A summer to forget for the auto wholesaler threatened to stretch into the colder months.A tough summer for wholesale automobile marketplace operator ACV Auctions (ACVA -2.81%) stretched out into the first full week of September. According to data compiled by S&P Global Market Intelligence, the company's stock price took a sub-15% tumble over that stretch. Lingering downbeat sentiment on the company was exacerbated by news of a client's bankruptcy filing. Client bankruptcy bluesBefore market open Wednesday, ...

PresentationAll right. I think we're on the clock. So, welcome, everyone. Thanks for joining. I'm Ron Josey. I cover the Internet sector here at Citi. And I'm always happy to share the stage with George Chamoun, ACV's CEO; and Bill Zerella, ACVA's CFO. Lot to talk about. A lot going on. Welcome.So I think most people know what ACVA is now. It's been a few years. We've gone through a few Analyst Days. But maybe, George, because we just had our Analyst Day back in March, we've had 2 quarters post that. Just l ...

Summary of ACV Auctions (ACVA) 2025 Conference Call Company Overview - **Company**: ACV Auctions (ACVA) - **Industry**: Automotive auction and technology services Key Points and Arguments Product and Technology Strategy - ACV focuses on enhancing its product and technology offerings to differentiate itself in the market, particularly for franchise and independent dealers [5][6][7] - The company has broadened its product suite to include pricing tools and value-added services like ACV Transportation and ACV Capital, which assist dealers in vehicle acquisition and logistics [8][9] - The introduction of a no reserve guarantee auction has resulted in three times more bidders per car, significantly increasing auction activity [13][14][15] Market Dynamics - The wholesale market is evolving, with ACV's strategy targeting both individual dealers and larger corporate accounts [12][10] - The company is leveraging its pricing engine, which predicts vehicle prices within $300 of retail value, to help dealers compete against larger competitors like CarMax and Carvana [18][25][26] - ACV is gaining traction with three out of the top ten dealer groups in the U.S. using its pricing engine [26] Project Viper - Project Viper is a new initiative aimed at improving vehicle appraisal and inspection efficiency, utilizing advanced scanning technology to provide condition reports quickly [30][34] - The project is expected to enhance the efficiency of wholesale inspections and is currently being piloted with select dealers [36][40] Commercial Wholesale Strategy - ACV is expanding into the commercial wholesale market, which presents a total addressable market (TAM) of approximately 8 million units, with an expected addressable market of 4 to 6 million units for ACV [77][78] - The company aims to maintain an asset-light model while increasing operational efficiency through strategic location rentals [73][75] Partnership with Amazon - ACV is a data and technology partner for Amazon Autos, providing a pricing engine for trade-in evaluations, which is crucial for online vehicle retailing [82][84] - The partnership allows ACV to leverage its technology to facilitate trade-ins and wholesale opportunities for Amazon [86][89] Market Challenges and Performance - The second quarter of 2025 experienced fluctuations in conversion rates due to early consumer demand, impacting revenue guidance [59][60] - Despite challenges, ACV has seen a bounce back in conversion rates, aligning with typical seasonal trends [62][64] Brand Awareness and Market Position - There is a recognition issue within the market regarding ACV's full capabilities beyond auctions, with many dealers unaware of the additional services offered [96][99] - The company is considering rebranding to enhance recognition and awareness of its broader service offerings [95][100] Additional Important Content - The company is focused on improving dealer adoption rates, with about one-third of franchise rooftops currently transacting on the platform [42][44] - ACV's growth strategy includes engaging with C-level executives at dealerships, which has shifted from traditional sales approaches targeting used car managers [52][56] - The company is optimistic about future growth, with expectations to expand Project Viper and other initiatives in the coming years [41][39]

