Proto Labs Inc

Previous wording

Our operations are comprised of two geographic operating segments in the United States and Europe.

Current wording

Our operations are comprised of two geographic reportable segments: the United States and Europe.

Previous wording

Revenue is derived from the sale of parts fulfilled through our owned manufacturing factories and worldwide network of premium manufacturing partners. Our product lines consist of Injection Molding, CNC Machining, 3D Printing and Sheet Metal. Injection Molding revenue consists of sales of custom injection molds and injection-molded parts. CNC Machining revenue consists of sales of CNC-machined custom parts. 3D Printing revenue consists of sales of 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal custom parts.

Current wording

Revenue is derived from the sale of parts fulfilled through our owned manufacturing factories and worldwide network of premium manufacturing partners. Our product lines consist of Injection Molding, CNC Machining, 3D Printing and Sheet Metal. Injection Molding revenue consists of sales of custom injection molds and injection-molded parts. CNC Machining revenue consists of sales of CNC-machined and lathe-turned custom parts. 3D Printing revenue consists of sales of 3D-printed parts. Sheet Metal revenue consists of sales of fabricated sheet metal custom parts.

Previous wording

•Accelerate Innovation – reaccelerate innovation across core manufacturing services to drive outsized growth and an accelerated pace of new releases. Leverage differentiated IP and deep manufacturing & engineering talent.

Current wording

•Accelerate Innovation – reaccelerate innovation across core manufacturing services to drive outsized growth and an accelerated pace of new releases. Leverage differentiated intellectual property and deep manufacturing and engineering talent.

Previous wording

•Expand Production – take a deliberate, customer-led approach—prioritizing the right customers, applications, and capabilities. Begin with most strategic customers and scale over time.

Current wording

•Expand Production – take a deliberate, customer-led approach—prioritizing the right customers, applications, and capabilities. Begin with the most strategic customers and scale over time.

Previous wording

Marketing and sales. Marketing and sales expense consists primarily of employee compensation, benefits, commissions, stock-based compensation, marketing demand generation costs such as electronic, print and pay-per-click advertising, trade shows and other related overhead. We expect sales and marketing expense to increase in the future as we increase the number of marketing and sales professionals and marketing demand generation costs targeted to increase our customer base and grow revenue.

Current wording

Marketing and sales. Marketing and sales expense consists primarily of employee compensation, benefits, commissions, stock-based compensation, marketing demand generation costs such as electronic, print and pay-per-click advertising, trade shows and other related overhead. We expect marketing and sales expense to increase in the future as we increase the number of marketing and sales professionals and marketing demand generation costs targeted to increase our customer base and grow revenue.

Previous wording

Costs related to disposal and exit activities. Costs related to disposal and exit activities are driven by our decision to close certain manufacturing facilities in Germany. The expenses consist primarily of operating expenses, including write-down of property and equipment and facility-related charges, and employee severance. Benefits may result from adjustments to initial estimates regarding the nature and timing of disposal and exit activities.

Current wording

Costs related to exit and disposal activities. Costs related to exit and disposal activities are driven by our decision to close certain manufacturing facilities in Germany. The expenses consist primarily of operating expenses, including write-down of property and equipment and facility-related charges, and employee severance. Benefits may result from adjustments to initial estimates regarding the nature and timing of exit and disposal activities.

Previous wording

Stock-based compensation expense included in the statements of operations data above for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Stock-based compensation expense included in the statements of operations data above for the three and nine months ended September 30, 2026 and 2025 was as follows:

Previous wording

Revenue by reportable segment and the related changes for the three months ended June 30, 2026 and 2025 were as follows:

Current wording

Revenue by reportable segment and the related changes for the three months ended September 30, 2026 and 2025 was as follows:

Previous wording

Our revenue increased $14.3 million, or 10.6%, for the three months ended June 30, 2026 compared to the same period in 2025. The growth in revenue was primarily driven by an increase in CNC and Injection Molding revenue in the United States from key growth industries, primarily aerospace and defense, and market dynamics that have driven increases in price. By reportable segment, revenue in the United States increased $12.0 million, or 10.9%, for the three months ended June 30, 2026 compared to the same period in 2025. Revenue in Europe increased $2.2 million, or 9.2%, for the three months ended June 30, 2026 compared to the same period in 2025. International revenue was favorably impacted by $0.4 million during the three months ended June 30, 2026 compared to the same period in 2025 as a result of foreign currency movements, primarily due to the strengthening of the Euro relative to the United States Dollar.

