Roblox Corp

Previous wording

Our free to use immersive platform for connection and communication consists of the Roblox Client, the Roblox Studio, and the Roblox Cloud (collectively, the “Roblox Platform” or the “Platform”). Roblox Client is the free application that allows users to explore 3D immersive experiences. Roblox Studio is the free toolset that allows developers and creators to build, publish, and operate 3D immersive experiences and other content accessed with the Roblox Client. Roblox Cloud includes the services and infrastructure that power our Platform.

Current wording

Our free to use immersive platform for connection and communication consists of the Roblox Client, the Roblox Studio, and the Roblox Cloud (collectively, the “Roblox Platform” or the “Platform”). Roblox Client is the free application that allows users to explore 3D immersive experiences. Roblox Studio is the free toolset that allows developers and creators to build, publish, and operate 3D immersive experiences and other content accessed with the Roblox Client. Roblox Cloud includes the services and infrastructure that power our Platform. We are continually innovating our Platform by investing in high fidelity avatars, more realistic experiences, artificial intelligence (“AI”) tools, and other social features.

Previous wording

Our mission is to connect a billion users with optimism and civility. We are constantly improving the ways in which our Platform supports shared experiences, ranging from how these experiences are built by an engaged community of developers and creators to how they are enjoyed and safely accessed by users across the globe.

Current wording

Our mission is to connect a billion users with optimism and civility. We are constantly improving the ways in which our Platform supports shared experiences, ranging from how these experiences are built by an engaged community of developers and creators to how they are enjoyed and safely accessed by users across the globe. We also believe there is a strong potential to capture a greater percentage of the global gaming market within the Roblox ecosystem. Our goal is to make it as easy as possible for creators and developers to build better experiences, including games, expand content into new genres, and ultimately reach more users.

Previous wording

Consistent with our free to play business model, a small portion of our users have historically been payers. For example, in the three months ended September 30, 2024, of our 88.9 million average DAUs, only approximately 1,143,000 represented our average daily unique paying users. Similarly, in the three months ended September 30, 2024, our average daily bookings per DAU was $0.14, whereas our average daily bookings per daily unique paying user was $10.73. We believe that maintaining and growing our overall number of DAUs, including the number of DAUs who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of DAUs who choose to purchase and spend Robux will continue to constitute a small portion of our overall users.

Current wording

Consistent with our free to play business model, a small portion of our users have historically been payers. For example, in the three months ended March 31, 2025, of our 97.8 million average DAUs, only approximately 1,220,000 represented our average daily unique paying users. Similarly, in the three months ended March 31, 2025, our average daily bookings per DAU was $0.14, whereas our average daily bookings per daily unique paying user was $10.99. We believe that maintaining and growing our overall number of DAUs, including the number of DAUs who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of DAUs who choose to purchase and spend Robux will continue to constitute a small portion of our overall users.

Previous wording

We are continually innovating our Platform by investing in high fidelity avatars, more realistic experiences, artificial intelligence (“AI”) tools, and other social features. In the second half of 2024 and into 2025, we have implemented, and expect to continue to implement, certain Platform policy and other changes in anticipation of and in response to regulatory requirements and evolving guidance from leading global organizations focused on child and internet safety in the United States and abroad. These changes could impact user engagement, revenue, and bookings, particularly from younger users.

Current wording

In the second half of 2024 and into 2025, we implemented certain Platform policy changes and features as part of our continuing efforts to evolve and refine our safety features. As our safety teams continue to innovate to help users feel safe on our Platform, we expect to continue to implement Platform policy and other changes, including in anticipation of and in response to regulatory requirements and evolving guidance from leading global organizations focused on child and internet safety in the United States and abroad. These changes have impacted and in the future may continue to impact user engagement, revenue, and bookings, particularly from younger users.

Previous wording

We define a DAU as a user who has logged in and visited Roblox through our website or application on a unique registered account on a given calendar day. If a registered, logged in user visits Roblox more than once within a 24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day. We track DAUs as an indicator of the size of the audience engaged on our Platform. We believe that the growth in DAUs reflects the increasing value of our Platform.

