Taboolacom Ltd

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with Taboola’s accompanying unaudited consolidated interim financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for thethree and six months ended June 30, 2024 (the “Quarterly Report”) and audited consolidated financial statements and the related notes appearing in our Annual Report on Form 10-K for the year ended December 31,2023 (the“2023 Form 10-K”)filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28,2024. Some of the information contained in this discussion and analysis is set forth in our 2023 Form 10-K, including information with respect to Taboola’s plans and strategy for Taboola’s business, and includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part I, Item 1A “Risk Factors” in our 2023 Form 10-K and “Note Regarding Forward-Looking Statements”in our 2023 Form 10-K and elsewhere herein, Taboola’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Throughout this section, unless otherwise noted or the context requires otherwise, “we,” “us,” “our” and the “Company” refer to Taboola and its consolidated subsidiaries, and in references to monetary amounts, “dollars” and “$” refer to U.S. Dollars, and “NIS” refers to New Israeli Shekels.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with Taboola’s accompanying unaudited consolidated interim financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for thethree and nine months ended September 30, 2024 (the “Quarterly Report”) and audited consolidated financial statements and the related notes appearing in our Annual Report on Form 10-K for the year ended December 31,2023 (the“2023 Form 10-K”)filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28,2024. Some of the information contained in this discussion and analysis is set forth in our 2023 Form 10-K, including information with respect to Taboola’s plans and strategy for Taboola’s business, and includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part I, Item 1A “Risk Factors” in our 2023 Form 10-K and “Note Regarding Forward-Looking Statements”in our 2023 Form 10-K and elsewhere herein, Taboola’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Throughout this section, unless otherwise noted or the context requires otherwise, “we,” “us,” “our” and the “Company” refer to Taboola and its consolidated subsidiaries, and in references to monetary amounts, “dollars” and “$” refer to U.S. Dollars, and “NIS” refers to New Israeli Shekels.

Previous wording

The weighted-average shares for the three months ended June 30, 2024 and 2023 includes 297,660,641 and 306,386,357 Ordinary shares and, 44,905,471 and 45,198,702 Non-voting Ordinary shares, respectively, and for the six months ended June 30, 2024 and 2023 includes 298,953,005 and 301,537,937 Ordinary shares and, 45,050,457 and 40,953,520 Non-voting Ordinary shares, respectively.

Current wording

The weighted-average shares for the three months ended September 30, 2024 and 2023 included 298,675,810 and 307,392,341 Ordinary shares, and 44,210,406 and 45,198,702 Non-voting Ordinary shares, respectively, and for the nine months ended September 30, 2024 and 2023 included 298,843,067 and 303,246,891 Ordinary shares, and 44,763,120 and 42,384,131 Non-voting Ordinary shares, respectively.

Previous wording

We calculate ex-TAC Gross Profit as gross profit adjusted to add back other cost of revenues.

Current wording

We calculate ex-TAC Gross Profit as gross profit adjusted to add back other cost of revenues and non-cash amortization of the Commercial agreement asset. We add back the non-cash amortization of the Commercial agreement asset because it is unique primarily due to the issuance of equity rather than cash, such that ex-TAC Gross Profit includes solely direct cash contribution components.

Previous wording

We calculate Adjusted EBITDA as net income (loss) before finance income (expenses), net, income tax expenses, depreciation and amortization, further adjusted to exclude share-based compensation including Connexity holdback compensation expenses and other noteworthy income and expense items such as M&A costs and restructuring costs which may vary from period-to-period.

Current wording

We calculate Adjusted EBITDA as net income (loss) before finance income (expenses), net, income tax expenses, depreciation and amortization and non-cash amortization of the Commercial agreement asset, further adjusted to exclude share-based compensation including Connexity holdback compensation expenses and other noteworthy income and expense items such as M&A costs and restructuring costs which may vary from period-to-period.

Previous wording

We believe that Adjusted EBITDA is useful because it allows us and others to measure our performance without regard to items such as share-based compensation expense, depreciation and amortization, and interest expense and other items that can vary substantially depending on our financing and capital structure, and the method by which assets are acquired. We use Adjusted EBITDA and GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors. We may also use Adjusted EBITDA as a metric for determining payment of cash or other incentive compensation.

