Sprout Social Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I—Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, and in other parts of this Quarterly Report. See "Cautionary Note Regarding Forward-Looking Statements."

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I—Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, and in other parts of this Quarterly Report. See "Cautionary Note Regarding Forward-Looking Statements."

Previous wording

We generated revenue of $96.8 million and $75.2 million during the three months ended March 31, 2024 and 2023, respectively, representing growth of 29%. In the three months ended March 31, 2024, software subscriptions contributed 99% of our revenue.

Current wording

We generated revenue of $99.4 million and $79.3 million during the three months ended June 30, 2024 and 2023, respectively, representing growth of 25%. We generated revenue of $196.2 million and $154.5 million during the six months ended June 30, 2024 and 2023, respectively, representing growth of 27%. In the six months ended June 30, 2024, software subscriptions contributed 99% of our revenue.

Previous wording

We generated net losses of $13.6 million and $10.3 million during the three months ended March 31, 2024 and 2023, respectively, which included stock-based compensation expense of $18.1 million and $13.7 million, respectively. We expect to continue investing in the growth of our business and, as a result, generate net losses for the foreseeable future.

Current wording

We generated net losses of $16.9 million and $13.1 million during the three months ended June 30, 2024 and 2023, respectively, which included stock-based compensation expense of $20.6 million and $16.4 million, respectively. We generated net losses of $30.5 million and $23.3 million during the six months ended June 30, 2024 and 2023, respectively, which included stock-based compensation expense of $38.7 million and $30.0 million, respectively. We expect to continue investing in the growth of our business and, as a result, generate net losses for the foreseeable future.

Previous wording

As a company with a global footprint, we are subject to risks and exposures caused by significant events and their macroeconomic impacts, including, but not limited to, high levels of inflation, high interest rates, ongoing overseas conflict, volatility in the capital markets and related market uncertainty. We continuously monitor the direct and indirect impacts, and the potential for future impacts, of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. Given the importance of our technology platform and heightened market awareness of social media as a strategic communications channel, these factors have not had a material adverse impact on our operational and financial performance to date. However, the potential implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, introduce additional uncertainty.

Current wording

As a company with a global footprint, we are subject to risks and exposures caused by significant events and their macroeconomic impacts, including, but not limited to, high levels of inflation, high interest rates, ongoing overseas conflict, volatility in the capital markets and related market uncertainty. We continuously monitor the direct and indirect impacts, and the potential for future impacts, of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape.

Previous wording

On August 2, 2023, we completed our acquisition of all the outstanding equity of Tagger Media, Inc. (“Tagger”), for a total preliminary purchase consideration of $144 million. We acquired Tagger in order to expand into the influencer marketing category. Tagger’s platform enables marketers to discover influencers, plan and manage campaigns, analyze competitor strategies, report on trends and measure return on investment. We funded the purchase consideration with a combination of cash on hand and $75 million borrowed under the Facility further described in Note 5 - “Revolving Line of Credit” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report).

Current wording

On August 2, 2023, we completed our acquisition of all the outstanding equity of Tagger Media, Inc. (“Tagger”), for a total purchase consideration of $144 million. We acquired Tagger in order to expand into the influencer marketing category. Tagger’s platform enables marketers to discover influencers, plan and manage campaigns, analyze competitor strategies, report on trends and measure return on investment. We funded the purchase consideration with a combination of cash on hand and $75 million borrowed under the Facility further described in Note 5 - “Revolving Line of Credit” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report).

Previous wording

We are focused on continuing to organically grow our customer base by increasing demand for our platform and penetrating our addressable market. We have invested, and expect to continue to invest, heavily in expanding our sales force and marketing efforts to acquire new cust omers. Currently, we have more than 30,000 customers. In November 2022, we announced a price increase. For the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, this price increase contributed to an increase in our average revenue per customer. While our total number of customers decreased over this same period, our number of customers contributing over $10,000 in ARR and $50,000 in ARR increased. We expect this trend to continue as we remain focused on our most sophisticated customers.

