ACV Auctions(US:ACVA)2025-11-05 22:09Marketplace Performance - Marketplace Units increased to 218,065 in Q3 2025, up from 198,354 in Q3 2024, representing a growth of 9%[85] - Marketplace GMV reached $2.7 billion in Q3 2025, compared to $2.5 billion in Q3 2024, reflecting a year-over-year increase of 8%[85] - The total Marketplace GMV for the nine months ended September 30, 2025, was $8.1 billion, an increase from $7.2 billion in the same period of 2024, marking a growth of 12.5%[85] - For the nine months ended September 30, 2025, marketplace and service revenue reached $518.4 million, up 21% from $429.8 million, driven by auction marketplace and transportation services revenue growth[139] - The volume of Marketplace Units sold increased to 636,519 for the nine months ended September 30, 2025, compared to 559,511 in the prior year, indicating enhanced customer engagement[139] Financial Performance - Adjusted EBITDA for Q3 2025 was $18.7 million, up from $11.2 million in Q3 2024, indicating a growth of 67%[85] - Total revenue for the nine months ended September 30, 2025, was $576.0 million, a 20.6% increase from $477.6 million in 2024[125] - Loss from operations for the three months ended September 30, 2025, was $23.7 million, compared to a loss of $17.1 million in the same period of 2024[123] - The net loss for the three months ended September 30, 2025, was $24.5 million, compared to a net loss of $16.0 million in 2024[123] - Non-GAAP Net income for the three months ended September 30, 2025, was $11.2 million, compared to $7.6 million for the same period in 2024, reflecting a 46.5% increase[161] - For the nine months ended September 30, 2025, Non-GAAP Net income was $30.9 million, up from $12.1 million in 2024, representing a 155.4% increase[161] Revenue Breakdown - For the three months ended September 30, 2025, marketplace and service revenue was $176.5 million, accounting for 88% of total revenue, compared to $155.9 million and 91% in the same period of 2024[123] - Customer assurance revenue for the same period was $23.1 million, representing 12% of total revenue, up from $15.4 million and 9% in 2024[123] - Auction marketplace revenue rose to $87.8 million from $84.9 million, while other marketplace revenue increased to $80.3 million from $62.7 million, indicating strong volume-driven growth[127] - Customer assurance revenue surged by 49%, reaching $23.1 million compared to $15.4 million, primarily due to increased Go Green assurance revenue[128] - Customer assurance revenue increased to $57.5 million for the nine months ended September 30, 2025, up from $47.8 million in the same period of 2024, representing a 20% increase[140] Expenses and Costs - Operating expenses for the three months ended September 30, 2025, totaled $223.3 million, compared to $188.5 million in 2024, reflecting an increase in costs associated with business scaling[123] - Selling, general, and administrative expenses for the three months ended September 30, 2025, were $72.8 million, up from $55.0 million in 2024, but expected to decrease as a percentage of revenue over the long term[117] - Operating expenses for marketplace and service cost of revenue increased to $70.9 million from $67.1 million, a 6% rise, with costs related to generating other marketplace revenue being the main contributor[129] - Selling, general, and administrative expenses rose by 32% to $72.8 million from $55.0 million, largely due to higher non-personnel related costs including a $18.7 million reserve for Tricolor bankruptcy[133] - Depreciation and amortization expenses increased to $32.4 million from $26.4 million, a 23% increase, mainly due to higher amortization of internal-use software costs[146] Cash Flow and Liquidity - Cash and cash equivalents totaled $265.3 million, with marketable securities amounting to $50.7 million as of September 30, 2025[164] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $90.6 million, an increase from $68.6 million in 2024, marking a 32.5% growth[178] - Net cash used in investing activities was $(124.8) million for the nine months ended September 30, 2025, compared to $12.3 million in 2024, indicating a significant increase in investment outflows[179] - Net cash provided by financing activities was $75.2 million for the nine months ended September 30, 2025, a turnaround from $(10.9) million in 2024[182] - The company’s liquidity position is expected to support working capital and capital expenditure requirements for at least the next 12 months[164] Debt and Financing - As of September 30, 2025, $100.0 million was drawn under the 2021 Revolver with an interest rate of 9.00%[171] - The Warehouse Facility had borrowings of $120.0 million as of September 30, 2025, with an interest rate of 7.32%[173] - The company may seek additional equity or debt financing in the future, depending on capital requirements and market conditions[164] - The company had borrowings from banks amounting to $220.0 million as of September 30, 2025, with variable interest rates indexed to SOFR[190] Market Conditions - The demand for used vehicles remains strong, with the company benefiting from rising consumer demand since early 2020[102] - Vehicle auction volume typically experiences seasonal fluctuations, with lower volumes expected in the fourth quarter and winter months[185] - Market risk exposure is primarily due to fluctuations in interest rates, which may impact the financial position[189] - A hypothetical 100 basis point change in interest rates would not have a material impact on the company's condensed consolidated financial statements[190] - The company does not engage in trading or speculative investments and has not used derivative financial instruments to manage interest rate risk exposure[190]