Current wording

Our revenue increased $19.0 million, or 14.0%, for the three months ended September 30, 2026 compared to the same period in 2025. The growth in revenue was primarily driven by an increase in CNC Machining, Injection Molding and 3D Printing revenue in the United States from key growth industries, primarily aerospace and defense, and market dynamics that have driven increases in price. By reportable segment, revenue in the United States increased $16.1 million, or 14.7%, for the three months ended September 30, 2026 compared to the same period in 2025. Revenue in Europe increased $2.9 million, or 11.2%, for the three months ended September 30, 2026 compared to the same period in 2025. International revenue was negatively impacted by $0.3 million during the three months ended September 30, 2026 compared to the same period in 2025 as a result of foreign currency movements, primarily due to the weakening of the Euro relative to the United States Dollar.

Previous wording

During the three months ended June 30, 2026, we served 20,630 unique customer contacts, which is a decrease of 5.3% from the same period in 2025. During the three months ended June 30, 2026, our customer contacts served decreased while our revenue grew. This was primarily due to our mix of customers served in the quarter as compared to the same period in 2025 and our focus on larger, more strategic customers as we strive to be their supplier of choice by serving their custom parts needs through our comprehensive offer. Our revenue per customer contact grew 16.7% for the three months ended June 30, 2026 compared to the same period in 2025.

Current wording

During the three months ended September 30, 2026, we served 20,777 unique customer contacts, which is a decrease of 2.2% from the same period in 2025. During the three months ended September 30, 2026, our customer contacts served decreased while our revenue grew. This was primarily due to changes in customer mix as compared to the same period in 2025 and our focus on larger, more strategic customers as we strive to be their supplier of choice by serving their custom parts needs through our comprehensive offer. Our revenue per customer contact grew 16.6% for the three months ended September 30, 2026 compared to the same period in 2025.

Previous wording

By product line, our revenue increase was driven by a 13.6% increase in CNC Machining revenue, a 13.1% increase in Injection Molding revenue, and a 3.7% increase in Sheet Metal revenue, partially offset by a 2.6% decrease in 3D Printing revenue for the three months ended June 30, 2026 compared to the same period in 2025.

Current wording

By product line, our revenue increase was primarily driven by a 16.4% increase in CNC Machining revenue, a 12.5% increase in Injection Molding revenue, an 11.4% increase in 3D Printing revenue and a 283.7% increase in Other revenue, partially offset by a 4.7% decrease in Sheet Metal revenue, for the three months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Cost of Revenue. Cost of revenue increased $4.7 million, or 6.3%, for the three months ended June 30, 2026 compared to the same period in 2025, while revenue increased 10.6% for the three months ended June 30, 2026 compared to the same period in 2025. The increase in the cost of revenue of $4.7 million was primarily driven by higher revenue volumes resulting in increases of $3.2 million in personnel and related costs, primarily due to increases in head count and overtime costs and contract labor to meet increased order volume, $1.2 million in raw material and production costs, and $0.3 million of equipment and facility related costs during the three months ended June 30, 2026 compared to the same period in 2025.

Current wording

Cost of Revenue. Cost of revenue increased $11.6 million, or 15.6%, for the three months ended September 30, 2026 compared to the same period in 2025, while revenue increased 14.0% for the three months ended September 30, 2026 compared to the same period in 2025. The increase in the cost of revenue of $11.6 million was primarily driven by higher revenue volumes resulting in increases of $5.4 million in personnel and related costs, primarily due to increases in head count and overtime costs and contract labor to meet increased order volume, $4.8 million in raw material and production costs, and $1.4 million of equipment and facility related costs during the three months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Gross Profit and Gross Margin. Gross profit increased $9.6 million, or 16.0%, for the three months ended June 30, 2026 compared to the same period in 2025. Gross margin increased to 46.4% in the three months ended June 30, 2026 from 44.3% in the same period in 2025.