Current wording

We define a DAU as a user who has logged in and visited Roblox through our website or application on a unique registered account on a given calendar day. If a registered, logged in user visits Roblox more than once within a 24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day. We track DAUs as an indicator of the size of the audience engaged on our Platform. We believe that the long-term growth in DAUs reflects the increasing value of our Platform.

Previous wording

We believe that DAUs, hours engaged, and bookings are highly correlated and over time we would expect hours engaged to grow slightly faster than DAUs, and bookings to grow faster than hours engaged. There are many reasons, but generally over time, as the content on our Platform improves and DAUs increase in tenure, engagement tends to go up. Similarly, over time as the content improves and our Platform functionality gets better, we expect more users to become payers and for those payers, on average, to increase their purchase of Robux which drives up both average bookings per monthly unique payer and overall bookings per hour. Further, we expect growth in our payers and monetization to lead to growth in revenue and bookings. These expectations are over long periods of time. Within any given month or quarter, the behavior of the metrics has not been, and will not always be, consistent.

Current wording

We believe that DAUs, hours engaged, and bookings are highly correlated and over long periods of time, we would expect hours engaged to grow slightly faster than DAUs, and bookings to grow faster than hours engaged. There are many reasons, but generally over long periods of time, as the content on our Platform improves and DAUs increase in tenure, hours engaged tends to go up. Similarly, over time as the content improves and our Platform functionality gets better, we expect more users to become payers and for payers, on average, to increase their purchase of Robux which drives up both average bookings per monthly unique payer and overall bookings per hour engaged. Further, we expect growth in our payers and monetization to lead to growth in revenue and bookings. Within any given month or quarter, the behavior of the metrics has not been, and will not always be, consistent.

Previous wording

We define ABPDAU as bookings in a given period divided by the DAUs for the same period. We use ABPDAU as a way to understand our monetization across our users through the sale of virtual currency and subscriptions.

Current wording

We define ABPDAU as bookings in a given period divided by the DAUs for the same period. We use ABPDAU as a way to understand our monetization across our users.

Previous wording

We use these measures to understand our monetization across our payers through the sale of virtual currency and subscriptions.

Current wording

We use these measures to understand our monetization across our payers.

Previous wording

Adjusted EBITDA represents our GAAP consolidated net loss, excluding interest income, interest expense, other (income)/expense, provision for/(benefit from) income taxes, depreciation and amortization expense, stock-based compensation expense, and certain other nonrecurring adjustments and differs from Covenant Adjusted EBITDA which is used in certain covenant calculations specified in the indenture governing our senior notes due 2030. Refer to the section titled “Liquidity and Capital Resources” for the definition of and discussion on Covenant Adjusted EBITDA.

Current wording

Adjusted EBITDA represents our GAAP consolidated net loss, excluding interest income, interest expense, other (income)/expense, provision for/(benefit from) income taxes, depreciation and amortization expense, stock-based compensation expense, and certain other nonrecurring adjustments and differs from Covenant Adjusted EBITDA which is used in certain covenant calculations specified in the indenture governing our senior notes due 2030 (the “Indenture”). Refer to the section titled “Liquidity and Capital Resources” for the definition of and discussion on Covenant Adjusted EBITDA.

Previous wording

(2)Relates to cash severance costs associated with the Company’s return-to-office (“RTO”) plan announced in October 2023, which required a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.

Current wording

(1)Relates to cash severance costs associated with the Company’s return-to-office (“RTO”) plan announced in October 2023, which required a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.

Previous wording

We define free cash flow as net cash and cash equivalents provided by operating activities less purchases of property, equipment, and intangible assets acquired through asset acquisitions. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash and cash equivalents generated from our core operations that, after the purchases of property, equipment, and intangible assets, can be used for strategic initiatives.

Current wording

We define free cash flow as net cash and cash equivalents provided by operating activities less purchases of property and equipment, and intangible assets acquired through asset acquisitions. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash and cash equivalents generated from our core operations that, after the purchases of property and equipment, and intangible assets, can be used for strategic initiatives.

Previous wording

Acquisition of property and equipment primarily includes tenant improvements, servers, infrastructure equipment, and capitalized software licenses.