Current wording

We are focused on continuing to organically grow our customer base by increasing demand for our platform and penetrating our addressable market. We have invested, and expect to continue to invest, heavily in expanding our sales force and marketing efforts to acquire new cust omers. Currently, we have more than 30,000 customers. In November 2022, we announced a price increase. For the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, this price increase contributed to an increase in our average revenue per customer. While our total number of customers decreased over this same period, our number of customers contributing over $10,000 in ARR and $50,000 in ARR increased. In addition, as we continue to focus on expanding our enterprise customer base, we have experienced and expect to continue to experience longer and more expansive average sale cycles and increased pricing pressure, which may be exacerbated by the macroeconomic factors described above. We expect these trends to continue as we remain focused on our most sophisticated customers.

Previous wording

We see international expansion as a meaningful opportunity to grow our platform. Revenue generated from non-U.S. customers during the three months ended March 31, 2024 was approximately 27% of our total revenue. We have teams in Ireland, Canada, the United Kingdom, Singapore, India, Australia, the Philippines and Poland to support our growth internationally. We believe global demand for our platform and offerings will continue to increase as awareness of our platform in international markets grows. We plan to continue adding to our local sales, customer support and customer success teams in select international markets over time.

Current wording

We see international expansion as a meaningful opportunity to grow our platform. Revenue generated from non-U.S. customers during the six months ended June 30, 2024 was approximately 27% of our total revenue. We have teams in Ireland, Canada, the United Kingdom, Singapore, India, Australia, the Philippines and Poland to support our growth internationally. We believe global demand for our platform and offerings will continue to increase as awareness of our platform in international markets grows. We plan to continue adding to our local sales, customer support and customer success teams in select international markets over time.

Previous wording

The increase in subscription revenue was primarily driven by increased revenue from our highest tier customers. Customers contributing over $10,000 in ARR grew 24% versus the prior year and customers contributing over $50,000 in ARR grew 44% versus theprior year. The increase in new customers within the highest tiers was primarily driven by prioritizing our customer success and growth resources towards these customers and continuing to grow our sales force capacity to meet market demand.

Current wording

The increase in subscription revenue was primarily driven by increased revenue from our highest tier customers. Customers contributing over $10,000 in ARR grew 21% versus the prior year and customers contributing over $50,000 in ARR grew 38% versus the prior year. The increase in new customers within the highest tiers was primarily driven by prioritizing our customer success and growth resources towards these customers and continuing to grow our sales force capacity to meet market demand.

Previous wording

Personnel costs increased primarily as a result of a 19%increase in headcount to grow our research and development teams to drive our technology innovation through the development and maintenance of our platform. The increase in stock-based compensation expense was primarily due to the increased headcount.

Current wording

Personnel costs increased primarily as a result of an 18% increase in headcount to grow our research and development teams to drive our technology innovation through the development and maintenance of our platform. The increase in stock-based compensation expense was primarily due to the increased headcount.

Previous wording

Personnel costs increased primarily as a result of a 23% increase in headcount as we continue to expand our sales teams to grow our customer base. The increase in stock-based compensation expense was primarily due to the increased headcount. The increase in other expense was driven by other general marketing costs.

Current wording

Personnel costs increased primarily as a result of a 20% increase in headcount as we continue to expand our sales teams to grow our customer base. The increase in stock-based compensation expense was primarily due to the increased headcount. The increase in other was primarily driven by various marketing events and initiatives.

Previous wording

Personnel costs and stock-based compensation expense increased primarily as a result of a 21%increase in headcount as we continue to grow our business. The increase in the amortization expense of intangible assets was primarily driven by the intangible assets recognized as part of the Tagger acquisition.

Current wording

Personnel costs and stock-based compensation expense increased primarily as a result of a 14% increase in headcount as we continue to grow our business. The increase in the amortization expense of intangible assets was primarily driven by the intangible assets recognized as part of the Tagger acquisition.

Previous wording

Fees paid to our data providers increased due to revenue growth. Personnel costs increased primarily as a result of a 4% increase in headcount as we continue to grow our customer support and customer success teams to support our customer growth. The increase in the amortization expense of intangible assets was driven by the acquired developed technology recognized as part of the Tagger acquisition. The increase in stock-based compensation expense was primarily due to the increased headcount.