Current wording

Gross Profit and Gross Margin. Gross profit increased $7.4 million, or 12.0%, for the three months ended September 30, 2026 compared to the same period in 2025. Gross margin decreased to 44.5% in the three months ended September 30, 2026 from 45.3% in the same period in 2025.

Previous wording

Research and Development. Our research and development expenses decreased $0.4 million, or 3.4%, during the three months ended June 30, 2026 compared to the same period in 2025 primarily due to decreases in personnel and related costs of $0.9 million, partially offset by increases of $0.3 million in professional services and $0.2 million in operating costs.

Current wording

Research and Development. Our research and development expenses increased $0.3 million, or 2.9%, during the three months ended September 30, 2026 compared to the same period in 2025 primarily due to increases of $0.3 million in operating costs and $0.2 million in professional services, partially offset by decreases in personnel and related costs of $0.2 million.

Previous wording

General and Administrative. Our general and administrative expenses increased $0.9 million, or 4.8%, during the three months ended June 30, 2026 compared to the same period in 2025 primarily due to increases in professional services of $0.7 million and $0.5 million of administrative costs, partially offset by decreases of $0.2 million in stock-based compensation and $0.1 million of personnel and related costs.

Current wording

General and Administrative. Our general and administrative expenses increased $1.1 million, or 6.3%, during the three months ended September 30, 2026 compared to the same period in 2025 primarily due to increases of $0.9 million of personnel and related costs, $0.3 million in administrative costs and $0.1 million in professional services, partially offset by a decrease of $0.2 million in stock-based compensation.

Previous wording

Restructuring and transformation costs. Restructuring and transformation costs include expenses related to actions taken to improve operational efficiency and streamline the organization and resulted in $0.9 million in operating expenses during 2026 primarily related to professional services and severance and related benefit costs. We had no restructuring and transformation costs for the same period in 2025.

Current wording

Restructuring and transformation costs. Restructuring and transformation costs include expenses related to actions taken to improve operational efficiency and streamline the organization and resulted in $0.4 million in operating expenses during three months ended September 30, 2026 primarily related to severance and related benefit costs and professional services. We had no restructuring and transformation costs for the same period in 2025.

Previous wording

Other income, net. We recognized other income, net of $1.2 million for the three months ended June 30, 2026, a decrease of $0.5 million compared to the same period in 2025. Other income, net for the current quarter primarily consisted of $1.3 million in interest income on investments, and $0.1 million of other income partially offset by $0.2 million of foreign currency losses. Other income, net for the three months ended June 30, 2025 primarily consisted of $1.1 million in interest income on investments, $0.5 million of foreign currency gains and $0.1 million of other income.

Current wording

Other income, net. We recognized other income, net of $1.8 million for the three months ended September 30, 2026, an increase of $0.3 million compared to the same period in 2025. Other income, net for the three months ended September 30, 2026 primarily consisted of $1.4 million in interest income on investments, and $0.4 million of other income. Other income, net for the three months ended September 30, 2025 primarily consisted of $1.2 million in interest income on investments and $0.2 million of other income.

Previous wording

Provision for Income Taxes. Our effective tax rate of 27.4% for the three months ended June 30, 2026 decreased 6.3% compared to 33.7% for the same period in 2025. The decrease in the effective tax rate was primarily due to an increase in tax benefits from the vesting of restricted stock and the exercise of stock options. Our income tax provision of $3.5 million for the three months ended June 30, 2026 increased $1.2 million as compared to our income tax provision of $2.2 million for the same period in 2025.

Current wording

Provision for Income Taxes. Our effective tax rate of 27.4% for the three months ended September 30, 2026 decreased 2.2% compared to 29.6% for the same period in 2025. The decrease in the effective tax rate was primarily due to an operating rate catch-up credit driven by strong pre-tax income and an offset by reduced excess tax benefits on stock-based compensation. Our income tax provision of $4.4 million for the three months ended September 30, 2026 increased $1.4 million as compared to our income tax provision of $3.0 million for the same period in 2025.

