers. This 7 Table of Conten t s data helps our dealers and commercial partners buy and sell vehicles and accurately assess and document vehicle condition.
We provide proprietary, vehicle-specific intelligence, including cosmetic and structural vehicle assessments that can be integrated into leading vehicle history report providers. This data helps our dealers and commercial partners buy and sell vehicles and accurately assess and document vehicle condition. Dealers utilize the True360 Report to make wholesale and retail transaction decisions with confidence both on and off our marketplace.
Our pricing engine utilizes our extensive repository of data to help predict wholesale and retail vehicle valuations at scale, and dealers can price any vehicle anywhere. 8 Table of Conten t s • Marketplace Enablement • MyACV .
We store, analyze, and connect this data to create comprehensive analytics tailored for our dealers and commercial partners. Our pricing engine utilizes our extensive repository of data to help predict wholesale and retail vehicle valuations at scale, and dealers can price any vehicle anywhere. • Marketplace Enablement • MyACV .
Our configurable and integrated services support payment processing, risk management, processing of titles by a dedicated ACV team or automated through machine learning, arbitration, and transportation services. • Live Appraisal. Through live appraisals, we enable dealers to quickly assess the value of potential trade-in vehicles from consumers. • Programmatic Buying.
Our configurable and integrated services support payment processing, risk management, processing of titles by a dedicated ACV team or automated through machine learning, arbitration, and transportation services. • Programmatic Buying.
Through services such as ACV Transportation and ACV Capital we help our customers manage the entire transaction journey on our marketplace platform, becoming an integral partner and deepening our relationships with them. 9 Table of Conten t s Growing Technology and Data Moat.
We offer a comprehensive suite of products and services that help create a seamless experience and remove the friction and pain points associated with the traditional wholesale process. Through services such as ACV Transportation and ACV Capital we help our customers manage the entire transaction journey on our marketplace platform, becoming an integral partner and deepening our relationships with them.
Our growing repository of data enables transparent, comprehensive, and accurate vehicle information that our customers can trust, powering more efficient and frictionless vehicle transactions both on and off our marketplace. Through the connection of hundreds of discrete data points collected along the entire used vehicle transaction journey, we improve existing products and react dynamically to our customers’ needs.
Growing Technology and Data Moat. Our growing repository of data enables transparent, comprehensive, and accurate vehicle information that our customers can trust, powering more efficient and frictionless vehicle transactions both on and off our marketplace.
Attractive Territory Economics. As our territories mature and scale, territory-level economics tend to improve driven by more cost-efficient operations and greater customer affinity for our offerings. As we reach greater scale and higher levels of density in a territory, we typically experience lower inspection cost per vehicle and better overall economics per transaction. Mission-Driven Culture and Proven Team.
As we reach greater scale and higher levels of density in a territory, we typically experience lower inspection cost per vehicle and better overall economics per transaction. Mission-Driven Culture and Proven Team. We believe the happiness of our teammates leads to successful business operations, and comes from learning and engaging in fulfilling work, which results in ample professional growth opportunities.
Dealers utilize the True360 Report to make wholesale and retail transaction decisions with confidence both on and off our marketplace. The True360 Reports can be used with leading vehicle history report providers, such as CarFax and AutoCheck, to increase transparency.
The True360 Reports can be used with leading vehicle history report providers, such as CarFax and AutoCheck, to increase transparency. Commercial partners use our detailed and marketable True360 commercial inspection reports to better price and sell their used vehicle inventory. • ACV Market Report .
We believe the happiness of our teammates leads to successful business operations, and comes from learning and engaging in fulfilling work, which results in ample professional growth opportunities. Additionally, we represent the successful creation of an entrepreneurial ecosystem in our hometown, and our success enables us to attract some of the best talent in the region and across the country.
Additionally, we represent the successful creation of an entrepreneurial ecosystem in our hometown, and our success enables us to attract some of the best talent in the region and across the country. Our leadership team is composed of seasoned executives with demonstrated track records of scaling businesses across auto, consumer, marketplace and technology companies.
Our leadership team is composed of seasoned executives with demonstrated track records of scaling businesses across auto, consumer, marketplace and technology companies. Sales Our sales team is responsible for onboarding our dealers and commercial partners and ensuring their success and satisfaction on our marketplace platform.
Sales Our sales team is responsible for onboarding our dealers and commercial partners and ensuring their success and satisfaction on our marketplace platform. We have built a robust internal sales team that act as account managers, and partner with our customers.
We believe Go Green's seller assurance service instills more confidence in dealers and commercial partners to transact digitally. Remarketing Centers Our remarketing centers offer expanded value-added services such as vehicle reconditioning and storage to facilitate auction business with commercial partners such as fleet, rental car, and financial sector consignors.
We believe Go Green's seller assurance service instills more confidence in dealers and commercial partners to transact digitally. Through our guarantee sale offering, we provide sellers with a price guarantee for vehicles to be sold on the marketplace.
Removed
Commercial partners use our detailed and marketable True360 commercial inspection reports to better price and sell their used vehicle inventory. • ACV Market Report . We provide transaction data and condition reports for comparable used vehicles, including pricing data from third-party sources.
Added
If a vehicle sells below the guaranteed price, we are responsible for paying the seller the difference between the guaranteed price and the sale price.
Removed
Our marketplace platform is fueled by the data we collect through our proprietary technology, inspections, and activity on our marketplace, as well as third-party market data. We store, analyze, and connect this data to create comprehensive analytics tailored for our dealers and commercial partners.
Added
Through the connection of hundreds of discrete data points collected along the entire used vehicle transaction journey, we improve existing products and react dynamically to our customers’ needs. Attractive Territory Economics. As our territories mature and scale, territory-level economics tend to improve driven by more cost-efficient operations and greater customer affinity for our offerings.
Removed
We offer a comprehensive suite of products and services that help create a seamless experience and remove the friction and pain points associated with the traditional wholesale process.
Removed
Typical seasonality trends may not be observed in periods where other external factors more significantly impact the industry. 11 Table of Conten t s Our Government Regulations The industry in which we operate is and will continue to be subject to extensive U.S. federal, state, local, and international laws and regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile we have security measures in place designed to protect customer information and prevent data loss, security breaches, cyber-attacks and other similar incidents, there can be no assurance that our security measures or those of our third-party service providers that store or otherwise process certain of our and our customers’ information on our behalf will be effective in protecting against unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our confidential information, marketplace platform or our customers’ information, including personal information, particularly given that our ability to monitor our third-party service providers’ information security practices is limited.
Biggest changeSimilarly, supply chain-attacks have increased in frequency and severity and we cannot guarantee that third parties and infrastructure in our supply chain and our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products/services) or the third-party information technology systems that support us and our services. 25 Table of Contents While we have security measures in place designed to protect customer information and prevent data loss, security breaches, cyber-attacks and other similar incidents, there can be no assurance that our security measures or those of our third-party service providers that store or otherwise process certain of our and our customers’ information on our behalf will be effective in protecting against unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our confidential information, marketplace platform or our customers’ information, including personally identifiable information, particularly given that our ability to monitor our third-party service providers’ information security practices is limited.
In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and marketplace platform capabilities, personnel or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our marketplace platform, or we have difficulty retaining the customers or vendors of any acquired business due to changes in ownership, management or otherwise.
In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and marketplace platform capabilities, personnel or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our marketplace platform, or we have difficulty retaining the customers or vendors of any acquired business due to changes in ownership, management, operations or otherwise.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations and financial condition; • variance in our financial performance from expectations of securities analysts; • changes in our projected operating and financial results; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • announcements or concerns regarding real or perceived quality, performance or capabilities with our products or similar products of our competitors; • adoption of new regulations applicable to the industries in which we operate or the expectations concerning future regulatory developments; • our involvement in litigation; • future sales of our Class A common stock by us or our stockholders; • changes in senior management or key personnel; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; and • general economic and market conditions.
The market price of our Common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations and financial condition; • variance in our financial performance from expectations of securities analysts; • changes in our projected operating and financial results; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • announcements or concerns regarding real or perceived quality, performance or capabilities with our products or similar products of our competitors; • adoption of new regulations applicable to the industries in which we operate or the expectations concerning future regulatory developments; • our involvement in litigation; • future sales of our Common stock by us or our stockholders; • changes in senior management or key personnel; • the trading volume of our Common stock; • changes in the anticipated future size and growth rate of our market; and • general economic and market conditions.
Live auctions at the Remarketing Centers may be delayed or canceled due to weather-related or other events. If any acquired business fails to achieve, or is unable to sustain, acceptable profitability levels, our business, results of operations and financial condition may be adversely affected. We bear settlement risk for vehicles sold through our marketplace platform.
Live auctions at the Remarketing Centers may be delayed or canceled due to weather-related or other events. If any acquired Remarketing Center fails to achieve, or is unable to sustain, acceptable profitability levels, our business, results of operations and financial condition may be adversely affected. We bear settlement risk for vehicles sold through our marketplace platform.
We may incur significant losses in the future for a number of reasons, including the other risks described herein, unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and Class A common stock may significantly decrease.
We may incur significant losses in the future for a number of reasons, including the other risks described herein, unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and Common stock may significantly decrease.
We participate in a highly competitive industry, and pressure from existing and new companies may adversely affect our business, results of operations and financial condition. We mainly compete with large, national physical vehicle auction companies, such as Manheim, a subsidiary of Cox Enterprises, Inc., Adesa, a subsidiary of Carvana, and OPENLANE.
We participate in a highly competitive industry, and pressure from existing and new companies may adversely affect our business, results of operations and financial condition. We mainly compete with large, national vehicle auction companies, such as Manheim, a subsidiary of Cox Enterprises, Inc., Adesa, a subsidiary of Carvana, and OPENLANE.
Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our Class A common stock would receive a premium for their shares of our Class A common stock in an acquisition.
Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our Common stock would receive a premium for their shares of our Common stock in an acquisition.
We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including difficulties in our ability to achieve market acceptance of our platform, products and services and attract customers, as well as increasing competition and increasing expenses as we continue to grow our business.
We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including difficulties in our ability to grow market acceptance of our platform, products and services and attract customers, as well as increasing competition and increasing expenses as we continue to grow our business.
Security incidents and attendant consequences may cause customers to stop using our products/services, deter new customers from using our products/services, and negatively impact our ability to grow and operate our business. Our agreements with certain customers may require us to use industry-standard or reasonable measures to safeguard personal information.
Security incidents and attendant consequences may cause customers to stop using our products/services, deter new customers from using our products/services, and negatively impact our ability to grow and operate our business. Our agreements with certain customers may require us to use industry-standard or reasonable measures to safeguard personal and sensitive information.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive the foregoing to be negative, it could have a material adverse effect on the price of our Class A common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive the foregoing to be negative, it could have a material adverse effect on the price of our Common stock.
We rely on third-party carriers to transport vehicles throughout the United States and are subject to business risks and costs associated with such carriers and with the transportation industry, many of which are out of our control. We rely on third-party carriers to transport vehicles sold through our marketplace to our customers.
