HUBSPOT INC

Previous wording

Our AI-powered engagement hubs include Marketing, Sales, Service, Operations, Content, and Commerce, as well as other tools and integrations that enable companies to attract, engage, and delight customers throughout the customer lifecycle. Our customer platform features a central database of lead and customer interactions and integrated applications designed to help businesses attract visitors to their websites, convert visitors into leads, close leads into customers, transact with those customers, and delight them so they become promoters of those businesses.

Current wording

Our AI-powered engagement hubs include Marketing, Sales, Service, Data, Content, and Commerce, as well as other tools and integrations that enable companies to attract, engage, and delight customers throughout the customer lifecycle. Our customer platform features a central database of lead and customer interactions and integrated applications designed to help businesses attract visitors to their websites, convert visitors into leads, close leads into customers, transact with those customers, and delight them so they become promoters of those businesses.

Previous wording

We focus on selling to mid-market business-to-business, or B2B, companies, which we define as companies that have between two and 2,000 employees. While our customer platform was built to grow with any company, we focus on selling to mid-market businesses because we believe we have significant competitive advantages attracting and serving this market segment. These mid-market businesses seek an integrated, easy-to-implement and easy-to-use solution to reach customers and compete with organizations that have larger marketing, sales, and customer service budgets. We efficiently reach these businesses at scale through our traditional and AI-enhanced engagement strategies, our Solutions Partners, and our “freemium” model. A Solutions Partner is a service provider that helps businesses with strategy, execution, and implementation of go-to-market activities and technology solutions. Our freemium model attracts customers who begin using our customer platform through our free products and then upgrade to our paid products. As of June 30, 2025, we had 8,723 full-time employees and 267,982 Customers of varying sizes in more than 135 countries, representing many industries.

Current wording

We focus on selling to mid-market business-to-business, or B2B, companies, which we define as companies that have between two and 2,000 employees. While our customer platform was built to grow with any company, we focus on selling to mid-market businesses because we believe we have significant competitive advantages attracting and serving this market segment. These mid-market businesses seek an integrated, easy-to-implement and easy-to-use solution to reach customers and compete with organizations that have larger marketing, sales, and customer service budgets. We efficiently reach these businesses at scale through our traditional and AI-enhanced engagement strategies, our Solutions Partners, and our “freemium” model. A Solutions Partner is a service provider that helps businesses with strategy, execution, and implementation of go-to-market activities and technology solutions. Our freemium model attracts customers who begin using our customer platform through our free products and then upgrade to our paid products. As of September 30, 2025, we had 8,824 full-time employees and 278,880 Customers of varying sizes in more than 135 countries, representing many industries.

Previous wording

We derive most of our revenue from subscriptions to our cloud-based customer platform and related professional services, which consist of customer on-boarding, training and consulting services. Subscription revenue accounted for 98% of our total revenue for the three and six months ended June 30, 2025 and 2024. We sell multiple product plans at different base prices on a subscription basis, each of which includes our Smart CRM and integrated applications to meet the needs of the various customers we serve. We also generate revenue through usage and consumption-based models. Customers pay additional fees if the number of contacts stored and tracked in the customer’s database exceeds specified thresholds. We also generate additional revenue based on the purchase of additional subscriptions, products and seats, and the number of account users. Most of our Customers’ subscriptions are one year or less in duration.

Current wording

We derive most of our revenue from subscriptions to our cloud-based customer platform and related professional services, which consist of customer on-boarding, training and consulting services. Subscription revenue accounted for 98% of our total revenue for the three and nine months ended September 30, 2025 and 2024. We sell multiple product plans at different base prices on a subscription basis, each of which includes our Smart CRM and integrated applications to meet the needs of the various customers we serve. We also generate revenue through usage and consumption-based models. Customers pay additional fees if the number of contacts stored and tracked in the customer’s database exceeds specified thresholds. We also generate additional revenue based on the purchase of additional subscriptions, products and seats, and the number of account users. Most of our Customers’ subscriptions are one year or less in duration.

