What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-06 · 192 added, 80 removed, 338 unchanged (45% of the section changed)

32 unchanged sentences

Our business metrics may be calculated in a manner different than similar business metrics used by other companies.

Three Months ended March 31,

Three Months ended June 30, Six Months ended June 30,

2026 2025 2026 2025

Marketplace Units 211,472 210,429 424,964 418,454

Marketplace GMV $2.7 billion $2.6 billion

Adjusted EBITDA $17.1 million $13.9 million

Marketplace GMV $ 2.7 billion $ 2.7 billion $ 5.4 billion $ 5.3 billion

Adjusted EBITDA $ 20.8 million $ 18.6 million $ 37.9 million $ 32.5 million

Marketplace Units

130 unchanged sentences

The following table sets forth our Condensed Consolidated Statements of Operations data expressed as a percentage of total revenue for the periods presented:

Three months ended March 31,

Three months ended June 30,

(in thousands)

19 unchanged sentences

Interest expense (3,221) (2,286)

Total other (expense) income

Total other expense (1,630) (134)

Loss before income taxes

2 unchanged sentences

Net loss $ (8,227) $ (7,298)

(1) Includes stock-based compensation expense as follows:

Three months ended March 31,

Six months ended June 30,

(in thousands)

Marketplace and service revenue $ 371,457 89 % $ 341,932 91 %

Customer assurance revenue 46,676 11 % 34,468 9 %

Total revenue 418,133 100 % 376,400 100 %

Operating expenses:

Marketplace and service cost of revenue (excluding depreciation & amortization) (1)

165,324 40 % 143,721 38 %

Customer assurance cost of revenue (excluding depreciation & amortization)

40,702 10 % 30,886 8 %

Operations and technology (1) (6)

93,414 22 % 89,991 24 %

Selling, general, and administrative (1) (3) (5) (6) (7)

110,019 26 % 111,990 30 %

Depreciation and amortization (2) (4)

23,956 6 % 21,438 6 %

Total operating expenses 433,415 398,026

Loss from operations

(15,282) (21,626)

Other Income (expense):

Interest income 3,285 4,041

Interest expense (6,041) (4,196)

Total other expense (2,756) (155)

Loss before income taxes

(18,038) (21,781)

Provision for income taxes 1,081 334

$ (19,119) $ (22,115)

(1) Includes stock-based compensation expense as follows:

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Marketplace and service cost of revenue (excluding depreciation & amortization) $ 210 $ 281 $ 407 $ 586

Operations and technology 3,698 4,077 7,150 8,351

Selling, general, and administrative 10,900 11,096 20,715 23,091

Stock-based compensation expense $ 14,808 $ 15,454 $ 28,272 $ 32,028

(2) Includes acquired intangible asset amortization as follows:

Three months ended March 31,

(in thousands)

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Depreciation and amortization $ 2,594 $ 2,591 $ 5,190 $ 5,364

(3) Includes litigation-related costs as follows:

Three months ended March 31,

(in thousands)

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Selling, general, and administrative $ — $ — $ — $ 1,100

(4) Includes amortization of capitalized stock based compensation as follows:

Three months ended March 31,

(in thousands)

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Depreciation and amortization $ 1,486 $ 1,504 $ 3,034 $ 2,967

(5) Includes acquisition-related costs as follows:

Three months ended March 31,

(in thousands)

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Selling, general, and administrative $ — $ — $ — $ 403

(6) Includes other costs as follows:

Three months ended March 31,

(in thousands)

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

(in thousands) (in thousands)

Operations and technology $ — $ — $ 73 $ —

1 unchanged sentence

Other costs $ (284) $ — $ 326 $ -

Comparison of the three months ended March 31, 2026 and 2025

Comparison of the three months ended June 30, 2026 and 2025

Marketplace and Service Revenue

Three months ended March 31, $ Change % Change

Three months ended June 30, $ Change % Change

(in thousands)

1 unchanged sentence

The increase was primarily driven by an increase in other marketplace revenue which is earned from providing transportation and financing services.

For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, other marketplace revenue increased to $88.3 million from $75.4 million and auction marketplace revenue

increased to $92.4 million from $92.3 million .