Previous wording

Revenue by reportable segment and the related changes for the six months ended June 30, 2026 and 2025 were as follows:

Current wording

Revenue by reportable segment and the related changes for the nine months ended September 30, 2026 and 2025 was as follows:

Previous wording

Our revenue increased $27.4 million, or 10.5%, for the six months ended June 30, 2026 compared to the same period in 2025. By reportable segment, revenue in the United States increased $23.9 million, or 11.3%, for the six months ended June 30, 2026 compared to the same period in 2025. Revenue in Europe increased $3.5 million, or 7.0%, for the six months ended June 30, 2026 compared to the same period in 2025. International revenues were favorably impacted by $2.6 million during the six months ended June 30, 2026 compared to the same period in 2025 as a result of foreign currency movements, primarily due to the strengthening of the British Pound and Euro relative to the United States Dollar.

Current wording

Our revenue increased $46.4 million, or 11.7%, for the nine months ended September 30, 2026 compared to the same period in 2025. By reportable segment, revenue in the United States increased $40.0 million, or 12.5%, for the nine months ended September 30, 2026 compared to the same period in 2025. Revenue in Europe increased $6.4 million, or 8.4%, for the nine months ended September 30, 2026 compared to the same period in 2025. International revenue was favorably impacted by $2.3 million during the nine months ended September 30, 2026 compared to the same period in 2025 as a result of foreign currency movements, primarily due to the strengthening of the British Pound and Euro relative to the United States Dollar.

Previous wording

During the six months ended June 30, 2026, we served 31,069 unique customer contacts, a decrease of 6.2% from the same period in 2025. This was primarily due to our mix of customers served in the quarter as compared to the same period in 2025 and our focus on larger, more strategic customers as we strive to be their supplier of choice by serving their custom parts needs through our comprehensive offer. Our revenue per customer contact grew 17.8% for the six months ended June 30, 2026 compared to the same period in 2025.

Current wording

During the nine months ended September 30, 2026, we served 40,129 unique customer contacts, a decrease of 4.2% from the same period in 2025. This was primarily due to changes in customer mix as compared to the same period in 2025 and our focus on larger, more strategic customers as we strive to be their supplier of choice by serving their custom parts needs through our comprehensive offer. Our revenue per customer contact grew 16.5% for the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

By product line, our revenue increase was driven by a 16.4% increase in CNC Machining revenue, an 8.9% increase in Injection Molding revenue and a 3.5% increase in Sheet Metal revenue, partially offset by a 0.7% decrease in 3D Printing revenue in each case for the six months ended June 30, 2026 compared to the same period in 2025.

Current wording

By product line, our revenue increase was primarily driven by a 16.4% increase in CNC Machining revenue, a 10.1% increase in Injection Molding revenue, a 3.3% increase in 3D Printing revenue, a 96.8% increase in Other revenue and a 0.8% increase in Sheet Metal revenue, in each case for the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Cost of Revenue. Cost of revenue increased $9.9 million, or 6.8%, for the six months ended June 30, 2026 compared to the same period in 2025, which was lower than the rate of revenue increase of 10.5% for the six months ended June 30, 2026 compared to the same period in 2025. The increase in cost of revenue of $9.9 million was primarily driven by higher revenue volumes resulting in increases of $5.1 million in raw material and production costs, $5.0 million in personnel and related costs, primarily due to increases in head count and overtime costs and contract labor to meet increased order volume, partially offset by decreases of $0.2 million in equipment and facility related costs during the six months ended June 30, 2026 compared to the same period in 2025.

Current wording

Cost of Revenue. Cost of revenue increased $21.5 million, or 9.8%, for the nine months ended September 30, 2026 compared to the same period in 2025, which was lower than the rate of revenue increase of 11.7% for the nine months ended September 30, 2026 compared to the same period in 2025. The increase in cost of revenue of $21.5 million was primarily driven by higher revenue volumes resulting in increases of $10.4 million in personnel and related costs, primarily due to increases in head count and overtime costs and contract labor to meet increased order volume, $9.9 million in raw material and production costs and $1.2 million in equipment and facility-related costs during the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Gross Profit and Gross Margin. Gross profit increased from $115.5 million in the six months ended June 30, 2025 to $132.9 million in the six months ended June 30, 2026. Gross margin increased from 44.2% in the six months ended June 30, 2025 to 46.0% in the six months ended June 30, 2026.