Current wording

We believe that Adjusted EBITDA is useful because it allows us and others to measure our performance without regard to items such as share-based compensation expense, depreciation and amortization, non-cash amortization of the Commercial agreement asset, and interest expense and other items that can vary substantially depending on our financing and capital structure, and the method by which assets are acquired. We use Adjusted EBITDA and GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors. We may also use Adjusted EBITDA as a metric for determining payment of cash or other incentive compensation.

Previous wording

The following table provides a reconciliation of ratio of net loss to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit:

Current wording

The following table provides a reconciliation of ratio of net income (loss) to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit:

Previous wording

We calculate Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude revaluation of our Warrants liability, share-based compensation expense including Connexity holdback compensation expenses, M&A costs and amortization of acquired intangible assets, foreign currency exchange rate gains (losses), net, and other noteworthy items that change from period to period and related tax effects.

Current wording

We calculate Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude revaluation of our Warrants liability, share-based compensation expense, including Connexity holdback compensation expenses, M&A costs, amortization of acquired intangible assets and the non-cash based Commercial agreement asset, foreign currency exchange rate gains (losses), net, and other noteworthy items that change from period to period and related tax effects.

Previous wording

We believe that Non-GAAP Net Income (Loss) is useful because it allows us and others to measure our operating performance and trends without regard to items such as the revaluation of our Warrants liability, share-based compensation expense, cash and non-cash M&A costs including amortization of acquired intangible assets, foreign currency exchange rate (gains) losses, net and other noteworthy items that change from period to period and related tax effects. These items can vary substantially depending on our share price, acquisition activity, the method by which assets are acquired and other factors.

Current wording

We believe that Non-GAAP Net Income (Loss) is useful because it allows us and others to measure our operating performance and trends without regard to items such as the revaluation of our Warrants liability, share-based compensation expense, cash and non-cash M&A costs, amortization of acquired intangible assets and the non-cash based Commercial agreement asset, foreign currency exchange rate (gains) losses, net and other noteworthy items that change from period to period and related tax effects. These items can vary substantially depending on our share price, acquisition activity, the method by which assets are acquired and other factors.

Previous wording

Traffic acquisition cost, or TAC, consists primarily of cost related to digital property compensation for placing our platform on their digital property and cost for advertising impressions purchased from real-time advertising exchanges and other third parties. Traffic acquisition cost also includes up-front payments, incentive payments, or bonuses paid to the digital property partners, which are amortized over the shorter of respective contractual terms and the economic benefit period of the digital property arrangement. For the majority of our digital properties partners, we have two primary compensation models for digital properties. The most common model is a revenue share model. In this model, we agree to pay a percentage of our revenue generated from advertisements placed on the digital properties. The second model includes guarantees. Under this model, we pay the greater of a percentage of the revenue generated or a committed guaranteed amount per thousand page views (“Minimum guarantee model”). Actual compensation is settled on a monthly basis. Expenses under both the revenue share model as well as the Minimum guarantee model are recorded as incurred, based on actual revenues generated by us at the respective month.

Current wording

Traffic acquisition cost, or TAC, consists primarily of cost related to digital property compensation for placing our platform on their digital property and cost for advertising impressions purchased from real-time advertising exchanges and other third parties. Traffic acquisition cost also includes up-front payments, incentive payments, or bonuses paid to the digital property partners and the amortization of the non-cash based Commercial agreement asset (see Note 1b of Notes to the Unaudited Consolidated Interim Financial Statements) which are amortized over the shorter of respective contractual terms and the economic benefit period of the digital property arrangement. For the majority of our digital properties partners, we have two primary compensation models for digital properties. The most common model is a revenue share model. In this model, we agree to pay a percentage of our revenue generated from advertisements placed on the digital properties. The second model includes guarantees. Under this model, we pay the greater of a percentage of the revenue generated or a committed guaranteed amount per thousand page views (“Minimum guarantee model”). Actual compensation is settled on a monthly basis. Expenses under both the revenue share model as well as the Minimum guarantee model are recorded as incurred, based on actual revenues generated by us at the respective month.

