RingCentral, Inc.
For the period ended Sep 30, 2026. Filed Oct 23, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 23, 2026
RNG$72.07-3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0001384905-26-000046
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-23.
0001384905-26-000061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 103 current paragraphs.
58 unchanged; 30 reworded; 14 added; 7 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
During the three months ended September 30, 2026, we released $544.9 million of the valuation allowance against our U.S. deferred tax assets, which resulted in a non-cash income tax benefit in the period. Refer to Note 12, Income Taxes, in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Current report
Cost of other revenues decreased by $10.8 million, or 13%, and gross margins improved, for the nine months ended September 30, 2026, as compared to the respective prior year period, primarily due to $6.7 million reduction in personnel costs, and $2.8 million decrease in professional fees.
Current report
Our Other gross margins improved due to continued disciplined personnel and vendor spending.
Current report
Sales and marketing expenses increased by $1.4 million, or less than 1%, for the three months ended September 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $12.6 million increase in commissions and a $4.3 million increase in personnel cost. These increases were partially offset by a $12.3 million reduction in overhead costs, and a $1.9 million reduction in share-based compensation due to lower new grant activity.
Current report
Sales and marketing expenses increased by $10.6 million, or 1%, for the nine months ended September 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $27.8 million increase in commissions and a $9.5 million increase in personnel costs. These increases were partially offset by a $15.7 million reduction in share-based compensation due to lower new grant activity, and a $12.0 million reduction in overhead costs.
Current report
General and administrative expenses increased by $3.4 million, or 5% for the three months ended September 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $3.7 million increase in personnel cost.
Current report
General and administrative expenses increased by $0.1 million, or less than 1%, for the nine months ended September 30, 2026, as compared to the respective prior year period. General and administrative expenses increased by a $6.7 million in overhead costs, that was partially offset by a $4.9 million reduction in share-based compensation resulting from lower new grant activity.
Current report
(Benefit From) Provision For Income Taxes
Current report
*nm – not meaningful
Current report
Benefit from income taxes increased by $541.2 million and $543.0 million, for the three and nine months ended September 30, 2026, respectively, as compared to the respective prior year. The increase was primarily attributable to the partial release of our valuation allowance on certain of our U.S. federal and state deferred tax assets in the three months ended September 30, 2026, which generated a $544.9 million income tax benefit. For further detail, refer to Note 12, Income Taxes in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Current report
We account for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. A valuation allowance reduces deferred tax assets to the amount that we believe is more likely than not to be realized.
Current report
We evaluate the realizability of our deferred tax assets each reporting period, considering both positive and negative evidence, which includes cumulative prior twelve quarter U.S. pre-tax income as well as recent and anticipated future earnings, and weighing that evidence based on how objectively it can be verified. Realization of deferred tax assets depends on the generation of future taxable income, the timing and amount of which are uncertain. Determining the need for a valuation allowance requires significant management judgment.
Current report
As of September 30, 2026, we demonstrated sustained profitability in the U.S. and we expect to continue to generate U.S. taxable income for the year ending December 31, 2026. Based on our analysis of available positive and negative evidence, we concluded that, as of September 30, 2026, it is more likely than not that a significant portion of our U.S. deferred tax assets, net of the remaining valuation allowance, will be realized. As a result of this change in judgment, we released $544.9 million of our valuation allowance on U.S. deferred tax assets during the three months ended September 30, 2026. This resulted in the recognition of deferred tax assets and an income tax benefit of $544.9 million during the three months ended September 30, 2026. For further detail, refer to Note 12, Income Taxes, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current report
Our judgment regarding the need for a valuation allowance may reasonably change in future reporting periods due to many factors, including changes in expectations of future U.S. profitability and changes in tax laws or regulations. We will continue to maintain a valuation allowance against deferred tax assets where we believe it is more likely than not that they will not be realized.
Removed paragraphs (7)
Previous report
Due to recent profitability, a reversal of our valuation allowance in certain jurisdictions in the foreseeable future is reasonably possible which would result in income tax benefit for the period in which we reduce the valuation allowance.
Previous report
Sales and marketing expenses increased by $11.3 million, or 4%, for the three months ended June 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $8.5 million increase in third-party commissions and a $5.6 million increase in personnel costs, partially offset by a $2.1 million reduction in share-based compensation due to lower new grant activity.