Previous wording

Many of our customers purchase on-boarding, training, and consulting services, which are designed to help customers enhance their ability to attract, engage and delight their customers using our customer platform. We also generate revenue from Commerce Hub and a number of revenue-share agreements with other companies. Professional services and other revenue accounted for 2% of total revenue for the three and six months ended June 30, 2025 and 2024.

Current wording

Many of our customers purchase on-boarding, training, and consulting services, which are designed to help customers enhance their ability to attract, engage and delight their customers using our customer platform. We also generate revenue from Commerce Hub and a number of revenue-share agreements with other companies. Professional services and other revenue accounted for 2% of total revenue for the three and nine months ended September 30, 2025 and 2024.

Previous wording

We believe that the growth of our business is dependent on many factors, including our ability to expand our customer base, increase adoption of our customer platform within existing customers, develop new products and applications to extend the functionality of our customer platform and provide a high level of customer service. We have invested and intend to continue investing for long-term growth. We intend to continue to invest in sales and marketing to support our growth. We plan to continue to invest in research and development as we continue to introduce new products and applications to extend the functionality of our customer platform. We intend to continue maintaining a high level of customer service and support which we consider critical for our continued success. We also plan to continue investing in our data center infrastructure and services capabilities in order to support continued future customer growth. We also expect to continue to incur additional general and administrative expenses as a result of both our growth and the infrastructure required to be a public company. We expect to use our cash flow from operations to fund these growth strategies and support our business and may break-even from a profitability perspective in the next 12 months.

Current wording

We believe that the growth of our business is dependent on many factors, including our ability to expand our customer base, increase adoption of our customer platform within existing customers, develop new products and applications to extend the functionality of our customer platform and provide a high level of customer service. We have invested and intend to continue investing for long-term growth. We intend to continue to invest in sales and marketing to support our growth. We plan to continue to invest in research and development as we continue to introduce new products and applications to extend the functionality of our customer platform. We intend to continue maintaining a high level of customer service and support which we consider critical for our continued success. We also plan to continue investing in our data center infrastructure and services capabilities in order to support continued future customer growth. We also expect to continue to incur additional general and administrative expenses as a result of both our growth and the infrastructure required to be a public company. Included in these investments are AI-enabled tools for guided selling and content generation to drive efficiencies and improve conversion rates, as well as machine learning capabilities to accelerate innovation, increase productivity, and support automated ticket resolution. We expect to use our cash flow from operations to fund these growth strategies and support our business and may break-even from a profitability perspective in the next 12 months.

Previous wording

Our results of operations may be significantly influenced by general macroeconomic conditions, including, but not limited to, the impact of pandemics, geo-political conflicts, foreign currency fluctuations, interest rates, inflation, recession risks, tariffs or other trade restrictions, existing and new domestic and foreign laws and regulations, all of which are beyond our control. Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods. As we continue to monitor the direct and indirect impacts of these circumstances, the broader implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, remain uncertain. See the section titled “Risk Factors'' included under Part II, Item 1A below for further discussion of the possible impact of these factors and other risks on our business.

Current wording

Our results of operations may be significantly influenced by general macroeconomic conditions, including, but not limited to, the impact of pandemics, geo-political conflicts, foreign currency fluctuations, interest rates, inflation, recession risks, tariffs or other trade restrictions, and existing and new domestic and foreign laws and regulations, all of which are beyond our control. Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods. As we continue to monitor the direct and indirect impacts of these circumstances, the broader implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, remain uncertain. See the section titled “Risk Factors'' included under Part II, Item 1A below for further discussion of the possible impact of these factors and other risks on our business.

Previous wording

Subscription-based revenue is derived from customers using our customer platform for their marketing, sales, service, operations, and content management needs. Our customer platform includes a system of engagement for efficiently engaging customers through SEO, web content, social, blogging, email, marketing automation, messaging, support ticketing, knowledge base, commerce, conversation routing, video hosting, and data enrichment. Over 1,700 integrations and applications are available for our users, across a wide range of categories, including integrations with leading social media, email, sales, video, analytics, content and webinar tools. All subscription fees that are billed in advance of service are recorded in deferred revenue. Subscription based revenue is recognized net of consideration paid to Solutions Partners when those Solutions Partners purchase a subscription to our customer platform.