Previous wording

The statutory corporate tax rate in Israel was 23% for the six months ended June 30, 2024 and 2023, although we are entitled to certain tax benefits under Israeli law.

Current wording

The statutory corporate tax rate in Israel was 23% for the nine months ended September 30, 2024 and 2023, although we are entitled to certain tax benefits under Israeli law.

Previous wording

As of June 30, 2024, we have an accumulated tax loss carry-forward of approximately $65.0 million in Israel. The tax loss can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.

Current wording

As of September 30, 2024, we have an accumulated tax loss carry-forward of approximately $64.5 million in Israel. The tax loss can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.

Previous wording

The following table provides consolidated statements of loss data for the periods indicated:

Current wording

The following table provides consolidated statements of income (loss) data for the periods indicated:

Previous wording

Revenues increased by $182.5 million, or 27.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. New digital property partners contributed approximately $246.9 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network, a majority of which is related to Yahoo supply. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) decreased by approximately $64.4 million. This decrease was primarily driven by lower advertiser rates on existing digital property partners due to spend being served on new Yahoo supply added to the network.

Current wording

Revenues increased by $72.8 million, or 20.2%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) increased by approximately $51.1 million. This increase was primarily driven by new revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers. New digital property partners contributed approximately $21.7 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network.

Previous wording

Gross profit increased by $17.7 million, or 18.3%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Gross profit increased by $32.2 million, or 32.0%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $26.4 million, or 21.4%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to new digital property partners, a majority of which is related to Yahoo supply.

Current wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $36.6 million, or 28.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers.

Previous wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs were approximately 18% and 20% for the three months ended June 30, 2024 and June 30, 2023, respectively.

Current wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs was approximately 20% for the three months ended September 30, 2024 and September 30, 2023.

Previous wording

Other cost of revenues increased by $8.7 million, or 33.3%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily as a result of a $4.7 million increase in data, content, communication and IT related expenses, $2.5 million increase in digital service tax expenses mostly due to the adoption of new legislation in certain jurisdictions and a $1.4 million increase in depreciation expenses related to new product innovation.

Current wording

Other cost of revenues increased by $4.4 million, or 15.7%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, mainly as a result of a $2.8 million increase in data, content, communication and IT related expenses and a $0.9 million increase in employee related costs.

Previous wording

General and administrative expenses decreased by $2.6 million, or 9.6%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, a result of a $1.7 million decrease in insurance expenses in connection with the Yahoo arrangement, and $1.1 million decrease in credit losses expenses, partially offset by an increase of $1.1 million in depreciation expenses.

Current wording

General and administrative expenses decreased by $0.1 million, or 0.2%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily attributable to decrease of $0.3 million in credit losses expenses, partially offset by an increase of $0.2 million in employee and subcontractor headcount and related costs, including share-based compensation expenses.

Previous wording

Revenues increased by $96.2 million, or 29.0%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. New digital property partners contributed approximately $103.7 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network, a majority of which is related to Yahoo supply. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) decreased by approximately $7.5 million. This decrease was primarily driven by lower advertiser rates on existing digital property partners due to spend being served on new Yahoo supply added to the network.

Current wording

Revenues increased by $255.3 million, or 25.0%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. New digital property partners contributed approximately $268.6 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) decreased by approximately $13.3 million. This decrease was primarily driven by lower advertiser rates on existing digital property partners due to spend being served on new Yahoo supply added to the network partially mitigated by continued growth on Yahoo supply.

Previous wording

Gross profit increased by $37.1 million, or 19.9%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Gross profit increased by $69.3 million, or 24.1%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $49.6 million, or 20.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to new digital property partners, a majority of which is related to Yahoo supply.

Current wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $86.1 million, or 23.5%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers.

Previous wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs were approximately 19% and 20% for the six months ended June 30, 2024 and June 30, 2023, respectively.

Current wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs were approximately 19% and 20% for the nine months ended September 30, 2024 and September 30, 2023, respectively.

Previous wording

Other cost of revenues increased by $12.5 million, or 23.9%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily as a result of a $5.1 million increase in data, content, communication and IT related expenses, $3.9 million increase in depreciation expenses related to new product innovation and $2.9 million increase in digital service tax expenses due to the recent adoption of legislation in certain jurisdictions.

