WORKIVA INC

Previous wording

Workiva’s mission is to power transparent reporting for a better world. We believe that all stakeholders, including consumers, employees, shareholders, and regulators, expect more from business – more action, transparency, and disclosure of financial and non-financial information. We build solutions to meet that demand and streamline processes, connect data and teams, and ensure consistency – all within the Workiva platform, the world’s leading cloud platform for assured integrated reporting. Additionally, we offer the only unified software-as-a-service (“SaaS”) platform that brings customers’ financial reporting, Environmental, Social, and Governance (“ESG”), and Governance, Risk, and Compliance (“GRC”) together in a controlled, secure, audit-ready platform.

Current wording

Workiva is on a mission to power transparent reporting for a better world. We build and deliver the world's leading cloud platform for assured integrated reporting to meet stakeholder demands for action, transparency, and disclosure of financial and non-financial data. Workiva offers the only unified software-as-a-service (“SaaS”) platform brings customers’ financial reporting, Governance, Risk, and Compliance (“GRC”) and Environmental, Social, and Governance (“ESG”) data together in a controlled, secure, audit-ready platform. Our platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency.

Previous wording

Workiva provides more than 6,100 organizations across the globe with SaaS platform solutions to help solve some of the most complex reporting and disclosure challenges. While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (Financial Reporting, ESG, and GRC) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).

Current wording

Workiva provides more than 6,200 organizations across the globe with SaaS platform solutions to help solve some of the most complex reporting and disclosure challenges. While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (Financial Reporting, ESG, and GRC) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).

Previous wording

We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,680 at June 30, 2024 from 2,508 at June 30, 2023, an increase of 6.9%.

Current wording

We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,751 at September 30, 2024 from 2,519 at September 30, 2023, an increase of 9.2%.

Previous wording

We have achieved significant revenue growth in recent periods. Our revenue grew to $177.5 million and $353.2 million during the three and six months ended June 30, 2024, respectively from $155.0 million and $305.2 million during the three and six months ended June 30, 2023, respectively. We incurred net losses of $17.5 million and $29.2 million during the three and six months ended June 30, 2024, respectively compared to $20.9 million and $67.1 million during the three and six months ended June 30, 2023, respectively.

Current wording

We have achieved significant revenue growth in recent periods. Our revenue grew to $185.6 million and $538.8 million during the three and nine months ended September 30, 2024, respectively from $158.2 million and $463.4 million during the three and nine months ended September 30, 2023, respectively. We incurred net losses of $17.0 million and $46.2 million during the three and nine months ended September 30, 2024, respectively compared to $56.3 million and $123.3 million during the three and nine months ended September 30, 2023, respectively.

Previous wording

Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and performance reporting. In addition, we market to teams responsible for environmental, social and governance reporting, and governance, risk and compliance programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.

Current wording

Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and performance reporting. In addition, we market to teams responsible for ESG reporting, and GRC programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.

Previous wording

Our subscription and support revenue retention rate was 97.6% as of June 30, 2024, which remained flat from June 30, 2023. We believe that our success in maintaining a high rate of revenue retention is attributable primarily to our robust technology platform and strong customer service. Customers whose securities were deregistered due to merger or acquisition or financial distress accounted for just over half of our revenue attrition in the latest quarter.

Current wording

Our subscription and support revenue retention rate was 97.5% as of September 30, 2024, down slightly from 97.7% as of September 30, 2023. We believe that our success in maintaining a high rate of revenue retention is attributable primarily to our robust technology platform and strong customer service. Customers whose securities were deregistered due to merger or acquisition or financial distress accounted for over half of our revenue attrition in the latest quarter.

Previous wording

Our subscription and support revenue retention rate including add-ons was 109.2% as of the quarter ended June 30, 2024, down from 111.1% as of June 30, 2023.

Current wording

Our subscription and support revenue retention rate including add-ons was 110.5% as of the quarter ended September 30, 2024, down from 112.0% as of September 30, 2023.

Previous wording

We generate revenue through the sale of subscriptions to our cloud-based software and the delivery of professional services. We serve a wide range of customers in many industries, and our revenue is not concentrated with any single customer or small group of customers. For the six months ended June 30, 2024 and 2023, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 10% of our revenue in the aggregate.