The increase in other marketplace revenue was primarily related to an increase in the revenue earned from the transportation of vehicles due to an increase in transportation revenue per mile and an increase in the number of units transported.

Increases in revenue per mile were driven by rising fuel costs being passed on to customers.

The increase in auction marketplace revenue was driven by buy fee rate increases and volume increases.

The volume of Marketplace Units sold on the marketplace platform increased to 211,472 for the three months ended June 30, 2026 from 210,429 for the comparable prior year period which is an indicator of increased overall customer engage ment.

The wholesale automotive industry continues to transition to digital transactions, with an increasing amount of customers transacting digitally versus at physical auction houses.

This industry transition, and our position as a leader in the area of digital wholesale automotive auctions, continues to drive more business to our marketplace platform.

The average total revenue per Marketplace Unit increased for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to higher buyer rates and customers adding more optional ancillary services to the auction such as transportation services and financing services which resulted in increase to both auction marketplace and other marketplace revenue.

Customer Assurance Revenue

Three months ended June 30, $ Change % Change

(in thousands)

Customer assurance revenue $ 24,694 $ 17,708 $ 6,986 39 %

The increase was primarily driven by an increase in other customer assurance revenue due to an increase in units sold through our price guarantee sales and an increase in the estimated fair value per unit sold through the guarantee sale.

Other customer assurance revenue increased to $6.3 million for the three months ended June 30, 2026 from $1.5 million for the three months ended June 30, 2025.

Go Green assurance revenue also increased, driven by an increase in units that elected the Go Green offering.

Fo r the three months ended June 30, 2026 compared to the three months ended June 30, 2025, Go Green assurance revenue increased to $18.4 million from $16.2 million.

Operating Expenses

Marketplace and Service Cost of Revenue

Three months ended June 30, $ Change % Change

(in thousands)

Marketplace and service cost of revenue (excluding depreciation & amortization) $ 85,504 $ 74,319 $ 11,185 15 %

Percentage of revenue 40 % 38 %

The increase primarily consisted of higher costs related to generating other marketplace revenue.

Other marketplace cost of revenues increased to $63.5 million for the three months ended June 30, 2026, compared to $52.3 million for the three months ended June 30, 2025, due to an increase in the average cost per mile transported and an increase in units transported.

Higher fuel costs drove the increase in the average cost per mile transported.

For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, total cost attributed to generating auction marketplace revenue increased to $17.0 million from $16.6 million.

For the three months ended June 30, 2026, data services cost of revenue was $5.1 million, compared to $5.4 million in the comparable prior year period.

Marketplace and service costs of revenues as a percentage of revenue increased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to a decrease in units sold at our physical auction locations which resulted in higher cost of revenue as a percentage of revenue on these units.

Higher fuel costs associated with transporting vehicles to customers also contributed to the increase.

Customer Assurance Cost of Revenue

Three months ended June 30, $ Change % Change

(in thousands)

Customer assurance cost of revenue (excluding depreciation & amortization) $ 21,722 $ 16,909 $ 4,813 28 %

Percentage of revenue 10 % 9 %

The increase was primarily driven by an increase in other customer assurance cost of revenue due to an increase in units sold through our price guarantee sales and an increase in the average cost per guarantee sale unit.

Other customer assurance cost of revenue increased to $6.1 million for the three months ended June 30, 2026, compared to $2.2 million for the three months ended June 30, 2025 due primarily to an increase in costs incurred on the Company's price guarantee sales driven by an increase in units sold through our price guarantee sales and an increase in the average cost per guarantee sale unit in the current year compared to the prior period.

Go Green assurance cost of revenue also increased, driven by an increase in the number of arbitration claims due to increased volume of completed auctions where the customer elected the Go Green offering.

For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, Go Green assurance cost of revenue increased to $15.6 million from $14.7 million.

Customer assurance cost of revenue as a percentage of revenue increased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to the higher proportion of units sold through our price guarantee sale.

Units sold through the guarantee sale generally have a higher cost of revenue as a percentage of revenue than units sold without a guarantee but we believe the guarantee sale units are still accretive to revenue and net income.