We rely on third-party carriers to transport vehicles throughout the United States and are subject to business risks and costs associated with such carriers and with the transportation industry, many of which are out of our control. We rely on third-party carriers to transport vehicles sold through our marketplace platform to our customers.
We are obligated to maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock.
We are obligated to maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Common stock.
Our efforts to grow our business may not be successful or may be costlier than we expect, or the rate of our growth in revenue may be slower than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses.
Our efforts to grow our business may not be successful or may be costlier than we expect, or the rate of our growth in revenue may be slower than we expect, and we may not be able to increase our revenue enough to offset our operating expenses.
Further, in future periods, our revenue growth could slow, our revenue could decline and/or our financial condition may be adversely impacted for a number of reasons, many of which are outside of our control, including: • the level of demand for our online marketplace and our value-added products and services, including fluctuation in our business; • our ability to retain existing customers, as well as our ability to increase sales of our full platform of products and services to existing customers; • growth rates and variations in the revenue mix of our marketplace and inspection products and services offerings; • differences between buyer and seller vehicle pricing expectations; • the timing and growth of our business, in particular through our hiring of new employees and expansion into additional markets; • changes in our business model; • the introduction of new products and services and enhancement of existing products and services by existing competitors or new entrants into our market, and changes in pricing offered by us or our competitors; • network outages, security breaches, cyber-attacks, fraud, technical difficulties or interruptions, or other similar incidents with respect to our marketplace platform; • changes in the growth rate of the markets in which we compete; 14 Table of Conten t s • changes in customers’ budgets, including as a result of rising prices, interest rate increases, increases in energy costs and other adverse developments in macroeconomic conditions; • seasonal variations related to sales and marketing and other activities; • our ability to control costs, including our operating expenses and vehicle arbitration costs; • our ability to recruit, train and retain our inspectors; • the perception of our business and brand among our customer base; • unforeseen litigation and actual or alleged intellectual property infringement, misappropriation or other violation; • fluctuations in our effective tax rate; • fluctuations in the amount of auction float on our balance sheet; • general economic and political conditions, as well as economic conditions specifically affecting the automotive industry, including as a result of the actual or threatened imposition of tariffs or other trade measures; and • natural disasters, weather events, pandemics, or energy or telecommunications failures.
Further, in future periods, our revenue growth could slow, our revenue could decline and/or our financial condition may be adversely impacted for a number of reasons, many of which are outside of our control, including: • the level of demand for our online marketplace and our value-added products and services, including fluctuation in our business; • our ability to retain existing customers, as well as our ability to increase sales of our full platform of products and services to existing customers; • growth rates and variations in the revenue mix of our marketplace and inspection products and services offerings; • differences between buyer and seller vehicle pricing expectations; • the timing and growth of our business, in particular through our hiring of new employees and expansion into additional markets; • changes in our business model; 14 Table of Contents • the introduction of new products and services and enhancement of existing products and services by existing competitors or new entrants into our market, and changes in pricing offered by us or our competitors; • network outages, security breaches, cyber-attacks, fraud, technical difficulties or interruptions, or other similar incidents with respect to our marketplace platform; • changes in the growth rate of the markets in which we compete; • changes in customers’ budgets, including as a result of rising prices, interest rate increases, increases in energy costs and other adverse developments in macroeconomic conditions; • seasonal variations related to sales and marketing and other activities; • our ability to control costs, including our operating expenses and vehicle arbitration costs; • our ability to recruit, train and retain our inspectors; • the perception of our business and brand among our customer base; • unforeseen litigation and actual or alleged intellectual property infringement, misappropriation or other violation; • fraud perpetuated by our customers or business partners; • fluctuations in our effective tax rate; • fluctuations in the amount of auction float on our balance sheet; • general economic and political conditions, as well as economic conditions specifically affecting the automotive industry, including as a result of the actual or threatened imposition of tariffs or other trade measures; and • natural disasters, weather events, pandemics, or energy or telecommunications failures.
The physical vehicle auction market in North America is largely consolidated, with Manheim and Adesa serving as large players in the market. Manheim has expanded into online wholesale marketplaces and auctions, and OPENLANE is also competing in the online wholesale auction market.
The physical vehicle auction market in North America is largely consolidated, with Manheim and Adesa serving as large players in the market. Manheim has expanded into online wholesale marketplaces and auctions, and OPENLANE is competing in the online wholesale auction market.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, acts of war, adverse weather events, global pandemics, geopolitical tensions, armed conflicts, acts of terrorism, human errors, infrastructure failures, energy crises and similar events. The third-party systems and operations on which we rely are subject to similar risks.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, acts of war, adverse weather events, global pandemics, geopolitical tensions, armed conflicts, acts of terrorism, human errors, infrastructure failures, cyber-attacks, energy crises and similar events. The third-party systems and operations on which we rely are subject to similar risks.
For example, technology is currently being developed to produce automated, driverless vehicles that could reduce the demand for, or replace, traditional vehicles, including the used vehicles that are sold through our marketplace. Additionally, ride-hailing and ride-sharing services are becoming increasingly popular as a means of transportation and may decrease consumer demand for the used vehicles, particularly as urbanization increases.
For example, technology is currently being developed to produce automated, driverless vehicles that could reduce the demand for, or replace, traditional vehicles, including the used vehicles that are sold through our marketplace. Additionally, ride-hailing and ride-sharing services are popular as a means of transportation and may decrease consumer demand for the used vehicles, particularly as urbanization increases.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our Class A common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 2 ⁄ 3 % of our outstanding shares of voting stock; 35 Table of Conten t s • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our board of directors to amend our bylaws and the approval of the holders of at least 66 2 ⁄ 3 % of our outstanding shares of voting stock to amend certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our Common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 2 ⁄ 3 % of our outstanding shares of voting stock; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our board of directors to amend our bylaws and the approval of the holders of at least 66 2 ⁄ 3 % of our outstanding shares of voting stock to amend certain provisions of our certificate of incorporation.
Upon our expansion into international markets, we and our third-party service providers may be subject to a new range of detailed and complex foreign laws regarding privacy and the processing of personal information and other data, most notably the General Data Protection Act Regulation (“GDPR”).
With our expansion into international markets, we and our third-party service providers may be subject to a new range of detailed and complex foreign laws regarding privacy and the processing of personal information and other data, most notably the General Data Protection Act Regulation (“GDPR”).
Problems with the reliability or security of our systems could harm our reputation, result in a loss of customers and result in additional costs. Problems faced by our third-party web-hosting providers, including Amazon Web Services and Google Cloud, could inhibit the functionality of our marketplace platform.
Actual or perceived problems with the reliability or security of our systems could harm our reputation, result in a loss of customers and result in additional costs. Problems faced by our third-party providers, including web-hosting providers including Amazon Web Services and Google Cloud, could inhibit the functionality of our marketplace platform.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Common stock.
Risks Related to Ownership of Our Class A Common Stock Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders. We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
Risks Related to Ownership of Our Common Stock Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders. We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
Other factors that may cause our quarterly results to fluctuate include, without limitation: • our ability to attract new customers; • our ability to generate revenue from our value-added products and services; • changes in the competitive dynamics of our industry; • the regulatory environment; • expenses associated with unforeseen quality issues; • macroeconomic or geopolitical conditions and armed conflicts; • seasonality of the automotive industry; and • litigation or other claims against us.
Other factors that may cause our quarterly results to fluctuate include, without limitation: • our ability to attract new customers; 20 Table of Contents • our ability to generate revenue from our value-added products and services; • changes in the competitive dynamics of our industry; • the regulatory environment; • expenses associated with unforeseen quality issues; • macroeconomic or geopolitical conditions and armed conflicts; • seasonality of the automotive industry; and • litigation or other claims against us.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Common stock.
During past global economic downturns, there has been an erosion of retail demand for new and used vehicles that, together with other factors such as financial market instability, led many lenders to reduce originations of new loans and leases and led to significant manufacturing capacity reductions by automakers selling vehicles in the United States and Canada.
During past global economic downturns, there has been an erosion of retail demand for new and used vehicles that, together with other factors such as financial market instability, led many lenders to reduce originations of new loans and leases and led to significant manufacturing capacity 22 Table of Contents reductions by automakers selling vehicles in the United States and Canada.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Class A common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our Class A common stock.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our Common stock.
We have registered all of the shares of Class A common stock issuable upon exercise or vesting of outstanding options or RSUs, respectively, or other equity incentives we may grant in the future, for public resale under the Securities Act.
We have registered all of the shares of Common stock issuable upon exercise or vesting of outstanding options or RSUs, respectively, or other equity incentives we may grant in the future, for public resale under the Securities Act.
Our systems and operations or those of our third-party vendors and partners could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry, cyber-attacks, security breaches, acts of terrorism, human error, vandalism or sabotage, financial insolvency, bankruptcy and similar events or incidents.
Our systems and operations or those of our third-party vendors and partners could be exposed to 24 Table of Contents damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry, cyber-attacks, security breaches, acts of terrorism, human error, vandalism or sabotage, financial insolvency, bankruptcy and similar events or incidents.
If our customers do not continue to use our marketplace platform or purchase additional services from us, our revenue may decline and our business, results of operations and financial condition may be harmed. Decreases in the supply of used vehicles coming to the wholesale market may impact sales volumes, which may adversely affect our revenue and profitability.
If our customers do not continue to use our marketplace platform or purchase additional services from us, our revenue may decline and our business, results of operations and financial condition may be harmed. 17 Table of Contents Decreases in the supply of used vehicles coming to the wholesale market may impact sales volumes, which may adversely affect our revenue and profitability.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may also negatively impact the market price of our Class A common stock. Sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may also negatively impact the market price of our Common stock. Sales of our Common stock in the public market could cause the market price of our Common stock to decline.
If we are unable to collect payments on a large number of vehicles, the resulting decreased fee revenue and potential loss of gross sales proceeds may adversely affect our business, results of operations and financial condition. Failure to deal effectively with fraudulent activities on our marketplace platform, could harm our business.
If we are unable to collect payments on a large number of vehicles, the resulting decreased fee revenue and potential loss of gross sales proceeds may adversely affect our business, results of operations and financial condition. 19 Table of Contents Failure to deal effectively with fraudulent activities on our marketplace platform, could harm our business.
Any failure or perceived failure by us or third parties we work with to comply with our policies, disclosures and obligations to customers, industry oversight organizations, or other third parties, or applicable data privacy and security 27 Table of Conten t s laws, regulations, rules, industry codes of conduct, policies, standards or other legal or contractual obligations, may result in, among other things, governmental or regulatory investigations, enforcement actions, regulatory or other fines, orders requiring that we change our practices, criminal compliance orders, claims for damages by affected individuals or litigation or public statements against us by consumer advocacy groups or others, and could cause customers to lose trust in us.
