Upland Software Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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, 2024 · Filed Nov 7, 2024
UPLD$3.97+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001505155-24-000069
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001505155-24-000108
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 131 previous paragraphs and 132 current paragraphs.
91 unchanged; 34 reworded; 7 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 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 (7)
Current report
•our expectations as to the timing of the discontinuation of any Sunset Assets, as well as the composition of Sunset Assets (as defined below);
Current report
Sales and marketing expense was $16.3 million in the three months ended September 30, 2024, compared to $16.9 million in the three months ended September 30, 2023, a decrease of $0.6 million, or 3%. The decrease in sales and marketing expense is attributable to decreases in personnel costs of $0.6 million related to our Sunset Assets.
Current report
Research and development expense was $11.4 million in the three months ended September 30, 2024, compared to $12.7 million in the three months ended September 30, 2023, a decrease of $1.3 million, or 10.3%. The decline in research and development expense is attributable to a $0.9 million decrease in personnel-related costs as we continue to shift our spending focus to our India Center of Excellence, as well as a $0.4 million decline in expenses related to our Sunset Assets.
Current report
Research and development expense was $36.1 million in the nine months ended September 30, 2024, compared to $37.7 million in the nine months ended September 30, 2023 a decrease of $1.6 million, or 4.4%. The decline in research and development expense is attributable to a $0.3 million decrease in personnel-related costs as we continue to shift our spending focus to our India Center of Excellence, as well as a $1.3 million decline in expenses related to our Sunset Assets.
Current report
Interest expense, net of interest income, was $2.3 million of net interest income in the three months ended September 30, 2024 compared to $2.5 million of net interest expense in the three months ended September 30, 2023, a change of $4.8 million or 193%. This was due primarily to prepayments on the Company’s Term Loans during the three months ended September 30, 2024, which resulted in an additional $9.0 million of the realized deferred gain from August 2023 being released from accumulated other comprehensive income to interest expense, net. In addition to this non-cash interest income, an additional $1.8 million of the deferred gain was amortized as a benefit to interest expense, net in the three months ended September 30, 2024. These interest income amounts were partially offset by interest expense, net of amounts received from interest rate swaps.
Current report
Interest expense, net of interest income was $7.7 million in the nine months ended September 30, 2024, compared to $13.4 million in the nine months ended September 30, 2023, a decrease of $5.7 million, or 43%. The decrease in interest expense is primarily attributable to the recognition of $9.0 million of the realized deferred gain from August 2023 being released from accumulated other comprehensive income to interest expense, net due to prepayments on the Company’s Term Loans in August and September 2024. In addition to this non-cash interest income, an additional $4.8 million of the deferred gain was amortized as a credit to interest expense, net in the nine months ended September 30, 2024. These interest income amounts were offset by interest expense, net of amounts received from interest rate swaps.
Current report
Cash used in financing activities was $192.8 million for the nine months ended September 30, 2024 compared to $48.7 million for the nine months ended September 30, 2023, an increase of $144.1 million of cash used due to $142.0 million in additional payments on the Company’s Term Loans in the nine months ended September 30, 2024 over payments made in the nine months ended September 30, 2023, and an additional $7.7 million used for Common Stock repurchases in the nine months ended September 30, 2024 over the nine months ended September 30, 2024. These increases in cash used were offset by $5.6 million less cash used in nine months ended
Removed paragraphs (6)
Previous report
•our Share Repurchase Plan (as defined in Note 10. Stockholders' Equity), including expectations regarding the timing and manner of repurchases made under the Share Repurchase Plan;
Previous report
Sales and marketing expense was $33.8 million in the six months ended June 30, 2024, compared to $30.0 million in the six months ended June 30, 2023, an increase of $3.8 million, or 13%. The increase in sales and marketing expense is attributable to an increase of $2.7 million in personnel costs and a $1.1 million increase in marketing and related expenses, both associated with the announced investments in our growth plan.
Previous report
Research and development expense was $12.2 million in the three months ended June 30, 2024, compared to $12.4 million in the three months ended June 30, 2023. While research and development expense has remained relatively flat in total, we have shifted the mix of our spending by moving personnel-related expenses from higher cost centers to our lower cost center in our India Center of Excellence thereby increasing development productivity for the same cost.