Current wording

Other cost of revenues increased by $16.8 million, or 21.0%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of a $8.8 million increase in data, content, communication and IT related expenses, $3.4 million increase in depreciation expenses related to new product innovation and $2.8 million increase in digital service tax expenses.

Previous wording

Research and development expenses increased by $3.6 million, or 5.4%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily attributable to $3.1 million increase in employee and subcontractor headcount and related costs, including share-based compensation expenses, reflecting our continued effort to enhance our product offerings and a $0.9 million increase in depreciation expenses.

Current wording

Research and development expenses increased by $4.4 million, or 4.3%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily attributable to $2.5 million increase in employee and subcontractor headcount and related costs, including share-based compensation expenses, reflecting our continued effort to enhance our product offerings and a $1.7 million increase in depreciation expenses.

Previous wording

Sales and marketing expenses increased by $10.7 million, or 8.8%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily attributable to $8.2 million increase in employee and subcontractor headcount and related costs, including share-based compensation expenses, supporting our growth, and $1.5 million in other marketing activities.

Current wording

Sales and marketing expenses increased by $18.8 million, or 10.4%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily attributable to $16.9 million increase in employee and subcontractor headcount and related costs, including share-based compensation expenses, supporting our growth, and $1.4 million in other marketing activities.

Previous wording

General and administrative expenses decreased by $5.1 million, or 9.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, a result of a decrease of $2.2 million in insurance expenses in connection with the Yahoo arrangement, a decrease of $2.0 million in credit losses expenses and a decrease of $1.9 million in employee and subcontractors related costs, including share-based compensation expenses, and, partially offset by an increase of $1.1 million in depreciation expenses.

Current wording

General and administrative expenses decreased by $5.1 million, or 6.7%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, a result of a decrease of $2.3 million in insurance expenses in connection with the Yahoo arrangement, a decrease of $2.3 million in credit losses expenses and a decrease of $1.7 million in employee and subcontractors related costs, including share-based compensation expenses, and, partially offset by an increase of $1.1 million in depreciation expenses.

Previous wording

Finance expenses, net decreased by $4.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, mainly attributable to $3.0 million decrease in interest expense due to the voluntary repayments of a portion of the long-term loan in 2023, $2.9 million Warrants liability devaluation, partially offset by a $1.6 million increase in foreign currency exchange rate losses.

Current wording

Finance expenses, net decreased by $7.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, mainly attributable to $3.9 million Warrants liability devaluation and $3.8 million decrease in interest expense due to the voluntary repayments of a portion of the long-term loan in 2023.

Previous wording

Our primary cash needs are for working capital, personnel costs, contractual obligations, including payments to digital property partners, office leases and software and information technology costs, capital expenditures for servers and capitalized software development, payment of interest and required principal payments on our long-term loan and other commitments. We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. For the six months ended June 30, 2024 and 2023, we generated cash from operations of $72.6 million and $29.1 million, respectively.

Current wording

Our primary cash needs are for working capital, personnel costs, contractual obligations, including payments to digital property partners, office leases and software and information technology costs, capital expenditures for servers and capitalized software development, payment of interest and required principal payments on our long-term loan and other commitments. We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. For the nine months ended September 30, 2024 and 2023, we generated cash from operations of $122.4 million and $61.6 million, respectively.

Previous wording

As of June 30, 2024 and December 31, 2023, we had $182.2 million and $176.1 million of cash and cash equivalents, respectively, and $5.5 million and $5.7 million in short and long-term restricted deposits, respectively, used, mainly, as security for our lease commitments and $5.7 million of short-term investments as of December 31, 2023. As of June 30, 2024 we did not hold short-term investments. Cash and cash equivalents consist of cash in banks and highly liquid marketable securities investments and money market funds, with an original maturity of three months or less at the date of purchase and are readily convertible to known amounts of cash. Short-term investments generally consist of bank deposits, U.S. government treasuries, commercial paper, corporate debt securities, and U.S. agency bonds.