Any failure or perceived failure by us or third parties we work with to comply with our policies, disclosures and obligations to customers, industry oversight organizations, or other third parties, or applicable data privacy and security laws, regulations, rules, industry codes of conduct, policies, standards or other legal or contractual obligations, may result in, among other things, governmental or regulatory investigations, enforcement actions, regulatory or other fines, orders requiring that we change our practices, criminal compliance orders, claims for damages by affected individuals or litigation or public statements against us by consumer advocacy groups or others, and could cause customers to lose trust in us.
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline. Our stock price may be volatile, and the value of our Class A common stock may decline.
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Common stock to decline. Our stock price may be volatile, and the value of our Common stock may decline.
Some open source software licenses require users who distribute or make available across a network software and services that include open source software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code, which could include valuable proprietary code, on unfavorable terms or at no cost.
Some open source software licenses require users who distribute or make available across a network software and services that include open source software to publicly disclose 30 Table of Contents all or part of the source code to such software and/or make available any derivative works of the open source code, which could include valuable proprietary code, on unfavorable terms or at no cost.
We have incurred and will continue to incur capital and operating expenses and other costs to comply with these laws and regulations. The foregoing description of laws and regulations to which we are or may be subject is not exhaustive, and the regulatory framework governing our operations is subject to evolving interpretations and continuous change.
We have incurred and will continue to incur capital and operating expenses and other costs to comply with these laws and regulations. 32 Table of Contents The foregoing description of laws and regulations to which we are or may be subject is not exhaustive, and the regulatory framework governing our operations is subject to evolving interpretations and continuous change.
If we cannot manage our growth effectively to maintain the quality and efficiency of our customers’ experience, our business may be harmed. We have a history of operating losses and we may not achieve or maintain profitability in the future. We have experienced net losses in each annual period since inception.
If we cannot manage our growth effectively to maintain the quality and efficiency of our customers’ experience, our business may be harmed. 13 Table of Contents We have a history of operating losses and we may not achieve or maintain profitability in the future. We have experienced net losses in each annual period since inception.
However, the second buyer may only be willing to pay a lower price for the vehicle than the first buyer, and we bear the risk of loss for such resale as well, which may adversely affect our business, results of operations and financial condition.
However, the second buyer may only be willing to pay a lower price for the vehicle than the first 18 Table of Contents buyer, and we bear the risk of loss for such resale as well, which may adversely affect our business, results of operations and financial condition.
If our operating metrics are not accurate representations of our business, if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, we expect that our business, results of operations, financial condition and reputation would be adversely affected.
If our operating metrics are not accurate representations of our business, if investors do not perceive our operating metrics to be accurate, or if we discover material 16 Table of Contents inaccuracies with respect to these figures, we expect that our business, results of operations, financial condition and reputation would be adversely affected.
In addition, the market for used vehicles may be impacted by the significant, and likely accelerating, changes to the broader automotive industry, which may render our existing or future business model or our auction marketplace and value-added products and services less competitive, unmarketable or obsolete.
In addition, the market for used vehicles may be impacted by changes to the broader automotive industry, which may render our existing or future business model or our auction marketplace and value-added products and services less competitive, unmarketable or obsolete.
We have exposure to credit risk with our dealer borrowers, which could have a negative impact on our business, results of operation and financial condition. We are subject to credit risk resulting from defaults on payments by our dealer borrowers on our floorplan loans.
We have exposure to credit risk with our dealer borrowers, which could have a negative impact on our business, results of operation and financial condition. We are subject to credit and fraud risk resulting from defaults on payments by our dealer borrowers on our floorplan loans, as well as from fraud by dealer borrowers.
If securities or industry analysts do not publish research or reports about our business, downgrade our Class A common stock, or publish negative reports about our business, our stock price would likely decline.
If securities or industry analysts do not publish research or reports about our business, downgrade our Common stock, or publish negative reports about our business, our stock price would likely decline.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. 36 Table of Conten t s We do not intend to pay dividends for the foreseeable future.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. We do not intend to pay dividends for the foreseeable future.
A security breach, cyber-attack or other similar incident may cause us to breach our customer contracts. A security breach, cyber-attack or other similar incident could lead to claims by our customers or other relevant stakeholders that we have failed to comply with such obligations.
A security breach, cyber-attack or other similar incident may cause us to breach our customer contracts. An actual or perceived security breach, cyber-attack or other similar incident could lead to claims by our customers or other relevant stakeholders that we have failed to comply with such obligations.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is 36 Table of Contents responsible for appointing the members of our management.
As a public company, we have incurred and will continue to incur significant finance, legal, accounting and other expenses, including director and officer liability insurance. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Stock Market, and other applicable securities rules and regulations impose various requirements on public companies.
As a public company, we have incurred and will continue to incur significant finance, legal, accounting and other expenses, including director and officer liability insurance. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The New York Stock Exchange, and other applicable securities rules and regulations impose various requirements on public companies.
In particular, we expect that we will continue to expend substantial financial and other resources on: • our online digital marketplace, including systems architecture, scalability, availability, performance and security; • the development of new products and services, as well as investments in further optimizing our existing products and services; • our sales organization, operations teams, and customer support teams to engage our existing and prospective customers, increase usage by existing customers, drive adoption of our products, expand use cases and integrations and support expansion; • acquisitions or strategic investments, including on post-acquisition investment to develop acquired companies; • expansion into new markets, including in markets outside of the United States; • increased headcount; and • general administration, including increased legal and accounting expenses associated with being a public company.
In particular, we expect that we will continue to expend substantial financial and other resources on: • our online digital marketplace, including systems architecture, scalability, availability, performance and security; • the development of new products and services, as well as investments in further optimizing our existing products and services; • security and cybersecurity protections across our products, services, and locations; • our sales organization, operations teams, and customer support teams to engage our existing and prospective customers, increase usage by existing customers, drive adoption of our products, expand use cases and integrations and support expansion; • acquisitions or strategic investments, including on post-acquisition investment to develop acquisitions, and to develop physical locations to support the expansion of commercial offerings; • expansion into new markets, including in markets outside of the United States; • increased headcount; and • general administration, including increased legal and accounting expenses associated with being a public company.
If material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially 33 Table of Conten t s misstated and result in the loss of investor confidence or delisting and cause the market price of our common stock to decline.
If material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our common stock to decline.
Although we have implemented measures designed to detect and reduce the occurrence of fraudulent activities on our marketplace platform and combat bad customer experiences, there can be no assurance that these measures will be effective in combating fraudulent transactions or improving overall satisfaction among sellers, buyers, and other 19 Table of Conten t s participants.
Although we have implemented measures designed to detect and reduce the occurrence of fraudulent activities on our marketplace platform and combat bad customer experiences, there can be no assurance that these measures will be effective in combating fraudulent transactions or improving overall satisfaction among sellers, buyers, and other participants.
Consumer purchases in general may decline during recessions, periods of prolonged declines in the equity markets or housing markets and periods 22 Table of Conten t s when disposable income and perceptions of consumer wealth are lower. Changes to U.S. federal tax policy may negatively affect consumer spending.
Consumer purchases in general may decline during recessions, periods of prolonged declines in the equity markets or housing markets and periods when disposable income and perceptions of consumer wealth are lower. Changes to U.S. federal tax policy may negatively affect consumer spending.
Our marketplace platform, systems, networks, and physical facilities could also be breached or information could be 25 Table of Conten t s otherwise compromised due to employee, contractor or customer error, negligence or malfeasance, if, for example, third parties fraudulently induce our employees, contractors or our customers to disclose information or user names or passwords, or otherwise compromise the security of our marketplace platform, networks, systems and physical facilities.
Our marketplace platform, systems, networks, and physical facilities could also be breached or information could be otherwise compromised due to employee, contractor or customer error, negligence or malfeasance, if, for example, third parties fraudulently induce our employees, contractors or our customers to disclose information or user names or passwords, or otherwise compromise the security of our marketplace platform, networks, systems and physical facilities.
Our net operating loss carryforwards, or NOLs, and certain other tax attributes could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax 32 Table of Conten t s law. Our U.S.
Our net operating loss carryforwards, or NOLs, and certain other tax attributes could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law. Our U.S.
However, we may fail to enter into such agreements with all applicable parties, and such agreements may also not effectively grant all necessary rights to any inventions that may have been developed by our employees and consultants.
However, we may fail to enter into such agreements with all applicable parties, and such agreements may also not effectively grant all necessary rights to any inventions that may have 28 Table of Contents been developed by our employees and consultants.
Our business has grown as new customers have begun to trust and use our digital marketplace and value-added products and services as a new way to buy and sell their vehicles to other dealers. However, our business is relatively new and has operated at substantial scale for only a limited period of time.
Our business has grown as new and existing customers have grown their trust in and use of our digital marketplace and value-added products and services as a way to buy and sell their vehicles to other dealers. However, our business has operated at substantial scale for only a limited period of time.
Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited. Our trade secrets, know-how 28 Table of Conten t s and other proprietary materials may be revealed to the public or our competitors or independently developed by our competitors and no longer provide protection for the related technology.
Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited. Our trade secrets, know-how and other proprietary materials may be revealed to the public or our competitors or independently developed by our competitors and no longer provide protection for the related technology.
While we have secured registration of several of our trademarks in the United States, and are actively seeking additional registrations in the United States and Canada, it is possible that others may assert senior rights to similar trademarks, in the United 29 Table of Conten t s States and internationally, and seek to prevent our use and registration of our trademarks in certain jurisdictions.
While we have secured registration of several of our trademarks in the United States, and are actively seeking additional registrations in the United States and Canada, it is possible that others may assert senior rights to similar trademarks, in the United States and internationally, and seek to prevent our use and registration of our trademarks in certain jurisdictions.
These threats, which are becoming increasingly difficult to detect, are perpetuated by a variety of sources, including traditional computer “hackers,” employees or contractors engaging in theft or misuse, organized criminal threat actors, nation-states and nation-state-supported actors.
These threats, which are becoming increasingly difficult to detect, are perpetuated by a variety of sources, including traditional computer “hackers,” employees or contractors engaging in theft or misuse, newly-developed artificial intelligence technology, organized criminal threat actors, nation-states and nation-state-supported actors.
Moreover, any debt financing that we secure in the future could involve restrictive covenants, which may make it more difficult for us to operate our business, obtain additional capital and to pursue business opportunities. Volatility in the credit markets may also have an adverse effect on our ability to obtain debt financing.
Moreover, any debt financing that we secure in the future could involve restrictive covenants, which may make it more difficult for us to 15 Table of Contents operate our business, obtain additional capital and to pursue business opportunities. Volatility and other developments in the credit markets may also have an adverse effect on our ability to obtain debt financing.
Even the perception of a decrease in the quality of our customer experience or brand could impact results. Our high rate of growth makes maintaining the quality of our customer experience more difficult.
Even the perception of a decrease in the quality of our customer experience or brand could impact results. Our continued growth makes maintaining the quality of our customer experience more difficult.