Core Insights - ACV has expanded its No Reserve Sale to four days a week, enhancing opportunities for dealers to sell and source inventory in $0 reserve auctions [1][2] Group 1: Auction Details - The new auction schedule includes sales every Tuesday, Wednesday, Thursday, and Saturday at 12:00 PM ET, with a new Wednesday sale added and Saturday's start time moved up for consistency [2] - The No Reserve Sale allows dealers to select vehicles from the My ACV dashboard, guaranteeing a payout and enabling sales on any of the four auction days [3][4] Group 2: Performance Metrics - 85% of vehicles sold in the No Reserve Sale exceed the guaranteed offer, with auctions attracting an average of 35+ bids and 100+ views per auction [9] - The platform provides flexibility for dealers to sell one vehicle or multiple units, resulting in fast and predictable cash flow [4] Group 3: Buyer and Seller Benefits - The No Reserve Sale has proven to increase vehicle visibility significantly, with some cars receiving triple or quadruple the views compared to traditional sales [5] - ACV aims to enhance dealer profitability and control, providing opportunities for quick inventory turnover and access to a diverse range of vehicles [7][6] Group 4: Company Mission - ACV is focused on transforming the automotive industry by creating trusted digital marketplaces and data solutions for used vehicle transactions [8]

Core Insights - ACV Auctions Inc. reported quarterly earnings of $0.07 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.02 per share a year ago [1] - The company posted revenues of $193.7 million for the quarter ended June 2025, which was 1.22% below the Zacks Consensus Estimate, but up from $160.62 million year-over-year [2] - The stock has underperformed, losing approximately 36.9% since the beginning of the year, while the S&P 500 has gained 8.6% [3] Earnings Performance - The company has surpassed consensus EPS estimates two times over the last four quarters [1] - ACV Auctions has topped consensus revenue estimates three times in the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.08, with expected revenues of $204.91 million, and for the current fiscal year, the estimate is $0.24 on revenues of $775.69 million [7] Market Outlook - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] - The industry, Auction and Valuation Services, is ranked in the bottom 16% of over 250 Zacks industries, suggesting a challenging environment for the stock [8] - The correlation between near-term stock movements and earnings estimate revisions is emphasized, indicating that investors should monitor these revisions closely [5]

Financial Data and Key Metrics Changes - Q2 revenue was $194 million, representing a 21% year-over-year growth, with 210,000 vehicles sold, marking a 13% increase despite market deceleration [7][19] - Adjusted EBITDA was $19 million, at the midpoint of guidance, with a margin improvement of 520 basis points year-over-year [20] - Non-GAAP net income was also at the midpoint of guidance, with a margin increase of 430 basis points year-over-year [20] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 57% of total revenue, growing 20% year-over-year, reflecting 13% unit growth and an average revenue per unit (ARPU) of $523, which grew 6% [20] - Marketplace services revenue comprised 39% of total revenue, growing 25% year-over-year, driven by record revenue for ACV Transport and ACV Capital [21] - SaaS and data services products made up 4% of total revenue, with revenue approximately flat year-over-year [21] Market Data and Key Metrics Changes - The company observed a 300 basis point year-over-year increase in trade retention rates, indicating dealers are keeping more vehicles for retail purposes [87] - The overall market conditions are expected to be flat to slightly down for the full year, influenced by macroeconomic factors [65][87] Company Strategy and Development Direction - The company is focused on three pillars: growth, innovation, and scale, leveraging AI across its suite of solutions to enhance dealer experiences and optimize pricing [8][14] - The company is expanding its total addressable market (TAM) and competitive moat through innovative product offerings and partnerships, including a new commercial platform [17][28] - The strategy includes maintaining adjusted EBITDA guidance while investing in long-term growth objectives, with a commitment to significant margin expansion [6][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top-line growth of at least 20% year-over-year despite ongoing macroeconomic challenges [5][25] - The company trimmed its 2025 revenue guidance by $5 million at the midpoint, now expecting revenue in the range of $765 million to $775 million [25][102] - Management noted that conversion rates improved in July, indicating a potential recovery in market conditions [24][38] Other Important Information - The company ended Q2 with $305 million in cash and cash equivalents and marketable securities, alongside $187 million of debt [23] - The company is excited about the upcoming launch of its first greenfield location in Houston, Texas, as part of its commercial platform strategy [17][116] Q&A Session Summary Question: Clarification on unit growth headwind - Management clarified that the 500 basis point unit growth headwind was due to lower conversion rates than anticipated, not solely due to higher retention rates [31][34] Question: Competitive dynamics in the marketplace - Management indicated that the slight dip in