Previous report
Research and development expense was $24.6 million in the six months ended June 30, 2024, compared to $25.0 million in the six months ended June 30, 2023. While research and development expense has remained relatively flat in total, we have shifted the mix of our spending by moving personnel-related expenses from higher cost centers to our lower cost center in our India Center of Excellence thereby increasing development productivity for the same cost.
Previous report
Interest expense, net of interest income was $5.1 million in the three months ended June 30, 2024 compared to $5.4 million in the three months ended June 30, 2023, a decrease of $0.3 million or 6%, due to a decrease in interest expense as a result of paying down $35 million of debt principal in August 2023 along with regularly scheduled principal payments lowering outstanding borrowings on our Credit Facility. Additionally, interest income earned on our cash balances has increased as interest rates have increased quarter over quarter.
Previous report
Interest expense, net of interest income was $10.0 million in the six months ended June 30, 2024, compared to $10.8 million in the six months ended June 30, 2023, a decrease of $0.8 million, or 8%. The decrease is primarily attributable to paying down $35 million of debt principal in August 2023 along with regularly scheduled principal payments lowering outstanding borrowings on our Credit Facility combined with higher interest income on our interest-bearing cash accounts.
Reworded paragraphs (34)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 22, 2024. In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “may,” “will,” “continue,” “seek,” “estimate,” “intend,” “hope,” “predict,” “could,” “should,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words. These forward-looking statements include, but are not limited to, statements concerning the following:
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2023.. In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “may,” “will,” “continue,” “seek,” “estimate,” “intend,” “hope,” “predict,” “could,” “should,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words. These forward-looking statements include, but are not limited to, statements concerning the following:
Previous wording
•our plans regarding, and our ability to effectively manage, our growth;
Current wording
•our plans regarding, and our ability to effectively manage, our growth, including with respect to our growth investments;
Previous wording
•other risk factors included under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024, as updated by this Quarterly Report on Form 10-Q and periodically updated as necessary in our future quarterly reports on Form 10-Q and other filings that we make with the SEC.
Current wording
•other risk factors included under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by this Quarterly Report on Form 10-Q and periodically updated as necessary in our future quarterly reports on Form 10-Q and other filings that we make with the SEC.
Previous wording
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
Current wording
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
Previous wording
Through a series of acquisitions and integrations, we have established a library of diverse software applications under the Upland brand that address specific digital transformation needs. Our revenue has grown from $149.9 million in the year ended December 31, 2018 to $297.9 million in the year ended December 31, 2023, representing a compound annual growth rate of 15%. During the six months ended June 30, 2024 and 2023, foreign revenue as a percent of total revenue was 29% and 30%, respectively.
Current wording
Through a series of acquisitions and integrations, we have established a library of diverse software applications under the Upland brand that address specific digital transformation needs. Our revenue has grown from $149.9 million in the year ended December 31, 2018 to $297.9 million in the year ended December 31, 2023, representing a compound annual growth rate of 15%. During the nine months ended September 30, 2024 and 2023, foreign revenue as a percent of total revenue was 29% and 30%, respectively.
Previous wording
To support continued growth, we may pursue acquisitions of complementary technologies and businesses. This may expand our product library, customer base, and market access resulting in increased benefits of scale. We have made 31 acquisitions from February 2012 through June 30, 2024.
Current wording
To support continued growth, we may pursue acquisitions of complementary technologies and businesses. This may expand our product library, customer base, and market access resulting in increased benefits of scale.
Previous wording
For the three-month period ended June 30, 2024, our Core Organic Growth Rate was a positive 0.3%.
Current wording
For the three-month period ended September 30, 2024, our Core Organic Growth Rate was negative 2.3%.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Total revenue was $69.3 million in the three months ended June 30, 2024, compared to $74.5 million in the three months ended June 30, 2023, a decrease of $5.2 million, or 7%. This decrease is primarily due to the expected decline in revenue from Sunset Assets of $4.8 million. The remaining decrease results from a decline in overage charges of $0.4 million as a result of customers not exceeding contractual minimums to the extent they did in the prior year period, and professional services revenue decline of $0.6 million due to fewer implementation projects. These declines are offset by an increase in perpetual license revenue of $0.5 million.