Previous report
Sales and marketing expenses increased by $9.3 million, or 2%, for the six months ended June 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $18.2 million increase in third-party commissions and a $5.2 million increase in personnel costs, partially offset by a $13.7 million reduction in share-based compensation due to lower new grant activity.
Previous report
General and administrative expenses remained relatively flat for the three months ended June 30, 2026, as compared to the respective prior year period as the increases in professional fees and overhead costs were partially offset by a $3.9 million reduction in share-based compensation due to lower new grant activity.
Previous report
General and administrative expenses decreased by $3.2 million, or (3)%, for the six months ended June 30, 2026, as compared to the respective prior year period. This decrease was primarily driven by a $9.1 million reduction in share-based compensation resulting from lower new grant activity, partially offset by a $4.0 million increase in professional fees and $2.2 million increase in overhead costs.
Previous report
We evaluate our deferred tax assets for realizability considering both positive and negative evidence. In evaluating the need for a valuation allowance, we estimate future taxable income based on management’s business plans. Realization of deferred tax assets is dependent upon the generation of future taxable income, the timing and amount of which are uncertain. This process involves significant management judgment about assumptions that are subject to change from period to period based on changes in tax laws or variances between future projected operating performance and actual results.
Previous report
We will continue to evaluate the need for a valuation allowance and may change our conclusion in a future period based on changes in facts. If we conclude that we are more likely than not to utilize some or all of our deferred tax assets, we will reduce some or all of our valuation allowance and our tax provision will decrease in the period in which we make such determination, which will cause a corresponding one-time increase to net income. Changes in the net deferred tax assets, less offsetting valuation allowance, in a period are recorded through the income tax provision and could have a material impact on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Reworded paragraphs (30)
Previous wording
Over the past 27 years, RingCentral, Inc., a global leader in AI-powered customer engagement, has transformed business communications, leading the shift from on-premises legacy communications to the cloud. Today, the company has an AI-powered, multi-product portfolio including Unified Communications as a Service (“UCaaS”), Contact Center as a Service (“CCaaS”), RingCentral AI solutions, Video and Events. RingCentral’s core tenets include: a) Trust: We provide a carrier-grade, cloud-based communications platform that businesses can trust with reliability, security, and privacy; b) Innovation: We plan to invest over $250 million in research and development in 2026 to execute through focused and strategic innovation, setting the bar in the industry for many market firsts; c) Partnerships: We have a diverse set of strategic partners, global service providers, channel partners, and third-party developers. RingCentral is designed for intelligent, connected, and effortless business communications, making employee and customer experiences more productive and efficient.
Current wording
Over the past 27 years, RingCentral, Inc., a global leader in AI-powered customer engagement, has transformed business communications, leading the shift from on-premises legacy communications to the cloud. Today, the company has an AI-powered, multi-product portfolio including Unified Communications as a Service (“UCaaS”), Contact Center as a Service (“CCaaS”), RingCentral AI solutions, Video and Events. RingCentral’s core tenets include: a) Trust: We provide a carrier-grade, cloud-based communications platform that businesses can trust with reliability, security, and privacy; b) Innovation: We have invested over $250 million in research and development in 2026 to execute through focused and strategic innovation, setting the bar in the industry for many market firsts; c) Partnerships: We have a diverse set of strategic partners, global service providers, channel partners, and third-party developers. RingCentral is designed for intelligent, connected, and effortless business communications, making employee and customer experiences more productive and efficient.
Previous wording
Our subscription plans have monthly, annual, or multi-year contractual terms. We believe that this flexibility in contract duration is important to meet the different needs of our customers. For the three and six months ended June 30, 2026, and 2025, subscriptions revenues accounted for over 90% of our total revenues. Other revenues are comprised of product revenues from the sale of pre-configured phones and professional services. We do not develop or manufacture physical phones and only offer them as a convenience to our customers. We rely on third-party providers to develop and manufacture these devices and fulfillment partners to successfully serve our customers.
Current wording
Our subscription plans have monthly, annual, or multi-year contractual terms. We believe that this flexibility in contract duration is important to meet the different needs of our customers. For the three and nine months ended September 30, 2026, and 2025, subscriptions revenues accounted for over 90% of our total revenues. Other revenues are comprised of product revenues from the sale of pre-configured phones and professional services. We do not develop or manufacture physical phones and only offer them as a convenience to our customers. We rely on third-party providers to develop and manufacture these devices and fulfillment partners to successfully serve our customers.