Operations and Technology Expenses

Three months ended June 30, $ Change % Change

(in thousands)

Operations and technology $ 46,944 $ 45,801 $ 1,143 2 %

Percentage of revenue 22 % 24 %

The increase was primarily due to higher software and technology costs as we continue to invest in our technology and infrastructure to enable future growth.

Software and technology costs increased to $6.4 million from $5.1 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

For the three months ended June 30, 2026 compared to the three months ended June 30, 2025, personnel-related costs remained flat at $37.8 million.

Other expenses decreased to $2.7 million from $2.9 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Operations and technology expense as a percentage of revenue decreased during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as we continued our efforts to effectively manage costs while growing revenue.

Selling, General, and Administrative Expenses

Three months ended June 30, $ Change % Change

(in thousands)

Selling, general, and administrative $ 53,781 $ 52,972 $ 809 2 %

Percentage of revenue 25 % 27 %

The increase was primarily driven by higher non-personnel costs, largely attributable to increased bad debt expense.

Non-personnel costs increased to $12.0 million for the three months ended June 30, 2026 from $7.9 million for the three months ended June 30, 2025 .

This increase was partially offset by a decrease in personnel-related costs, including stock-based compensation and incentive-based compensation,to $41.9 million from $45.1 million for the same period.

Selling, general, and administrative expenses as a percentage of revenue decreased during the three months ended

June 30, 2026 compared to the three months ended June 30, 2025 as we continued our efforts to effectively manage costs while growing revenue.

Depreciation and Amortization

Three months ended June 30, $ Change % Change

(in thousands)

Depreciation and amortization $ 12,036 $ 10,897 $ 1,139 10 %

Percentage of revenue 6 % 6 %

The increase was primarily due to an increase of $1.0 million in amortization of internal-use software costs due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense.

Depreciation and amortization as a percentage of revenue remained the same during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Comparison of the six months ended June 30, 2026 and 2025

Marketplace and Service Revenue

Six months ended June 30, $ Change % Change

(in thousands)

Marketplace and service revenue $ 371,457 $ 341,932 $ 29,525 9 %

The increase was primarily driven by an increase in other marketplace revenue which is earned from providing transportation and financing services.

Auction marketplace revenue from our Marketplace Buyers and Marketplace Sellers increased as well.

For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, other marketplace revenue increased to $80.4 million from $67.7 million and auction marketplace revenue increased to $93.8 million from $90.0 million .

The increase in other marketplace revenue was primarily related to an

increase in the revenue earned from the transportation of vehicles due to an increase in the number of units transported.

The increase in auction marketplace revenue was primarily volume driven.

The volume of Marketplace Units sold on the marketplace platform increased to 213,492 for the three months ended March 31, 2026 from 208,025 for the comparable prior year period which is an indicator of increased overall customer engage ment.

The wholesale automotive industry continues to transition to digital transactions, with an increasing amount of cust omers transacting digitally versus at physical auction houses.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, other marketplace revenue increased to $168.7 million from $143.1 million and auction marketplace revenue increased to $186.2 million from $182.3 million.

Increases in revenue per mile were driven by rising fuel costs being passed on to customers.

The increase in auction marketplace revenue was driven by buy fee rate increases and volume increases.

The volume of Marketplace Units sold on the marketplace platform increased to 424,964 for the six months ended June 30, 2026 from 418,454 for the comparable prior year period which is an indicator of increased overall customer engagement.

The wholesale automotive industry continues to transition to digital transactions, with an increasing amount of customers transacting digitally versus at physical auction houses.

This industry transition, and our position as a leader in the area of digital wholesale automotive auctions, continues to drive more business to our marketplace platform.

The average total revenue per Marketplace Unit increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to higher buyer rates and customers adding more optional ancillary services to the auction such as transportation services and financing services which resulted in increase to both auction marketplace and other marketplace revenue.

The average total revenue per Marketplace Unit increased for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the aforementioned higher buyer fee rates and customers adding more optional ancillary services to the auction such as transportation services and financing services which resulted in an increase to both auction marketplace and other marketplace revenue.

Customer Assurance Revenue

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

Customer assurance revenue $ 46,676 $ 34,468 $ 12,208 35 %

The increase was primarily driven by an increase in other customer assurance revenue due to an increase in units sold through our price guarantee sales.