Current wording

We generate revenue through the sale of subscriptions to our cloud-based software and the delivery of professional services. We serve a wide range of customers in many industries, and our revenue is not concentrated with any single customer or small group of customers. For the nine months ended September 30, 2024 and 2023, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 10% of our revenue in the aggregate.

Previous wording

Professional Services Revenue. We believe our professional services facilitate the sale of our subscription service to certain customers. To date, most of our professional services have consisted of document set up, XBRL tagging, and consulting to help our customers with business processes and best practices for using our platform. Our professional services are not required for customers to utilize our solution. We recognize revenue for document set ups when the service is complete and control has transferred to the customer. Revenues from XBRL tagging and consulting services are recognized as the services are performed.

Current wording

Professional Services Revenue. We believe our professional services facilitate the sale of our subscription service to certain customers. To date, most of our professional services have consisted of document set up, XBRL tagging, and consulting to help our customers with business processes and best practices for using our platform. Our professional services are not required for customers to utilize our solution. We recognize revenue for document set up when the service is complete and control has transferred to the customer. Revenues from XBRL tagging and consulting services are recognized as the services are performed.

Previous wording

Comparison of Three and Six Months Ended June 30, 2024 and 2023

Current wording

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

Previous wording

Total revenue increased $22.5 million for the three months ended June 30, 2024 compared to the same quarter a year ago due primarily to a $24.0 million increase in subscription and support revenue. Growth in subscription and support revenue in the second quarter was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services decreased $1.5 million for the three months ended June 30, 2024 compared to the same quarter a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.

Current wording

Total revenue increased $27.4 million for the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to a $27.6 million increase in subscription and support revenue. Growth in subscription and support revenue in the third quarter was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services was relatively flat for the three months ended September 30, 2024 compared to the same quarter a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.

Previous wording

Total revenue increased $48.0 million for the six months ended June 30, 2024 compared to the same period a year ago due primarily to a $49.3 million increase in subscription and support revenue. Growth in subscription and support revenue was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services decreased $1.3 million for the six months ended June 30, 2024 compared to the same period a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.

Current wording

Total revenue increased $75.4 million for the nine months ended September 30, 2024 compared to the same period a year ago due primarily to a $76.9 million increase in subscription and support revenue. Growth in subscription and support revenue was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services decreased $1.5 million for the nine months ended September 30, 2024 compared to the same period a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.

Previous wording

Cost of revenue increased $1.7 million during the three months ended June 30, 2024 compared to the same quarter a year ago. Subscription and support cost of revenue increased $2.9 million due primarily to $2.4 million in higher cash-based compensation and benefits costs and $0.5 million of additional stock-based compensation. The increase in compensation resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue decreased $1.2 million due primarily to a $0.8 million decrease in cash-based compensation and benefits costs. The decrease was primarily driven by a decrease in employee headcount as we continue to transition consulting and other services to our partners.

Current wording

Cost of revenue increased $5.3 million during the three months ended September 30, 2024 compared to the same quarter a year ago. Subscription and support cost of revenue increased $5.8 million due primarily to $3.5 million in higher cash-based compensation and benefits costs and $0.9 million of additional stock-based compensation. The increase in compensation was primarily driven by a modest increase in employee headcount. Amortization of acquired intangible assets for Sustain.Life was $0.6 million. Professional services cost of revenue decreased $0.4 million due primarily to a $0.5 million decrease in cash-based compensation and benefits costs. The decrease was primarily driven by a decrease in employee headcount as we continue to transition consulting and other services to our partners.

Previous wording

Cost of revenue increased $4.7 million during the six months ended June 30, 2024 compared to the same period a year ago. Subscription and support cost of revenue increased $6.7 million due primarily to $4.9 million in higher cash-based compensation and benefits costs, $1.1 million of additional stock-based compensation, and a $0.4 million increase in software expense. The increases in compensation and software expense resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue decreased $2.0 million due primarily to a $1.6 million decrease in cash-based compensation and benefits costs. The decrease was primarily driven by a decrease in employee headcount as we continue to transition consulting and other services to our partners.

