BrightView Holdings, Inc.

Previous wording

Selling, general and administrative expense consists of costs incurred related to compensation and benefits for management, sales and administrative personnel, equity-based compensation, branch and office rent and facility operating costs, depreciation expense related to branch and office locations, as well as professional fees, software costs and other miscellaneous expenses. Corporate expenses, including corporate executive compensation, finance, legal and information technology, are included in consolidated Selling, general and administrative expense and not allocated to the business segments.

Current wording

Selling, general and administrative expense consists of costs incurred related to compensation and benefits for management, sales and administrative personnel, equity-based compensation, branch and office rent and facility operating costs, depreciation expense related to branch and office locations, as well as professional fees, software costs and other miscellaneous expenses. Corporate expenses, including corporate executive compensation, finance, legal and information technology, are included in consolidated Selling, general and administrative expense.

Previous wording

Other (income) consists primarily of investment gains related to investments held in Rabbi Trust.

Current wording

Other expense (income) consists primarily of investment gains related to investments held in Rabbi Trust.

Previous wording

Income tax (benefit) includes U.S. federal, state and local income taxes. Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax credits and certain nondeductible expenses. Our effective tax rate may vary from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical distribution of our pre-tax earnings, changes in the tax rates of different jurisdictions, the availability of tax credits and nondeductible items. Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the period of the change.

Current wording

Income tax expense (benefit) includes U.S. federal, state and local income taxes. Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax credits and certain nondeductible expenses. Our effective tax rate may vary from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical distribution of our pre-tax earnings, changes in the tax rates of different jurisdictions, the availability of tax credits and nondeductible items. Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the period of the change.

Previous wording

Weather may impact the timing of performance of landscape maintenance and enhancement services and progress on development projects from quarter to quarter. For example, snow events in the winter, hurricane-related cleanup in the summer and fall, and the effects of abnormally high rainfall or drought in a given market may impact our services. These less predictable weather patterns can impact both our revenues and our costs, especially from quarter to quarter, but also from year to year in some cases. Extreme weather events such as hurricanes and tropical storms can result in a positive impact to our business in the form of increased enhancement services revenues related to cleanup and other services. However, such weather events may also negatively impact our ability to deliver our contracted services or impact the timing of performance.

Current wording

Weather may impact the timing of performance of landscape maintenance and enhancement services and progress on development projects from quarter to quarter. For example, snow events in the winter, hurricane-related cleanup in the summer and fall, and the effects of abnormally high rainfall or drought in a given market may impact our services. These less predictable weather patterns can impact both our revenues and our costs, especially from quarter to quarter, but also from year to year in some cases. Extreme weather events such as hurricanes and tropical storms can result in a positive impact to our business in the form of increased enhancement services revenues related to cleanup and other services. However, such weather events may also negatively impact our ability to deliver our contracted services or impact the timing of performance. In our seasonal markets, the performance of our snow removal services is correlated with the amount of snowfall and number of snowfall events in a given season.

Previous wording

Based on our most recent annual analysis as of July 1, 2024, the fair values for all identified reporting units exceeded the carrying values, and therefore no indicators of impairment existed for the reporting units; however, the fair value of the Maintenance reporting unit exceeded the carrying value by 9.6%. Since the Maintenance reporting unit fair value did not substantially exceed the carrying value, we may be at risk for an impairment loss in the future if interest rates and market conditions continue to trend unfavorably or if our forecasts assumed in the fair value calculation are not realized. As of December 31, 2024, there was $1,797.5 million of goodwill recorded related to the Maintenance reporting unit.

Current wording

Based on our most recent annual analysis as of July 1, 2024, the fair values for all identified reporting units exceeded the carrying values, and therefore no indicators of impairment existed for the reporting units; however, the fair value of the Maintenance reporting unit exceeded the carrying value by 9.6%. Since the Maintenance reporting unit fair value did not substantially exceed the carrying value, we may be at risk for an impairment loss in the future if interest rates and market conditions continue to trend unfavorably or if our forecasts assumed in the fair value calculation are not realized. As of March 31, 2025, there was $1,797.6 million of goodwill recorded related to the Maintenance reporting unit.