Previous wording
As of June 30, 2026, we had customers from a range of industries, including healthcare, financial and professional services, retail, state and local government, education, legal services, real estate, technology, insurance, construction and hospitality, among others. For the three and six months ended June 30, 2026, and 2025, the vast majority of our total revenues were generated in the U.S. and Canada.
Current wording
As of September 30, 2026, we had customers from a range of industries, including healthcare, financial and professional services, retail, state and local government, education, legal services, real estate, technology, insurance, construction and hospitality, among others. For the three and nine months ended September 30, 2026, and 2025, the vast majority of our total revenues were generated in the U.S. and Canada.
Previous wording
We have been actively implementing various measures to enhance operational efficiencies, expand margins and free cash flows while optimizing our working capital requirements. These measures include disciplined hiring, expanded use of offshore service providers, vendor consolidation, optimization of our go-to-market motions, and increased internal deployment of AI tools to drive productivity. A key component of our margin expansion strategy is the reduction of stock-based compensation (SBC) as a percentage of revenue. SBC decreased to approximately 8.7% of total revenue for the three months ended June 30, 2026, compared to approximately 10.2% for the prior-year period. For the six months ended June 30, 2026, SBC decreased to approximately 8.6% of total revenue, compared to approximately 11.5% for the prior-year period.
Current wording
We have been actively implementing various measures to enhance operational efficiencies, expand margins and free cash flows while optimizing our working capital requirements. These measures include disciplined hiring and stock grants, expanded use of offshore service providers, vendor consolidation, optimization of our go-to-market motions, and increased internal deployment of AI tools to drive productivity.
Previous wording
We believe that our Annualized Exit Monthly Recurring Subscriptions (“ARR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends in order to formulate financial projections and make strategic business decisions. Our ARR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at June 30, 2026 was $229.7 million. As such, our ARR at June 30, 2026 was $2.76 billion compared to $2.59 billion at June 30, 2025.
Current wording
We believe that our Annualized Exit Monthly Recurring Subscriptions (“ARR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends in order to formulate financial projections and make strategic business decisions. Our ARR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at September 30, 2026 was $233.2 million. As such, our ARR at September 30, 2026 was $2.80 billion compared to $2.63 billion at September 30, 2025.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
Previous wording
Subscriptions revenues. Subscriptions revenues increased by $34.9 million, or 6%, for the three months ended June 30, 2026, and $68.0 million, or 6%, for the six months ended June 30, 2026, as compared to the respective prior year period. Subscriptions revenues increased primarily due to acquisition of new customers and upsell of our products, including new AI-led products.
Current wording
Subscriptions revenues. Subscriptions revenues increased by $37.1 million, or 6%, for the three months ended September 30, 2026, and $105.1 million, or 6%, for the nine months ended September 30, 2026, as compared to the respective prior year period. Subscriptions revenues increased primarily due to acquisition of new customers and upsell of our products, including new AI-led products.
Previous wording
Other revenues. Other revenues increased by $1.7 million, or 8%, for the three months ended June 30, 2026, and $0.8 million, or 2%, for the six months ended June 30, 2026, as compared to the respective prior year period. The increase in other revenues was primarily driven by higher professional services and higher device sales as a result of overall growth in business compared to the respective prior year periods.
Current wording
Other revenues. Other revenues increased by $0.3 million, or 1%, for the three months ended September 30, 2026, and $1.0 million, or 2%, for the nine months ended September 30, 2026, as compared to the respective prior year period. The increase in other revenues was primarily driven by higher device sales as a result of overall growth in business, partially offset by lower professional services revenues.
Previous wording
Although we expect to continue to add new customers for our products, including new product sales, and increase the usage of our products for existing customers, we will monitor the macroeconomic factors that could impact customer buying behavior and demand, including contract duration, timing of customer purchases, pricing changes, churn, upsell and down-sell, renewals, payment terms, and credit card declines, all of which could cause variability in our revenue.