Current wording

Subscription-based revenue is derived from customers using our customer platform for their marketing, sales, service, data, and content management needs. Our customer platform includes a system of engagement for efficiently engaging customers through SEO, web content, social, blogging, email, marketing automation, messaging, support ticketing, knowledge base, commerce, conversation routing, video hosting, and data enrichment. Over 2,000 integrations and applications are available for our users, across a wide range of categories, including integrations with leading social media, email, sales, video, analytics, content and webinar tools. All subscription fees that are billed in advance of service are recorded in deferred revenue. Subscription based revenue is recognized net of consideration paid to Solutions Partners when those Solutions Partners purchase a subscription to our customer platform.

Previous wording

General and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, human resources, employee-related information technology, administrative personnel, including payroll, benefits and stock-based compensation expense, professional fees for external legal, accounting and other consulting services, and allocated overhead costs. We expect that general and administrative expenses will increase on an absolute dollar basis as we incur the costs of compliance associated with being a publicly trade company, and remain relatively consistent as a percentage of total revenue, exclusive of stock-based compensation expense, as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business. Over time, we expect general and administrative expenses to remain consistent as a percentage of total revenue, exclusive of stock-based compensation.

Current wording

General and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, human resources, employee-related information technology, administrative personnel, including payroll, benefits and stock-based compensation expense, professional fees for external legal, accounting and other consulting services, and allocated overhead costs. We expect that general and administrative expenses will increase on an absolute dollar basis as we incur the costs of compliance associated with being a publicly traded company, and remain relatively consistent as a percentage of total revenue, exclusive of stock-based compensation expense, as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business.

Previous wording

Interest income primarily consists of interest earned on invested cash and cash equivalents balances and investments. Interest expense primarily consists of amortization of issuance costs and contractual interest expense related to our 2025 Notes. Other income (expense) primarily consists of the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities and any gains, losses, or impairments on our strategic investments.

Current wording

Interest income primarily consists of interest earned on invested cash and cash equivalents balances and investments. Interest expense primarily consists of amortization of issuance costs and contractual interest expense related to our 2025 Notes. Other (expense) income primarily consists of the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities and any gains, losses on, or impairments of our strategic investments.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Subscription revenue increased during the three months ended June 30, 2025 compared to the same period in 2024 primarily due to the increase in Customers, which grew from 228,054 as of June 30, 2024 to 267,982 as of June 30, 2025. Average Subscription Revenue per Customer increased from $11,215 for the three months ended June 30, 2024 to $11,310 for the three months ended June 30, 2025. The increase in Average Subscription Revenue per Customer was primarily driven by increased demand for our Professional and Enterprise products and the impact of foreign currency translation primarily attributable to the decrease in the value of the U.S. Dollar relative to the Euro and British Pound Sterling, offset by continued purchases of our lower-priced Starter products.

Current wording

Subscription revenue increased during the three months ended September 30, 2025 compared to the same period in 2024 primarily due to the increase in Customers, which grew from 238,128 as of September 30, 2024 to 278,880 as of September 30, 2025. Average Subscription Revenue per Customer increased from $11,235 for the three months ended September 30, 2024 to $11,578 for the three months ended September 30, 2025. The increase in Average Subscription Revenue per Customer was primarily driven by increased demand for our Professional and Enterprise products and the impact of foreign currency translation primarily attributable to the decrease in the value of the U.S. Dollar relative to the Euro and British Pound Sterling, offset by continued purchases of our lower-priced Starter products.

Previous wording

Subscription revenue increased during the six months ended June 30, 2025 compared to the same period in 2024 primarily due to the increase in Customers, which grew from 228,054 as of June 30, 2024 to 267,982 as of June 30, 2025. Average Subscription Revenue per Customer decreased from $11,335 for the six months ended June 30, 2024 to $11,183 for the six months ended June 30, 2025. The growth in Customers was primarily driven by increased demand for our lower-priced Starter products. The decrease in Average Subscription Revenue per Customer was primarily driven by continued purchases of our lower-priced Starter products and the impact of foreign currency translation primarily attributable to the increase in the value of the U.S. Dollar relative to the Euro and British Pound Sterling, offset by increased demand for our Professional and Enterprise products.