Current wording

Acquisition of property and equipment primarily includes leasehold improvements related to our leased office spaces and data centers, servers, infrastructure equipment, and capitalized software licenses.

Previous wording

We generate substantially all of our revenue through the sale of virtual content or access to virtual content to users, enabling them to enhance their social experience on the Roblox Platform. We recognize revenue over the estimated period of time the virtual items are available to the user on the Roblox Platform (estimated average lifetime of a paying user) or at the time the virtual item is consumed. The estimated average lifetime of a paying user is calculated based on the monthly retention data for each paying user cohort. We then calculate the average retention period by determining the weighted-average period paying users have spent on the Platform and are projected to participate in the Roblox environment.

Current wording

We generate substantially all of our revenue through the sale of or access to virtual content to users, enabling them to enhance their social experience on the Roblox Platform. We recognize revenue over the estimated period of time the virtual items are available to the user on the Roblox Platform (estimated average lifetime of a paying user) or at the time the virtual item is consumed. The estimated average lifetime of a paying user is calculated based on the monthly retention data for each paying user cohort. We then calculate the average retention period by determining the weighted-average period paying users have spent on the Platform and are projected to participate in the Roblox environment.

Previous wording

We allocate shared costs, such as certain facilities (including rent and depreciation on equipment and leasehold improvements shared by all departments) and software costs, to all departments based on headcount. As such, allocated shared costs are reflected in each expense category, with the exception of cost of revenue and developer exchange fees expense.

Current wording

We allocate shared costs, such as certain facilities (including rent and depreciation on equipment and leasehold improvements shared by all departments), software costs, and certain other operating expenses, to all departments based on headcount. As such, allocated shared costs are reflected in each expense category, with the exception of cost of revenue and developer exchange fees expense.

Previous wording

Personnel costs generally include employee expenses (salaries, benefits, and stock-based compensation expense) and contractor expenses, and are reflected in each expense category, with the exception of cost of revenue and developer exchange fees. In the three and nine months ended September 30, 2024, personnel costs were $467.4 million and $1,390.7 million, respectively, and during the three and nine months ended September 30, 2023, were $415.9 million and $1,205.6 million, respectively.

Current wording

Personnel costs generally include employee expenses (salaries, benefits, and stock-based compensation expense) and contractor expenses, and are reflected in each expense category, with the exception of cost of revenue and developer exchange fees. In the three months ended March 31, 2025, personnel costs were $497.4 million and during the three months ended March 31, 2024, were $466.9 million.

Previous wording

Cost of revenue primarily consists of third-party payment processing fees charged by the various distribution channels in connection with sales of our virtual currency. We initially defer payment processing fees and recognize them as expense over the same period as the respective revenue. Cost of revenue also includes costs associated with the printing of prepaid cards and sales tax expense for jurisdictions where the Company does not collect sales tax from the purchaser at the time of the sale.

Current wording

Cost of revenue primarily consists of third-party payment processing fees charged by the various distribution channels in connection with sales of our virtual currency. We initially defer payment processing fees and recognize them as expense over the same period as the respective revenue. Cost of revenue also includes sales tax expense for jurisdictions where the Company does not collect sales tax from the purchaser at the time of the sale and costs associated with the printing of prepaid cards.

Previous wording

Developer exchange fees expense represent the amount earned by developers and creators on the Roblox Platform that are qualified and registered in the Developer Exchange Program. Developers and creators are able to exchange their earned Robux for real-world currency under certain conditions outlined in our Developer Exchange Program. Developers and creators can earn Robux primarily through the sale of access to their experiences and enhancements in their experiences, the incorporation of immersive ads, the sale of content and tools between developers through the Creator Store (formerly the Creator Marketplace), and the sale of items to users through the Marketplace. Developers can also earn Robux through our engagement-based reward program that rewards developers based on the number of hours spent in their experiences by Roblox Premium subscribers (the “Engagement-Based Payouts” program).