Current wording

Cost of revenue increased $10.0 million during the nine months ended September 30, 2024 compared to the same period a year ago. Subscription and support cost of revenue increased $12.4 million due primarily to $8.4 million in higher cash-based compensation and benefits costs, $2.0 million of additional stock-based compensation, and a $0.5 million increase in travel expense. The increase in compensation was primarily driven by a modest increase in employee headcount. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount. Amortization of acquired intangible assets for Sustain.Life was $0.6 million. Professional services cost of revenue decreased $2.4 million due primarily to a $2.1 million decrease in cash-based compensation and benefits costs and a $0.7 million decrease in professional service fees. The decrease was primarily driven by a decrease in employee headcount and staff augmentation as we continue to transition consulting and other services to our partners.

Previous wording

Research and development expenses increased $5.4 million during the six months ended June 30, 2024 compared to the same period a year ago due primarily to $4.1 million in higher cash-based compensation and benefits, $0.3 million of additional stock-based compensation, and a $1.0 million increase in professional service fees partially offset by a $0.4 million decrease in software expense. The increases in compensation and professional service fees resulted primarily from our continued investment in and support of our platform and solutions.

Current wording

Research and development expenses increased $6.7 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to $4.0 million in higher cash-based compensation and benefits, $1.5 million of additional stock-based compensation and a $1.0 million increase in professional service fees The increase in compensation was primarily driven by a modest increase in employee headcount. The increase in professional service fees resulted primarily from our continued investment in and support of our platform and solutions.

Previous wording

Research and development expenses increased $5.7 million during the three months ended June 30, 2024 compared to the same quarter a year ago due primarily to $2.0 million in higher cash-based compensation and benefits, $0.3 million of additional stock-based compensation, a $1.9 million increase in travel expense, and a $1.0 million increase in professional service fees. The increases in compensation and professional service fees resulted primarily from our continued investment in and support of our platform and solutions. The increase in travel expense was primarily due to our annual research and development event which was held in the second quarter of 2024. In the prior year the event was held in the first quarter.

Current wording

Research and development expenses increased $12.1 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to $8.1 million in higher cash-based compensation and benefits, $1.8 million of additional stock-based compensation, and a $2.1 million increase in professional service fees. The remaining increase in compensation was primarily driven by a modest increase in employee headcount. The increase in professional service fees resulted primarily from our continued investment in and support of our platform and solutions.

Previous wording

Sales and marketing expenses increased $24.7 million during the six months ended June 30, 2024 compared to the same period a year ago due primarily to $16.3 million in higher cash-based compensation and benefits, $2.9 million of additional stock-based compensation, a $2.2 million increase in travel expense, a $1.8 million increase in professional service fees, and a $1.0 million increase in public relations. The increase in compensation was primarily due to an increase in employee headcount and sales commissions as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to our annual internal sales and marketing event and a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising was the result of our continued investment in and support of our platform and solutions.

Current wording

Sales and marketing expenses increased $17.2 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to $8.0 million in higher cash-based compensation and benefits, $2.8 million of additional stock-based compensation, a $1.9 million increase in travel expense, a $1.7 million increase in professional service fees, and a $2.5 million increase in marketing and advertising. During the third quarter of 2024 we recognized an additional $1.8 million in cash-based and stock-based compensation pursuant to certain severance obligations. The remaining increase in compensation was primarily due to an increase in employee headcount as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising was the result of our continued investment in and support of our platform and solutions.

Previous wording

Sales and marketing expenses increased $12.8 million during the three months ended June 30, 2024 compared to the same quarter a year ago due primarily to $8.1 million in higher cash-based compensation and benefits, $1.8 million of additional stock-based compensation, a $1.0 million increase in travel expense, a $0.9 million increase in professional service fees, and a $0.8 million increase in marketing and advertising. The increase in compensation was primarily due to an increase in employee headcount as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising was the result of our continued investment in and support of our platform and solutions.

Current wording

Sales and marketing expenses increased $41.9 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to $24.3 million in higher cash-based compensation and benefits, $5.7 million of additional stock-based compensation, a $4.1 million increase in travel expense, a $3.6 million increase in professional service fees, and a $3.5 million increase in marketing and advertising. The increase in compensation was primarily due to an increase in employee headcount and sales commissions as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising were the result of our continued investment in and support of our platform and solutions.

Previous wording

General and administrative expenses increased $2.7 million during the three months ended June 30, 2024 compared to the same quarter a year ago due primarily to a $0.4 million increase in cash-based compensation and benefits, $2.0 million of additional stock-based compensation, and a $0.9 million increase in professional service fees. In addition, during the second quarter of 2023 we recorded one-time fees of $0.6 million related to the cancellation of certain events which did not recur in the second quarter of 2024. The increase in compensation was primarily due to additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The remaining increase in compensation was due to a modest increase in employee headcount. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.