Current wording

As of September 30, 2024 and December 31, 2023, we had $217.2 million and $176.1 million of cash and cash equivalents, respectively, and $5.4 million and $5.7 million in short and long-term restricted deposits, respectively, used, mainly, as security for our lease commitments and $5.7 million of short-term investments as of December 31, 2023. As of September 30, 2024 we did not hold short-term investments. Cash and cash equivalents consist of cash in banks and highly liquid marketable securities investments and money market funds, with an original maturity of three months or less at the date of purchase and are readily convertible to known amounts of cash. Short-term investments generally consist of bank deposits, U.S. government treasuries, commercial paper, corporate debt securities, and U.S. agency bonds.

Previous wording

On August 9, 2022 we entered into an incremental revolving credit facility amendment to our existing senior secured credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provides for borrowings in an aggregate principal amount of up to $90 million (the “Revolving Facility”). The proceeds of the Revolving Facility can be used to finance working capital needs and general corporate purposes. Borrowings under the Revolving Facility are subject to customary borrowing conditions and will bear interest at a variable annual rate based on Term SOFR or Base Rate plus a fixed margin. The Amended Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio. As of June 30, 2024, we had no outstanding borrowings under the Revolving Facility.

Current wording

On August 9, 2022 we entered into an incremental revolving credit facility amendment to our existing senior secured credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provides for borrowings in an aggregate principal amount of up to $90.0 million (the “Revolving Facility”). The proceeds of the Revolving Facility can be used to finance working capital needs and general corporate purposes. Borrowings under the Revolving Facility are subject to customary borrowing conditions and will bear interest at a variable annual rate based on Term SOFR or Base Rate plus a fixed margin. The Amended Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio. As of September 30, 2024, we had no outstanding borrowings under the Revolving Facility.

Previous wording

During the six months ended June 30, 2024, we repurchased 12.5 million of our shares, consisting of 11.5 million Ordinary shares and 1.0 million Non-voting Ordinary shares at an average price of $4.32 per share (excluding broker and transaction fees of $0.3 million). As of June 30, 2024 the Company had remaining authorization from our board of directors to repurchase Ordinary shares up to an aggregate amount of $65.6 million, subject to satisfying required conditions under the Israeli Companies Law and the Companies Regulations. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Note 9 and Note 12 of Notes to the Unaudited Consolidated Interim Financial Statements.

Current wording

During the nine months ended September 30, 2024, we repurchased 15.5 million of our shares consisting of 14.5 million Ordinary shares and 1.0 million Non-voting Ordinary shares at an average price of $4.14 per share (excluding broker and transaction fees of $0.4 million). As of September 30, 2024 the Company had remaining authorization from our board of directors to repurchase Ordinary shares up to an aggregate amount of $55.6 million, subject to satisfying required conditions under the Israeli Companies Law and the Companies Regulations. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, Note 9 and Note 12 of Notes to the Unaudited Consolidated Interim Financial Statements.

Previous wording

During the six months ended June 30, 2024 net cash provided by operating activities was $72.6 million, an increase of $43.5 million, compared to $29.1 million for the same period in 2023. The $72.6 million was related to our net loss of $30.4 million adjusted by non-cash charges of $83.6 million and positive changes in working capital of $19.5 million.

Current wording

During the nine months ended September 30, 2024 net cash provided by operating activities was $122.4 million, an increase of $60.8 million, compared to $61.6 million for the same period in 2023. The $122.4 million was related to our net loss of $36.9 million adjusted by non-cash charges of $124.8 million and positive changes in working capital of $34.5 million.

Previous wording

The $83.6 million of non-cash charges consisted of depreciation and amortization of $51.2 million and share-based compensation expense related to vested equity awards of $34.7 million, partially offset by decrease of $3.9 million due to revaluation of Warrants liability.

Current wording

The $124.8 million of non-cash charges primarily consisted of depreciation and amortization of $76.0 million, share-based compensation expense related to vested equity awards of $51.9 million and Commercial agreement asset amortization of $1.4 million, partially offset by decrease of $4.6 million due to revaluation of Warrants liability.

Previous wording

The $19.5 million increase in cash resulting from changes in working capital primarily consisted of a $24.6 million decrease in trade receivables, net, a $15.0 million decrease in prepaid expenses and other assets, partially offset by a $11.9 million decrease in trade payables and a $7.9 million decrease in deferred taxes, net.