Current wording

Developer exchange fees expense represent the amount earned by developers and creators on the Roblox Platform that are qualified and registered in the Developer Exchange Program. Developers and creators are able to exchange their earned Robux for fiat currency under certain conditions outlined in our Developer Exchange Program. Developers and creators can earn Robux through the sale of access to their experiences and enhancements in their experiences, the incorporation of immersive ads, the sale of content and tools between developers through the Creator Store, and the sale of items to users through the Marketplace. Developers can also earn Robux through our engagement-based reward program that rewards developers based on the number of hours spent in their experiences by Roblox Premium subscribers (the “Engagement-Based Payouts” program).

Previous wording

In order to be qualified for our Developer Exchange Program and eligible to exchange earned Robux for real-world currency, developers and creators must meet certain conditions, such as having earned the minimum amount of Robux required to qualify for the program, a verified developer account, and an account in good standing. On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the program from 100,000 Robux to 50,000 Robux and subsequently on January 31, 2023, we further reduced the minimum requirement from 50,000 Robux to 30,000 Robux. We believe these reductions in the minimum amounts required further incentivize our developer and creator community, and promote the long term growth and the health of such community. As of September 30, 2024, over 22,500 developers and creators qualified for and were registered in our Developer Exchange Program.

Current wording

In order to be qualified for our Developer Exchange Program and eligible to exchange earned Robux for fiat currency, developers and creators must meet certain conditions, such as having earned the minimum amount of Robux required to qualify for the program, a verified developer account, and an account in good standing. On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the program from 100,000 Robux to 50,000 Robux and subsequently on January 31, 2023, we further reduced the minimum requirement from 50,000 Robux to 30,000 Robux. We believe these reductions in the minimum amounts required further incentivize our developer and creator community, and promote the long term growth and the health of such community. As of March 31, 2025, over 26,900 developers and creators qualified for and were registered in our Developer Exchange Program.

Previous wording

Over the next few years, a major goal is to increase our developer and creator earnings (i) by creating new earnings methods and enhancing existing ones and (ii) through efficiencies realized in other areas of our business, while maintaining reasonable margins.

Current wording

A major goal of ours is to continue increasing developer and creator earnings by continuing to (i) create new earnings methods and enhancing existing ones and (ii) pass on efficiencies realized in other areas of our business, while maintaining reasonable margins.

Previous wording

Infrastructure and trust & safety expenses consist primarily of expenses related to the operation of our data centers and technical infrastructure. These costs include third-party service providers costs, such as cloud computing or other hosting and data storage, facilities-related expenses for our co-located data centers and edge data centers that we lease and operate, and network and bandwidth costs, as well as depreciation and associated support and maintenance costs of our servers and infrastructure equipment. Depreciation and amortization expense related to infrastructure and trust & safety in the three months ended September 30, 2024 and 2023 was $61.3 million and $46.0 million, respectively, and in the nine months ended September 30, 2024 and 2023 was $152.9 million and $132.8 million, respectively.

Current wording

Infrastructure and trust & safety expenses consist primarily of expenses related to the operation of our data centers and technical infrastructure. These costs include third-party service provider costs, such as cloud computing or other hosting and data storage, facilities-related expenses for our co-located data centers and edge data centers that we lease and operate, and network and bandwidth costs, as well as depreciation and associated support and maintenance costs of our servers and infrastructure equipment. Depreciation and amortization expense related to infrastructure and trust & safety in the three months ended March 31, 2025 and 2024 was $43.8 million and $46.2 million, respectively.

Previous wording

We plan to continue increasing the capacity, capability, and reliability of our infrastructure to support more sophisticated content, more users, and increased engagement. Through the end of 2023, we were investing heavily in our infrastructure, and as a result, we were able to moderate our investment in infrastructure throughout fiscal year 2024, but expect to increase our investment supporting our global infrastructure over the long-term. We intend to achieve scalability by building and maintaining our own technical infrastructure, while generating operating leverage over the long-term.

Current wording

We plan to continue increasing the capacity, capability, and reliability of our infrastructure to support more sophisticated content, more users, and increased engagement. In fiscal year 2023, we invested heavily in our infrastructure, and as a result, we were able to moderate our investment in infrastructure throughout fiscal year 2024 and into 2025, but expect to increase our investment over the long-term to support our global infrastructure. We intend to achieve scalability by building and maintaining our own technical infrastructure, while generating operating leverage over the long-term.