conversion rates was consistent across the industry, with both macroeconomic factors and company initiatives contributing to the trends [37][39] Question: Progress on pricing engine and auction liquidity - Management reported significant progress in their pricing engine, with guaranteed sales accounting for 15% of units sold by the end of Q2, indicating strong auction liquidity [44][47] Question: Outlook on Amazon partnership and AI solutions - Management stated that while they are investing in partnerships and AI solutions, they do not expect material contributions to revenue this year, focusing instead on long-term benefits [55][57] Question: Organic growth rate excluding acquisitions - Management noted that the recent acquisition contributed about 1% to dealer unit growth in the quarter, with organic growth remaining strong [114] Question: Commercial opportunities and greenfield locations - Management expressed excitement about their greenfield strategy, with plans for additional locations and a focus on organic growth rather than acquisitions [116][120]

Financial Data and Key Metrics Changes - Q2 revenue was $194 million, representing a 21% year-over-year growth, with 210,000 vehicles sold, marking a 13% increase despite market deceleration [7][19]. - Adjusted EBITDA was $19 million, at the midpoint of guidance, with a margin improvement of 520 basis points year-over-year [20]. - Non-GAAP net income was also at the midpoint of guidance, with a margin increase of 430 basis points year-over-year [20]. Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 57% of total revenue, growing 20% year-over-year, reflecting 13% unit growth and an average revenue per unit (ARPU) of $523, which grew 6% [20]. - Marketplace services revenue comprised 39% of total revenue, growing 25% year-over-year, driven by record revenue for ACV Transport and ACV Capital [21]. - SaaS and data services products made up 4% of total revenue, with revenue approximately flat year-over-year [21]. Market Data and Key Metrics Changes - The company observed a 300 basis point year-over-year increase in trade retention rates, indicating dealers are keeping more vehicles for retail purposes [87]. - The overall market is expected to be flat to slightly down for the full year, influenced by macroeconomic factors and dealer behavior [65][87]. Company Strategy and Development Direction - The company focuses on three pillars for long-term shareholder value: growth, innovation, and scale [8]. - The strategy includes leveraging AI across solutions to enhance pricing accuracy and improve dealer engagement [8][14]. - The company is expanding its addressable market through new product offerings and partnerships, including a commercial platform and greenfield locations [17][118]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top-line growth of at least 20% year-over-year despite macroeconomic challenges [5][25]. - The company trimmed its 2025 revenue guidance by $5 million at the midpoint, now expecting revenue in the range of $765 million to $775 million [25]. - Management noted that conversion rates improved in July, indicating a potential recovery in market conditions [24][38]. Other Important Information - The company ended Q2 with $305 million in cash and cash equivalents and $187 million in debt, reflecting a strong capital structure [23]. - The company is investing in its remarketing center strategy and commercial platform, expecting operating expenses to grow approximately 11% in 2025 [22][26]. Q&A Session Summary Question: Clarification on unit growth headwind - Management clarified that the 500 basis point unit growth headwind was due to lower conversion rates than anticipated, not solely due to higher retention rates [31][34]. Question: Competitive dynamics in the marketplace - Management indicated that the slight dip in conversion rates was consistent across the industry, with both macroeconomic factors and company initiatives influencing performance [37][39]. Question: Progress on pricing engine and auction liquidity - Management reported significant progress in their pricing engine, with guaranteed sales accounting for 15% of units sold by the end of Q2, indicating strong auction liquidity [44][47]. Question: Outlook on Amazon partnership and AI solutions - Management stated that while they are investing in partnerships and AI solutions, they do not expect material contributions to revenue this year, focusing instead on long-term benefits [55][57]. Question: Organic growth rate excluding acquisitions - Management noted that the recent acquisition contributed about 1% to dealer unit growth in Q2, with other acquisitions prior to Q2 last year not affecting organic growth [114]. Question: Commercial opportunities and greenfield locations - Management expressed excitement about their greenfield strategy, with the first location in Houston going live and plans for additional locations in the future [116][118].