Current wording
Although we expect to continue to add new customers for our products, including new product sales, and increase the usage of our products for existing customers, we will continue to monitor the macroeconomic factors that could impact customer buying behavior and demand, including contract duration, timing of customer purchases, pricing changes, churn, upsell and down-sell, renewals, payment terms, and credit card declines, all of which could cause variability in our revenue.
Previous wording
Subscriptions cost of revenues and gross margin. Cost of subscriptions revenues increased by $8.7 million, or 6%, for the three months ended June 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $10.2 million increase in infrastructure support costs, partially offset by a $1.9 million decrease in third-party costs to support our solution offerings.
Current wording
Subscriptions cost of revenues and gross margin. Cost of subscriptions revenues increased by $6.9 million, or 4%, for the three months ended September 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $7.0 million increase in infrastructure support costs.
Previous wording
Cost of subscriptions revenues increased by $10.0 million, or 3%, for the six months ended June 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $15.2 million increase in infrastructure support costs, partially offset by a $3.9 million decrease in third-party costs to support our solution offerings.
Current wording
Cost of subscriptions revenues increased by $16.9 million, or 4%, for the nine months ended September 30, 2026, as compared to the respective prior year period. The increase was primarily driven by a $22.7 million increase in infrastructure support costs, partially offset by a $5.1 million decrease in third-party costs and professional fees to support our solution offerings.
Previous wording
Our subscription gross margin remained consistent for the three and six months ended June 30, 2026, as compared to the respective prior year period.
Current wording
Our subscription gross margin remained consistent for the three and nine months ended September 30, 2026, as compared to the respective prior year period.
Previous wording
Cost of other revenues and gross margin. Cost of other revenues decreased and gross margins improved for the three and six months ended June 30, 2026, as compared to the respective prior year period, primarily due to reduction in personnel costs.
Current wording
Cost of other revenues and gross margin. Cost of other revenues decreased by $5.5 million, or 21%, and gross margins improved, for the three months ended September 30, 2026, as compared to the respective prior year period, primarily due to $2.9 million decrease in professional fees, and $2.3 million reduction in personnel costs.
Previous wording
Research and development expenses increased by $5.3 million, or 7%, for the three months ended June 30, 2026, as compared to the respective prior year period, primarily driven by a $4.2 million increase in personnel costs.
Current wording
Research and development expenses increased by $8.2 million, or 10%, for the three months ended September 30, 2026, as compared to the respective prior year period, primarily driven by a $4.6 million increase in personnel costs and a $3.8 million increase in overhead costs.
Previous wording
Research and development expenses increased by $5.0 million, or 3%, for the six months ended June 30, 2026, as compared to the respective prior year period, primarily driven by a $5.1 million increase in personnel costs and a $2.3 million increase in overhead costs. These increases were partially offset by a $2.3 million reduction in share-based compensation expense due to lower new grant activity.
Current wording
Research and development expenses increased by $13.1 million, or 5%, for the nine months ended September 30, 2026, as compared to the respective prior year period, primarily driven by a $10.7 million increase in personnel costs and a $6.1 million increase in overhead costs. These increases were partially offset by a $3.2 million reduction in share-based compensation expense due to lower new grant activity.
Previous wording
Interest expense. Interest expense increased by $2.2 million, or 13%, and $0.9 million, or 3%, for the three and six months ended June 30, 2026, respectively, as compared to the respective prior year, primarily attributable to interest incurred on the incremental Term Loan.
Current wording
Interest expense. Interest expense increased by $3.2 million, or 23%, and $4.1 million, or 9%, for the three and nine months ended September 30, 2026, respectively, as compared to the respective prior year, primarily attributable to interest incurred on the incremental Term Loan.
Previous wording
Other income (expense) increased by $12.9 million for the six months ended June 30, 2026, as compared to the respective prior year, primarily due to a $15.0 million net gain recognized in connection with an amended agreement with a partner, partially offset by a $1.6 million increase in loss on debt extinguishment recognized in connection with the repurchase of $100.0 million principal amount of our 2030 Senior Notes for an aggregate repurchase price of $105.0 million.
Current wording
Other (expense) income increased by $4.0 million for the nine months ended September 30, 2026, as compared to the respective prior year, primarily due to a $15.0 million net gain recognized in connection with an amended agreement with a partner, partially offset by a $9.7 million increase in loss on debt extinguishment recognized in connection with the repurchase of $250.0 million principal of our 2030 Senior Notes.