Current wording

General and administrative expenses increased $4.5 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to a $0.9 million increase in cash-based compensation and benefits, $2.6 million of additional stock-based compensation, and a $0.8 million increase in recruiting and professional service fees. The increase in compensation was primarily due to additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The remaining increase in compensation was due to a modest increase in employee headcount. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.

Previous wording

General and administrative expenses decreased $15.0 million during the six months ended June 30, 2024 compared to the same period a year ago due primarily to a $1.0 million decrease in cash-based compensation and benefits and a $14.8 million decrease in stock-based compensation partially offset by a $0.6 million increase in professional service fees. In addition, during the six months ended June 30, 2023, we recorded a one-time benefit of $1.0 million related to a goods and services tax refund as well as one-time fees of $0.6 million related to the cancellation of certain events which did not recur in 2024. The decrease in compensation during the first six months of 2024 is primarily due to the recognition of $1.4 million and $18.1 million in cash-based and stock-based compensation, respectively, pursuant to certain transition agreements with former executives during the first quarter of 2023 which did not recur in 2024, partially offset by a modest increase in employee headcount and an increase in performance-based restricted stock expense driven by additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.

Current wording

General and administrative expenses decreased $10.4 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to a $12.2 million decrease in stock-based compensation partially offset by a $2.0 million increase in professional service fees. In addition, during the nine months ended September 30, 2023, we recorded a one-time benefit of $1.0 million related to a goods and services tax refund as well as one-time fees of $0.6 million related to the cancellation of certain events which did not recur in 2024. The decrease in compensation during the first nine months of 2024 is primarily due to the recognition of $1.4 million and $18.1 million in cash-based and stock-based compensation, respectively, pursuant to certain transition agreements with former executives during the first quarter of 2023 which did not recur in 2024, partially offset by a modest increase in employee headcount and an increase in performance-based restricted stock expense driven by additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.

Previous wording

Interest Income, Interest Expense and Other (Expense) Income, Net

Current wording

Interest Income, Interest Expense and Other Expense, Net

Previous wording

During the three months ended June 30, 2024, interest income increased $5.8 million compared to the same quarter a year ago due primarily to an increase in our investment balance, facilitated by the issuance of our 2028 convertible notes, coupled with higher interest rates. Interest expense increased $1.7 million compared to the same quarter a year ago due primarily to the issuance of our 2028 convertible notes. Other (expense) income, net decreased $0.4 million compared to the same quarter a year ago due primarily to gains on foreign currency transactions as well as losses on the sale of available-for-sale securities from the second quarter of 2023 which did not recur in the second quarter of 2024.

Current wording

During the three months ended September 30, 2024, interest income increased $2.0 million compared to the same quarter a year ago due primarily to an increase in our investment balance, coupled with higher interest rates. During the three months ended September 30, 2023, we recorded a $45.1 million loss on induced conversion from the partial repurchase of our convertible senior notes due in 2026 (the "2026 Notes"), which did not recur in 2024 and contributed primarily to the decrease in interest expense compared to the same quarter a year ago. Other expense, net increased $0.3 million compared to the same quarter a year ago due primarily to losses on foreign currency transactions.

Previous wording

During the six months ended June 30, 2024, interest income increased $12.5 million compared to the same period a year ago due primarily to an increase in our investment balance, facilitated by the issuance of our 2028 convertible notes, coupled with higher interest rates. Interest expense increased $3.5 million compared to the same period a year ago due primarily to the issuance of our 2028 convertible notes. Other (expense) income, net decreased $1.4 million compared to the same period a year ago due primarily to gains on foreign currency transactions as well as losses on the sale of available-for-sale securities from the first six months of 2023 which did not recur in 2024.

Current wording

During the nine months ended September 30, 2024, interest income increased $14.5 million compared to the same period a year ago due primarily to an increase in our investment balance, facilitated by the issuance of our 2028 convertible notes (the "2028 Notes"), coupled with higher interest rates. During the nine months ended September 30, 2023, we recorded a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes, which did not recur in 2024 and contributed primarily to the decrease in interest expense compared to the same period a year ago. Other expense, net decreased $1.1 million compared to the same period a year ago due primarily to gains on foreign currency transactions as well as losses on the sale of available-for-sale securities from the first nine months of 2023 which did not recur in 2024.

