ACV Auctions Inc.ACVA
ACV Auctions Inc. Stock Compensation Disclosure
Stock-Based Compensation
Effective March 23, 2021, the Company adopted the ACV Auctions Inc. 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan became effective on the date of the underwriting agreement related to the IPO, and no further grants were made under the 2015 Plan. All shares that remained available for issuance under the 2015 Plan at that time were transferred to the 2021 Plan. Employees, outside directors, consultants and advisors of the Company are eligible to participate in the 2021 Plan. The 2021 Plan allows the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units ("RSUs"), performance awards, and other forms of awards.
Common stock options generally vest and become exercisable over a four-year service period with 25% vesting one year from the date of grant or service-inception date and ratably vesting monthly over the remaining three-year period. RSUs generally vest and become exercisable over a - or four-year service period. There were 33.1 million shares available for future grants under the 2021 Plan at December 31, 2025.
Effective March 23, 2021, the Company adopted the ACV Auctions Inc. 2021 Employee Stock Purchase Plan (the "ESPP"), which became effective on the date of the underwriting agreement related to the IPO, and was subsequently amended and restated as of May 22, 2025. The ESPP authorizes the issuance of shares of the Company's Common stock pursuant to purchase rights granted to employees ("employee stock purchase rights"). As of December 31, 2025, 6.3 million shares of the Company's Common stock have been reserved for future issuance under the ESPP. The price at which Common stock is purchased under the ESPP is equal to 85% of the fair market value of the Company's Common stock on the first or last day of the offering period, whichever is lower. During the year ended December 31, 2025, 504,327
shares were issued under the ESPP. As of December 31, 2025, unrecognized compensation expense related to the ESPP was $0.9 million and is expected to be recognized over the remaining term of the current offering period.
During the second quarter of 2024, the Company's Board of Directors approved long-term incentive awards to certain of the Company's executive officers comprised of performance share units (“PSUs”), which may only be settled in shares of the Company’s Common stock. The PSUs are subject to both service-based vesting conditions and a requirement that the average closing price of the Company’s Common stock, as measured over a period of 30 trading days commencing at the grant date and ending July 1, 2027, equal or exceed a designated level (the “Stock Price Condition”). The PSUs will vest in one-third installments on each of July 1, 2025, 2026 and 2027, provided that the Stock Price Condition has been satisfied prior to the relevant date. If the Stock Price Condition has not yet been satisfied prior to the relevant date, then the PSUs that otherwise would have vested on such date will remain unvested unless and until the Stock Price Condition has been satisfied. If the Stock Price Condition has not been satisfied by July 1, 2027, then the PSUs will be forfeited on that date. In each circumstance, vesting is subject to the executive’s continued service with the Company until the time of vesting.
During the second quarter of 2025, the Company's Board of Directors approved long-term incentive awards to certain of the Company's executive officers comprised of PSUs, which may only be settled in shares of the Company’s Common stock. The PSUs are subject to both service-based vesting conditions and a requirement that the relative total shareholder return ("rTSR") of the Company's Common stock, measured against the Russell 2000, achieve at least the 25th percentile, at which point 50% of the award is earned, with a maximum earning potential of 200% if the 75th percentile or above is achieved (the “rTSR Condition”). The rTSR Condition is measured over a two-year performance period ending on December 31, 2026. The rTSR Condition earning potential is capped at 100% if the Company’s stock price is lower at the end of the performance period than at the beginning of such period. If the rTSR Condition is met at the end of the performance period, 50% of the award will vest in the first quarter of 2027, with the remaining 50% of the award vesting in the first quarter of 2028. In each circumstance, vesting is subject to the executive’s continued service with the Company until the time of vesting.
The following table summarizes the stock option activity for the year ended December 31, 2025 (in thousands, except for per share amounts):
Number of Options | Weighted- Average Exercise Price Per Share | Intrinsic Value | Weighted- Average Remaining Contractual Term (in years) | ||||||||||||||||||||
| Outstanding, December 31, 2024 | 3,882 | $ | 1.55 | $ | 77,824 | 3.21 | |||||||||||||||||
| Exercised | (2,187) | 0.67 | |||||||||||||||||||||
| Forfeited | (1) | 5.54 | |||||||||||||||||||||
| Expired | (18) | 5.22 | |||||||||||||||||||||
| Outstanding, December 31, 2025 | 1,676 | $ | 2.67 | $ | 8,975 | 2.76 | |||||||||||||||||
| Exercisable, December 31, 2025 | 1,676 | $ | 2.67 | $ | 8,975 | 2.76 | |||||||||||||||||
Stock options exercised during the years ended December 31, 2024 and 2023 were 2.4 million and 1.4 million, respectively.
The following table summarizes the RSU activity for the year ended December 31, 2025 (in thousands, except for per share amounts):
Number of RSUs | Weighted- Average Grant-Date Fair Value | ||||||||||
| Outstanding, December 31, 2024 | 8,078 | $ | 16.04 | ||||||||
| Granted | 5,719 | 15.52 | |||||||||
| Vested | (4,214) | 15.34 | |||||||||
| Forfeited | (869) | 15.94 | |||||||||
| Outstanding, December 31, 2025 | 8,714 | $ | 16.05 | ||||||||
The weighted-average grant-date fair value of RSU's granted during the years ended December 31, 2024 and 2023 was $17.56 and $14.04, respectively.
The fair value of stock awards vested and the intrinsic value from the exercise of options for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Fair value of awards vested | $ | 64,643 | $ | 58,438 | $ | 47,736 | |||||||||||
| Intrinsic value of options exercised | $ | 32,098 | $ | 33,651 | $ | 15,688 | |||||||||||
Total stock-based compensation expense recognized for restricted stock units and common stock options has been reported in the Consolidated Statements of Operations as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Marketplace and service cost of revenue (excluding depreciation & amortization) | $ | 1,026 | $ | 1,065 | $ | 938 | |||||||||||
| Operations and technology | 15,355 | 16,595 | 10,875 | ||||||||||||||
| Selling, general, and administrative | 40,481 | 50,350 | 37,835 | ||||||||||||||
| Stock-based compensation, net of amount capitalized | 56,862 | 68,010 | 49,648 | ||||||||||||||
| Capitalized stock-based compensation | 7,602 | 5,516 | 3,383 | ||||||||||||||
| Stock-based compensation expense | $ | 64,464 | $ | 73,526 | $ | 53,031 | |||||||||||
The compensation expense related to the unvested portion of restricted stock units was approximately $117.5 million at December 31, 2025. The unvested portion of compensation expense for restricted stock units is expected to be recognized over a weighted-average period of 2.5 years.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.