Current wording

Gross Profit and Gross Margin. Gross profit increased from $176.8 million in the nine months ended September 30, 2025 to $201.6 million in the nine months ended September 30, 2026. Gross margin increased from 44.6% in the nine months ended September 30, 2025 to 45.5% in the nine months ended September 30, 2026.

Previous wording

Marketing and Sales. Our marketing and sales expenses increased $1.0 million during the three months ended June 30, 2026 compared to the same period in 2025 primarily due to increases in marketing program costs of $0.6 million and $0.3 million of personnel and related costs.

Current wording

Marketing and Sales. Marketing and sales expenses increased $1.9 million, or 2.7%, during the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to increases of $1.4 million of marketing program costs and $0.5 million in personnel and related costs.

Previous wording

Research and Development. Our research and development expenses decreased $0.5 million, or 2.1%, during the six months ended June 30, 2026 compared to the same period in 2025 primarily due to personnel and related cost decreases of $1.2 million, which were partially offset by increases in other operating costs of $0.5 million and professional services of $0.2 million.

Current wording

Research and Development. Our research and development expenses decreased $0.1 million, or 0.4%, during the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to a decrease of $1.3 million in personnel and related costs, partially offset by increases of $0.7 million in operating costs and $0.5 million in professional services.

Previous wording

General and Administrative. Our general and administrative expenses increased $1.1 million, or 3.0%, during the six months ended June 30, 2026 compared to the same period in 2025 primarily due to increases in$1.1 million of professional services, $0.4 million of personnel and related costs, administrative costs of $0.2 million, partially offset by decreases of $0.6 million in stock-based compensation.

Current wording

General and Administrative. Our general and administrative expenses increased $2.1 million, or 4.1%, during the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to increases of $1.4 million in administrative costs, $1.3 million in personnel and related costs and $0.2 million in professional services, partially offset by a decrease of $0.8 million in stock-based compensation.

Previous wording

Restructuring and transformation costs. Restructuring and transformation costs include expenses related to actions taken to improve operational efficiency and streamline the organization and resulted in $2.3 million in operating expenses during 2026 primarily related to severance and related benefit costs, and professional services. We had no restructuring and transformation costs for the same period in 2025.

Current wording

Restructuring and transformation costs. Restructuring and transformation costs include expenses related to actions taken to improve operational efficiency and streamline the organization and resulted in $2.8 million in operating expenses during the nine months ended September 30, 2026, which primarily consisted of $1.7 million of severance and related benefit costs and $1.1 million of professional services. We had no restructuring and transformation costs for the same period in 2025.

Previous wording

Costs related to exit and disposal. Costs related to disposal and exit activities are primarily driven by our decision to close certain manufacturing facilities in Germany. Our costs related to exit and disposal activities increased $0.8 million during the six months ended June 30, 2026 compared to the same period in 2025 primarily due to the write-down of the abandoned facility right-of-use asset of $0.9 million. Costs related to exit and disposal activities for the six months ended June 30, 2025 consisted of $0.2 million expense related to the write-down of fixed assets and $0.1 million in personnel and related cost benefits.

Current wording

Costs related to exit and disposal activities. Costs related to exit and disposal activities are primarily driven by our decision to close certain manufacturing facilities in Germany. Our costs related to exit and disposal activities increased $0.8 million during the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to the write-down of the abandoned facility right-of-use asset of $0.9 million. Costs related to exit and disposal activities for the nine months ended September 30, 2025 consisted of $0.2 million expense related to the write-down of property and equipment and $0.1 million in professional services, partially offset by $0.1 million in personnel and related cost benefits. These items are the result of changes from the estimated amounts accrued in 2024 and the timing of employee separation payments.