Future growth and profitability will depend in part on the cost and efficiency of our promotional advertising and marketing programs and related expenditures, including our ability to create greater awareness of our marketplace platform and brand name, to appropriately plan for future expenditures and to drive the promotion of 21 Table of Conten t s our marketplace platform.
Future growth and profitability will depend in part on the cost and efficiency of our promotional advertising and marketing programs and related expenditures, including our ability to create greater awareness of our marketplace platform and brand name, to appropriately plan for future expenditures and to drive the promotion of our marketplace platform.
Accordingly, holders of our Class A common stock may need to rely on sales of their holdings of Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Item 1B. Unresolved Staff Comments. None.
Accordingly, holders of our Common stock may need to rely on sales of their holdings of Common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. 37 Table of Contents Item 1B. Unresolved Staff Comments. None.
Capacity reductions or supply shortages, including as a result of disruptions to supply chains, could depress the number of vehicles coming to the wholesale market in the future and could lead to reduced 17 Table of Conten t s numbers of vehicles from various suppliers, negatively impacting auction volumes.
Capacity reductions or supply shortages, including as a result of disruptions to supply chains, could depress the number of vehicles coming to the wholesale market in the future and could lead to reduced numbers of vehicles from various suppliers, negatively impacting auction volumes.
There can be no assurances that monitoring of our credit risk as it affects the collectability of loans and our efforts to mitigate credit 18 Table of Conten t s exposure through underwriting policies and risk-mitigation strategies will be sufficient to prevent a negative impact on our business, results of operations and financial condition.
There can be no assurances that monitoring of our credit and fraud risk as it affects the collectability of loans and our efforts to mitigate credit exposure through underwriting policies and risk-mitigation strategies will be sufficient to prevent a negative impact on our business, results of operations and financial condition.
Currently, our marketplace platform consists of our digital marketplace, including our auction and value-added services, ACV Capital and ACV Transportation, and Go Green assurance; remarketing centers; data services, including our True360 and ACV Market reports and ACV MAX inventory software management offerings; and data and technology, 16 Table of Conten t s including our inspection software.
Currently, our marketplace platform consists of our digital marketplace, including our auction and value-added services, ACV Capital and ACV Transportation, and Go Green assurance; remarketing centers; data services, including our True360 and ACV Market reports and ACV MAX inventory software management offerings; and data and technology, including our inspection software.
In addition, we face risks with respect to fraudulent activities on our marketplace platform, including the sale of illegally-acquired vehicles through our auction marketplace, the unauthorized entry into and use of our marketplace platform by persons who do not meet our criteria and standards, and participation of buyers in our marketplace platform who have no intention to pay.
In addition, we face risks with respect to fraudulent activities on our marketplace platform, including the sale of illegally-acquired vehicles through our auction marketplace, the unauthorized entry into and use of our marketplace platform by persons who do not meet our criteria and standards, the provision of fraudulent titles by selling dealers, participation of buyers in our marketplace platform who have no intention to pay, and transportation-related fraud.
The violation of any of these laws or regulations could result in administrative, civil or criminal penalties or in a 31 Table of Conten t s cease-and-desist order against our business operations, any of which could damage our reputation and adversely affect our business.
The violation of any of these laws or regulations could result in administrative, civil or criminal penalties or in a cease-and-desist order against our business operations, any of which could damage our reputation and adversely affect our business.
Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise 34 Table of Conten t s capital through the sale of additional equity securities.
Sales of a substantial number of shares of our Common stock in the public market, or the perception that these sales might occur, could depress the market price of our Common stock and could impair our ability to raise capital through the sale of additional equity securities.
Even if our revenue continues to increase, it is possible that our revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business, increased competition, changes to technology, a decrease in the growth of 12 Table of Conten t s our overall market or our failure, for any reason, to continue to take advantage of growth opportunities.
Even if our revenue continues to increase, it is possible that our revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business, increased competition, adverse macroeconomic conditions, changes to technology, a decrease in the growth of our overall market or our failure, for any reason, to continue to take advantage of growth opportunities.
In connection with any acquired business, we will need to ensure the security of vehicles and safety of our employees and customers, negotiate favorable lease terms, obtain any necessary permits and licenses, hire, train and retain our personnel, and coordinate with our digital marketplace so as to minimize any internal competition.
At the Remarketing Centers we will need to ensure the security of vehicles and safety of our employees and customers, negotiate favorable lease terms, obtain any necessary permits and licenses, hire, train and retain our personnel, and coordinate with our digital marketplace so as to minimize any internal competition.
Interruptions in these systems, whether due to system failures, programming or configuration errors, bugs, vulnerabilities, computer viruses, physical or electronic break-ins or similar events, could affect the availability of our inventory on our marketplace platform and prevent or inhibit the ability of customers to access our marketplace 24 Table of Conten t s platform.
We may experience significant interruptions to our systems in the future. Interruptions in these systems, whether due to system failures, programming or configuration errors, bugs, vulnerabilities, computer viruses, physical or electronic break-ins or similar events, could affect the availability of our inventory on our marketplace platform and prevent or inhibit the ability of customers to access our marketplace platform.
We acquire new dealers and commercial partners through a variety of marketing channels including digital, such as social media and search engine optimization, direct marketing, such as brand-oriented marketing campaigns, and outbound business development, and we have expanded our in-house marketing significantly in recent years.
We acquire new dealers and commercial partners through a variety of marketing channels including digital, such as social media and search engine optimization, direct marketing, such as brand-oriented marketing campaigns, and outbound business development.
Federal NOLs generated in tax years beginning before January 1, 2018 are only permitted to be carried forward for 20 taxable years under applicable U.S. federal tax law. As of December 31, 2024, we had U.S. federal and state NOLs of $348.0 million and $302.4 million, respectively.
Federal NOLs generated in tax years beginning before January 1, 2018 are only permitted to be carried forward for 20 taxable years under applicable U.S. federal tax law. As of December 31, 2025, we had U.S. federal and state NOLs of $360.9 million and $318.6 million, respectively.
Our third-party carriers who deliver vehicles to our customers could adversely affect the customer experience if they do not perform to our standards of timeliness and care while handling the vehicles, which may harm our business. Our future growth and profitability relies on the effectiveness and efficiency of our sales and marketing efforts, and these efforts may not be successful.
Our third-party carriers who deliver vehicles to our customers could adversely affect the customer experience if they do not perform to our standards of timeliness and care while handling the vehicles, or may not take financial responsibility for damage caused to vehicles while in their control which may harm our business. 21 Table of Contents Our future growth and profitability relies on the effectiveness and efficiency of our sales and marketing efforts, and these efforts may not be successful.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may be forced to obtain financing on undesirable terms or our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, results of operations and financial condition may be harmed. 15 Table of Conten t s Pursuant to the terms of our outstanding indebtedness, we may be limited in our ability to incur future debt.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may be forced to obtain financing on undesirable terms or our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, results of operations and financial condition may be harmed.
If we have material weaknesses in the future, it could affect the financial results that we report or create a perception that those financial results do not fairly state our results of operations or financial condition. Either of those events could have an adverse effect on the value of our common stock.
If we have material weaknesses in the future, it could affect the financial results that we report or create a perception that those financial results do not fairly state our results of operations or financial condition.
Costs and 13 Table of Conten t s expenses could fluctuate in future periods, which could negatively affect our future results of operations.
Costs and expenses could fluctuate in future periods, which could negatively affect our future results of operations.
Our actual business results may vary significantly from such guidance due to a number of factors, including many outside of our control, such as global economic uncertainty and market conditions, which could adversely affect our business and future results of operations or financial condition. Furthermore, we may in the future make downward revisions of our previously announced guidance.
Our actual business results may vary significantly from such guidance or analysts' or investors' expectations due to a number of factors, including many outside of our control, such as global economic uncertainty and market conditions, which could adversely affect our business and future results of operations or financial condition.
Further, even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP), because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
Either of those events could have an adverse effect on the value of our common stock. 34 Table of Contents Further, even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP), because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
In the event of this or any other adverse developments, our continued success will depend on our ability to successfully adjust our strategy to meet changing market dynamics. If we are unable to do so, our business may be harmed.
In the event of this or any other adverse developments, our continued success will depend on our ability to successfully adjust our strategy to meet changing market dynamics. If we are unable to do so, our business may be harmed. Our growth has placed and may continue to place significant demands on our management and our operational and financial resources.
A weak economic environment, degradations in the value of used vehicles or consumers' financing becoming more expensive could exert pressure on our dealer customers resulting in higher delinquencies, repossessions, and losses for us.
A weak economic environment, fraud by dealer borrowers, borrowers' use of multiple lenders, degradations in the value of used vehicles or consumers' financing becoming more expensive could exert pressure on our dealer customers resulting in higher delinquencies, repossessions, collection efforts, customer bankruptcies, and losses for us.
Many of our stockholders who held our capital stock prior to the completion of our IPO have substantial unrecognized gains on the value of the equity they hold based upon the price at which shares were sold in our IPO, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares.
Some of our stockholders who held our capital stock prior to the completion of our IPO have unrecognized gains on the value of the equity they hold, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAny incident whose impacts are judged to be potentially material is escalated immediately to a senior management team 37 Table of Conten t s comprised of at least our CIO, Chief Legal Officer, Chief Operations Officer, and Chief Financial Officer.
Biggest changeAny incident whose impacts they believe to be potentially material is escalated immediately to a senior management team comprised of at least our CISO, Chief Legal Officer, Chief Operations Officer, and Chief Financial Officer. Additionally, certain cybersecurity events, such as a ransomware attack, will be immediately escalated to the designated members set forth above and the CISO.
For more information regarding the risks relating to cybersecurity, see “Risk Factors—Risks Related to Information Technology and Intellectual Property—Security breaches, cyber-attacks or other similar incidents with respect to our information technology systems, or those of our third- party service providers, could result in adverse consequences, including, but not limited to, a disruption of our business operations; reputational harm; loss of revenue or profits; regulatory investigations or actions; litigation; fines and penalties.
For more information regarding our cybersecurity measures and risks relating to cybersecurity, see “Risk Factors—Risks Related to Information Technology and Intellectual Property—Security breaches, cyber-attacks or other similar incidents with respect to our information technology systems, or those of our third- party service providers, could result in adverse consequences, including, but not limited to, a disruption of our business operations; reputational harm; loss of revenue or profits; regulatory investigations or actions; litigation; fines and penalties.
Governance While our board of directors has overall responsibility for risk oversight, our Audit Committee assists our board of directors in monitoring cybersecurity risks by receiving regular reports from our CIO, as needed, that cover information such as NIST review outcomes, and actions to address findings and vulnerabilities. Our CIO has primary management responsibility for ACV’s cybersecurity.
Governance While our board of directors has overall responsibility for risk oversight, our Audit Committee assists our board of directors in monitoring cybersecurity risks by receiving regular reports from our CISO, as needed, that cover information such as NIST review outcomes, and actions to address findings and vulnerabilities. Our CISO has primary management responsibility for ACV’s cybersecurity.