Current wording

The $34.5 million increase in cash resulting from changes in working capital primarily consisted of a $23.8 million decrease in prepaid expenses and other assets, $23.0 million increase in accrued expenses and other liabilities and $13.0 million decrease in trade receivables, net, partially offset by a $12.9 million decrease in trade payables and $11.0 million decrease in deferred taxes, net.

Previous wording

Net cash provided by operating activities of $29.1 million for the six months ended June 30, 2023 was related to our net loss of $62.7 million adjusted by non-cash charges of $77.6 million and changes in working capital of $14.1 million.

Current wording

Net cash provided by operating activities of $61.6 million for the nine months ended September 30, 2023 was related to our net loss of $85.8 million adjusted by non-cash charges of $120.4 million and changes in working capital of $26.9 million.

Previous wording

The $77.6 million of non-cash charges primarily consisted of depreciation and amortization of $45.4 million and share-based compensation expense related to vested equity awards of $32.6 million.

Current wording

The $120.4 million of non-cash charges primarily consisted of depreciation and amortization of $70.7 million and share-based compensation expense related to vested equity awards of $48.9 million.

Previous wording

The $14.1 million increase in cash resulting from changes in working capital primarily consisted of a $39.3 million decrease in trade receivables, net and $8.6 million decrease of in prepaid expenses and other current assets and long-term prepaid expenses, partially offset by $29.7 million decrease in trade payables and $6.5 million decrease in deferred taxes, net.

Current wording

The $26.9 million increase in cash resulting from changes in working capital primarily consisted of $24.6 million decrease in trade receivables, net, increase of $5.4 million in accrued expenses and other current liabilities and other long-term liabilities, $2.6 million decrease in prepaid expenses and other current assets and long-term prepaid expenses and $2.2 million increase in trade payables, partially offset by $8.2 million decrease in deferred taxes, net.

Previous wording

During the six months ended June 30, 2024 net cash used in investing activities was $13.2 million, a decrease of $58.3 million, compared to $45.1 million in net cash provided in the same period in 2023. Net cash used in investing activities for the six months ended June 30, 2024 primarily consisted of $18.2 million purchase of property and equipment, including capitalized internal-use software partially offset by $5.8 million proceeds from maturities of short-term investments.

Current wording

During the nine months ended September 30, 2024 net cash used in investing activities was $20.1 million, a decrease of $85.3 million, compared to $65.2 million in net cash provided in the same period in 2023. Net cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $25.1 million purchase of property and equipment, including capitalized internal-use software partially offset by $5.8 million proceeds from maturities of short-term investments.

Previous wording

Net cash provided by investing activities of $45.1 million for the six months ended June 30, 2023 primarily consisted of $77.6 million proceeds from maturities of short-term investments partially offset by $22.0 million purchase of short-term investments and $10.2 million purchase of property and equipment, including capitalized internal-use software.

Current wording

Net cash provided by investing activities was $65.2 million for the nine months ended September 30, 2023 primarily consisted of $107.7 million proceeds from sales and maturities of short-term investments partially offset by $22.0 million purchase of short-term investments and $19.8 million purchase of property and equipment, including capitalized internal-use software.

Previous wording

During the six months ended June 30, 2024 net cash used in financing activities was $52.6 million, an increase of $17.3 million, compared to $35.3 million net cash used in the same period in 2023. Net cash used in financing activities for the six months ended June 30, 2024 primarily consisted of $54.5 million repurchase of Ordinary shares and $1.7 million payment of tax withholding for share-based compensation expenses, partially offset by $4.7 million proceeds received from exercise of options and vested RSUs.

Current wording

During the nine months ended September 30, 2024 net cash used in financing activities was $62.3 million, an increase of $9.1 million, compared to $53.2 million net cash used in the same period in 2023. Net cash used in financing activities for the nine months ended September 30, 2024 primarily consisted of $64.5 million repurchase of Ordinary shares and $2.4 million payment of tax withholding for share-based compensation expenses, partially offset by $5.7 million proceeds received from exercise of options and vested RSUs.