Previous wording

We believe the non-discretionary nature of our landscape maintenance services provides us with a fairly predictable recurring revenue model. The perennial nature of the landscape maintenance service sector, as well as its wide range of end users, minimizes the impact of a broad or sector-specific downturn. However, in connection with our enhancement services and development services, when demand for commercial construction declines, demand for landscape enhancement services and development projects may decline. When commercial construction activity rises, demand for landscape enhancement services to maintain green space may also increase. This is especially true for new developments in which green space tends to play an increasingly important role. Economic conditions, including rising inflation and fuel prices, as well as rising interest rates, have impacted and may further impact our costs and expenses, and fluctuations in labor markets, may impact our ability to identify, hire and retain employees.

Current wording

We believe the non-discretionary nature of our landscape maintenance services provides us with a fairly predictable recurring revenue model. The perennial nature of the landscape maintenance service sector, as well as its wide range of end users, minimizes the impact of a broad or sector-specific downturn. However, in connection with our enhancement services and development services, when demand for commercial construction declines, demand for landscape enhancement services and development projects may decline. When commercial construction activity rises, demand for landscape enhancement services to maintain green space may also increase.

Previous wording

Net service revenues for the three months ended December 31, 2024 decreased $27.5 million, or 4.4%, to $599.2 million, from $626.7 million in the 2023 period. The decrease was driven by a decrease in Maintenance Services revenues of $33.0 million, partially offset by an increase in Development Services revenues of $6.4 million as discussed further below in Segment Results.

Current wording

Net service revenues for the three months ended March 31, 2025 decreased $10.3 million, or 1.5%, to $662.6 million, from $672.9 million in the 2024 period. The decrease was driven by a decrease in Maintenance Services revenues of $17.7 million, primarily driven by strategic reductions of non-core businesses, partially offset by an increase in Development Services revenues of $7.5 million as discussed further below in Segment Results.

Previous wording

Gross profit for the three months ended December 31, 2024 decreased $7.0 million, or 5.2%, to $126.8 million, from $133.8 million in the 2023 period. Gross margin decreased 10 basis points, to 21.2%, in the three months ended December 31, 2024, from 21.3% in the comparable 2023 period. The decreases in gross profit was primarily driven by the decrease in Net Services revenues described above.

Current wording

Gross profit for the three months ended March 31, 2025 decreased $4.5 million, or 3.0%, to $147.5 million, from $152.0 million in the 2024 period. Gross margin decreased 30 basis points, to 22.3%, in the three months ended March 31, 2025, from 22.6% in the comparable 2024 period. The decreases in gross profit was primarily driven by the decrease in Net Services revenues described above combined with increased depreciation expense.

Previous wording

Selling, general and administrative expense for the three months ended December 31, 2024 decreased $10.6 million, or 8.2%, to $119.3 million, from $129.9 million in the 2023 period. As a percentage of revenue, Selling, general and administrative expense decreased 80 basis points for the three months ended December 31, 2024 to 19.9%, from 20.7% in the 2023 period. The decrease was driven primarily by decreases in compensation-related costs as a result of the Company's cost management initiatives.

Current wording

Selling, general and administrative expense for the three months ended March 31, 2025 decreased $6.9 million, or 5.5%, to $118.1 million, from $125.0 million in the 2024 period. As a percentage of revenue, Selling, general and administrative expense decreased 80 basis points for the three months ended March 31, 2025 to 17.8% from 18.6% in the 2024 period. The decrease was driven primarily by decreases in compensation-related costs as a result of the Company's cost management initiatives.

Previous wording

Amortization expense for the three months ended December 31, 2024 decreased $2.0 million, or 19.8%, to $8.1 million, from $10.1 million in the 2023 period. The decrease was principally due the decrease in the amortization of intangible assets, based on the pattern consistent with expected future cash flows calculated at the time the assets were acquired.

Current wording

Amortization expense for the three months ended March 31, 2025 decreased $1.6 million, or 18.4%, to $7.1 million from $8.7 million in the 2024 period. The decrease was principally due the decrease in the amortization of intangible assets, based on the pattern consistent with expected future cash flows calculated at the time the assets were acquired.

Previous wording

Other income was $0.2 million for the three months ended December 31, 2024 compared to $1.2 million in the 2023 period. The decrease of $1.0 million was driven principally by the change in value of investments held in the Rabbi Trust.

Current wording

Other expense was $0.8 million for the three months ended March 31, 2025 compared to income of $0.8 million in the 2024 period. The decrease of $1.6 million was driven principally by the change in value of investments held in the Rabbi Trust and costs associated the repricing of the Company's term loan.