Current wording

Fees paid to our data providers increased due to revenue growth. The increase in the amortization expense of intangible assets was driven by the acquired developed technology recognized as part of the Tagger acquisition. Personnel costs and stock-based compensation expense increased as we continue to invest in our customer support and customer success teams to support our customer growth. The increase in other was primarily driven by hosting fees.

Previous wording

The change in income tax (benefit) expense was primarily attributable to a foreign income tax benefit in the current year.

Current wording

The change in income tax expense was primarily attributable to a foreign income tax benefit in the current year, partially offset by an increase in income tax expense due to higher earnings in foreign jurisdictions.

Previous wording

We define non-GAAP operating income as GAAP loss from operations, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP operating income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP operating income to exclude acquisition-related expenses in connection with the Tagger acquisition (which are not applicable for the periods presented) and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP operating income as GAAP loss from operations, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP operating income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP operating income to exclude acquisition-related expenses in connection with the Tagger acquisition and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Previous wording

We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP net income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income to exclude acquisition-related expenses in connection with the Tagger acquisition (which are not applicable for the periods presented) and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP net income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income to exclude acquisition-related expenses in connection with the Tagger acquisition and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Previous wording

We define non-GAAP net income per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income per share to exclude acquisition-related expenses in connection with the Tagger acquisition (which are not applicable for the periods presented) and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP net income per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition. We believe non-GAAP net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses and amortization expense, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income per share to exclude acquisition-related expenses in connection with the Tagger acquisition and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Previous wording

We define non-GAAP free cash flow as net cash provided by (used in) operating activities less expenditures for property and equipment, acquisition-related costs and interest. Non-GAAP free cash flow does not reflect our future contractual obligations or represent the total increase or decrease in our cash balance for a given period. We believe that non-GAAP free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash used in our core operations that, after the expenditures for property and equipment, acquisition-related costs and interest, is available to be used for strategic initiatives. For example, if non-GAAP free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. In 2023, we revised our definition of non-GAAP free cash flow to exclude payments related to acquisition-related costs associated with our acquisition of Tagger (which are not applicable for the periods presented) and cash paid for interest on our revolving line of credit.

Current wording

We define non-GAAP free cash flow as net cash provided by operating activities less expenditures for property and equipment, acquisition-related costs and interest. Non-GAAP free cash flow does not reflect our future contractual obligations or represent the total increase or decrease in our cash balance for a given period. We believe that non-GAAP free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash used in our core operations that, after the expenditures for property and equipment, acquisition-related costs and interest, is available to be used for strategic initiatives. For example, if non-GAAP free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. In 2023, we revised our definition of non-GAAP free cash flow to exclude payments related to acquisition-related costs associated with our acquisition of Tagger (which are not applicable for the periods presented) and cash paid for interest on our revolving line of credit.

Previous wording

As of March 31, 2024, our principal sources of liquidity were cash and cash equivalents of $69.2 million, marketable securities of $26.0 million and net accounts receivable of $50.4 million. Historically, we have generated losses from operations as evidenced by our accumulated deficit and in previous years, we had negative cash flows from operations. However, for the three months ended March 31, 2024 and 2023, we generated positive cash flows from operations. We expect to continue to incur operating losses and may have negative operating cash flows for the foreseeable future as we continue to grow the business. We may experience greater than anticipated operating losses in the short- and long-term due to macroeconomic, financial, and other factors that are beyond our control, such as rising inflation rates and a potential recession. The impact of these factors on our customers and our operations going forward remains uncertain, and we continue to proactively monitor our liquidity position.

Current wording

As of June 30, 2024, our principal sources of liquidity were cash and cash equivalents of $80.9 million, marketable securities of $12.3 million and net accounts receivable of $58.6 million. Historically, we have generated losses from operations as evidenced by our accumulated deficit and in previous years, we had negative cash flows from operations. However, for the six months ended June 30, 2024 and 2023, we generated positive cash flows from operations. We expect to continue to incur operating losses for the foreseeable future as we continue to grow the business. We may experience greater than anticipated operating losses in the short- and long-term due to macroeconomic, financial, and other factors that are beyond our control, such as high inflation rates and a potential recession. The impact of these factors on our customers and our operations going forward remains uncertain, and we continue to proactively monitor our liquidity position.