Previous wording
Other income (expense), net, can fluctuate in the future due to changes in interest rates on our money market funds, interest expense on our Credit Agreement, and fluctuations in currency exchange rates in the current macroeconomic environment.
Current wording
Other (expense) income, net, can fluctuate in the future due to changes in interest rates on our money market funds, interest expense on our Credit Agreement, and fluctuations in currency exchange rates in the current macroeconomic environment.
Previous wording
We finance our operations primarily through sales to our customers, which could be billed either monthly or annually one year in advance. For customers with annual or multi-year contracts and those who opt for annual invoicing, we generally invoice only one annual period in advance and revenue is deferred for such advanced billings. As of June 30, 2026, and December 31, 2025, we had cash and cash equivalents of $111.5 million and $132.6 million, respectively. These amounts include restricted cash of $8.4 million and $8.4 million, respectively, held as a bank deposit for issuance of a foreign bank guarantee. As of June 30, 2026, we have access to additional liquidity of $50.0 million available under our delayed draw-down Term Loan and $305.0 million available under our Revolving Credit Facility.
Current wording
We finance our operations primarily through sales to our customers, which could be billed either monthly or annually one year in advance. For customers with annual or multi-year contracts and those who opt for annual invoicing, we generally invoice only one annual period in advance and revenue is deferred for such advanced billings. As of September 30, 2026, and December 31, 2025, we had cash and cash equivalents of $110.1 million and $132.6 million, respectively. These amounts include restricted cash of $8.4 million and $8.4 million, respectively, held as a bank deposit for issuance of a foreign bank guarantee. As of September 30, 2026, we have access to additional liquidity of $305.0 million available under our Revolving Credit Facility.
Previous wording
For the six months ended June 30, 2026, net cash provided by operating activities was $370.5 million. During the six months ended June 30, 2026, we generated $320.8 million of free cash flow, a non-GAAP financial measure defined as net cash provided by operating activities less capital expenditures (see below for a reconciliation to GAAP). Our capital allocation strategy includes investing in innovation, reducing debt, returning capital to shareholders through share repurchases and dividends. For the six months ended June 30, 2026, we repurchased 4.8 million common shares for $175.0 million, repaid $132.2 million of long-term debt, used $7.9 million of cash for business combinations and used $12.8 million to pay quarterly cash dividend of $0.075 per share of our outstanding capital stock.
Current wording
For the nine months ended September 30, 2026, net cash provided by operating activities was $550.4 million. During the nine months ended September 30, 2026, we generated $477.6 million of free cash flow, a non-GAAP financial measure defined as net cash provided by operating activities less capital expenditures (see below for a reconciliation to GAAP). Our capital allocation strategy includes investing in innovation, reducing debt, and returning capital to shareholders through share repurchases and dividends. For the nine months ended September 30, 2026, we repurchased 5.2 million common shares for $193.0 million, repaid $244.4 million of our debt, used $7.9 million of cash for business combinations, and used $23.3 million to pay quarterly cash dividend of $0.075 per share in each of the first and second quarters and $0.125 per share in the third quarter of our outstanding capital stock.
Previous wording
During the six months ended June 30, 2026, we reduced our outstanding debt by $132.2 million by repaying in full the remaining $609.1 million outstanding principal of our 2026 Convertible Notes using $600.0 million of proceeds from borrowings under our Term Loan, and cash on hand equal to $9.1 million. Further, we made payments aggregating to $23.1 million as part of our regular scheduled quarterly principal repayment obligations under the Credit Agreement. As a result, as of June 30, 2026, the total outstanding Term Loan balance was $879.1 million and the Revolving Credit Facility balance was zero. We also repurchased $100.0 million of principal of 2030 Senior Notes. As a result, as of June 30, 2026, the total outstanding principal of the 2030 Senior Notes was $250.0 million. Refer to Note 5, Long-Term Debt, in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our Credit Agreement, and the 2030 Senior Notes.