Previous wording

Interest expense, net for the three months ended December 31, 2024 decreased $2.9 million, or 17.0%, to $14.2 million, from $17.1 million in the 2023 period. The decrease was driven by lower interest expense as a result of the decrease in interest rates as a result of the repricing of our Series B Term Loans in fiscal 2024 and the decrease in the Company's long-term debt balance with an increase in interest income associated with the increase in cash and cash equivalents balance.

Current wording

Interest expense, net for the three months ended March 31, 2025 decreased $3.2 million, or 20.0%, to $12.8 million from $16.0 million in the 2024 period. The decrease was driven by lower interest expense as a result of the decrease in interest rates as a result of the repricing of our Series B Term Loans in fiscal 2024 and the decrease in the Company's long-term debt balance partially offset by a decrease in interest income associated with the decrease in the cash and cash equivalents balance.

Previous wording

For the three months ended December 31, 2024, Income tax benefit was $4.2 million compared to $5.7 million in the 2023 period. The decrease was primarily attributable to the decrease in net loss relative to the prior year.

Current wording

For the three months ended March 31, 2025, Income tax expense was $2.3 million compared to $13.3 million in the 2024 period. The decrease was primarily attributable to the impact of the nonrecurring gain on the divestiture of the U.S. Lawns subsidiary on pre-tax book income in the prior year.

Previous wording

For the three months ended December 31, 2024, Net loss was $10.4 million compared to $16.4 million in the 2023 period due to the changes noted above. Net loss as a percentage of revenue was 1.7% for the three months ended December 31, 2024, compared to 2.6% for the three months ended December 31, 2023.

Current wording

For the three months ended March 31, 2025, Net income was $6.4 million compared to $33.7 million in the 2024 period due to the changes noted above. Net loss as a percentage of revenue was 1.0% for the three months ended March 31, 2025 compared to 5.0% for the three months ended March 31, 2024.

Previous wording

Adjusted EBITDA increased $5.4 million for the three months ended December 31, 2024, to $52.1 million, from $46.7 million in the 2023 period. Adjusted EBITDA as a percentage of revenue was 8.7% and 7.5% for the three months ended December 31, 2024 and 2023, respectively. The increase in Adjusted EBITDA was primarily driven by an increase of $3.2 million, or 10.2%, in Maintenance Services Segment Adjusted EBITDA, combined with an increase of $2.2 million, or 14.4%, in Development Services Segment Adjusted EBITDA, as discussed further below in Segment Results.

Current wording

Adjusted EBITDA increased $8.7 million for the three months ended March 31, 2025, to $73.5 million, from $64.8 million in the 2024 period. Adjusted EBITDA as a percentage of revenue was 11.1% and 9.6% for the three months ended March 31, 2025 and 2024, respectively. The increase in Adjusted EBITDA was primarily driven by an increase of $1.2 million, or 2.2%, in Maintenance Services Segment Adjusted EBITDA, combined with an increase of $7.5 million, or 77.3%, in Development Services Segment Adjusted EBITDA, as discussed further below in Segment Results.

Previous wording

Adjusted Net Income for the three months ended December 31, 2024 increased $2.6 million to $5.6 million, from $3.0 million in the 2023 period due to the changes noted above.

Current wording

Adjusted Net Income for the three months ended March 31, 2025 increased $4.6 million to $21.5 million, from $16.9 million in the 2024 period due to the changes noted above.

Previous wording

We believe that Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Adjusted Net Income is defined as net (loss) including interest and depreciation and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions and the removal of the discrete tax items. Adjusted EPS is defined as Adjusted Net Income divided by the (i) weighted average number of common shares outstanding used in the calculation of basic earnings per share plus (ii) shares of common stock related to the Series A Preferred Stock on an as-converted basis, assumed to be converted for the entire period. We believe that the adjustments applied in presenting Adjusted EBITDA, Adjusted Net (Loss) and Adjusted EPS are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future.

Current wording

We believe that Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Adjusted Net Income is defined as net income (loss) including interest and depreciation and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions and the removal of the discrete tax items. Adjusted EPS is defined as Adjusted Net Income divided by the (i) weighted average number of common shares outstanding used in the calculation of basic earnings per share plus (ii) shares of common stock related to the Series A Preferred Stock on an as-converted basis, assumed to be converted for the entire period. We believe that the adjustments applied in presenting Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future.