Our policies and processes underlie and support the integrity and availability of critical data and systems, and are designed to provide a framework for timely, effective responses to cybersecurity threats, such as threats associated with our services and with our use of services or technology products by our strategic vendors, contractors, or other suppliers.
Our policies and processes underlie and support the integrity and availability of critical data and systems, and are designed to provide a framework for timely, effective responses to cybersecurity threats, such as threats associated with our information systems and services and with our use of services or technology products provided by our strategic vendors, contractors, or other suppliers.
Events that do not meet the standard of incident are resolved and closed out by the Cybersecurity Department in our cybersecurity event management system. If an event is identified as an incident, the CIRP provides for notification to designated members of the Cybersecurity Department and the legal compliance function who will analyze the incident for potential materiality.
Events that do not meet the standard of incident are resolved and closed out by the Cybersecurity Department in our cybersecurity event management system. If an event is identified as a cybersecurity incident, the CIRP provides for notification to designated members of the Cybersecurity Department and the legal compliance function who will analyze the incident.
The Cybersecurity Department works with our strategic vendors, contractors, or other suppliers that provide services or technology products to complete information security risk assessments, each consisting of a holistic review using NIST as a standard. For these suppliers, operational security details, including third-party reports on compliance frameworks (such as NIST, SOC2 Type2), are reviewed by the Cybersecurity Department for sufficiency.
The Cybersecurity Department works with and requires our strategic vendors, contractors, or other suppliers that provide services or technology products to us to complete information security risk assessments, each consisting of a holistic review using NIST as a standard.
Additionally, certain cybersecurity events, such as a ransomware attack, will be immediately escalated to the designated members set forth above and the CIO. If the threat is found to be credible, it is further escalated on an emergency basis to the Chief Legal Officer and Chief Financial Officer.
If the threat is found to be credible, it is further escalated on an emergency basis to the Chief Legal Officer and Chief Financial Officer.
Once a cybersecurity incident is escalated to senior management, other members of management and senior management may be engaged to oversee the assessment, response, recovery, and disclosure efforts relating to such cybersecurity event. Despite our efforts, we can offer no guarantees that the cybersecurity measures we use will prevent unauthorized or malicious access to ACV systems and information.
Once a cybersecurity incident is escalated to senior management, other members of management and senior management may be engaged to oversee the assessment, response, recovery, and disclosure efforts relating to such cybersecurity event. 38 Table of Contents Despite our efforts, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Our efforts are led by ACV's Chief Information Officer (“CIO”) with the oversight of our Audit Committee, Chief Legal Officer and Chief Financial Officer, who oversees a team of cybersecurity professionals (the “Cybersecurity Department”) dedicated to identifying, assessing, escalating, responding to, and recovering from cybersecurity threats on a day-to-day basis.
Our cybersecurity efforts are led by ACV's Chief Information Security Officer (“CISO”) with the oversight of our Audit Committee, Chief Legal Officer and Chief Financial Officer. Our CISO reports to our Chief Financial Officer.
The Cybersecurity Department uses tools to assist in monitoring cyber activities, benign and otherwise, and creates alerts based on anomalous activities or potential vulnerabilities. ACV personnel also are required to take cybersecurity training, which is designed to prepare our personnel to look out for and report any suspicious or anomalous events they may experience.
For these strategic vendors, contractors, or suppliers, operational security details, including available third-party reports on compliance frameworks (such as NIST, SOC2 Type2), are reviewed by the Cybersecurity Department for sufficiency. ACV personnel also are required to take cybersecurity training, which is designed to prepare our personnel to look out for and report any suspicious or anomalous events they may experience.
He has over twenty- five years of experience working in information technology, with the last fifteen years in senior leadership and delivery roles in large, geographically spread corporate technology settings.
He has over 30 years of experience working in information security and technology, with over 15 years in senior leadership roles designing and implementing security solutions for national and international companies.
Added
Our CISO oversees a team of cybersecurity professionals (the “Cybersecurity Department”) dedicated to identifying, assessing, escalating, responding to, and recovering from cybersecurity threats on a day-to-day basis. The Cybersecurity Department uses various tools to assist in monitoring cyber activities, benign and otherwise, and creates alerts based on anomalous activities or potential vulnerabilities.
Added
Moreover, we monitor industry trends to mitigate cybersecurity risk for our customers and business, and to remain apprised of industry developments and emerging threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located at 640 Ellicott Street, Buffalo, New York. We lease other offices and facilities around the world, primarily in the United States and Canada. We do not own any real property.
Biggest changeItem 2. Properties. Our corporate headquarters are located at 640 Ellicott Street, Buffalo, New York. We lease other offices and facilities around the world, primarily in the United States. We do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently subject to any pending or threatened litigation that we believe, if determined adversely to us, would individually, or taken together, would reasonably be expected to have a material adverse effect on our business or financial results. Item 4. Mine Safety Disclosures. Not applicable. 38 Table of Conten t s PART II
Biggest changeWe are not presently subject to any pending or threatened litigation that we believe, if determined adversely to us, individually, or taken together, would reasonably be expected to have a material adverse effect on our business or financial results. Item 4. Mine Safety Disclosures. Not applicable. 39 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The graph below shows a comparison, from March 24, 2021 (the date our Class A common stock commenced trading on Nasdaq) through December 31, 2024, of the cumulative total return to stockholders of our Class A common stock relative to the Nasdaq Composite Index and the Nasdaq-100 Technology Sector Index. 39 Table of Conten t s The graph assumes that $100 was invested in each of our Class A common stock, the Nasdaq Composite Index and the Nasdaq-100 Technology Sector Index at their respective closing prices on March 24, 2021.
Biggest changeStock Performance Graph The graph below shows a comparison, from March 24, 2021 (the date our Common stock commenced trading on Nasdaq) through December 31, 2025, of the cumulative total return to stockholders of our Common stock relative to the Nasdaq Composite Index and the Nasdaq-100 Technology Sector Index.
Dividend Policy We have never declared or paid any dividends on our Class A common stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business. Accordingly, we do not anticipate declaring or paying dividends in the foreseeable future.
We currently intend to retain all available funds and any future earnings for the operation and expansion of our business. Accordingly, we do not anticipate declaring or paying dividends in the foreseeable future.
Certain shares are held in street name and accordingly, the actual number of holders of record is not known or included in the foregoing number. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Certain shares are held in street name and accordingly, the actual number of holders of record is not known or included in the foregoing number. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have never declared or paid any dividends on our Common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information and Holders of Record Our Class A common stock is traded on the Nasdaq Global Select Market, under the symbol "ACVA." As of February 14, 2025, there were 131 holders of record of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information and Holders of Record Our Common stock is traded on the New York Stock Exchange, under the symbol "ACVA." As of February 16, 2026, there were 120 holders of record of our Common stock.
Removed
Use of Proceeds The Registration Statement on Form S-1 (File No. 333-253617), for our initial public offering (the "IPO") was declared effective by the SEC on March 23, 2021.
Added
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
Removed
There has been no material change in the planned use of proceeds from the IPO from that described in the prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on March 24, 2021. Recent Sales of Unregistered Securities On January 30, 2024, we issued 1,280,834 shares of Class A common stock in connection with an acquisition.
Added
The company transferred its listing to NYSE on March 24, 2025 and the historical stock data prior to such date reflects trading on the former exchange. 40 Table of Contents The graph assumes that $100 was invested in each of our Common stock, the Nasdaq Composite Index and the Nasdaq-100 Technology Sector Index at their respective closing prices on March 24, 2021.
Removed
The issuance was deemed exempt from registration under the Securities Act pursuant to the exemption provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering. On March 13, 2024, we issued 132,241 shares of Class A common stock in connection with an acquisition.
Removed
The issuance was made pursuant to the exemption from the registration requirement of the Securities Act provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table sets forth our Consolidated Statements of Operations data expressed as a percentage of total revenue for the periods presented: Year ended December 31, 2024 2023 Amount % of Revenue Amount % of Revenue (in thousands) Revenue: Marketplace and service revenue $ 572,971 90 % $ 422,527 88 % Customer assurance revenue 64,185 10 % 58,707 12 % Total revenue 637,156 100 % 481,234 100 % Operating expenses: Marketplace and service cost of revenue (excluding depreciation & amortization) (1)(6) 248,210 39 % 192,707 40 % Customer assurance cost of revenue (excluding depreciation & amortization) 56,231 9 % 51,747 11 % Operations and technology (1)(6) 162,700 26 % 140,959 29 % Selling, general, and administrative (1)(3)(5)(6) 217,435 34 % 166,510 35 % Depreciation and amortization (2)(4) 36,685 6 % 18,988 4 % Total operating expenses 721,261 570,911 Income (loss) from operations (84,105) (89,677) Other income (expense): Interest income 9,337 16,507 Interest expense (4,244) (1,565) Total other income (expense) 5,093 14,942 Income (loss) before income taxes (79,012) (74,735) Provision for income taxes 688 526 Net income (loss) $ (79,700) $ (75,261) 46 Table of Conten t s (1) Includes stock-based compensation expense as follows: Year ended December 31, 2024 2023 (in thousands) Marketplace and service cost of revenue (excluding depreciation & amortization) $ 1,065 $ 938 Operations and technology 16,595 10,875 Selling, general, and administrative 50,350 37,835 Stock-Based Compensation Expense $ 68,010 $ 49,648 (2) Includes acquired intangible asset amortization as follows: Year ended December 31, 2024 2023 (in thousands) Depreciation and amortization $ 11,687 $ 5,471 (3) Includes litigation-related costs as follows: Year ended December 31, 2024 2023 (in thousands) Selling, general, and administrative $ 1,553 $ — (4) Includes amortization of capitalized stock-based compensation as follows: Year ended December 31, 0 2024 2023 (in thousands) Depreciation and amortization $ 4,675 $ 1,836 (5) Includes acquisition-related costs as follows: Year ended December 31, 2024 2023 (in thousands) Selling, general, and administrative $ 3,966 $ 1,237 (6) Includes other adjustments as follows: Year ended December 31, 0 2024 2023 (in thousands) Marketplace and service cost of revenue (excluding depreciation & amortization) $ — $ 144 Operations and technology 46 18 Selling, general, and administrative 737 894 Other adjustments $ 783 $ 1,056 Comparison of the Years Ended December 31, 2024 and December 31, 2023 Revenue Marketplace and Service Revenue Year ended December 31, $ Change % Change 2024 2023 (in thousands) Marketplace and service revenue $ 572,971 $ 422,527 $ 150,444 36 % The increase was primarily driven by an increase in auction marketplace revenue from our buyers and sellers, as well as increases in revenue earned from arranging for the transportation of vehicles to buyers.