Other customer assurance revenue increased to $4.8 million for the three months ended March 31, 2026 from $1.8 million for the three months ended March 31, 2025 due to the aforementioned increase in units sold through the guarantee sales.

Other assurance revenue increased to $11.1 million for the six months ended June 30, 2026 from $3.4 million for the six

months ended June 30, 2025.

Go Green assurance revenue also increased, driven by an increase in units that elected the Go Green offering.

Fo r the three months ended March 31, 2026 compared to the three months ended March 31, 2025, Go Green assurance revenue increased to $17.2 million from $15.0 million.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, Go Green assurance revenue increased to $35.6 million from $31.1 million.

Operating Expenses

Marketplace and Service Cost of Revenue

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

2 unchanged sentences

The increase primarily consisted of higher costs related to generating other marketplace revenue.

Other marketplace cost of revenues increased to $57.4 million for the three months ended March 31, 2026, compared to $47.7 million for the three months ended March 31, 2025, primarily due to an increase in units transported.

For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, total cost attributed to generating auction marketplace revenue increased to $17.8 million from $16.6 million.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, total cost attributed to generating other marketplace revenue increased to $120.9 million compared to $100.0 million, due to an increase in the average cost per mile transported and increase in units transported.

Higher fuel costs drove the increase in the average cost per mile transported.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, total cost attributed to generating auction marketplace revenue increased to $34.8 million from $33.2 million.

The increase in auction marketplace cost of revenue is due to increased units sold through our marketplace.

For the three months ended March 31, 2026 data services cost of revenue was $4.6 million, compared to $5.1 million in the comparable prior year period.

Marketplace and service costs of revenues as a percentage of revenue increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to a decrease in units sold at our physical auction locations which resulted in lower margins on these units.

Data services cost of revenue was $9.6 million for the six months ended June 30, 2026 compared to $10.5 million for the six months ended June 30, 2025.

Marketplace and services cost of revenues as a percentage of revenue increased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to a decrease in units sold at our physical auction locations which resulted in higher cost of revenue as a percentage of revenue on these units.

Higher fuel costs associated with transporting vehicles to customers also contributed to the increase.

Customer Assurance Cost of Revenue

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

1 unchanged sentence

Percentage of revenue 10 % 8 %

The increase was primarily driven by an increase in other customer assurance cost of revenue due to an increase in units sold through our price guarantee sales.

Other customer assurance cost of revenue increased to $4.8 million for the three months ended March 31, 2026, compared to $1.3 million for the three months ended March 31, 2025 due primarily to an increase in costs incurred on the Company's price guarantee sales driven by an increase in units sold through our price guarantee sales in the current year compared to the prior period.

Other customer assurance cost of revenue increased to $11.0 million for the six months ended June 30, 2026, compared to $3.5 million for the six months ended June 30, 2025 due primarily to an increase in costs incurred on the Company's price guarantee sales driven by an increase in units sold through our price guarantee sales and an increase in the average cost per guarantee sale unit in the current year compared to the prior period.

For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, Go Green assurance cost of revenue increased to $14.1 million from $12.7 million.

Customer assurance cost of revenue as a percentage of revenue increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to the higher proportion of units sold through our price guarantee sale during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 .

Units sold through the guarantee sale are generally lower margin than units sold without a guarantee but we believe the guarantee sale units are still accretive to revenue and net income.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, Go Green assurance cost of revenue increased to $29.7 million from $27.3 million.

Customer assurance cost of revenues as a percentage of revenue increased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the higher proportion of units sold through our price guarantee sale.

Units sold through the guarantee sale generally have higher cost of revenue as a percentage of revenue than units sold without a guarantee but we believe the guarantee sale units are still accretive to revenue and net income.

Operations and Technology Expenses

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

1 unchanged sentence

Percentage of revenue 22 % 24 %

The increase was primarily due to higher software and technology costs as we continue to invest in our technology and infrastructure amid ongoing business growth.

Software and technology costs increased to $6.8 million from $4.9 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, personnel-related costs decreased to $37.0 million from $37.6 million.

Other expenses increased to $2.7 million from $1.7 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Operations and technology expense as a percentage of revenue decreased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 as we continued our efforts to effectively manage costs while growing revenue.