Current wording
During the nine months ended September 30, 2026, we reduced our outstanding debt by $244.4 million by repaying in full the remaining $609.1 million outstanding principal of our 2026 Convertible Notes using $600.0 million of proceeds from borrowings under our Term Loan, and cash on hand equal to $9.1 million. We also repaid $250.0 million of principal of 2030 Senior Notes partially using the remaining $50.0 million available under our Term Loan. Further, we made payments aggregating to $35.4 million as part of our regular scheduled quarterly principal repayment obligations under the Credit Agreement. As a result, as of September 30, 2026, the total outstanding Term Loan balance was $916.9 million, the 2030 Senior Notes was $100.0 million and the Revolving Credit Facility balance was zero. As of October 22, 2026, total outstanding principal amount was $996.9 million due to a subsequent repayment. In October 2026, the Company also issued a notice to redeem $25.0 million aggregate principal amount of its 2030 Senior Notes which will be due and payable on October 23, 2026. Following the redemption, the total outstanding principal amount will be $971.9 million. Refer to Note 5, Long-Term Debt, in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our Credit Agreement, and the 2030 Senior Notes.
Previous wording
Under our share repurchase programs, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or other means. The programs do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. During the six months ended June 30, 2026, we repurchased and settled approximately 4.8 million shares of our Class A Common Stock, by paying an aggregate amount of approximately $175.0 million under the plans previously authorized by our board of directors. The authorization under these programs does not expire. As of June 30, 2026, approximately $325.8 million remained authorized and available under our share repurchase programs for future share repurchases. Refer to Note 10, Stockholders’ Deficit in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Current wording
Under our share repurchase programs, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or other means. The programs do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. During the nine months ended September 30, 2026, we repurchased and settled approximately 5.2 million shares of our Class A Common Stock, by paying an aggregate amount of approximately $193.0 million under the plans previously authorized by our board of directors. The authorization under these programs does not expire. As of September 30, 2026, approximately $308.9 million remained authorized and available under our share repurchase programs for future share repurchases. Refer to Note 10, Stockholders’ Deficit in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Previous wording
In February 2026, our Board of Directors initiated our first-ever quarterly cash dividend program. In May 2026, the Company declared a quarterly cash dividend of $0.075 per share of our outstanding capital stock, payable on June 11, 2026 to stockholders of record as of the close of business on June 2, 2026. In July 2026, our Board of Directors approved a cash dividend of $0.125 per share, representing, approximately, a 67% increase from the previous quarterly dividend of $0.075 per share. The dividend is payable on August 20, 2026 to stockholders of record as of the close of business on August 6, 2026, on each of the Company's Class A common stock, Class B common stock, and Series A Convertible Preferred Stock (on an as-converted basis). We intend to pay a cash dividend on a quarterly basis going forward, subject to market conditions and approval by our Board.
Current wording
In February 2026, our Board of Directors initiated our first-ever quarterly cash dividend program. During the first and second quarters of 2026, the Company paid a quarterly cash dividend of $0.075 per share of our outstanding capital stock. In July 2026, our Board of Directors approved an increased quarterly cash dividend of $0.125 per share, representing approximately a 67% increase from the previous quarterly dividend of $0.075 per share, which was paid on August 20, 2026. In October 2026, our Board of Directors approved a cash dividend of $0.125 per share of outstanding capital stock. The dividend is payable on November 20, 2026 to stockholders of record as of the close of business on November 6, 2026. We intend to pay a cash dividend on a quarterly basis going forward, subject to market conditions and approval by our Board.
Previous wording
Net cash provided by operating activities was $370.5 million for the six months ended June 30, 2026. The cash flow from operating activities was driven by timing of cash receipts from customers, partners and global service providers, offset by cash payments for personnel-related costs and payments to vendors along with interest payments on our debt obligations.
Current wording
Net cash provided by operating activities was $550.4 million for the nine months ended September 30, 2026. The cash flow from operating activities was driven by timing of cash receipts from customers, partners and global service providers, offset by cash payments for personnel-related costs and payments to vendors along with interest payments on our debt obligations.
Previous wording
Net cash provided by operating activities for the six months ended June 30, 2026 increased by $53.4 million, as compared to the respective prior year period, driven by a $66.9 million improvement in net income reflecting strong operating performance and continued efficiency gains, partially offset by $29.6 million reduction in stock-based compensation expense. Cash flow provided by operating activities also increased by $11.8 million, net due to changes in assets and liabilities, including benefits from customer and partner prepayments.