Biggest changeProvision for Income Taxes Provision for income taxes consists of U.S. federal, state and foreign income taxes. 47 Table of Contents Results of Operations The following table sets forth our Consolidated Statements of Operations data expressed as a percentage of total revenue for the periods presented: Year ended December 31, 2025 2024 Amount % of Revenue Amount % of Revenue (in thousands) Revenue: Marketplace and service revenue $ 677,964 89 % $ 572,971 90 % Customer assurance revenue 81,642 11 % 64,185 10 % Total revenue 759,606 100 % 637,156 100 % Operating expenses: Marketplace and service cost of revenue (excluding depreciation & amortization) (1) 288,120 38 % 248,210 39 % Customer assurance cost of revenue (excluding depreciation & amortization) 73,288 10 % 56,231 9 % Operations and technology (1)(6) 182,674 24 % 162,700 26 % Selling, general, and administrative (1)(3)(5)(6)(7) 234,991 31 % 217,435 34 % Depreciation and amortization (2)(4) 43,724 6 % 36,685 6 % Total operating expenses 822,797 721,261 Loss from operations (63,191) (84,105) Other income (expense): Interest income 8,008 9,337 Interest expense (9,620) (4,244) Total other income (expense) (1,612) 5,093 Loss before income taxes (64,803) (79,012) Provision for income taxes 1,338 688 Net loss $ (66,141) $ (79,700) 48 Table of Contents (1) Includes stock-based compensation expense as follows: Year ended December 31, 2025 2024 (in thousands) Marketplace and service cost of revenue (excluding depreciation & amortization) $ 1,026 $ 1,065 Operations and technology 15,355 16,595 Selling, general, and administrative 40,481 50,350 Stock-Based Compensation Expense $ 56,862 $ 68,010 (2) Includes acquired intangible asset amortization as follows: Year ended December 31, 2025 2024 (in thousands) Depreciation and amortization $ 10,554 $ 11,687 (3) Includes litigation-related costs as follows: Year ended December 31, 2025 2024 (in thousands) Selling, general, and administrative $ 1,100 $ 1,553 (4) Includes amortization of capitalized stock-based compensation as follows: Year ended December 31, 0 2025 2024 (in thousands) Depreciation and amortization $ 6,214 $ 4,675 (5) Includes acquisition-related costs as follows: Year ended December 31, 2025 2024 (in thousands) Selling, general, and administrative $ 403 $ 3,966 (6) Includes other adjustments as follows: Year ended December 31, 0 2025 2024 (in thousands) Operations and technology $ 66 $ 46 Selling, general, and administrative 2,078 737 Other adjustments $ 2,144 $ 783 (7) Includes Tricolor bankruptcy losses as follows: Year ended December 31, 2025 2024 (in thousands) Selling, general, and administrative 18,711 — Comparison of the Years Ended December 31, 2025 and December 31, 2024 Revenue Marketplace and Service Revenue Year ended December 31, $ Change % Change 2025 2024 (in thousands) Marketplace and service revenue $ 677,964 $ 572,971 $ 104,993 18 % 49 Table of Contents The increase was primarily driven by an increase in auction marketplace revenue from our Marketplace Buyers and Marketplace Sellers, as well as increases in revenue earned from transportation and financing services.
Marketplace Units have generally increased as we have expanded our territory coverage, added new Marketplace Buyers and Marketplace Sellers increased our share of wholesale transactions from existing customers. Because we only earn auction and ancillary fees in the case of a successful auction, Marketplace Units will remain a critical driver of our revenue growth.
Marketplace Units have generally increased as we have expanded our territory coverage, added new Marketplace Buyers and Marketplace Sellers and increased our share of wholesale transactions from existing customers. Because we only earn auction and ancillary fees in the case of a successful auction, Marketplace Units will remain a critical driver of our revenue growth.
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 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, Marketplace GMV does not represent revenue earned by us.
When we act as the agent, revenue is recognized net of the consideration due to a third party at the point in time when the services are provided. In contracts with multiple performance obligations, we allocate the transaction price to each distinct performance obligation proportionately based on the estimated stand-alone selling price, or SSP, of each performance obligation.
When we act as the agent, revenue is recognized net of the consideration due to a third party at the point in time when the services are provided. In contracts with multiple performance obligations, we allocate the transaction price to each distinct performance obligation proportionately based on the estimated stand-alone selling price ("SSP") of each performance obligation.
Overview Our mission is to build and enable the most trusted and efficient marketplace platform for buying and selling used vehicles with transparency and comprehensive data that was previously unimaginable. We provide a highly efficient and vibrant marketplace platform ("marketplace platform" or "marketplace") for wholesale vehicle transactions and data services that offer transparent and accurate vehicle information to our customers.
Overview Our mission is to build and enable the most trusted and efficient marketplace platform for buying and selling used vehicles with transparency and comprehensive data that was previously unimaginable. We provide a highly efficient and vibrant marketplace platform for wholesale vehicle transactions and data services that offer transparent and accurate vehicle information to our customers.
We have a team of VCIs that regularly interact with our customers, providing high-quality inspection services and developing strong customer relationships. • Drive Customer Loyalty. Our loyal customers and referrals serve as a highly effective customer acquisition tool, and help drive our growth in a given territory. • Grow Brand Awareness.
We have a team of VCIs that regularly interacts with our customers, providing high-quality inspection services and developing strong customer relationships. • Drive Customer Loyalty. Our loyal customers and referrals serve as a highly effective customer acquisition tool, and help drive our growth in a given territory. • Grow Brand Awareness.
The increase in cash provided by operating activities during the year ended December 31, 2024 relative to the year ended December 31, 2023 is primarily due to increased revenues and the timing of collections and disbursements of funds related to auctions completed near period end.
The increase in cash provided by operating activities during the year ended December 31, 2025 relative to the year ended December 31, 2024 is primarily due to increased revenues and the timing of collections and disbursements of funds related to auctions completed near period end.
These purchase commitments include goods and services received and recorded as liabilities as of December 31, 2024 as well as goods and services which have not yet been delivered or performed and have, therefore, not been reflected in our Consolidated Balance Sheets and Consolidated Statements of Operations.
These purchase commitments include goods and services received and recorded as liabilities as of December 31, 2025 as well as goods and services which have not yet been delivered or performed and have, therefore, not been reflected in our Consolidated Balance Sheets and Consolidated Statements of Operations.
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%.
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 2.75%.
Operations and technology expense as a percentage of revenue decreased during the year ended December 31, 2024 compared to the year ended December 31, 2023 as we continued our efforts to effectively manage costs while growing revenue.
Operations and technology expense as a percentage of revenue decreased during the year ended December 31, 2025 compared to the year ended December 31, 2024 as we continued our efforts to effectively manage costs while growing our revenue.
Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration that we expect to receive in exchange for those services. Determining whether performance obligations should be accounted for separately or combined may require judgment.
Revenue is recognized when the services are completed and control of the promised services is transferred to customers in an amount that reflects the consideration that we expect to receive in exchange for those services. Determining whether performance obligations should be accounted for separately or combined may require judgment.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Revenue Recognition of Auction and Other Marketplace Revenue We generate auction and other marketplace revenue from contracts with customers.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. 57 Table of Contents Revenue Recognition of Auction and Other Marketplace Revenue We generate auction and other marketplace revenue from contracts with customers.
Our ability to attract new Marketplace Buyers and Marketplace Sellers will depend on a number of factors including: the ability of our sales team to onboard dealers and commercial consignors onto our marketplace platform and ensure their satisfaction, the ability of our territory managers to build awareness of our brand, the ability of our vehicle condition inspectors, or VCIs, to cultivate relationships with our customers in their respective territories, and the effectiveness of our marketing efforts. 43 Table of Conten t s Grow Awareness for Our Offerings and Brand Wholesale vehicle online penetration is in the early stages, lagging the consumer automotive market, and we expect more dealers and commercial partners to source and manage their inventory online.
Our ability to attract new Marketplace Buyers and Marketplace Sellers will depend on a number of factors including: the ability of our sales team to onboard dealers and commercial consignors onto our marketplace platform and ensure their satisfaction, the ability of our territory managers to build awareness of our brand, the ability of our vehicle condition inspectors, or VCIs, to cultivate relationships with our customers in their respective territories, and the effectiveness of our marketing efforts. 44 Table of Contents Grow Awareness for Our Offerings and Brand Wholesale vehicle online penetration is in the early stages, lagging the consumer automotive market, and we expect more dealers and commercial partners to source and manage their inventory online.
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.
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.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10- K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations with our audited consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10- K.
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. As of December 31, 2024, our principal commitments primarily consist of long-term debt and leases for facilities.
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. 54 Table of Contents As of December 31, 2025, our principal commitments primarily consist of long-term debt and leases for facilities.
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.
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.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Form 10-K filed with the SEC on February 21, 2024.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Form 10-K filed with the SEC on February 19, 2025.
General Guarantees We provide certain guarantees to Sellers in the marketplace in the ordinary course of business, which are accounted for under ASC 460, Guarantees , or ASC 460, as a general guarantee. Vehicle Condition Guarantees —We offer guarantees to sellers in qualifying situations where we performed a vehicle inspection and prepared the vehicle condition report.
Guarantees We provide certain guarantees to Sellers in the marketplace in the ordinary course of business, which are accounted for under ASC 460, Guarantees ("ASC 460") as a general guarantee. Included in our guarantees are vehicle condition guarantees whereby we offer guarantees to sellers in qualifying situations where we performed a vehicle inspection and prepared the vehicle condition report.
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 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 2.75%.
Customer assurance revenue also includes revenue from other price guarantee products offered to sellers. Customer assurance revenue is measured based upon the fair value of the guarantees that we provide.
Customer assurance revenue also 46 Table of Contents includes revenue from other price guarantee products offered to sellers. Customer assurance revenue is measured based upon the fair value of the guarantees that we provide.
Seasonality also impacts used vehicle pricing, with used vehicles depreciating at a faster rate in the last two quarters of each year and a slower rate in the first two quarters of each year.
Seasonality also impacts used vehicle pricing, with used vehicles depreciating at a 45 Table of Contents faster rate in the last two quarters of each year and a slower rate in the first two quarters of each year.
Marketplace Sellers include independent and franchise dealers selling on our marketplace, as well as commercial partners, consisting of commercial leasing companies, rental car companies, bank or other finance companies, who use our marketplace to sell their inventory. 42 Table of Conten t s We monitor the growth in both Marketplace Buyers and Marketplace Sellers as they each promote a more vibrant and healthy marketplace.
Marketplace Sellers include independent and franchise dealers selling on our marketplace, as well as commercial partners, consisting of commercial leasing companies, rental car companies, bank or other finance companies, who use our marketplace to sell their inventory. 43 Table of Contents We monitor the growth in both Marketplace Buyers and Marketplace Sellers as they each promote a more vibrant and healthy marketplace.
However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance. Adjusted EBITDA is a financial measure that is not presented in accordance with GAAP.
However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance. 52 Table of Contents Adjusted EBITDA is a financial measure that is not presented in accordance with GAAP.
We may experience 44 Table of Conten t s seasonal and other fluctuations in our quarterly results of operations, which may not fully reflect the underlying performance of our business. See the section titled “Seasonality” for additional information on the impacts of seasonality on our business.