Previous wording

Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Free Cash Flow are not recognized terms under GAAP and should not be considered as an alternative to net (loss) as a measure of financial performance or cash flows provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to the same or other similarly titled measures of other companies and can differ significantly from company to company.

Current wording

Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Free Cash Flow are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to the same or other similarly titled measures of other companies and can differ significantly from company to company.

Previous wording

Set forth below are the reconciliations of net (loss) to Adjusted EBITDA and Adjusted Net Income, and cash flows from operating activities to Adjusted Free Cash Flow. Adjusted EPS is defined as Adjusted Net Income (shown below) divided by the Adjusted Weighted Average Number of Common Shares Outstanding for the period used in the calculation of basic EPS which is presented in Note 14 “(Loss) Per Share of Common Stock” in the Notes to our unaudited consolidated financial statements.

Current wording

Set forth below are the reconciliations of net income (loss) to Adjusted EBITDA and Adjusted Net Income, and cash flows from operating activities to Adjusted Free Cash Flow. Adjusted EPS is defined as Adjusted Net Income (shown below) divided by the Adjusted Weighted Average Number of Common Shares Outstanding for the period used in the calculation of basic EPS which is presented in Note 14 “Earnings (Loss) Per Share of Common Stock” in the Notes to our unaudited consolidated financial statements.

Previous wording

Represents the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items, which collectively result in a reduction of income tax (benefit). The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include tax impact of the gain on divestiture of U.S. Lawns, changes in laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances.

Current wording

Represents the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items, which collectively result in a reduction of income tax expense (benefit). The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include tax impact of the gain on divestiture of U.S. Lawns, changes in laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances.

Previous wording

The following tables present Net service revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments for the three months ended three months ended December 31, 2024 and 2023. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.

Current wording

The following tables present Net service revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments for the three months ended March 31, 2025 and 2024. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.

Previous wording

Segment Adjusted EBITDA for the three months ended December 31, 2024 increased by $3.2 million to $34.6 million from $31.4 million in the 2023 period. Segment Adjusted EBITDA Margin increased 140 basis points, to 8.5%, in the three months ended December 31, 2024, from 7.1% in the 2023 period. The increase in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin was primarily driven by lower overhead as a result of the Company's cost management initiatives, partially offset by the decrease in revenues described above and increased landscape services labor costs.

Current wording

Segment Adjusted EBITDA for the three months ended March 31, 2025 increased by $1.2 million to $56.3 million from $55.1 million in the 2024 period. Segment Adjusted EBITDA Margin increased 60 basis points, to 11.4%, in the three months ended March 31, 2025, from 10.8% in the 2024 period. The increase in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin was primarily driven by lower overhead as a result of the Company's cost management initiatives and increased snow removal services revenue described above. These savings were partially offset by increased landscape maintenance labor costs.

Previous wording

Development Services net service revenues for the three months ended December 31, 2024 increased $6.4 million, or 3.5%, compared to the 2023 period. The increase was driven by an increase in Development Services project volumes.

Current wording

Development Services net service revenues for the three months ended March 31, 2025 increased $7.5 million, or 4.6%, compared to the 2024 period. The increase was driven by an increase in Development Services project volumes.

Previous wording

Segment Adjusted EBITDA for the three months ended December 31, 2024 increased $2.2 million, to $17.5 million, compared to the 2023 period. Segment Adjusted EBITDA Margin increased 80 basis points, to 9.1% for the three months ended December 31, 2024, from 8.3% in the 2023 period. The increases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were primarily driven by the increase in revenues described above.

Current wording

Segment Adjusted EBITDA for the three months ended March 31, 2025 increased $7.5 million, to $17.2 million, compared to the 2024 period. Segment Adjusted EBITDA Margin increased 410 basis points to 10.0% for the three months ended March 31, 2025, from 5.9% in the 2024 period. The increase in Adjusted EBITDA and Segment Adjusted EBITDA Margin were primarily driven by the increase in net service revenues described above and a shift in the timing and mix of projects.

Previous wording

Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement and the Receivables Financing Agreement. Our principal uses of cash are to provide working capital, meet debt service requirements, fund capital expenditures and finance strategic plans, including acquisitions. We may also seek to finance capital expenditures under finance leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. While we have in the past financed certain acquisitions with internally generated cash, in the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings.