Current wording

Subscription revenue increased during the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to the increase in Customers, which grew from 238,128 as of September 30, 2024 to 278,880 as of September 30, 2025. Average Subscription Revenue per Customer decreased from $11,324 for the nine months ended September 30, 2024 to $11,307 for the nine months ended September 30, 2025. The growth in Customers was primarily driven by increased demand for our lower-priced Starter products. The decrease in Average Subscription Revenue per Customer was primarily driven by continued purchases of our lower-priced Starter products, offset by increased demand for our Professional and Enterprise products and the impact of foreign currency translation primarily attributable to the decrease in the value of the U.S. Dollar relative to the Euro and British Pound Sterling.

Previous wording

Professional services and other revenue increased during the six months ended June 30, 2025 compared to the same period in 2024 primarily due to an increase in other revenue streams, including Commerce Hub.

Current wording

Professional services and other revenue increased during the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to an increase in other revenue streams, including Commerce Hub.

Previous wording

Total cost of revenue for the three and six months ended June 30, 2025 increased compared to the same period in 2024 primarily due to an increase in subscription and hosting costs, amortization of capitalized software development costs, and amortization of acquired technology, offset by decreases in allocated overhead expenses and employee-related costs. Gross margins remained relatively consistent year-over-year.

Current wording

Total cost of revenue for the three and nine months ended September 30, 2025 increased compared to the same period in 2024 primarily due to an increase in subscription and hosting costs, amortization of capitalized software development costs, and amortization of acquired technology, offset by decreases in allocated overhead expenses and employee-related costs. Gross margins remained relatively consistent year-over-year.

Previous wording

Subscription and hosting costs increased primarily due to growth in our Customer base from 228,054 as of June 30, 2024 to 267,982 as of June 30, 2025. We also saw higher subscription and hosting costs as we continued to support the growth of our customer base and increased usage of our customer platform. Amortization of capitalized software development costs increased due to the increased number of developers working on our software platform as we continued to develop new products and increased functionality. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Frame AI and Dashworks in 2025. Employee-related costs decreased as a result of improved resource alignment and operational efficiencies. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Current wording

Subscription and hosting costs increased primarily due to growth in our Customer base from 238,128 as of September 30, 2024 to 278,880 as of September 30, 2025. We also saw higher subscription and hosting costs as we continued to support the growth of our customer base, increased usage of our customer platform, and continued investments to expand AI functionality. Amortization of capitalized software development costs increased due to the increased number of developers working on our software platform as we continued to develop new products and increased functionality. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Frame AI and Dashworks in 2025. Employee-related costs decreased as a result of improved resource alignment and operational efficiencies by leveraging AI to resolve customer inquiries. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Previous wording

Subscription and hosting costs increased primarily due to growth in our Customer base from 228,054 as of June 30, 2024 to 267,982 as of June 30, 2025. We also saw higher subscription and hosting costs as we continued to support the growth of our customer base and increased usage of our customer platform. Amortization of capitalized software development costs increased due to the increased number of developers working on our software platform as we continued to develop new products and increased functionality. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Frame AI and Dashworks in 2025. Employee-related costs decreased as a result of improved resource alignment and operational efficiencies. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Current wording

Subscription and hosting costs increased primarily due to growth in our Customer base from 238,128 as of September 30, 2024 to 278,880 as of September 30, 2025. We also saw higher subscription and hosting costs as we continued to support the growth of our customer base, increased usage of our customer platform, and continued investments to expand AI functionality. Amortization of capitalized software development costs increased due to the increased number of developers working on our software platform as we continued to develop new products and increased functionality. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Frame AI and Dashworks in 2025. Employee-related costs decreased as a result of improved resource alignment and operational efficiencies by leveraging AI to resolve customer inquiries. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Previous wording

The increase in professional services and other cost of revenue for three and six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the following:

Current wording

The increase in professional services and other cost of revenue for three and nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the following:

Previous wording

Commerce payment processing fees increased due to higher payment volume and merchant activity. Amortization of capitalized software development costs increased as we continued to increase functionality with our internally built software platform. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Cacheflow in the fourth quarter of 2024. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue. Employee-related costs decreased as we continue to leverage our Solutions Partners to deliver on-boarding and other professional services.