We may experience seasonal and other fluctuations in our quarterly results of operations, which may not fully reflect the underlying performance of our business. See the section titled “Seasonality” for additional information on the impacts of seasonality on our business.
Grow Value-Added and Data Services 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.
Grow Value-Added and Data Services 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.
Used vehicle sales are also seasonal. Sales typically peak late in the first quarter and early in the second quarter, with the lowest relative level of industry vehicle sales occurring in the fourth quarter.
Sales typically peak late in the first quarter and early in the second quarter, with the lowest relative level of industry vehicle sales occurring in the fourth quarter.
Risk Factors” in this Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements contained in the following discussion and analysis.
Risk Factors” in this Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
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.
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 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.
Our primary uses of cash from operating activities are for personnel expenses, sales and marketing expenses and overhead expenses. In the years ended December 31, 2024, and 2023, net cash provided by (used in) operating activities was $65.4 million and $(17.9) million, respectively.
Our primary uses of cash from operating activities are for personnel expenses, sales and marketing expenses and overhead expenses. In the years ended December 31, 2025 and 2024, net cash provided by operating activities was $78.2 million and $65.4 million, respectively.
We remain in the early stages of penetrating our Marketplace Buyers’ and Sellers’ total number of wholesale transactions. As we continue to invest in eliminating key risks of uncertainty related to the auction process through our trusted and efficient marketplace platform, we expect that we will capture an increasing share of transactions from our existing buyers and sellers.
We remain in the early stages of penetrating our Marketplace Buyers’ and Sellers’ total number of wholesale transactions. As we continue to invest in our trusted and efficient marketplace platform, we expect that we will capture an increasing share of transactions from our existing buyers and sellers.
We have $3.8 million of lease obligations due within a year, and an additional $37.3 million of lease obligations due at various dates through 2038. Refer to Note 10. Leases , of our consolidated financial statements.
We have $5.2 million of lease obligations due within a year, and an additional $41.8 million of lease obligations due at various dates through 2039. Refer to Note 10. Leases , of our consolidated financial statements.
For the year ended December 31, 2024 compared to the year ended December 31, 2023, total cost attributed to generating auction marketplace revenue increased to $54.4 million from $35.8 million.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, total cost attributed to generating auction marketplace revenue increased to $68.3 million from $54.4 million.
We exclude amortization of acquired intangible assets from the calculation of Non-GAAP Net income (loss). We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the underlying intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.
We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons 53 Table of Contents between operating results from period to period as the underlying intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.
Financing Activities In the years ended December 31, 2024, and 2023, net cash provided by (used in) financing activities was $(7.9) million and $30.6 million, respectively.
Financing Activities In the years ended December 31, 2025, and 2024, net cash provided by (used in) financing activities was $43.0 million and $(7.9) million, respectively.
Net cash provided by operating activities during the year ended December 31, 2024 consisted primarily of cash arising from the generation of revenue from customers, offset by normal operating expenses, an increase in accounts payable to sellers and a decrease in accounts receivable from buyers.
In the year ended December 31, 2024 net cash provided by operating activities consisted primarily of cash earnings, a decrease to accounts receivable from buyers and an increase in accounts payable to sellers.
Investing Activities In the years ended December 31, 2024, and 2023, net cash used in investing activities was $15.9 million and $111.0 million, respectively.
Investing Activities In the years ended December 31, 2025, and 2024, net cash used in investing activities was $74.1 million and $15.9 million, respectively.
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 December 31, 2024 borrowings under the Warehouse Facility were $66.5 million.
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 Capital Funding II LLC must also pay upfront any unused fees in connection with the facility.
Other marketplace cost of revenue increased to $173.0 million for the year ended December 31, 2024, compared to $135.3 million for the year ended December 31, 2023, primarily due to an increase in the units transported to buyers from sellers.
Other marketplace cost of revenue increased to $206.9 million for the year ended December 31, 2025, compared to $173.0 million for the year ended December 31, 2024, primarily due to an increase in the units transported.
We use an observable price to determine the SSP for each performance obligation. Where observable prices are not available, an expected cost-plus margin approach is used.
We use an observable price to determine the SSP for each performance obligation. Where observable prices are not available, an expected cost-plus margin approach is used. We then determine how the services are transferred to the customer to determine the timing of revenue recognition.
Recently Adopted Accounting Pronouncements For information on recently issued accounting pronouncements, refer to Note 1. Nature of Business and Summary of Significant Accounting Policies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Vehicle condition guarantee revenue is recognized on the earlier of the guarantee expiration date or the guarantee settlement date. Recently Adopted Accounting Pronouncements For information on recently issued accounting pronouncements, refer to Note 1. Nature of Business and Summary of Significant Accounting Policies in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For the year ended December 31, 2024 compared to the year ended December 31, 2023, auction marketplace revenue increased to $303.0 million from $210.9 million and other marketplace revenue increased to $236.7 million from $179.0 million.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, other marketplace revenue increased to $295.8 million from $236.7 million and auction marketplace revenue increased to $347.7 million from $303.0 million.
Provision for Income Taxes Year ended December 31, $ Change % Change 2024 2023 (in thousands) Provision for income taxes $ 688 $ 526 $ 162 31 % Our effective tax rate was approximately (0.9)% and (0.7%) for the year ended December 31, 2024 and 2023, respectively.
Provision for Income Taxes Year ended December 31, $ Change % Change 2025 2024 (in thousands) Provision for income taxes $ 1,338 $ 688 $ 650 94 % Our effective tax rate was approximately (2.1)% and (0.9%) for the year ended December 31, 2025 and 2024, respectively.
These costs include personnel-related expenses, legal and other professional services expenses and other allocated facility and office costs. Also included in selling, general and administrative expense is advertising and marketing costs to promote our services. We expect that our selling, general and administrative expense will increase in absolute dollars as our business grows.
Also included in selling, general and administrative expense is advertising and marketing costs to promote our services. We expect that our selling, general and administrative expense will increase in absolute dollars as our business grows.
For the year ended December 31, 2024, Go Green assurance cost of revenue increased to $50.9 million from $46.5 million in the year ended December 31, 2023. Other assurance cost of revenue increased to $5.3 million from $5.2 million during the year ended December 31, 2024 and the year ended December 31, 2023.
For the year ended December 31, 2025, Go Green assurance cost of revenue increased to $62.3 million from $50.9 million in the year ended December 31, 2024.
Year ended December 31, 2024 2023 Marketplace Units 743,008 598,767 Marketplace GMV $ 9.5 billion $ 8.8 billion Marketplace Buyers 20,975 17,121 Marketplace Sellers 14,377 11,505 Adjusted EBITDA $ 28.1 million $ (18.2) million Marketplace Units Marketplace Units is a key indicator of our potential for growth in Marketplace GMV and revenue.
Year ended December 31, 2025 2024 Marketplace Units 829,276 743,008 Marketplace GMV $ 10.4 billion $ 9.5 billion Marketplace Buyers 22,062 20,975 Marketplace Sellers 14,905 14,377 Adjusted EBITDA $ 58.8 million $ 28.1 million Marketplace Units Marketplace Units is a key indicator of our potential for growth in Marketplace GMV and revenue.
The guarantee provides us with the right to retain proceeds from the subsequent liquidation of the vehicle covered under the guarantee. The fair value of vehicle condition guarantees issued is estimated based on historical results and other qualitative factors. The vehicle condition guarantee revenue is recognized on the earlier of the guarantee expiration date or the guarantee settlement date.
In situations where the sale of covered vehicles is unwound due to circumstances covered by the guarantee, the guarantee provides us with the right to retain proceeds from the subsequent liquidation of the vehicle covered under the guarantee. The fair value of vehicle condition guarantees issued is estimated based on historical results and other qualitative factors.
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.
As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $271.5 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.
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 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.
Selling, General, and Administrative Expenses Year ended December 31, $ Change % Change 2024 2023 (in thousands) Selling, general, and administrative $ 217,435 $ 166,510 $ 50,925 31 % Percentage of revenue 34 % 35 % The increase primarily consisted of higher personnel-related costs.
Selling, General, and Administrative Expenses Year ended December 31, $ Change % Change 2025 2024 (in thousands) Selling, general, and administrative $ 234,991 $ 217,435 $ 17,556 8 % Percentage of revenue 31 % 34 % The increase primarily consisted of higher non-personnel costs .
For the year ended December 31, 2024 compared to the year ended December 31, 2023, personnel-related costs increased to $178.6 million from $138.7 million, primarily as a result of headcount increases and increased stock-based compensation in 2024.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, personnel-related costs decreased to $173.0 million from $178.6 million, primarily as a result of lower stock-based compensation.
In the year ended December 31, 2023 net cash used in operating activities consisted primarily of a decrease to accounts receivable from buyers offset by a decrease in accounts payable to sellers.
Net cash provided by operating activities during the year ended December 31, 2025 consisted primarily of cash earnings and an increase in accounts payable to sellers partially offset by an increase in accounts receivable from buyers.
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. 51 Table of Conten t s The following table presents a reconciliation of Non-GAAP Net income (loss) to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented: Year ended December 31, 2024 2023 Non-GAAP Net loss Reconciliation Net income (loss) $ (79,700) $ (75,261) Stock-based compensation 68,010 49,648 Amortization of acquired intangible assets 11,687 5,471 Amortization of capitalized stock-based compensation 4,675 1,836 Acquisition-related costs 3,966 1,237 Litigation-related costs (1) 1,553 — Other 783 1,056 Non-GAAP Net Income (loss) $ 10,974 $ (16,013) (1) Litigation-related costs are related to an anti-competition case which we do not consider to be representative of our underlying operating performance Liquidity and Capital Resources We have financed operations since our inception primarily through our marketplace revenue, proceeds from sales of equity securities, and debt facilities.
The following table presents a reconciliation of Non-GAAP Net income (loss) to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented: Year ended December 31, 2025 2024 Net income (loss) $ (66,141) $ (79,700) Stock-based compensation 56,862 68,010 Amortization of acquired intangible assets 10,554 11,687 Amortization of capitalized stock-based compensation 6,214 4,675 Acquisition-related costs 403 3,966 Litigation-related costs (1) 1,100 1,553 Tricolor bankruptcy losses (2) 18,711 — Other 2,144 783 Non-GAAP Net Income (loss) $ 29,847 $ 10,974 (1) Litigation-related costs are related to an anti-competition case which we do not consider to be representative of our ongoing operating performance (2) Operating expenses are related to the bankruptcy of an ACV Capital customer which we do not consider to be representative of our ongoing operating performance Liquidity and Capital Resources We have financed operations since our inception primarily through our marketplace revenue, proceeds from sales of equity securities, and debt facilities.
Revenue increases were primarily volume-driven. In addition, buyer fee rates were higher for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Revenue increases in the current year were primarily volume-driven and also impacted by higher buyer fee rates for the year ended December 31, 2025 compared to the prior year period.