Previous wording

As of June 30, 2024, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $740.9 million, which were held for working capital purposes. We have financed our operations primarily through cash generated from operations and issuances of convertible debts. We have generated significant operating losses as reflected in our accumulated deficit on our condensed consolidated balance sheets. While we expect to continue to incur operating losses and may incur negative cash flows from operations in the future, we believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.

Current wording

As of September 30, 2024, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $776.4 million, which were held for working capital purposes. We have financed our operations primarily through cash generated from operations and issuances of convertible debt. We have generated significant operating losses as reflected in our accumulated deficit on our condensed consolidated balance sheets. While we expect to continue to incur operating losses and may incur negative cash flows from operations in the future, we believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.

Previous wording

In August 2023, we issued $702.0 million aggregate principal amount of 1.250% convertible senior notes due 2028 (the "2028 Notes"). Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs. We used $396.9 million of the net proceeds from the 2028 Notes offering to repurchase $273.8 million principal amount, together with accrued and unpaid interest thereon, of our 1.125% convertible senior notes due 2026 (the "2026 Notes") in separate and individually negotiated transactions with certain holders. As of June 30, 2024, we had outstanding debt relating to our 2026 Notes and 2028 Notes of $70.7 million and $693.0 million, with corresponding maturity dates of August 15, 2026 and August 15, 2028, respectively.

Current wording

In August 2023, we issued $702.0 million aggregate principal amount of our 1.250% 2028 Notes. Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs. We used $396.9 million of the net proceeds from the 2028 Notes offering to repurchase $273.8 million principal amount, together with accrued and unpaid interest thereon, of our 1.125% 2026 Notes in separate and individually negotiated transactions with certain holders. As of September 30, 2024, we had outstanding debt relating to our 2026 Notes and 2028 Notes of $70.7 million and $693.5 million, with corresponding maturity dates of August 15, 2026 and August 15, 2028, respectively.

Previous wording

On July 30, 2024, our board of directors authorized a share repurchase program for up to $100.0 million of our outstanding Class A common stock (the “2024 Repurchase Plan”). The repurchases may be made in the open market or through privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means, each in compliance with Rule 10b-18 under the Exchange Act. The timing, manner, price, and amount of the repurchase will be subject to the discretion of the Company’s management, and it may be suspended or discontinued at any time.

Current wording

On July 30, 2024, our board of directors authorized a share repurchase program for up to $100.0 million of our outstanding Class A common stock (the “2024 Repurchase Plan”). The repurchases may be made in the open market or through privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means, each in compliance with Rule 10b-18 under the Exchange Act. The timing, manner, price, and amount of the repurchase will be subject to the discretion of the Company’s management, and it may be suspended or discontinued at any time. As of September 30, 2024, we have not made any repurchases under the 2024 Repurchase Plan.

Previous wording

Cash provided by operating activities of $26.0 million for the three months ended June 30, 2023 consisted of a net loss of $20.9 million adjusted for non-cash charges of $22.3 million and net cash inflows of $24.6 million from changes in operating assets and liabilities. Customer growth and contract renewals for longer terms accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in accounts receivable, prepaid expenses, and accrued expenses and other liabilities as well as the decrease in accounts payable were attributable primarily to the timing of our billings, cash collections, and cash payments.

Current wording

Cash provided by operating activities of $15.0 million for the three months ended September 30, 2023 consisted of a net loss of $56.3 million adjusted for non-cash charges of $65.7 million and net cash inflows of $5.5 million from changes in operating assets and liabilities. The adjustments for non-cash charges included a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes. Customer growth and contract renewals for longer terms accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in accounts receivable, other receivables, and accrued expenses and other liabilities as well as the decreases in prepaid expenses and other assets were attributable primarily to the timing of our billings, cash collections, and cash payments.

Previous wording

Cash provided by operating activities of $24.8 million for the six months ended June 30, 2024 consisted of a net loss of $29.2 million adjusted for non-cash charges of $47.4 million and net cash inflows of $6.7 million from changes in operating assets and liabilities. The change in operating assets and liabilities was driven by a decrease in deferred revenue which was due in part to a reduction of multi-year prepaid customer contracts and timing of contract negotiations. The increase in deferred costs was primarily due to growth in subscription bookings. The increases in other assets, accounts payable, and accrued expenses and other liabilities as well as the decreases in accounts receivable, prepaid expenses, and other receivables were attributable primarily to the timing of our billings, cash collections, and cash payments.