Current wording

Commerce payment processing fees increased due to higher payment volume and merchant activity. Amortization of capitalized software development costs increased as we continued to increase functionality with our internally built software platform. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisition of Cacheflow in the fourth quarter of 2024. Employee-related costs decreased and professional fees increased as we continue to leverage our Solutions Partners to deliver on-boarding and other professional services. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Previous wording

Commerce payment processing fees increased due to higher payment volume and merchant activity. Amortization of capitalized software development costs increased as we continued to increase functionality with our internally built software platform. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisitions of Cacheflow in the fourth quarter of 2024. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue. Employee-related costs decreased as we continue to leverage our Solutions Partners to deliver on-boarding and other professional services.

Current wording

Commerce payment processing fees increased due to higher payment volume and merchant activity. Amortization of capitalized software development costs increased as we continued to increase functionality with our internally built software platform. Amortization of acquired technology increased due to the amortization of acquired technology associated with our acquisition of Cacheflow in the fourth quarter of 2024. Employee-related costs decreased and professional fees increased as we continue to leverage our Solutions Partners to deliver on-boarding and other professional services. Allocated overhead expenses decreased primarily due to the decreased proportional allocation of shared company expenses associated with headcount in subscription cost of revenue.

Previous wording

The increase in research and development expense for the three and six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the following:

Current wording

The increase in research and development expense for the three and nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the following:

Previous wording

The increase in sales and marketing expense for the three and six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the following:

Current wording

The increase in sales and marketing expense for the three and nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the following:

Previous wording

Employee-related costs increased as a result of increased headcount as we expanded our selling and marketing organizations to grow our customer base. Marketing programs increased due to the timing and size of certain marketing efforts as we made investments in attracting new customers. Solutions Partner commissions decreased as we changed the duration of lifetime commissions for certain Solutions Partner to better align with the value delivered to customers. The decrease from the change in duration of commissions was offset by increased revenue generated through our Solutions Partners. Professional fees increased due to an increase in the use of third party services and contractors for our marketing efforts. Allocated overhead expenses increased due to an increase in shared company expenses associated with our systems and infrastructure to support our business growth.

Current wording

Employee-related costs increased as a result of increased headcount as we expanded our selling and marketing organizations to grow our customer base. Marketing programs increased due to the timing and size of certain marketing efforts as we made investments in attracting new customers. Professional fees increased due to an increase in the use of third party services and contractors for our marketing efforts. Allocated overhead expenses increased due to an increase in shared company expenses associated with our systems and infrastructure to support our business growth. Solutions Partner commissions decreased as we changed the duration and eligibility of lifetime commissions for certain Solutions Partner to better align with the value delivered to customers. The decrease from the change in duration of commissions was offset by increased revenue generated through our Solutions Partners.

Previous wording

Employee-related costs increased as a result of increased headcount as we expanded our selling and marketing organizations to grow our customer base. Marketing programs increased due to the timing and size of certain marketing efforts as we made investments in attracting new customers. Solutions Partner commissions increased as a result of increased revenue generated through our Solutions Partner, offset by a decrease in the second quarter of 2025 as we changed the duration of lifetime commissions for certain Solutions Partner to better align with the value delivered to customers. Professional fees increased due to an increase in the use of third party services and contractors for our marketing efforts. Allocated overhead expenses increased due to an increase in shared company expenses associated with our systems and infrastructure to support our business growth.

Current wording

Employee-related costs increased as a result of increased headcount as we expanded our selling and marketing organizations to grow our customer base. Marketing programs increased due to the timing and size of certain marketing efforts as we made investments in attracting new customers. Professional fees increased due to an increase in the use of third party services and contractors for our marketing efforts. Allocated overhead expenses increased due to an increase in shared company expenses associated with our systems and infrastructure to support our business growth. Solutions Partner commissions decreased as we changed the duration and eligibility of lifetime commissions for certain Solutions Partner to better align with the value delivered to customers. The decrease from the change in duration of commissions was offset by increased revenue generated through our Solutions Partners.