Previous wording

Infrastructure and trust & safety expenses also include personnel costs and moderation and customer support related costs, as well as allocated overhead expenses, to support our infrastructure and trust & safety initiatives. We have been investing in AI and automation to increase the accuracy and efficiency of our safety moderation and customer support related efforts, which has increased the quality of our safety and civility systems and led to a decrease in safety moderation and customer support costs in recent periods.

Current wording

Infrastructure and trust & safety expenses also include personnel costs, moderation and customer support related costs, and allocated overhead expenses. We have been and expect to continue investing in AI and automation to increase the accuracy and efficiency of our safety moderation and customer support related efforts, which has increased the quality of our safety and civility systems and led to a decrease in safety moderation and customer support costs in recent periods.

Previous wording

Research and development expenses consist primarily of personnel costs and allocated overhead expenses for our engineering, design, product management, data science, and other employees engaged in maintaining and enhancing the functionality of the Platform. Research and development expenses also include costs associated with our Game Fund program, which funds certain developers upfront to develop new experience types for the Platform. We plan to increase research and development expenses for the foreseeable future primarily driven by increased headcount to develop new features, functionality, and innovation of our product. However, we have been, and expect to continue, moderating our headcount growth rate throughout fiscal year 2024 and expect to continue to generate operating leverage generally through the end of fiscal year 2025.

Current wording

Research and development expenses consist primarily of personnel costs and allocated overhead expenses for our engineering, design, product management, data science, and other employees engaged in maintaining and enhancing the functionality of the Platform. We plan to increase research and development expenses for the foreseeable future primarily driven by increased headcount to develop new features, functionality, and innovation of our product. We expect to continue generating operating leverage generally through the end of fiscal year 2025.

Previous wording

General and administrative expenses consist primarily of personnel costs and allocated overhead for our finance and accounting, legal, human resources, talent acquisition, and other administrative teams. General and administrative expenses also include professional services fees such as outside legal, accounting, audit, and outsourcing services, and other corporate expenses, as well as certain accruals and settlements associated with legal proceedings. We have been, and expect to continue, moderating our headcount growth rate in fiscal year 2024, but generally expect to increase general and administrative expenses for the foreseeable future thereafter to support the growth of the business.

Current wording

General and administrative expenses consist primarily of personnel costs and allocated overhead for our finance and accounting, legal, human resources, talent acquisition, and other administrative teams. General and administrative expenses also include professional services fees such as outside legal, accounting, audit, and outsourcing services, and other corporate expenses, as well as certain accruals and settlements associated with legal proceedings. We generally expect to increase general and administrative expenses for the foreseeable future, primarily to support the growth and increasing complexity of our business.

Previous wording

Provision for/(benefit from) income taxes consists primarily of income taxes in foreign jurisdictions and U.S. federal and state income taxes. We maintain a full valuation allowance on our federal, state, and foreign deferred tax assets as we have concluded that it is not likely that the deferred assets will be utilized.

Current wording

Provision for/(benefit from) income taxes consists primarily of income taxes in foreign jurisdictions and U.S. federal and state income taxes. We maintain a full valuation allowance on our federal, state, and certain foreign deferred tax assets as we have concluded that it is not likely that the deferred assets will be utilized.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Previous wording

Revenue increased $205.7 million, or 29%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to a higher amortization of prior period deferred revenue and an increase in bookings in the current period. The increase in the amortization of prior period deferred revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Changes in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Current wording

Revenue increased $233.9 million, or 29%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to a higher amortization of prior period deferred revenue and an increase in bookings in the current period. The increase in the amortization of prior period deferred revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024.

Previous wording

The increase in bookings during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 870,000 during the three months ended September 30, 2023 to approximately 1,143,000 during the three months ended September 30, 2024. The average number of daily unique paying users represents the number of user accounts that made a payment on the Platform, including via redemption of prepaid cards for Robux, on an average daily basis during the respective period.