Current wording

Cash provided by operating activities of $43.7 million for the nine months ended September 30, 2024 consisted of a net loss of $46.2 million adjusted for non-cash charges of $75.9 million and net cash inflows of $14.0 million from changes in operating assets and liabilities. The adjustments for non-cash charges included a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to multi-year prepaid customer contracts coupled with growth in our customer base. The increase in deferred costs was primarily due to growth in subscription bookings. The increases in accounts receivable, other assets, accounts payable, and accrued expenses and other liabilities as well as the decreases in other receivables and prepaid expenses were attributable primarily to the timing of our billings, cash collections, and cash payments.

Previous wording

Cash provided by operating activities of $31.5 million for the six months ended June 30, 2023 consisted of a net loss of $67.1 million adjusted for non-cash charges of $63.1 million and net cash inflows of $35.5 million from changes in operating assets and liabilities. Customer growth accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in prepaid expenses and accrued expenses and other liabilities as well as the decreases in accounts receivable and accounts payable were attributable primarily to the timing of our billings, cash collections, and cash payments.

Current wording

Cash provided by operating activities of $46.5 million for the nine months ended September 30, 2023 consisted of a net loss of $123.3 million adjusted for non-cash charges of $128.9 million and net cash inflows of $41.0 million from changes in operating assets and liabilities. Customer growth accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in other receivables, prepaid expenses, and accrued expenses and other liabilities as well as the decreases in accounts receivable and accounts payable were attributable primarily to the timing of our billings, cash collections, and cash payments.

Previous wording

Cash used in investing activities of $26.3 million for the three months ended June 30, 2024 consisted of $98.3 million for the acquisition of Sustain.Life and $35.0 million in purchases of marketable securities partially offset by $107.1 million from the maturities of marketable securities.

Current wording

Cash used in investing activities of $49.6 million for the three months ended September 30, 2024 consisted of $158.5 million in purchases of marketable securities and $0.2 million for the acquisition of Sustain.Life partially offset by $109.0 million from the maturities of marketable securities.

Previous wording

Cash used in investing activities of $8.9 million for the six months ended June 30, 2024 consisted of $98.3 million for the acquisition of Sustain.Life and $151.6 million in purchases of marketable securities partially offset by $236.7 million from the maturities of marketable securities and $4.6 million from the sale of marketable securities.

Current wording

Cash used in investing activities of $58.5 million for the nine months ended September 30, 2024 consisted of $310.1 million in purchases of marketable securities, $98.1 million for the acquisition of Sustain.Life, and $0.6 million in purchases of fixed assets partially offset by $345.7 million from the maturities of marketable securities and $4.6 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.

Previous wording

Cash used in investing activities of $73.0 million for the six months ended June 30, 2023 consisted of $177.0 million in purchases of marketable securities and $0.8 million in purchases of fixed assets partially offset by $65.1 million from the sale of marketable securities and $39.9 million from the maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.

Current wording

Cash used in investing activities of $182.0 million for the nine months ended September 30, 2023 consisted of $322.0 million in purchases of marketable securities and $1.7 million in purchases of fixed assets partially offset by $65.1 million from the sale of marketable securities and $76.8 million from the maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.

Previous wording

Cash used in financing activities of $2.8 million for the six months ended June 30, 2024 consisted of $10.3 million in taxes paid related to net share settlements of stock-based compensation awards partially offset by $7.1 million in proceeds from shares issued in connection with our employee stock purchase plan and $0.6 million in proceeds from option exercises.

Current wording

Cash provided by financing activities of $8.7 million for the three months ended September 30, 2024 consisted of $6.7 million in proceeds from shares issued in connection with our Employee Stock Purchase Plan ("ESPP") and $3.3 million in proceeds from option exercises partially offset by $1.2 million in taxes paid related to net share settlements of stock-based compensation awards.

Previous wording

During the six months ended June 30, 2024, there were no significant changes to our critical accounting policies and estimates as described in the financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.

Current wording

During the nine months ended September 30, 2024, there were no significant changes to our critical accounting policies and estimates as described in the financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.