Financial Data and Key Metrics Changes - Q2 revenue was $194 million, representing a 21% year-over-year growth, and the company sold 210,000 vehicles, which is a 13% increase year-over-year despite market deceleration [6][19][20] - Adjusted EBITDA was $19 million, at the midpoint of guidance, with a margin improvement of 520 basis points year-over-year [20][25] - Non-GAAP net income was also at the midpoint of guidance, with a margin increase of 430 basis points year-over-year [20] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 57% of total revenue, growing 20% year-over-year, driven by 13% unit growth and an average revenue per unit (ARPU) of $523, which increased by 6% [20] - Marketplace services revenue made up 39% of total revenue, growing 25% year-over-year, reflecting record revenue for ACV Transport and ACV Capital [20] - SaaS and data services products comprised 4% of total revenue, with revenue approximately flat year-over-year [21] Market Data and Key Metrics Changes - The company observed a 300 basis point increase in trade retention rates year-over-year, indicating dealers are keeping more vehicles for retail purposes [90] - Conversion rates decreased during the quarter but showed improvement in July, aligning with normal seasonal patterns [24][38] Company Strategy and Development Direction - The company focuses on three pillars for long-term shareholder value: growth, innovation, and scale, leveraging AI across its suite of solutions to enhance dealer experiences [5][7] - The company is expanding its total addressable market (TAM) and competitive moat through innovative product offerings and partnerships, including a new commercial platform [17][28] - The company is committed to maintaining adjusted EBITDA guidance while investing in long-term growth objectives, expecting a revenue growth of at least 20% year-over-year [5][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing a profitable growth strategy despite challenging market conditions, with expectations for strong top-line growth [4][6] - The company trimmed its 2025 revenue guidance by $5 million to reflect ongoing macroeconomic challenges, now expecting revenue in the range of $765 million to $775 million [25][106] - Management noted that while the market may be flat to slightly down, they anticipate returning to mid-teens market share gains in the future [64][90] Other Important Information - The company is excited about the upcoming launch of its first greenfield location in Houston, Texas, which will enhance its commercial platform capabilities [17][120] - The company is actively working on integrating new technology and data products to improve pricing accuracy and auction liquidity [42][46] Q&A Session Summary Question: Clarification on unit growth headwind - Management clarified that the 500 basis point unit growth headwind was due to lower conversion rates than anticipated, while dealers are retaining more vehicles [31][34][36] Question: Competitive dynamics in the marketplace - Management indicated that the slight dip in conversion rates was consistent across the industry, with improvements noted at the start of the current quarter [38][39] Question: Progress on pricing engine and auction liquidity - Management reported significant progress in their pricing engine, achieving a close estimate of vehicle sale prices, which enhances auction liquidity [42][45] Question: Amazon partnership and geographic expansion of AI tools - Management stated that while they are investing in partnerships and new capabilities, they do not expect material contributions from these initiatives in the current year [52][56] Question: Drivers of deceleration relative to the broader industry - Management emphasized that while growth has slowed, they remain confident in their ability to gain market share and expect a return to mid-teens growth [62][64] Question: Update on ClearCar and market success - Management highlighted strong performance from ClearCar, particularly in supply-constrained markets, and noted plans to integrate new features with their offerings [96][101]