Current wording
Total revenue was $66.7 million in the three months ended September 30, 2024, compared to $74.1 million in the three months ended September 30, 2023, a decrease of $7.4 million, or 10%. This decrease is primarily due to the expected decline in revenue from Sunset Assets of $4.7 million. The remaining decrease results from declines in core subscription and support revenue of $1.3 million, declines in overage charges related to core products of $0.1 million, declines in total professional services revenue of $0.9 million, and total perpetual license revenue of $0.4 million.
Previous wording
Total revenue was $140.1 million in the six months ended June 30, 2024, compared to $151.6 million in the six months ended June 30, 2023, a decrease of $11.5 million, or 8%. This decrease is primarily due to the expected decline in revenue from Sunset Assets of $8.7 million. The remaining decrease results from a decline in overage charges of $0.9 million as a result of customers not exceeding contractual minimums to the extent they did in the prior year period, professional services revenue decline of $1.0 million due to fewer implementation projects, and a decline of $1.3 million due to lower subscription and support revenue from a subset of our products which we are addressing with our growth investments. These declines are offset by an increase in perpetual license revenue of $0.4 million.
Current wording
Total revenue was $206.8 million in the nine months ended September 30, 2024, compared to $225.7 million in the nine months ended September 30, 2023, a decrease of $18.9 million, or 8%. This decrease is due to expected decline in revenue from Sunset Assets of $13.7 million. The remaining decrease results from declines in core subscription and support revenue of $2.3 million, declines in overage charges related to core products of $1.0 million, and declines in total professional services revenue of $1.9 million due to fewer implementation projects.
Previous wording
Cost of subscription and support revenue was $19.2 million in the three months ended June 30, 2024, compared to $22.1 million in the three months ended June 30, 2023, a decrease of $2.9 million, or 13%. The decrease in cost of subscription and support revenue is primarily related to a decrease of $1.1 million in infrastructure costs, a $0.5 million decrease in variable telecom carrier costs, a $0.2 million decrease in personnel costs and a $1.0 million decrease in amortization of intangible assets related to our Sunset Assets.
Current wording
Cost of subscription and support revenue was $18.4 million in the three months ended September 30, 2024, compared to $20.9 million in the three months ended September 30, 2023, a decrease of $2.5 million, or 12%. The decrease in cost of subscription and support revenue is primarily related to a decrease of $0.3 million in infrastructure costs, a $0.3 million decrease in variable telecom carrier costs, a $0.8 million decrease in personnel costs and a $1.1 million decrease in amortization of intangible assets related to our Sunset Assets.
Previous wording
Cost of professional services and other revenue was $1.2 million in the three months ended June 30, 2024, compared to $2.1 million in the three months ended June 30, 2023, a decrease of $0.9 million, or 42%. The decrease in cost of professional services was related to a decrease in personnel-related expenses.
Current wording
Cost of professional services and other revenue was $1.3 million in the three months ended September 30, 2024, compared to $2.1 million in the three months ended September 30, 2023, a decrease of $0.8 million, or 40%. The decrease in cost of professional services was related to a decrease in personnel-related expenses.
Previous wording
Cost of subscription and support revenue was $39.1 million in the six months ended June 30, 2024, compared to $45.6 million in the six months ended June 30, 2023, a decrease of $6.5 million, or 14%. The decrease in cost of subscription and support revenue is primarily related to a decrease of $2.2 million in infrastructure costs, a $0.9 million decrease in variable telecom carrier costs, a decrease of $1.4 million in personnel-related costs, and a $2.0 million decrease in amortization of intangible assets related to our Sunset Assets.
Current wording
Cost of subscription and support revenue was $57.5 million in the nine months ended September 30, 2024, compared to $66.4 million in the nine months ended September 30, 2023, a decrease of $8.9 million, or 13%. The decrease in cost of subscription and support revenue is primarily related to a decrease of $2.5 million in infrastructure costs, a $1.2 million decrease in variable telecom carrier costs, a decrease of $2.1 million in personnel-related costs, and a $3.1 million decrease in amortization of intangible assets related to our Sunset Assets.
Previous wording
Cost of professional services and other revenue was $2.4 million in the six months ended June 30, 2024, compared to $4.2 million in the six months ended June 30, 2023, a decrease of $1.7 million, or 41%. The decrease in cost of professional services was related to a decrease in personnel-related expenses.
Current wording
Cost of professional services and other revenue was $3.7 million in the nine months ended September 30, 2024, compared to $6.2 million in the nine months ended September 30, 2023, a decrease of $2.5 million, or 41%. The decrease in cost of professional services was related to a decrease in personnel-related expenses.