The increase is primarily due to higher software and technology costs as we continue to invest in our technology and infrastructure to enable future growth.

Software and technology expenses increased to $13.2 million from $10.1 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Other expenses increased to $5.4 million from $4.5 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, personnel-related costs decreased to $74.9 million from $75.3 million.

Operations and technology expense as a percentage of revenue decreased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as we continued our efforts to effectively manage costs while growing our revenue.

Selling, General, and Administrative Expenses

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

1 unchanged sentence

Percentage of revenue 26 % 30 %

The decrease was primarily due to personnel costs decreasing in the current period.

For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, personnel-related costs decreased to $41.9 million from $47.2 million, primarily as a result of lower stock-based compensation.

Non-personnel expenses in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 increased to $14.2 million from $11.6 million primarily due to an increase in bad debt expense.

Selling, general, and administrative expenses decreased as a percentage

of revenue during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 as we continued our efforts to effectively manage costs while growing revenue.

The decrease primarily consisted of lower personnel-related other costs.

For the six months ended June 30, 2026 compared to the six months ended June 30, 2025, personnel-related costs, including stock-based compensation and incentive-based compensation decreased to $83.9 million from $92.3 million Non-personnel expenses increased to $26.2 million in the six months ended June 30, 2026 from $19.7 million in the six months ended June 30, 2025 primarily due to increased bad debt expense.

Selling, general, and administrative expenses as a percentage of revenue decreased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as we continued our efforts to effectively manage costs while growing revenue.

Depreciation and Amortization

Three months ended March 31, $ Change % Change

Six months ended June 30, $ Change % Change

(in thousands)

2 unchanged sentences

The increase was primarily due to an increase of $2.4 million in amortization of internal-use software costs due to the placing of internal-use software projects into service and the subsequent recognition of amortization expense.

Depreciation and amortization as a percentage of revenue remained the same during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Depreciation and amortization as a percentage of revenue remained flat during the six months ended June 30, 2026 and six months ended June 30, 2025.

Non-GAAP Financial Measures

18 unchanged sentences

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Net loss $ (8,227) $ (7,298) $ (19,119) $ (22,115)

27 unchanged sentences

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:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Net loss $ (8,227) $ (7,298) $ (19,119) $ (22,115)

4 unchanged sentences

Litigation-related costs (1)

Other (284) — 326 —

Non-GAAP Net income $ 10,377 $ 12,251 $ 17,703 $ 19,747

1 unchanged sentence

We have financed operations since our inception primarily through our marketplace revenue, proceeds from sales of equity securities, and debt facilities.

As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents totaling $341.0 million.

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $242.3 million.

We believe that our existing cash and cash equivalents and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months and for the long-term.

4 unchanged sentences

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 March 31, 2026, our principal commitments primarily consist of long-term debt and leases for facilities.

As of June 30, 2026, our principal commitments primarily consist of long-term debt and leases for facilities.

We have $5.5 million of lease obligations due within a year, and an additional $39.2 million of lease obligations due at various dates through 2039.

1 unchanged sentence

Additionally, we enter into purchase commitments for goods and services made in the ordinary course of business.

These purchase commitments include goods and services received and recorded as liabilities as of March 31, 2026 as well as goods and services which have not yet been delivered or performed and have, therefore, not been reflected in our unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.

These purchase commitments include goods and services received and recorded as liabilities as of June 30, 2026 as well as goods and services which have not yet been delivered or performed and have, therefore, not been reflected in our unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.

These commitments typically become due after the delivery and completion of such goods or services.

4 unchanged sentences

2021 Revolver

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

As of March 31, 2026, we had unused borrowing capacity of $161.9 million under the 2021 revolver.

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

As of June 30, 2026, we had unused borrowing capacity of $166.9 million under the 2021 revolver.

Warehouse Facility

As of March 31, 2026 borrowings under the Warehouse Facility were $115.0 million with an interest rate of 6.53%.

As of March 31, 2026, we had unused borrowing capacity of $85.0 million under our Warehouse Facility.

We were in compliance with all such applicable covenants as of March 31, 2026, and believe we are in compliance as of the date of this Quarterly Report on Form 10-Q.