Financial Performance - ACV Auctions' Q2-25 revenue reached $194 million, a 21% year-over-year increase compared to $161 million in Q2-24[13] - Adjusted EBITDA for Q2-25 was $19 million, significantly higher than the $7 million in Q2-24[13] - Marketplace units in Q2-25 totaled 210,000, up from 187,000 in Q2-24[13] - The company anticipates full year 2025 revenue to be between $765 million and $775 million, representing a year-over-year growth of 20% to 22%[70] - Adjusted EBITDA for the full year 2025 is projected to be between $68 million and $72 million, with an Adjusted EBITDA margin of approximately 9%[70] Revenue Streams - SaaS & Data Services accounted for 57% of revenue in Q2-25, showing approximately flat year-over-year growth[60] - Data-enabled solutions contributed 38% to the revenue in Q2-25, with a 25% year-over-year increase[60] - Marketplace Services made up 5% of the revenue in Q2-25, reflecting a 20% year-over-year increase[60] Operational Efficiency - Non-GAAP cost of revenue decreased from 49% of revenue in Q2-24 to 47% in Q2-25[63] - Non-GAAP operating expenses (excluding cost of revenue) also decreased from 50% of revenue in Q2-24 to 47% in Q2-25[63] Capital and Cash Flow - As of June 30, 2025, ACV Auctions had $305 million in cash, cash equivalents, and marketable securities[68] - Operating cash flow for the first half of 2025 was $80 million, a 70% increase year-over-year compared to $47 million in the first half of 2024[68]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents ACV Auctions Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025 and 2024, including operations, balance sheets, cash flows, and notes [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue for Q2 2025 increased 20.6% to **$193.7 million**, with net loss narrowing to **$7.3 million** from **$17.1 million** year-over-year Condensed Consolidated Statements of Operations (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Total revenue** | $193,703 | $160,624 | $376,400 | $306,313 | | **Total operating expenses** | $200,898 | $179,265 | $398,026 | $347,481 | | **Loss from operations** | $(7,195) | $(18,641) | $(21,626) | $(41,168) | | **Net loss** | $(7,298) | $(17,063) | $(22,115) | $(37,534) | | **Net loss per share - basic and diluted** | $(0.04) | $(0.10) | $(0.13) | $(0.23) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$1.14 billion** from **$984.1 million**, with liabilities rising to **$689.5 million** and equity at **$448.8 million** Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $737,935 | $593,197 | | **Total assets** | $1,138,273 | $984,149 | | **Total current liabilities** | $462,658 | $381,166 | | **Total liabilities** | $689,490 | $544,145 | | **Total stockholders' equity** | $448,783 | $440,004 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations for H1 2025 significantly increased to **$80.3 million**, with **$93.6 million** used in investing and **$47.4 million** provided by financing activities Six Months Ended June 30, Cash Flows (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $80,339 | $47,491 | | **Net cash used in investing activities** | $(93,646) | $(3,997) | | **Net cash provided by (used in) financing activities** | $47,398 | $(11,025) | | **Net increase in cash, cash equivalents, and restricted cash** | $34,300 | $32,401 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's accounting policies and financial statement items, covering business nature, financial instruments, revenue, debt, compensation, acquisitions, and segments * The company operates in a single reportable segment, providing a wholesale auction marketplace for used vehicles, primarily in North America, with services including digital marketplaces, remarketing centers, data, transportation, and financing[27](index=27&type=chunk)[28](index=28&type=chunk)[71](index=71&type=chunk) Disaggregated Marketplace and Service Revenue (in thousands) | | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :--- | :--- | :--- | | Auction marketplace revenue | $92,267 | $182,250 | | Other marketplace revenue | $75,397 | $143,074 | | Data services revenue | $8,331 | $16,608 | | **Total** | **$175,995** | **$341,932** | * In Q2 2025, the company amended its 2021 Revolver, increasing borrowing capacity from **$160 million** to **$250 million** and extending maturity to June 2030[50](index=50&type=chunk) * The company completed four business acquisitions during 2024, including Indiana Auto Auction, 166 Auto Auction, and Alliance Auto Auctions, to expand offerings to dealers and commercial partners[63](index=63&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial results, highlighting a 22% revenue increase, improved profitability, narrowed net loss, and increased Adjusted EBITDA, covering key metrics, operations, liquidity, and debt Key Operating and Financial Metrics | | Three Months ended June 30, 2025 | Three Months ended June 30, 2024 | | :--- | :--- | :--- | | **Marketplace Units** | 210,429 | 186,526 | | **Marketplace GMV** | $2.7 billion | $2.4 billion | | **Adjusted EBITDA** | $18.6 million | $7.1 million | * Revenue growth was primarily volume-driven, with Marketplace Units increasing **13% YoY** for Q2 2025, also boosted by higher buyer fee rates and ancillary service adoption[121](index=121&type=chunk)[122](index=122&type=chunk) * Operating expenses as a percentage of revenue decreased across major categories, indicating improved operating leverage as the company scales[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) * The