Previous wording

Other income, net. We recognized other income, net of $2.7 million for the six months ended June 30, 2026, a decrease of $0.4 million compared to other income, net of $3.2 million for the same period in 2025. Other income, net for the six months ended June 30, 2026 primarily consisted of $2.5 million in interest income on investments, and $0.5 million of other income partially offset by $0.2 million of foreign currency losses. Other income, net for the six months ended June 30, 2025 primarily consisted of $2.2 million in interest income on investments, $0.5 million of foreign currency gains and $0.4 million of other income.

Current wording

Other income, net. We recognized other income, net of $4.5 million for the nine months ended September 30, 2026, a decrease of $0.1 million compared to other income, net of $4.6 million for the same period in 2025. Other income, net for the nine months ended September 30, 2026 primarily consisted of $3.9 million in interest income on investments and $0.8 million of other income partially offset by $0.2 million of foreign currency losses. Other income, net for the nine months ended September 30, 2025 primarily consisted of $3.5 million in interest income on investments, $0.6 million of other income and $0.5 million of foreign currency gains.

Previous wording

Provision for Income Taxes. Our effective tax rate of 27.8% for the six months ended June 30, 2026 decreased 8.8% compared to 36.6% for the same period in 2025. The decrease in the effective tax rate was primarily due to an increase in tax benefits from the vesting of restricted stock and the exercise of stock options, as well as tax benefits recognized on losses incurred by a newly established entity in India. Our income tax provision of $6.7 million for the six months ended June 30, 2026 increased $2.0 million compared to our income tax provision of $4.6 million for the six months ended June 30, 2025.

Current wording

Provision for Income Taxes. Our effective tax rate of 27.7% for the nine months ended September 30, 2026 decreased 5.8% compared to 33.5% for the same period in 2025. The decrease in the effective tax rate was primarily due to a favorable shift in the geographic mix of pre-tax income toward lower-tax jurisdictions and strong domestic pre-tax income. Our income tax provision of $11.1 million for the nine months ended September 30, 2026 increased $3.4 million compared to our income tax provision of $7.7 million for the nine months ended September 30, 2025.

Previous wording

The following table summarizes our cash flows during the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our cash flows during the nine months ended September 30, 2026 and 2025:

Previous wording

Historically, we have primarily financed our operations and capital expenditures through cash flow from operations. We had cash and cash equivalents of $127.9 million as of June 30, 2026, an increase of $17.1 million from December 31, 2025. The increase in our cash was primarily due to cash provided by operating activities of $33.0 million and $7.3 million of proceeds from issuance of common stock related to equity plans, which were partially offset by net purchases of property, equipment and other capital assets of $8.5 million, $6.0 million in purchases of shares withheld for tax obligations associated with equity transactions, $5.0 million in repurchases of common stock and net purchases of marketable securities of $3.5 million.

Current wording

Historically, we have primarily financed our operations and capital expenditures through cash flow from operations. We had cash and cash equivalents of $133.8 million as of September 30, 2026, an increase of $23.0 million from December 31, 2025. The increase in our cash was primarily due to cash provided by operating activities of $55.7 million and $8.0 million of proceeds from issuance of common stock related to equity plans, which were partially offset by net purchases of property, equipment and other capital assets of $14.3 million, $6.1 million in purchases of shares withheld for tax obligations associated with equity transactions, $10.0 million in repurchases of common stock and net purchases of marketable securities of $10.0 million.

Previous wording

Cash flows from operating activities were $33.0 million during the six months ended June 30, 2026 and primarily consisted of net income of $17.3 million, adjusted for certain non-cash items, including depreciation and amortization of $16.2 million, stock-based compensation expense of $7.3 million, increases in deferred taxes of $4.1 million and impairment on a leased facility of $0.9 million, which were partially offset by changes in operating assets and liabilities and other items totaling $12.8 million. Cash flows from operating activities were $29.0 million during the six months ended June 30, 2025 and primarily consisted of net income of $8.0 million, adjusted for certain non-cash items, including depreciation and amortization of $17.3 million, stock-based compensation expense of $8.3 million and an impairment on a leased facility and fixed asset of $0.4 million, which were partially offset by deferred taxes of $4.0 million and changes in operating assets and liabilities and other items totaling $1.0 million.