Current wording

The increase in bookings during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 914,000 during the three months ended March 31, 2024 to approximately 1,220,000 during the three months ended March 31, 2025. The average number of daily unique paying users represents the number of user accounts that made a payment on the Platform, including via redemption of prepaid cards for Robux, on an average daily basis during the respective period.

Previous wording

Cost of revenue increased $41.4 million, or 25%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to anet increase of$40.9 million in expense for payment processing fees, primarily driven by a higher amortization of prior period deferred cost of revenue and an increase in current period payment processing fees from the related growth in bookings. The increase in the amortization of prior period deferred cost of revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Changes in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Current wording

Cost of revenue increased $45.9 million, or 26%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to anet increase of$46.5 million in expense for payment processing fees, primarily driven by a higher amortization of prior period deferred cost of revenue and an increase in current period payment processing fees from the related growth in bookings. The increase in the amortization of prior period deferred cost of revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024.

Previous wording

Developer exchange fees increased $60.8 million, or 36%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period.

Current wording

Developer exchange fees increased $79.2 million, or 39%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period. However, the growth in developer exchange fees exceeded the growth in bookings, primarily driven by differential Robux pricing which launched in November 2024, and offers more Robux for users purchasing Robux through payment processing channels with lower transaction processing fees, which in turn increases the supply of Robux available for developers to earn.

Previous wording

Infrastructure and trust & safety expenses increased $25.6 million, or 12%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily driven by $17.9 million of accelerated depreciation expense related to certain software licenses as the Company re-assessed the estimated useful life of these licenses in the third quarter of 2024. The increase was further supplemented by an increase of $12.7 million related to data center and technical infrastructure expenses (including depreciation and amortization) and hosting costs associated with providing the Platform to our users, as well as an increase of $5.4 million in personnel costs, which includes an increase of $4.6 million in stock-based compensation expense. The overall increase was offset by a decrease of $7.8 million in moderation and customer support related costs primarily due to internal efficiency gains and automation from AI-driven tools.

Current wording

Infrastructure and trust & safety expenses increased $15.2 million, or 7%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily driven by an increase of $10.1 million related to data center and technical infrastructure expenses (including depreciation and amortization) and hosting costs associated with providing the Platform to our users, as well as an increase of $7.8 million in personnel costs, which includes an increase of $6.3 million in stock-based compensation expense, primarily due to a slight increase in headcount to support our infrastructure growth. The overall increase was offset by a decrease of $5.2 million in moderation and customer support related costs, primarily due to internal efficiency gains and automation from AI-driven tools.

Previous wording

Research and development expenses increased $43.8 million, or 14%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to an increase of $41.9 million in personnel costs, which includes an increase of $33.4 million in stock-based compensation expense, primarily due to growth in headcount supporting our engineering, design, and product teams.

Current wording

Research and development expenses increased $12.5 million, or 3%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to an increase of $10.0 million in personnel costs, which includes an increase of $3.7 million in stock-based compensation expense, primarily due to a slight growth in headcount supporting our engineering, design, and product teams.

Previous wording

Sales and marketing expenses increased $11.7 million, or 29%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to an increase of $4.8 million in advertising and promotional expenses and$5.0 million in personnel costs, which includes anincrease of$3.0 millionin stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams.

Current wording

Sales and marketing expenses increased $12.2 million, or 34%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to an increase of$7.1 million in personnel costs, which includes anincrease of$4.1 millionin stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams, and $4.5 million in advertising and promotional expenses.

Previous wording

Interest expense and provision for/(benefit from) income taxes, net were all relatively flat (in terms of amount) for the three and nine months ended September 30, 2024 compared to the same periods of the prior year.

Current wording

Interest income, interest expense, other income/(expense), net, and provision for/(benefit from) income taxes were all relatively flat (in terms of amount) for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous wording

As of September 30, 2024 and December 31, 2023, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $3.9 billion and $3.2 billion, respectively, which were primarily held for working capital purposes, capital expenditures, and acquisitions. Our investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements. We do not enter into investments for trading or speculative purposes.