Previous wording
Sales and marketing expense was $16.8 million in the three months ended June 30, 2024, compared to $15.8 million in the three months ended June 30, 2023, an increase of $1.0 million, or 7%. The increase in sales and marketing expense is attributable to an increase of $0.6 million in personnel costs and a $0.4 million increase in marketing and related expenses, both associated with the announced investments in our growth plan.
Current wording
Sales and marketing expense was $50.1 million in the nine months ended September 30, 2024, compared to $46.9 million in the nine months ended September 30, 2023, an increase of $3.2 million, or 7%. The increase in sales and marketing expense is attributable to an increase of $3.0 million in personnel costs and $1.0 million in marketing expense related to our core products and associated with the previously announced investments in our growth plan. Partially offsetting these growth plan investments are decreases in sales and marketing costs related to our Sunset Assets.
Previous wording
General and administrative expense was $13.9 million in the three months ended June 30, 2024, compared to $15.6 million in the three months ended June 30, 2023, a decrease of $1.7 million, or 11%. This decrease is primarily due to reductions in personnel-related costs including a decrease of $0.9 million in non-cash stock compensation expense.
Current wording
General and administrative expense was $11.1 million in the three months ended September 30, 2024, compared to $14.6 million in the three months ended September 30, 2023, a decrease of $3.5 million, or 24%. This decrease is primarily due to a decrease of $2.8 million in personnel-related costs including a decrease of $1.7 million in non-cash stock compensation expense. Decreases in non-recurring litigation costs and tax-related professional fees also contributed $0.7 million to the decline in general and administrative expense.
Previous wording
General and administrative expense was $27.1 million in the six months ended June 30, 2024, compared to $32.8 million in the six months ended June 30, 2023, a decrease of $5.7 million, or 17%. This decrease is primarily due to reductions in personnel-related costs including a decrease of $3.5 million in non-cash stock compensation expense.
Current wording
General and administrative expense was $38.2 million in the nine months ended September 30, 2024, compared to $47.4 million in the nine months ended September 30, 2023, a decrease of $9.2 million, or 19%. This decrease is primarily due to reductions of $7.0 million in personnel-related costs including a decrease of $5.2 million in non-cash stock compensation expense. Decreases in non-recurring ligitation costs, legal-related professional fees and tax-related professional fees also contributed $1.7 million to the decline while decreases in other expenses comprised the remaining $0.5 million decrease in general and administrative expense.
Previous wording
Depreciation and amortization expense was $11.4 million in the three months ended June 30, 2024, compared to $14.9 million in the three months ended June 30, 2023, a decrease of $3.5 million, or 23%. This decrease resulted from intangible assets becoming fully amortized.
Current wording
Depreciation and amortization expense was $11.5 million in the three months ended September 30, 2024, compared to $14.3 million in the three months ended September 30, 2023, a decrease of $2.8 million, or 19%. This decrease resulted from certain intangible assets becoming fully amortized.
Previous wording
Depreciation and amortization expense was $22.8 million in the six months ended June 30, 2024, compared to $29.9 million in the six months ended June 30, 2023, a decrease of $7.2 million, or 24%. This decrease resulted from intangible assets becoming fully amortized.
Current wording
Depreciation and amortization expense was $34.3 million in the nine months ended September 30, 2024, compared to $44.2 million in the nine months ended September 30, 2023, a decrease of $9.9 million, or 22%. This decrease resulted from certain intangible assets becoming fully amortized.
Previous wording
Acquisition-related expense was nil in the three months ended June 30, 2024, compared to $1.1 million in the three months ended June 30, 2023, a decrease of $1.1 million, or 100%. We have had no new acquisitions since our two acquisitions during 2022. Acquisition-related expenses in the three months ended June 30, 2023 include expenses related to acquisitions closed in 2022.
Current wording
Acquisition-related expense was nil in the three months ended September 30, 2024, compared to $0.4 million in the three months ended September 30, 2023. We have had no new acquisitions since our two acquisitions during 2022. Acquisition-related expenses in the three months ended September 30, 2023 include expenses related to acquisitions closed in 2022.