Operating Expenses Marketplace and Service Cost of Revenue Year ended December 31, $ Change % Change 2024 2023 (in thousands) Marketplace and service cost of revenue (excluding depreciation & amortization) $ 248,210 $ 192,707 $ 55,503 29 % Percentage of revenue 39 % 40 % The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace cost of revenue.
Operating Expenses Marketplace and Service Cost of Revenue Year ended December 31, $ Change % Change 2025 2024 (in thousands) Marketplace and service cost of revenue (excluding depreciation & amortization) $ 288,120 $ 248,210 $ 39,910 16 % Percentage of revenue 38 % 39 % The increase primarily consisted of higher costs related to generating auction marketplace and other marketplace revenue, partially offset by a decrease in data services cost of revenue.
The increase in auction marketplace cost of revenue is primarily due to increased units sold through our marketplace and costs associated with our acquired remarketing centers' delivery of auction marketplace revenue.
The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace and to a lesser extent, other costs of revenue associated with our prior year acquisitions.
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.
Investment in Growth 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.
Net cash provided by (used in) financing activities during the year ended December 31, 2024 relates to payments of RSU tax withholding net of proceeds from other equity plan activity, offset by proceeds from long term debt, net of repayments of long term debt .
Net cash provided by financing activities during the year ended December 31, 2025 relates to proceeds, net of repayments, from long term debt partially offset by payments of RSU tax withholdings in exchange for common shares surrendered by RSU holders.
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 inventory management system, which enables dealers to accurately price wholesale and retail inventory while maximizing profit by leveraging predictive analytics informed by artificial intelligence.
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.
Other Income (Expense) 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. Provision for Income Taxes Provision for income taxes consists of U.S. federal, state and foreign income taxes.
Other Income (Expense) Other income (expense) consists primarily of interest expense on our borrowings and interest earned on our marketable securities and cash and cash equivalents.
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. 50 Table of Conten t s The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP, for the periods presented: Year ended December 31, 2024 2023 Adjusted EBITDA Reconciliation Net income (loss) $ (79,700) $ (75,261) Depreciation and amortization 36,807 19,285 Stock-based compensation 68,010 49,648 Interest (income) expense (5,093) (14,942) Provision for income taxes 688 526 Acquisition-related costs 3,966 1,237 Litigation-related costs (1) 1,553 — Other 1,905 1,298 Adjusted EBITDA $ 28,136 $ (18,209) (1) Litigation-related costs are related to an anti-competition case which we do not consider to be representative of our underlying operating performance Non-GAAP Net income (loss) We report our financial results in accordance with GAAP.
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP, for the periods presented: Year ended December 31, 2025 2024 Net income (loss) $ (66,141) $ (79,700) Depreciation and amortization 43,743 36,807 Stock-based compensation 56,862 68,010 Interest expense (income), net 1,612 (5,093) Provision for income taxes 1,338 688 Acquisition-related costs 403 3,966 Litigation-related costs (1) 1,100 1,553 Tricolor bankruptcy losses (2) 18,711 — Other 1,126 1,905 Adjusted EBITDA $ 58,754 $ 28,136 (1) Litigation-related costs are related to an anti-competition case which we do not consider to be representative of our ongoing operating performance (2) Operating expenses are related to the bankruptcy of an ACV Capital customer which we do not consider to be representative of our ongoing operating performance Non-GAAP Net income (loss) We report our financial results in accordance with GAAP.
We also earn ancillary fees through additional value-added services to buyers and sellers in connection with the auction. 41 Table of Conten t s Our customers include participants on our marketplace platform and purchasers of our data services.
We also earn ancillary fees through additional value-added services to buyers and sellers in connection with the auction. 42 Table of Contents Our customers include participants on our marketplace platform and purchasers of our data services. Certain dealers and commercial partners purchase data services in connection with vehicle assessments, software subscriptions, and transactions that do not occur on our Marketplace.
Net cash provided by (used in) in financing activities during the year ended December 31, 2023 related to proceeds, net of repayments, on long term debt, partially offset by payments of RSU tax withholding net of proceeds from other equity plan activity.
Net cash used in financing activities during the year ended December 31, 2024 related to payments of RSU tax withholdings in exchange for common shares surrendered by RSU holders partially offset by proceeds, net of repayments, on long term debt and proceeds from the exercises of stock options.
Seasonality 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.
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.
Customer Assurance Cost of Revenue Year ended December 31, $ Change % Change 2024 2023 (in thousands) Customer assurance cost of revenue (excluding depreciation & amortization) $ 56,231 $ 51,747 $ 4,484 9 % Percentage of revenue 9 % 11 % 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.
Marketplace and service cost of revenue as a percentage of revenue decreased during the year ended December 31, 2025 compared to the year ended December 31, 2024 due primarily to the benefit from the legal settlement. 50 Table of Contents Customer Assurance Cost of Revenue Year ended December 31, $ Change % Change 2025 2024 (in thousands) Customer assurance cost of revenue (excluding depreciation & amortization) $ 73,288 $ 56,231 $ 17,057 30 % Percentage of revenue 10 % 9 % The increase primarily consisted of costs attributable to our Go Green assurance offerings due to increased volume of completed auctions where the customer elected the Go Green offering, and an increase in the arbitration cost per unit sold.
We expect that our operations and technology expense will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in our marketplace, transportation capabilities and other technologies. 45 Table of Conten t s Selling, General and Administrative Selling, general and administrative expense consists of costs resulting from sales, accounting, finance, legal, marketing, human resources, executive, and other administrative activities.
We expect that our operations and technology expense will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in our marketplace, transportation capabilities and other technologies.
The facility is secured by all assets of ACV Funding, including the auto floorplan loans owned by it.
The Warehouse 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 Capital Funding II LLC, including the auto floorplan loans owned by it.
The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes.
See Note 1 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a description of our other significant accounting policies. The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes.
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.
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.
We were in compliance with all such applicable covenants as of December 31, 2024, and believe we are in compliance as of the date of this Yearly Report on Form 10-K. 53 Table of Conten t s Cash Flows from Operating, Investing, and Financing Activities The following table shows a summary of our cash flows for the periods presented: Year ended December 31, 2024 2023 (in thousands) Net cash provided by (used in) operating activities $ 65,397 $ (17,885) Net cash provided by (used in) investing activities (15,863) (110,972) Net cash provided by (used in) financing activities (7,874) 30,633 Effect of exchange rate (166) 43 Net increase (decrease) in cash and equivalents $ 41,494 $ (98,181) Operating Activities Our largest source of operating cash is cash collection from fees earned on our marketplace.
Cash Flows from Operating, Investing, and Financing Activities The following table shows a summary of our cash flows for the periods presented: Year ended December 31, 2025 2024 (in thousands) Net cash provided by operating activities $ 78,232 $ 65,397 Net cash used in investing activities (74,051) (15,863) Net cash provided by (used in) financing activities 42,974 (7,874) Effect of exchange rate changes 277 (166) Net increase in cash and equivalents $ 47,432 $ 41,494 56 Table of Contents Operating Activities Our largest source of operating cash is cash collection from fees earned on our marketplace.
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.
As of December 31, 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.
We then determine how the services are transferred to the customer to determine the timing of revenue recognition. 55 Table of Conten t s From time to time, we provide promotions and incentives to buyers and sellers in various forms including discounts on fees, credits and rebates.
From time to time, we provide promotions and incentives to buyers and sellers in various forms including discounts on fees, credits and rebates. Promotions and incentives which are consideration payable to a customer are recognized as a reduction of revenue when revenue is recognized.
The decrease in net cash used in investing activities during the year ended December 31, 2024 relative to the year ended December 31, 2023 was primarily driven by increased net proceeds from the sale and maturity of certain marketable securities, offset by increased spending on acquisitions of businesses.
Net cash used in investing activities during the year ended December 31, 2025 was primarily related to the increase in finance receivables and capitalized software development, partially offset by net proceeds from the sale and maturities of the marketable securities portfolio.
For the year ended December 31, 2024 compared to the year ended December 31, 2023, personnel-related costs increased to $138.5 million from $118.8 million as a result of headcount increases and stock-based compensation in 2024. Software and technology expenses increased to $16.3 million from $15.2 million.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, personnel-related costs increased to $150.5 million from $138.5 million as a result of headcount increases from our prior year acquisitions and investment in our internal product and technology capabilities to enable future growth initiatives.
Key Operating and Financial Metrics We regularly monitor a number of operating and financial metrics in order to measure our current performance and estimate our future performance. Our business metrics may be calculated in a manner different than similar business metrics used by other companies.
Our business metrics may be calculated in a manner different than similar business metrics used by other companies.
Net cash used in investing activities during the year ended December 31, 2023 was primarily due to the growth of the financing receivables portfolio, investments in capitalized software and acquisitions of businesses.
The increase in net cash used in investing activities during the year ended December 31, 2025 relative to the year ended December 31, 2024 was primarily driven by an increase in our financing receivables portfolio.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. See Note 1 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a description of our other significant accounting policies.
Critical Accounting Policies and Estimates We believe that the following accounting policies and estimates involve a high degree of judgment and complexity. Accordingly, these are the policies and estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations.
Because our receivables typically have been, on average, settled faster than our payables, our cash position at each balance sheet date has been bolstered by marketplace float.
Because our receivables typically have been, on average, settled faster than our payables, our cash position at each balance sheet date has been bolstered by marketplace float. Changes in working capital vary from quarter-to-quarter as a result of Marketplace GMV and the timing of collections and disbursements of funds related to auctions completed near period end.
Marketplace and service cost of revenue as a percentage of revenue decreased during the year ended December 31, 2024 compared to the year ended December 31, 2023 as we continued to grow revenue and scale our business.
Depreciation and amortization as a percentage of revenue remained flat during the year ended December 31, 2025 compared to the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest-earning instruments carry a degree of interest rate risk as increases in rates will negatively affect the fair value of our marketable securities. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
Biggest changeWe do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We had borrowings from banks of $190.0 million as of December 31, 2025. The interest rate paid on these borrowings is variable, indexed to SOFR.
A hypothetical 100 basis point change in interest rates would not result in a material impact on our consolidated financial statements. 56 Table of Conten t s
Therefore, increases in interest rates will increase the interest expense on these borrowings. A hypothetical 100 basis point change in interest rates would not result in a material impact on our consolidated financial statements. 58 Table of Contents
Interest Rate Risk We had cash and cash equivalents of $224.1 million and marketable securities of $46.0 million as of December 31, 2024, which consisted of interest-bearing investments with maturities of three months or less and investment grade securities respectively.
Interest Rate Risk We had cash and cash equivalents of $271.5 million as of December 31, 2025, which includes interest-bearing investments with maturities of three months or less. Interest-earning instruments carry a degree of interest rate risk as increases in rates will negatively affect the fair value of our cash equivalents.
Removed
We had borrowings from banks of $123.0 million as of December 31, 2024. The interest rate paid on these borrowings is variable, indexed to SOFR. Therefore increases in interest rates will increase the interest expense on these borrowings.

Other ACVA 10-K year-over-year comparisons