Previous wording

The increase in general and administrative expense for the three and six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the following:

Current wording

The increase in general and administrative expense for the three and nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the following:

Previous wording

Restructuring charges in the three and six months ended June 30, 2025 and 2024 consisted of variable facilities-related costs on unused space.

Current wording

Restructuring charges in the three and nine months ended September 30, 2025 and 2024 consisted of variable facilities-related costs on unused space.

Previous wording

The decrease during the three and six months ended June 30, 2025 is primarily due to lower average investment balances driven by cash outlays from our 2025 Notes settlements and share repurchase program.

Current wording

The decrease during the three and nine months ended September 30, 2025 is primarily due to lower average investment balances driven by cash outlays from our 2025 Notes settlements and 2025 Share Repurchase Program.

Previous wording

Interest expense decreased due to the early conversion of a portion of our 2025 Notes during the three and six months ended June 30, 2025 and settlement of our 2025 Notes upon maturity in June 2025.

Current wording

Interest expense decreased due to the early conversion of a portion of our 2025 Notes in the first quarter of 2025 and settlement of the remaining 2025 Notes upon maturity in June 2025.

Previous wording

The change in other income (expense) during the three and six months ended June 30, 2025 is primarily due to the following:

Current wording

The change in other (expense) income during the three and nine months ended September 30, 2025 is primarily due to the following:

Previous wording

The change in foreign currency gains and losses transactions is primarily attributable to the value of the U.S. Dollar relative to the Euro and British Pound Sterling. The decrease in the impairment of strategic investments is due to an impairment of $0.5 million in the three months ended June 30, 2024 that did not occur in 2025. The decrease in gain on strategic investments is due to gains of $2.1 million from observable price changes in the value of certain strategic investments in the three months ended June 30, 2024 compared to $1.8 million in the three months ended June 30, 2025.

Current wording

The change in foreign currency gains and losses transactions is primarily attributable to the value of the U.S. Dollar relative to the Euro and British Pound Sterling. The increase in the impairment of strategic investments is due to impairments of $2.1 million in the three months ended September 30, 2025 that did not occur in 2024.

Previous wording

The change in foreign currency gains and losses transactions is primarily attributable to the value of the U.S. Dollar relative to the Euro and British Pound Sterling. The decrease in the impairment of strategic investments is due to an impairment of $4.1 million in the six months ended June 30, 2024 compared to $1.6 million in the six months ended June 30, 2025. The decrease in gain on strategic investments is due to gains of $18.5 million from observable price changes in the value of certain strategic investments in the six months ended June 30, 2024 compared to $1.9 million in the six months ended June 30, 2025.

Current wording

The change in foreign currency gains and losses transactions is primarily attributable to the value of the U.S. Dollar relative to the Euro and British Pound Sterling. The decrease in the impairment of strategic investments is due to an impairment of $4.1 million in the nine months ended September 30, 2024 compared to $3.7 million in the nine months ended September 30, 2025. The decrease in gain on strategic investments is due to gains of $18.6 million from observable price changes in the value of certain strategic investments in the nine months ended September 30, 2024 compared to $2.0 million in the nine months ended September 30, 2025.

Previous wording

The decrease in income tax expense in the three and six months ended June 30, 2025 was primarily driven by the timing of when our U.S. entity realizes pre-tax earnings and losses throughout the year.

Current wording

The increase in the income tax expense was primarily driven by the timing of when our foreign entities realize pre-tax earnings and losses throughout the year.

Previous wording

The following table shows cash and cash equivalents, working capital, net cash and cash equivalents provided by operating activities, net cash and cash equivalents used in investing activities, and net cash and cash equivalents provided by financing activities for the six months ended June 30, 2025 and 2024.

Current wording

The following table shows cash and cash equivalents, working capital, net cash and cash equivalents provided by operating activities, net cash and cash equivalents provided by (used in) investing activities, and net cash and cash equivalents (used in) provided by financing activities for the nine months ended September 30, 2025 and 2024.