Previous wording
Acquisition-related expense was nil in the six months ended June 30, 2024, compared to $2.2 million in the six months ended June 30, 2023, a decrease of $1.1 million, or 100%. We have had no new acquisitions since our two acquisitions during 2022. Acquisition-related expenses in the three months ended June 30, 2023 include expenses related to acquisitions closed in 2022.
Current wording
Acquisition-related expense was nil in the nine months ended September 30, 2024, compared to $2.6 million in the nine months ended September 30, 2023. We have had no new acquisitions since our two acquisitions during 2022. Acquisition-related expenses in the nine months ended September 30, 2023 include expenses related to acquisitions closed in 2022.
Previous wording
Other income, net was $0.2 million in the three months ended June 30, 2024, compared to other expense, net of $0.6 million in the three months ended June 30, 2023. Other income (expense), net recognized during the three months ended June 30, 2024 and 2023 were related primarily to foreign currency exchange fluctuations.
Current wording
Other income (expense), net recognized during the three months ended September 30, 2024 and 2023 were related primarily to foreign currency exchange fluctuations.
Previous wording
Other income, net was $0.1 million in the six months ended June 30, 2024, compared to other income, net of $0.8 million in the six months ended June 30, 2023. Other income (expense), net recognized in the six months ended June 30, 2024 and June 30, 2023 related primarily to foreign currency exchange fluctuations.
Current wording
Other expense, net was $0.1 million in the nine months ended September 30, 2024, compared to other income, net of $0.9 million in the nine months ended September 30, 2023. Other income (expense), net recognized in the nine months ended September 30, 2024 and September 30, 2023 related primarily to foreign currency exchange fluctuations.
Previous wording
Provision for income taxes was $1.2 million in the three months ended June 30, 2024, compared to a benefit from income taxes of $0.2 million in the three months ended June 30, 2023, resulting in an increase in expense from income taxes of $1.4 million. The provision for income taxes for the three months ended June 30, 2024 related primarily to the foreign income taxes associated with our combined non U.S. operations. The benefit from income taxes for the three months ended June 30, 2023 related primarily to the foreign income taxes associated with our combined non U.S. operations. This tax benefit is offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill, and U.S. state taxes in certain states in which the Company does not file on a consolidated basis or have NOL’s.
Current wording
Provision for income taxes was $0.5 million in the three months ended September 30, 2024, compared to a benefit from income taxes of $1.5 million in the three months ended September 30, 2023, resulting in an increase in expense from income taxes of $2.0 million. The increase for the three months ended September 30, 2024 related primarily to the foreign income taxes associated with our combined non-U.S. operations.
Previous wording
The provision for income taxes was $0.7 million in the six months ended June 30, 2024, compared to a benefit from income taxes of $1.7 million in the six months ended June 30, 2023, an increase in the provision of $2.4 million. This increase was due primarily to foreign taxes associated with our combined non-U.S. operations, which was partially offset by the non-cash impact of deferred taxes related to the goodwill impairment recorded in the first quarter of 2024.
Current wording
The provision for income taxes was $1.2 million in the nine months ended September 30, 2024, compared to a benefit from income taxes of $3.1 million in the nine months ended September 30, 2023, an increase in the provision of $4.3 million. This increase was largely comprised of foreign taxes associated with our combined non-U.S. operations, and was partially offset by the non-cash impact of deferred taxes related to the goodwill impairment recorded in the first quarter of 2024.
Previous wording
We have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock, and borrowings under our credit facility. We believe that current cash and cash equivalents, cash flows from operating activities, and availability under our existing credit facility will be sufficient to fund our operations for at least the next twelve months.
Current wording
We have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock, and borrowings under our Credit Facility. 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
As of June 30, 2024, we had cash and cash equivalents of $232.4 million, $60.0 million of available borrowings under our Revolver that matures August 6, 2024, and $479.4 million of borrowings outstanding under our Term Loans that mature August 6, 2026. As of December 31, 2023, we had cash and cash equivalents of $236.6 million, $60.0 million of available borrowings under our Revolver, and $482.1 million of borrowings outstanding under our Term Loans. The $4.2 million decrease in cash and cash equivalents from December 31, 2023 to June 30, 2024 was due primarily to $11.0 million paid to repurchase shares of the Company’s Common Stock, and $2.7 million in debt repayment, offset by $10.6 million in cash flows from operations.