Current wording

Cash flows from operating activities were $55.7 million during the nine months ended September 30, 2026 and primarily consisted of net income of $29.0 million, adjusted for certain non-cash items, including depreciation and amortization of $24.3 million, stock-based compensation expense of $10.7 million, increases in deferred taxes of $5.6 million and impairment on a leased facility of $0.9 million, which were partially offset by changes in operating assets and liabilities and other items totaling $14.7 million. Cash flows from operating activities were $58.1 million during the nine months ended September 30, 2025 and primarily consisted of net income of $15.2 million, adjusted for certain non-cash items, including depreciation and amortization of $25.7 million, stock-based compensation expense of $11.9 million, deferred taxes of $2.4 million, changes in operating assets and liabilities and other items totaling $2.4 million and an impairment on a leased facility and property and equipment of $0.4 million.

Previous wording

Cash flows from operating activities increased $4.0 million during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to increases in net income of $9.2 million, increases in deferred taxes of $8.0 million and an increase of $0.5 million in leased facility impairment charges, which were partially offset by changes in operating assets and liabilities and other items totaling $11.7 million, decreases in depreciation and amortization of $1.1 million and decreases in stock-based compensation of $0.9 million.

Current wording

Cash flows from operating activities decreased $2.3 million during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to decreases from changes in operating assets and liabilities and other items totaling $17.1 million, depreciation and amortization of $1.4 million and stock-based compensation of $1.3 million, partially offset by increases in net income of $13.8 million, deferred taxes of $3.2 million and $0.5 million in leased facility impairment charges.

Previous wording

Cash used in investing activities was $12.0 million during the six months ended June 30, 2026, consisting of $8.5 million for net purchases of property, equipment and other capital assets and $3.5 million of net purchases of marketable securities.

Current wording

Cash used in investing activities was $24.3 million during the nine months ended September 30, 2026, consisting of $14.3 million for net purchases of property, equipment and other capital assets and $10.0 million of net purchases of marketable securities.

Previous wording

Cash used in investing activities was $3.6 million during the six months ended June 30, 2025, consisting of $2.7 million for net purchases of property, equipment and other capital assets and $0.8 million of purchases of marketable securities, net of proceeds from call redemptions and maturities.

Current wording

Cash used in investing activities was $7.8 million during the nine months ended September 30, 2025, consisting of $6.0 million for net purchases of property, equipment and other capital assets and $1.8 million of purchases of marketable securities, net of proceeds from call redemptions and maturities.

Previous wording

Cash used in financing activities was $3.9 million during the six months ended June 30, 2026, consisting of $6.0 million in purchases of shares withheld for tax obligations associated with equity transactions, $5.0 million in repurchases of common stock and $0.2 million for repayments of finance lease obligations, partially offset by $7.3 million in proceeds related to equity plans.

Current wording

Cash used in financing activities was $8.3 million during the nine months ended September 30, 2026, consisting of $10.0 million in repurchases of common stock, $6.1 million in purchases of shares withheld for tax obligations associated with equity transactions and $0.2 million for repayments of finance lease obligations, partially offset by $8.0 million in proceeds related to equity plans.

Previous wording

Cash used in financing activities was $25.2 million during the six months ended June 30, 2025, consisting of $24.0 million in repurchases of common stock, $3.1 million in purchases of shares withheld for tax obligations associated with equity transactions and $0.2 million for repayments of finance lease obligations, which were partially offset by $2.1 million in proceeds related to equity plans.

Current wording

Cash used in financing activities was $35.9 million during the nine months ended September 30, 2025, consisting of $36.7 million in repurchases of common stock, $3.1 million in purchases of shares withheld for tax obligations associated with equity transactions and $0.2 million for repayments of finance lease obligations, which were partially offset by $4.2 million in proceeds related to equity plans.

Previous wording

We have adopted various accounting policies to prepare the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make estimates, judgments and assumptions. Our significant accounting policies and estimates are disclosed in Note 2 to the Consolidated Financial Statements included Part II, Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2025. There were no material changes to our critical accounting policies and estimates during the six months ended June 30, 2026.

Current wording

We have adopted various accounting policies to prepare the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make estimates, judgments and assumptions. Our significant accounting policies and estimates are disclosed in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. There were no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2026.