Previous wording

Our cash and cash equivalents at June 30, 2025 were held for working capital purposes. At June 30, 2025, $331.5 million of our cash and cash equivalents was held in accounts outside the United States. We do not assert indefinite reinvestment of our foreign earnings because these earnings have been subject to United States Federal tax. While we have concluded that any incremental tax incurred upon ultimate distribution of these earnings to be immaterial, our current plans do not demonstrate a need to repatriate undistributed earnings to fund our U.S. operations.

Current wording

Our cash and cash equivalents at September 30, 2025 were held for working capital purposes. At September 30, 2025, $321.9 million of our cash and cash equivalents was held in accounts outside the United States. We do not assert indefinite reinvestment of our foreign earnings because these earnings have been subject to United States Federal tax. While we have concluded that any incremental tax incurred upon ultimate distribution of these earnings to be immaterial, our current plans do not demonstrate a need to repatriate undistributed earnings to fund our U.S. operations.

Previous wording

Net cash and cash equivalents provided by operating activities consists primarily of net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization and other non-cash charges, net.

Current wording

Net cash and cash equivalents provided by operating activities consist primarily of net income (loss) adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization and other non-cash charges, net.

Previous wording

Net cash and cash equivalents provided by operating activities during the six months ended June 30, 2025 primarily reflected our net loss of $25.1 million, $62.0 million of depreciation and amortization, $257.7 million in stock-based compensation, an impairment of strategic investments of $1.6 million, and $0.6 million of amortization of debt discount and issuance costs, offset by non-cash expenses that included $24.4 million accretion of bond discounts, a gain on strategic investments of $1.9 million, and $2.8 million of unrealized currency translation. Working capital sources of cash and cash equivalents primarily included a $63.9 million increase in deferred revenue primarily resulting from the growth in the number of customers invoiced during the period, a $30.0 million decrease in accounts receivable related to increased collection, a $9.1 million increase in accounts payable related to timing of bill payments, a $59.9 million increase in accrued expenses and other liabilities, and a $12.8 million decrease in right-of-use asset. These sources of cash and cash equivalents were offset by a $50.1 million increase in prepaid expenses and other assets, a $17.7 million decrease in operating lease liabilities, and a $49.6 million increase in deferred commissions.

Current wording

Net cash and cash equivalents provided by operating activities during the nine months ended September 30, 2025 primarily reflected our net loss of $8.5 million, $97.7 million of depreciation and amortization, $395.8 million in stock-based compensation, impairments of strategic investments of $3.7 million, and $0.6 million of amortization of debt discount and issuance costs, offset by non-cash expenses that included $33.4 million accretion of bond discounts, gains on strategic investments of $2.0 million, and $1.8 million of unrealized currency translation. Working capital sources of cash and cash equivalents primarily included a $35.8 million decrease in accounts receivable related to increased collection, a $19.3 million decrease in right-of-use asset, a $20.1 million increase in accounts payable related to timing of bill payments, a $61.6 million increase in accrued expenses and other liabilities, and a $61.4 million increase in deferred revenue primarily resulting from the growth in the number of customers invoiced during the period. These sources of cash and cash equivalents were offset by a $37.2 million increase in prepaid expenses and other assets, a $73.2 million increase in deferred commissions, and a $26.3 million decrease in operating lease liabilities.

Previous wording

Net cash and cash equivalents provided by operating activities during the six months ended June 30, 2024 primarily reflected our net loss of $8.5 million, $43.4 million of depreciation and amortization, $240.1 million in stock-based compensation, an impairment of strategic investments of $4.1 million, and $1.0 million of amortization of debt discount and issuance costs, offset by non-cash expenses that included $23.1 million accretion of bond discounts, a gain on strategic investments of $18.5 million, and $0.9 million of unrealized currency translation. Working capital sources of cash and cash equivalents primarily included a $44.3 million increase in deferred revenue primarily resulting from the growth in the number of customers invoiced during the period, a $18.4 million decrease in accounts receivable related to increased collection, a $15.0 million increase in accrued expenses and other liabilities, and a $20.4 million decrease in right-of-use asset. These sources of cash and cash equivalents were offset by a $27.2 million increase in prepaid expenses and other assets, a $23.2 million decrease in operating lease liabilities, a $40.1 million increase in deferred commissions, and a $0.2 million decrease in accounts payable related to timing of bill payments.