Current wording

As of March 31, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $4.5 billion and $4.0 billion, respectively, which were primarily held for working capital purposes, capital expenditures, and acquisitions. Our investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements. We do not enter into investments for trading or speculative purposes.

Previous wording

(2)Relates to cash severance costs associated with the Company’s return-to-office (“RTO”) plan announced in October 2023, which required a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.

Current wording

(1)Relates to cash severance costs associated with the Company’s return-to-office (“RTO”) plan announced in October 2023, which required a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.

Previous wording

As of September 30, 2024, contractual obligations related to the 2030 Notes are remaining payments of $19.4 million in 2024 and $38.8 million each year from 2025 through 2029 and $1,019.4 million due in 2030. These amounts represent principal and interest cash payments over the term of the 2030 Notes based on the stated maturity date. Any future redemption of the 2030 Notes could impact the amount or timing of our cash payments. For more information regarding the 2030 Notes, see Note 9, “Debt” to the notes to condensed consolidated financial statements.

Current wording

As of March 31, 2025, contractual obligations related to the 2030 Notes are remaining payments of $38.8 million each year from 2025 through 2029 and $1,019.4 million due in 2030. These amounts represent principal and interest cash payments over the term of the 2030 Notes based on the stated maturity date. Any future redemption of the 2030 Notes could impact the amount or timing of our cash payments. For more information regarding the 2030 Notes, refer to Note 8, “Debt” to the notes to condensed consolidated financial statements.

Previous wording

We believe our existing cash and cash equivalents and short-term investments, together with expected cash to be provided by future operations, will be sufficient to meet our needs for the next 12 months. Our future capital requirements, however, will depend on many factors, including our growth rate, investment in our headcount, capital expenditures to build out new facilities and purchase hardware for infrastructure, timing and extent of spending to support our efforts to develop our Platform, and the effects of inflation on these various expenses, amongst other factors. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, or debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. See Part 1, Item 1A. “Risk Factors” for more information.

Current wording

We believe our existing cash and cash equivalents and short-term investments, together with expected cash to be provided by future operations, will be sufficient to meet our needs for the next 12 months. Our future capital requirements, however, will depend on many factors, including our growth rate, investment in our headcount, capital expenditures to build out new facilities and purchase hardware for infrastructure, timing and extent of spending to support our efforts to develop our Platform, amongst other factors. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, or debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. See Part 1, Item 1A. “Risk Factors” for more information.

Previous wording

The following table summarizes our cash flows for the periods presented:

Current wording

The following table summarizes our cash flows for the periods presented (in thousands):

Previous wording

During the nine months ended September 30, 2024, net cash and cash equivalents provided by operating activities was $637.8 million, which consisted of consolidated net loss of $719.6 million, adjusted by non-cash charges of $964.2 million and net cash inflows from the change in net operating assets and liabilities of $393.2 million. The non-cash charges were primarily comprised of stock-based compensation expense of $757.6 million and depreciation and amortization expense of $175.1 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $409.8 million increase in deferred revenue, primarily due to bookings generated in the current period, and a $119.5 million decrease in accounts receivable, primarily driven by collection of outstanding accounts receivable and partially offset by an increase in accounts receivable from bookings generated in the current period. The overall increase was offset by a $99.5 million increase in deferred cost of revenue, primarily due to payment processing fees incurred in the current period, and a $54.6 million decrease due to payment of operating lease liabilities.

Current wording

During the three months ended March 31, 2025, net cash and cash equivalents provided by operating activities was $443.9 million, which consisted of consolidated net loss of $216.3 million, adjusted by non-cash charges of $323.7 million and net cash inflows from the change in net operating assets and liabilities of $336.5 million. The non-cash charges were primarily comprised of stock-based compensation expense of $258.9 million and depreciation and amortization expense of $53.7 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $211.3 million decrease in accounts receivable, net, due to the timing of collection of prior period bookings and receipts on bookings generated in the current period and a $175.5 million increase in deferred revenue, primarily due to bookings generated in the current period. The overall increase was offset by a $30.2 million increase in deferred cost of revenue, primarily due to payment processing fees incurred in the current period, and a $25.5 million decrease due to payment of operating lease liabilities.