Previous wording

On August 1, 2023, we borrowed $75 million under the Credit Agreement in connection with the Tagger acquisition. As of March 31, 2024, $45 million remains outstanding under the Credit Agreement. Refer to Note 11 - “Business Combinations” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report) for further discussion.

Current wording

On August 1, 2023, we borrowed $75 million under the Credit Agreement in connection with the Tagger acquisition. As of June 30, 2024, $40 million remains outstanding under the Credit Agreement. Refer to Note 11 - “Business Combinations” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report) for further discussion.

Previous wording

Our largest source of operating cash is cash collections from our customers for subscription services. Our primary uses of cash from operating activities are for personnel costs across the sales and marketing and research and development departments and hosting costs. Historically, we have generated negative cash flows from operating activities. However, for the three months ended March 31, 2024 and 2023, we generated positive cash flows from operating activities.

Current wording

Our largest source of operating cash is cash collections from our customers for subscription services. Our primary uses of cash from operating activities are for personnel costs across the sales and marketing and research and development departments and hosting costs. In previous years, we have generated negative cash flows from operating activities. However, for thesix months ended June 30, 2024 and 2023, we generated positive cash flows from operating activities.

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2024 was $11.2 million, which resulted from a net loss of $13.6 million adjusted for non-cash charges of $24.4 million and net cash inflow of $0.4 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $18.1 million of stock-based compensation expense, $3.5 million for amortization of deferred contract acquisition costs, which were primarily commissions, $0.4 million of amortization of right-of-use, or ROU, operating lease assets, and $2.5 million of depreciation and intangible asset amortization expense. The net cash inflow from changes in operating assets and liabilities was primarily the result of a $13.0 million decrease in accounts receivable and a $5.6 million increase in deferred revenue. These inflows were primarily offset by a $7.7 million increase in prepaid expenses and other assets, a $6.8 million increase in deferred commissions due to the addition of new customers and expansion of the business, a $1.0 million decrease in operating lease liabilities and a$2.9 million decrease in accounts payable and accrued expenses.

Current wording

Net cash provided by operating activities during thesix months ended June 30, 2024 was $13.2 million, which resulted from a net loss of $30.5 million adjusted for non-cash charges of $52.5 million and net cash outflow of $8.8 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $38.7 million of stock-based compensation expense, $7.4 million for amortization of deferred contract acquisition costs, which were primarily commissions, $5.0 million of depreciation and intangible asset amortization expense and $0.9 million of amortization of right-of-use, or ROU, operating lease assets. The net cash outflow from changes in operating assets and liabilities was primarily the result of a $13.8 million increase in deferred commissions due to the addition of new customers and expansion of the business, a $4.7 million increase in prepaid expenses and other assets, a $2.0 million decrease in operating lease liabilities and a$0.2 million decrease in accounts payable and accrued expenses. These outflows were primarily offset by a $7.8 million increase in deferred revenue and a $4.1 million decrease in accounts receivable.

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2023 was $8.3 million, which resulted from a net loss of $10.3 million adjusted for non-cash charges of $20.4 million and net cash outflow of $1.9 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $13.7 million of stock-based compensation expense, $5.9 million for amortization of deferred contract acquisition costs, which were primarily commissions, $0.4 million of amortization of right-of-use, or ROU, operating lease assets, and $1.1 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities was primarily the result of a $7.8 million increase in deferred commissions due to the addition of new customers and expansion of the business, a $4.1 million increase in prepaid expenses and other assets, a $0.8 million decrease in operating lease liabilities, a $1.1 million increase in accounts receivable and a $1.6 million decrease in accounts payable and accrued expenses. These outflows were primarily offset by a $13.6 million increase in deferred revenue.