Current wording
As of September 30, 2024, we had cash and cash equivalents of $59.7 million and $301.0 million of borrowings outstanding under our Term Loans that mature August 6, 2026. As of December 31, 2023, we had cash and cash equivalents of $236.6 million and $482.1 million of borrowings outstanding under our Term Loans. The $176.8 million decrease in cash and cash equivalents from December 31, 2023 to September 30, 2024 was due primarily to $11.0 million paid to repurchase shares of the Company’s Common Stock, and $181.1 million in debt repayment which includes $177.0 million of prepayments made in the current quarter, offset by $14.9 million in cash flows from operations.
Previous wording
As of June 30, 2024 and December 31, 2023, we had working capital surpluses of $167.6 million and $169.6 million, respectively.
Current wording
As of September 30, 2024 and December 31, 2023, we had a working capital deficit of $1.0 million and a working capital surplus of $169.6 million, respectively.
Previous wording
As described in “Note 6. Debt—Credit Facility”, the Company has a Credit Facility which includes the fully drawn Term Loans as of June 30, 2024, and a $60 million undrawn Revolver. The Term Loans mature on August 6, 2026, after the scheduled quarterly principal amortization. The undrawn Revolver matures on August 6, 2024, and currently, the Company has no intent or need to draw on this Revolver before its maturity.
Current wording
As described in “Note 6. Debt—Credit Facility”, the Company has a Credit Facility which includes the fully drawn Term Loans as of September 30, 2024. The Term Loans mature on August 6, 2026. The $60 million revolver under our Credit Facility expired in August 2024 with no amounts outstanding at the time of maturity.
Previous wording
Cash provided by operating activities was $10.6 million for the six months ended June 30, 2024 compared to cash provided by operating activities of $22.8 million for the six months ended June 30, 2023, a decrease of approximately $12.3 million driven by changes in net loss and non-cash adjustments to operating cash flow. Changes in working capital for the six months ended June 30, 2024 included collections on accounts receivable, increases in prepaid and other current assets, payments of current liabilities and decreases in deferred revenue.
Current wording
Cash provided by operating activities was $14.9 million for the nine months ended September 30, 2024 compared to cash provided by operating activities of $41.2 million for the nine months ended September 30, 2023, a decrease of approximately $26.3 million driven by the $54.6 million decrease in net loss, and offset by the one-time $20.5 million cash gain on the sale of a portion of our interest rate swaps in the nine months ended September 30, 2023. Other changes in cash provided by operating activities were due to a decrease in non-cash interest expense, net related to the $9.0 million deferred gain that was released to interest expense, net, upon the prepayment of $175 million of the Company’s debt in August 2024 as compared to the $2.8 million deferred gain that was released to interest expense, net upon prepayment of $35 million of the Company’s debt in August 2023 as well as changes in working capital for the nine months ended September 30, 2024 which include collections on accounts receivable, increases in prepaid and other current assets, payments of current liabilities and decreases in deferred revenue.
Previous wording
Historically, our primary investing activities have consisted of acquisitions of complementary technologies and businesses. As our business grows, we expect our primary investing activities to continue to expand our product library, customer base, and market access.
Current wording
Historically, our primary investing activities have consisted of acquisitions of complementary technologies and businesses. As our business grows and evolves, we expect our primary investing activities to continue to expand and refine our product library, customer base, and market access, as well as routine purchases of office equipment.
Previous wording
For the six months ended June 30, 2024, cash used in investing activities consisted of purchases of property and equipment of $0.5 million.
Current wording
For the nine months ended September 30, 2024, cash used in investing activities consisted of purchases of property and equipment of $0.6 million compared to $1.0 million of purchases of property and equipment for the nine months ended September 30, 2023. The decrease in purchases of property and equipment was related to a one-time purchase of office software during the nine months ended September 30, 2023.
Previous wording
Cash used in financing activities changed by $5.5 million for the six months ended June 30, 2024 compared to the same period in 2023 due to $11.0 million used for Common Stock repurchases in 2024 and $5.5 million used for payments for additional consideration to sellers of businesses in 2023.
Current wording
September 30, 2024 for payments for additional consideration to sellers of businesses than in the nine months ended September 30, 2023.
Previous wording
Our unaudited interim financial statements and other financial information for the three and six months ended June 30, 2024, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.
Current wording
Our unaudited interim financial statements and other financial information for the three and nine months ended September 30, 2024, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.