Current wording

Net cash and cash equivalents provided by operating activities during the nine months ended September 30, 2024 primarily reflected our net loss of $0.4 million, $68.4 million of depreciation and amortization, $370.4 million in stock-based compensation, an impairment of strategic investments of $4.1 million, and $1.5 million of amortization of debt discount and issuance costs, offset by non-cash expenses that included $36.7 million accretion of bond discounts, a gain on strategic investments of $18.5 million, $0.6 million benefit from deferred income taxes, and $3.4 million of unrealized currency translation. Working capital sources of cash and cash equivalents primarily included a $41.1 million increase in deferred revenue primarily resulting from the growth in the number of customers invoiced during the period, a $13.9 million decrease in accounts receivable related to increased collection, a $39.3 million increase in accrued expenses and other liabilities, a $26.5 million decrease in right-of-use asset, and a $1.4 million increase in accounts payable related to timing of bill payments. These sources of cash and cash equivalents were offset by a $8.6 million increase in prepaid expenses and other assets, a $32.6 million decrease in operating lease liabilities, and a $61.4 million increase in deferred commissions.

Previous wording

Our investing activities have consisted primarily of purchases and maturities of investments, property and equipment purchases, purchases of strategic investments, capitalization of software development costs, and business acquisitions. Capitalized software development costs are related to new products or improvements to our existing software platform that expands the functionality for our customers.

Current wording

Our investing activities have consisted primarily of purchases and maturities of investments, property and equipment purchases, purchases of strategic investments, capitalization of software development costs, and business acquisitions. Capitalized software development costs are related to new products or improvements to our existing software platform that expand the functionality for our customers.

Previous wording

Net cash and cash equivalents provided by investing activities during the six months ended June 30, 2025 consisted primarily of $1.3 billion received related to the maturity of investments, offset by $830.2 million purchases of investments, $29.4 million of purchased property and equipment, $18.8 million purchases of strategic investments, $69.8 million related to business acquisitions, and $65.9 million of capitalized software development costs.

Current wording

Net cash and cash equivalents provided by investing activities during the nine months ended September 30, 2025 consisted primarily of $1.9 billion received related to the maturity of investments, offset by $1.2 billion purchases of investments, $39.7 million of purchased property and equipment, $27.7 million purchases of strategic investments, $100.4 million of capitalized software development costs, and $71.5 million related to business acquisitions.

Previous wording

Net cash and cash equivalents provided by investing activities during the six months ended June 30, 2024 consisted primarily of $849.6 million received related to the maturity of investments and $1.9 million of proceeds from a net working capital settlement, offset by cash used for $651.7 million purchases of investments, $14.1 million of purchased property and equipment, and $43.1 million of capitalized software development costs.

Current wording

Net cash and cash equivalents used in investing activities during the nine months ended September 30, 2024 consisted primarily of cash used for $1.5 billion purchases of investments, $7.6 million of purchases of strategic investments, $3.9 million in an equity method investment, $25.2 million of purchased property and equipment, and $66.7 million of capitalized software development costs, offset by $1.2 billion received related to the maturity of investments, $2.0 million of proceeds from sale of investments, and $1.9 million of proceeds from a net working capital settlement.

Previous wording

For the six months ended June 30, 2025 cash used in financing activities consisted of $125.0 million used for repurchases of our common stock, $459.8 million for repayments of the 2025 Notes attributable to the principal, and $13.8 million used for payment of employee taxes related to the net share settlement of stock-based awards, offset by $38.7 million of proceeds related to issuance of common stock under stock plans.

Current wording

For the nine months ended September 30, 2025 cash used in financing activities consisted of $485.3 million used for repurchases of our common stock, $459.8 million for repayments of the 2025 Notes attributable to the principal, and $18.2 million used for payment of employee taxes related to the net share settlement of stock-based awards, offset by $62.7 million of proceeds related to issuance of common stock under stock plans.