Current wording

Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement and the Receivables Financing Agreement. Our principal uses of cash are to provide working capital, meet debt service requirements, fund capital expenditures and finance strategic plans, including acquisitions and share repurchases under the share repurchase program announced in March 2025. We may also seek to finance capital expenditures under finance leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. While we have in the past financed certain acquisitions with internally generated cash, in the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings.

Previous wording

Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility under the Credit Agreement and the Receivables Financing Agreement, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the next twelve months and the foreseeable future.

Current wording

Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility under the Credit Agreement and the Receivables Financing Agreement, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements and share repurchases for the next twelve months and the foreseeable future.

Previous wording

Net cash provided by operating activities for the three months ended December 31, 2024 increased $34.3 million, to $60.5 million, from $26.2 million in the 2023 period. This increase was due to increases in cash provided by accounts payable, unbilled and deferred revenue, and other operating liabilities and a decrease in net loss.

Current wording

Net cash provided by operating activities for the six months ended March 31, 2025 increased $42.2 million to $151.7 million, from $109.5 million in the 2024 period. This increase was due to a decrease in net income, more than offset by increases in non-cash adjustments to reconcile net (loss) income to net cash provided by operating activities.

Previous wording

Net cash used by investing activities increased $46.7 million to $55.3 million for the three months ended December 31, 2024 from $8.6 million in the 2023 period. The increase was driven by a $48.6 million increase in capital expenditures, partially offset by a $1.4 million increase in proceeds from the sale of property plant and equipment in comparison to the prior period.

Current wording

Net cash used by investing activities increased $115.7 million to $83.4 million for the six months ended March 31, 2025 from Net cash provided by investing activities of $32.3 million in the 2024 period. The increase was driven by a $69.6 million increase in capital expenditures, and a $51.6 million decrease in proceeds from divestiture, partially offset by a $5.0 million increase in proceeds from the sale of property and equipment in comparison to the prior period.

Previous wording

Net cash flows used by financing activities of $47.3 million for the three months ended December 31, 2024 included a decrease in book overdrafts of $17.0 million, repayments of finance lease obligations of $10.7 million, Series A preferred stock dividends of $9.0 million, repayments of our Receivables Financing Agreement of $8.4 million, and repurchase of common stock and distributions of $5.1 million.

Current wording

Net cash flows used by financing activities of $67.4 million for the six months ended March 31, 2025 included repayments of finance lease obligations of $21.1 million, Series A preferred stock dividends of $18.0 million, a decrease in book overdrafts of $17.2 million, repayments of our Receivables Financing Agreement of $16.0 million, and repurchase of common stock and distributions of $6.8 million. These uses of cash were partially offset by proceeds from our receivables financing agreement of 11.6 million.

Previous wording

Adjusted Free Cash Flow decreased $12.9 million to $4.4 million for the three months ended December 31, 2024 from $17.3 million in the 2023 period. The decrease in Adjusted Free Cash Flow was due to an increase in cash used for capital expenditures, partially offset by an increase in net cash provided by operating activities, each as described above.

Current wording

Adjusted Free Cash Flow decreased $22.4 million to $67.0 million for the six months ended March 31, 2025 from $89.4 million in the 2024 period. The decrease in Adjusted Free Cash Flow was due to an increase in cash used for capital expenditures, partially offset by an increase in net cash provided by operating activities, each as described above.

Previous wording

Net working capital is defined as current assets less current liabilities. Net working capital decreased $30.1 million to $206.7 million as of December 31, 2024, from $236.8 million as of September 30, 2024, primarily driven by a decrease in cash and cash equivalents of $42.1 million, decrease in unbilled revenue of $40.8 million, increase in deferred revenue of $28.0 million, and decrease in accounts receivable of $25.2 million. This was partially offset by a decrease in accrued expenses and other current liabilities of $69.2 million, decrease in accounts payable of $21.6 million, and increase in other current assets of $14.0 million.

Current wording

Net working capital is defined as current assets less current liabilities. Net working capital decreased $26.1 million to $210.7 million as of March 31, 2025, from $236.8 million as of September 30, 2024, primarily driven by a decrease in unbilled revenue of $46.3 million, increase in deferred revenue of $29.6 million, and decrease in accounts receivable of $20.3 million. This was partially offset by a decrease in accrued expenses and other current liabilities of $59.8 million, decrease in accounts payable of $7.5 million, and increase in other current assets of $1.1 million.