company's liquidity remains strong with **$258.4 million** in cash and cash equivalents and **$46.4 million** in marketable securities as of June 30, 2025, sufficient for the next 12 months[157](index=157&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section compares Q2 and H1 2025 and 2024 financial results, showing Q2 2025 total revenue growth of **20.6%** to **$193.7 million** and improved operating loss Revenue Comparison - Q2 2025 vs Q2 2024 (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Marketplace and service | $175,995 | $144,126 | $31,869 | 22% | | Customer assurance | $17,708 | $16,498 | $1,210 | 7% | | **Total Revenue** | **$193,703** | **$160,624** | **$33,079** | **20.6%** | Operating Expenses Comparison - Q2 2025 vs Q2 2024 (in thousands) | Expense Category | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Marketplace and service cost | $74,319 | $64,253 | $10,066 | 16% | | Customer assurance cost | $16,909 | $14,558 | $2,351 | 16% | | Operations and technology | $45,801 | $39,694 | $6,107 | 15% | | Selling, general, and administrative | $52,972 | $51,912 | $1,060 | 2% | | Depreciation and amortization | $10,897 | $8,848 | $2,049 | 23% | [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA and Non-GAAP Net Income (Loss) to evaluate performance, with Q2 2025 Adjusted EBITDA significantly increasing to **$18.6 million** from **$7.1 million** Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Net loss** | $(7,298) | $(17,063) | $(22,115) | $(37,534) | | Depreciation and amortization | 10,904 | 8,880 | 21,450 | 16,682 | | Stock-based compensation | 15,454 | 14,965 | 32,028 | 29,794 | | Other adjustments | (483) | 286 | 818 | 1,875 | | **Adjusted EBITDA** | **$18,577** | **$7,078** | **$32,485** | **$11,347** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had **$258.4 million** in cash, **$46.4 million** in marketable securities, and **$186.5 million** in long-term debt, with improved H1 2025 operating cash flow * Principal sources of liquidity include **$258.4 million** in cash and cash equivalents, **$46.4 million** in marketable securities, and cash flow from operations[157](index=157&type=chunk) * The company has two main debt facilities: the 2021 Revolver with **$250 million** capacity (**$100.0 million** drawn) and a Warehouse Facility with **$125 million** capacity (**$86.5 million** drawn) for auto floorplan loans[162](index=162&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) Summary of Cash Flows - Six Months Ended June 30 (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $80,339 | $47,491 | | Net cash used in investing activities | $(93,646) | $(3,997) | | Net cash provided by (used in) financing activities | $47,398 | $(11,025) | [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations, affecting interest income and variable-rate debt, with **$186.5 million** in SOFR-indexed borrowings as of June 30, 2025 * The primary market risk is interest rate risk, impacting both interest-earning assets and variable-rate debt[181](index=181&type=chunk) * As of June 30, 2025, the company had **$186.5 million** in variable-rate borrowings indexed to SOFR, where interest rate increases will lead to higher expense[183](index=183&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter * The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[185](index=185&type=chunk) * No material changes in internal control over financial reporting were identified during the quarter[186](index=186&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material pending or threatened litigation that would adversely affect its business or financial results * The company states it is not presently subject to any material litigation[189](index=189&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, were reported * No material changes to risk factors were reported since the last Annual Report[190](index=190&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption, modification, or termination of Rule 10b5-1 trading plans by Section 16 officers during Q2 2025, including actions by the CEO, CAO, COO, and CFO * CFO William Zerella terminated a trading plan on April 7, 2025[196](index=196&type=chunk) * CAO Andrew Peer adopted a trading plan on June 11, 2025[196](index=196&type=chunk) * COO Vikas Mehta modified a trading plan on June 12, 2025, and CEO George Chamoun adopted a new trading plan on June 13, 2025[199](index=199&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Amended and Restated Certificate of Incorporation, CEO and CFO certifications, and XBRL data files * Key exhibits filed include the Amended and Restated Certificate of Incorporation, Employee Stock Purchase Plan, and Sarbanes-Oxley Act certifications from the Principal Executive Officer and Principal Financial Officer[200](index=200&type=chunk)