Current wording
Net cash provided by operating activities for the nine months ended September 30, 2026 increased by $81.9 million, as compared to the respective prior year period, reflecting strong operating performance and continued efficiency gains from further optimization of our working capital requirements. The increase in net cash provided by operating activities is primarily driven by $44.5 million improvement in net income (excluding non-cash benefits from partial release of valuation allowance on U.S. deferred tax assets of $544.9 million and $29.6 million from reduction in stock-based compensation expense) and $37.0 million, net from changes in working capital.
Previous wording
Net cash used in investing activities was $57.6 million for the six months ended June 30, 2026, driven by $49.6 million in capital expenditures, including personnel-related costs associated with the development of internal-use software, and $7.9 million in cash paid for business combination.
Current wording
Net cash used in investing activities was $80.7 million for the nine months ended September 30, 2026, driven by $72.8 million in capital expenditures, including personnel-related costs associated with the development of internal-use software, and $7.9 million in cash paid for business combination.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2026 increased by $15.1 million, as compared to the respective prior year period. The change was attributed to $7.9 million of cash used for business combinations, and a $7.1 million increase in capital expenditures.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2026 decreased by $4.4 million, as compared to the respective prior year period primarily due to $12.8 million decrease in cash paid for business combinations, partially offset by an $8.4 million increase in capital expenditures.
Previous wording
Net cash used in financing activities was $332.9 million for the six months ended June 30, 2026. This was primarily driven by the cash settlement of $609.1 million upon the maturity of our 2026 Convertible Notes, partially offset by $600.0 million of Term Loans drawn under our Credit Agreement. Additional outflows included $175.0 million used to repurchase approximately 4.8 million shares of our Class A Common Stock, $105.0 million to repurchase $100.0 million of principal on our 2030 Senior Notes, $23.1 million of principal repayments in respect of our Term Loan, $15.5 million for taxes related to net share settlement of equity awards, and $12.8 million paid for dividends. These outflows were partially offset by $10.0 million in proceeds from issuance of stock in connection with our stock plans.
Current wording
Net cash used in financing activities was $491.0 million for the nine months ended September 30, 2026. This was primarily driven by the cash settlement of $609.1 million upon the maturity of our 2026 Convertible Notes, partially offset by $650.0 million of Term Loans drawn under our Credit Agreement. Additional outflows included $193.0 million used to repurchase approximately 5.2 million shares of our Class A Common Stock, $261.4 million to repurchase $250.0 million of principal on our 2030 Senior Notes, $35.4 million of principal repayments in respect of our Term Loan, $22.3 million for taxes related to net share settlement of equity awards, and $23.3 million paid for dividends. These outflows were partially offset by $10.0 million in proceeds from issuance of stock in connection with our stock plans.
Previous wording
Net cash used in financing activities decreased by $20.9 million, as compared to the respective prior year period. The decrease was primarily driven by lower net debt repayments of $139.1 million, reflecting $132.2 million of net principal repayments during the six months ended June 30, 2026 compared to $271.3 million in the comparable prior-year period. This decrease was partially offset by $93.2 million of higher common stock repurchases, $12.0 million of higher payments for taxes on net share settlement of equity awards, and $12.8 million of cash dividends paid during the period.
Current wording
Net cash used in financing activities increased by $6.4 million, as compared to the respective prior year period. The increase was primarily driven by $23.3 million of dividends paid during the nine months ended September 30, 2026, under first-ever cash dividend program initiated by our Board of Directors in February 2026, and $14.0 million of higher payments for taxes related to net share settlement of equity awards. These increases were partially offset by $30.8 million of lower net debt repayments and $6 million lower payments for repurchase of common stock compared to prior year.
Previous wording
During the six months ended June 30, 2026 and 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Current wording
During the nine months ended September 30, 2026 and 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Other (expense) income. Other (expense) income decreased by $8.9 million for the three months ended September 30, 2026, as compared to the respective prior year, primarily due to an $8.3 million increase in loss on debt extinguishment recognized in connection with the repurchase of $150.0 million principal amount of our 2030 Senior Notes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Other income (expense). Other income (expense) increased by $15.5 million for the three months ended June 30, 2026, as compared to the respective prior year, primarily due to a $15.0 million net gain recognized in connection with an amended agreement with a partner.