Current wording

Net cash provided by operating activities during the six months ended June 30, 2023 was $14.6 million, which resulted from a net loss of $23.3 million adjusted for non-cash charges of $44.1 million and net cash outflow of $6.2 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $30.0 million of stock-based compensation expense, $12.2 million for amortization of deferred contract acquisition costs, which were primarily commissions, $0.7 million of amortization of right-of-use, or ROU, operating lease assets, and $2.3 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities was primarily the result of a $16.6 million increase in deferred commissions due to the addition of new customers and expansion of the business, a $4.1 million increase in prepaid expenses and other assets, a $1.7 million decrease in operating lease liabilities, and a $7.2 million increase in accounts receivable. These outflows were primarily offset by a $3.0 million increase in accounts payable and accrued expenses and a $20.4 million increase in deferred revenue.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 was $20.1 million, which was primarily due to $22.6 million in proceeds from the maturities of marketable securities and $0.1 million consideration received related to a purchase price adjustment from the Tagger acquisition, partially offset by the $1.5 million payout of the Repustate acquisition purchase price holdback and $1.1 million in purchases of computer equipment and hardware.

Current wording

Net cash provided by investing activities for thesix months ended June 30, 2024 was $33.4 million, which was primarily due to $36.4 million in proceeds from the maturities of marketable securities and $0.1 million consideration received related to a purchase price adjustment from the Tagger acquisition, partially offset by $1.6 million in purchases of computer equipment and hardware and the $1.5 million payout of the Repustate acquisition purchase price holdback.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2023 was $8.7 million, which was primarily due to $30.1 million in purchases of marketable securities and $6.4 million for the acquisition of Repustate, partially offset by $28.2 million in proceeds from the maturities and sale of marketable securities.

Current wording

Net cash used in investing activities for the six months ended June 30, 2023 was $17.4 million, which was primarily due to $63.1 million in purchases of marketable securities and $6.4 million for the acquisition of Repustate, partially offset by $52.8 million in proceeds from the maturities and sale of marketable securities.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 was $11.5 million, primarily driven by $10.0 million in repayments of the Facility and $1.5 million in payments related to employee withholding taxes as a result of the net settlement of stock-based awards.

Current wording

Net cash used in financing activities for thesix months ended June 30, 2024 was $15.5 million, primarily driven by $15.0 million in repayments of the Facility and $1.7 million in payments related to employee withholding taxes as a result of the net settlement of stock-based awards, partially offset by$1.2 million in proceeds from purchases under our employee stock purchase plan.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2023 was $1.1 million, primarily driven by $1.1 million in payments related to employee withholding taxes as a result of the net settlement of stock-based awards.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2023 was $0.1 million, primarily driven by $1.4 million in payments related to employee withholding taxes as a result of the net settlement of stock-based awards, partially offset by $1.4 million in proceeds from purchases under our employee stock purchase plan.

Previous wording

As of March 31, 2024, we have non-cancellable contractual obligations related primarily to operating leases and minimum guaranteed purchase commitments for data and services. As of March 31, 2024, the total obligation for operating leases was $20.4 million, of which $4.8 million is expected to be paid in the next twelve months. As of March 31, 2024, our purchase commitment for primarily data and services was $15.9 million, of which $9.0 million is expected to be paid in the next twelve months. See Note 3 - “Operating Leases” and Note 7 - “Commitments and Contingencies” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report)for more information regarding these obligations.

Current wording

As of June 30, 2024, we have non-cancellable contractual obligations related primarily to operating leases and minimum guaranteed purchase commitments for data and services. As of June 30, 2024, the total obligation for operating leases was $19.2 million, of which $4.8 million is expected to be paid in the next twelve months. As of June 30, 2024, our purchase commitment for primarily data and services was $13.8 million, of which $8.4 million is expected to be paid in the next twelve months. See Note 3 - “Operating Leases” and Note 7 - “Commitments and Contingencies” of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report)for more information regarding these obligations.

Previous wording

Our significant accounting policies are discussed in Note 1 - “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024. There have been no significant changes to these policies during thethree months ended March 31, 2024, except as noted in Note 1 of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report).

Current wording

Our significant accounting policies are discussed in Note 1 - “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024. There have been no significant changes to these policies during the six months ended June 30, 2024, except as noted in Note 1 of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report).