As of June 30, 2026 borrowings under the Warehouse Facility were $125.0 million with an interest rate of 6.59%.

As of June 30, 2026, we had unused borrowing capacity of $75.0 million under our Warehouse Facility.

We were in compliance with all such applicable covenants as of June 30, 2026, and believe we are in compliance as of the date of this Quarterly Report on Form 10-Q.

Cash Flows from Operating, Investing, and Financing Activities

The following table shows a summary of our cash flows for the periods presented:

Three months ended March 31,

Six months ended June 30,

Net cash provided by operating activities $ 41,012 $ 80,339

Net cash used in investing activities (33,933) (93,646)

Net cash provided by financing activities 7,910 32,032

Net cash (used in) provided by financing activities (36,080) 47,398

Effect of exchange rate changes (237) 209

Net increase in cash, cash equivalents, and restricted cash $ 69,473 $ 67,820

Net (decrease) increase in cash and cash equivalents $ (29,238) $ 34,300

Operating Activities

Our largest source of operating cash is cash collection from fees earned on our marketplace.

Our primary uses of cash from operating activities are for personnel expenses, sales and marketing expenses and overhead expenses.

In the three months ended March 31, 2026 and 2025, net cash provided by operating activities was $76.5 million and $66.6 million, respectively.

Net cash provided by operating activities during the three months ended March 31, 2026 and 2025 consisted primarily of cash earnings and an increase in accounts payable to sellers partially offset by an increase in accounts receivable due from buyers.

The increase in cash provided by operating activities during the three months ended March 31, 2026 relative to the three months ended March 31, 2025 is primarily due to increased revenues and the timing of collections and disbursements of funds related to auctions completed near period end.

Our primary uses of cash from operating activities are for costs of revenue, personnel expenses, sales and marketing expenses and overhead expenses.

In the six months ended June 30, 2026 and 2025, net cash provided by operating activities was $41.0 million and $80.3 million, respectively.

Net cash provided by operating activities during the six months ended June 30, 2026 and 2025 consisted primarily of cash earnings and an increase in accounts payable to sellers partially offset by an increase in accounts receivable due from buyers.

The decrease in cash provided by operating activities during the six months ended June 30, 2026 relative to the six months ended June 30, 2025 is primarily due to the timing of collections and disbursements of funds related to auctions completed near period end.

Investing Activities

In the three months ended March 31, 2026 and 2025, net cash used in investing activities was $14.8 million and $30.9 million, respectively.

Net cash used in investing activities during the three months ended March 31, 2026 consisted of capitalized software development costs and an increase in finance receivables.

Net cash used in investing activities during the three months ended March 31, 2025 was primarily related to the increase in finance receivables, capitalized software development and the net outflows from the purchases/maturities of marketable securities.

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

In the six months ended June 30, 2026 and 2025, net cash used in investing activities was $33.9 million and $93.6 million, respectively.

Net cash used in investing activities during the six months ended June 30, 2026 consisted of capitalized software development costs and an increase in finance receivables.

Net cash used in investing activities during the six months ended June 30, 2025 was primarily related to the increase in finance receivables as well as capitalized software development.

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

Financing Activities

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

Net cash provided by financing activities during the three months ended March 31, 2026 and 2025 relate to proceeds, net of repayments, from long term debt, partially offset by payments of RSU tax withholding in exchange for common shares surrendered by RSU holders.

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

The volume of vehicles sold through our auctions generally fluctuates from quarter to quarter.

In the six months ended June 30, 2026 net cash used in financing activities was $36.1 million and in the six months ended June 30, 2025 net cash provided by financing activities was $47.4 million.

Net cash used in financing activities during the six months ended June 30, 2026 relates to the repurchase of common stock offset by the proceeds, net of repayments, from long term debt.

Net cash provided by financing activities during the six months ended June 30, 2025 relates to the proceeds, net of repayments, from long term debt, partially offset by payments of RSU tax withholding in exchange for common shares surrendered by RSU holders.

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

The volume of vehicles sold through our auctions fluctuates from quarter to quarter.

This seasonality is caused by several factors, including holidays, weather, the seasonality of the retail market for used vehicles and the timing of federal tax returns, which affects the demand side of the auction industry.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis