ACV Auctions (ACVA) risk factors, FY2025 10-K

Risks Related to Our Growth and Capital Requirements

1. 01Our recent growth may not be indicative of our future growth
2. 02We have a history of operating losses and we may not achieve or maintain profitability in the future29% rewritten
3. 03We have a limited operating history, and our future results of operations or financial condition may fluctuate significantly due to a wide range of factors, which makes it difficult to forecast our future results of operations or financial condition
4. 04We may require additional debt and equity capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances. If such capital is not available to us, our business may be harmed
5. 05Pursuant to the terms of our outstanding indebtedness, we may be limited in our ability to incur future debt96% rewritten
6. 06We may be adversely affected by fluctuations in benchmark interest rates because of our 2021 Revolver and Warehouse Facility
7. 07We track certain operational metrics with internal systems and tools and do not independently verify such metrics

Risks Related to Our Business, Our Brand and Our Industry

1. 08Our ability to expand our products and services may be limited, which could negatively impact our growth rate, revenue and financial performance
2. 09We participate in a highly competitive industry, and pressure from existing and new companies may adversely affect our business, results of operations and financial condition
3. 10Our business depends on growing the share of wholesale transactions from existing customers, and the failure to do so could have a material adverse effect on our business, results of operations and financial condition
4. 11Decreases in the supply of used vehicles coming to the wholesale market may impact sales volumes, which may adversely affect our revenue and profitability
5. 12Our business is sensitive to changes in the prices of used vehicles
6. 13The loss of sellers could adversely affect our business, results of operations and financial condition, and an inability to increase our sources of vehicle supply could adversely affect our growth rates
7. 14Failure to properly and accurately inspect the condition of vehicles sold through our marketplace could harm our business
8. 15We have exposure to credit risk with our dealer borrowers, which could have a negative impact on our business, results of operation and financial condition63% rewritten
9. 16Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, results of operations and financial condition
10. 17We bear settlement risk for vehicles sold through our marketplace platform
11. 18Failure to deal effectively with fraudulent activities on our marketplace platform, could harm our business
12. 19Prospective purchasers of vehicles may choose not to shop online, which could prevent us from growing our business
13. 20We may experience seasonal and other fluctuations in our quarterly results of operations, which may not fully reflect the underlying performance of our business
14. 21If the quality of our customer experience, our reputation or our brand were negatively affected, our business, results of operations and financial condition may be harmed
15. 22Unfavorable media coverage could harm our business, results of operations and financial condition
16. 23We 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 control29% rewritten
17. 24Our future growth and profitability relies on the effectiveness and efficiency of our sales and marketing efforts, and these efforts may not be successful
18. 25Our insurance may not provide adequate levels of coverage against claims
19. 26We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed

Risks Related to Socioeconomic and Geopolitical Factors

1. 27Our business is highly sensitive to changes in macroeconomic conditions, and risks related to the larger automotive ecosystem, including customer demand, could reduce auto sales and profitability, which may harm our business, results of operations and financial condition
2. 28Our business is subject to the risk of natural disasters, adverse weather events, global pandemics, and other catastrophic events, and to interruption by man-made problems such as geopolitical tensions, armed conflicts and acts of terrorism

Risks Related to Information Technology and Intellectual Property

1. 29We may not properly leverage or make the appropriate investment in technology advancements, which could result in the loss of any sustainable competitive advantage in products, services and processes65% rewritten
2. 30If use of our web and mobile marketplace is not accepted by the dealer industry, our business may be harmed
3. 31We rely on third-party technology and information systems to complete critical business functions and such reliance may negatively impact our business
4. 32A significant disruption in service of, or other performance or reliability issues with, our marketplace platform could damage our reputation and result in a loss of customers, which could harm our brand or our business95% rewritten
5. 33We are subject to stringent and changing data privacy and security laws, regulations, rules, industry code of conduct, policies, standards, and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to adverse consequences
6. 34Failure to adequately obtain, maintain, protect, defend and enforce our intellectual property rights, including our technology and confidential information, could harm our business
7. 35Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business, results of operations and financial condition
8. 36If we are not able to maintain, enhance and protect our reputation and brand recognition through the maintenance and protection of trademarks, our business may be harmed
9. 37We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property
10. 38Our use of “open source” software could adversely affect our ability to offer our products and services and subject us to possible litigation
11. 39We rely on third-party providers to perform payment-related services on our behalf, and the failure of such third-parties to adequately perform such services or comply with applicable laws could harm our business
12. 40Our third-party service providers may increase the fees they charge us in the future, which would increase our operating expenses. This could, in turn, require us to increase the fees we charge to customers and cause some customers to reduce their use of our marketplace or to leave our marketplace platform altogether
13. 41We utilize artificial intelligence, which could expose us to liability or adversely affect our businessNew

Risks Related to Government Regulation and Litigation

1. 42We operate in highly regulated industries and either are or may be subject to a wide range of federal, state, local, and international laws and regulations and our failure to comply with these laws and regulations may force us to change our operations or harm our business
2. 43Government regulation of the internet and ecommerce is evolving, and unfavorable changes or failure by us to comply with these regulations could harm our business
3. 44We are, and may in the future be, subject to legal proceedings in the ordinary course of our business. If the outcomes of these proceedings are adverse to us, it could have an adverse effect on our business
4. 45We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability79% rewritten
5. 46the year 2035 and $348.6 million will carry forward indefinitely. As of December 31, 2025, we had Foreign NOLs of $22.5 million, which will carryforward indefinitelyNew

Risks Related to Being a Public Company

1. 47We will continue to incur costs as a result of operating as a public company, and our management will be required to continue to devote substantial time to compliance with our public company responsibilities and corporate governance practices
2. 48We 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 stock30% rewritten
3. 49During the evaluation and testing process of our internal controls in future years, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective

Risks Related to Ownership of Our Common Stock

1. 50Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders
2. 51Our stock price may be volatile, and the value of our Common stock may decline
3. 52Sales of our Common stock in the public market could cause the market price of our Common stock to decline42% rewritten
4. 53If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our Common stock could decline
5. 54Anti-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
6. 55We do not intend to pay dividends for the foreseeable future