Sprout Social Inc

Previous wording

Sprout Social is a powerful, centralized platform that provides the critical business layer to unlock the massive commercial value of social media. We have made it increasingly easy to standardize on Sprout Social as the centralized system of record for social and to help customers maximize the value of this mission critical channel. Currently, more than 30,000 customers across more than 100 countries rely on our platform.

Current wording

Sprout Social is a powerful, centralized platform that provides the critical business layer to unlock the massive commercial value of social media. We have made it increasingly easy to standardize on Sprout Social as the centralized system of record for social and to help customers maximize the value of this mission critical channel. Currently, approximately 30,000 customers across more than 100 countries rely on our platform.

Previous 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.

Current wording

We generated revenue of $102.6 million and $85.5 million during the three months ended September 30, 2024 and 2023, respectively, representing growth of 20%. We generated revenue of $298.8 million and $240.1 million during the nine months ended September 30, 2024 and 2023, respectively, representing growth of 24%. In the nine months ended September 30, 2024, software subscriptions contributed 99% of our revenue.

Previous 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.

Current wording

We generated net losses of $17.1 million and $23.0 million during the three months ended September 30, 2024 and 2023, respectively, which included stock-based compensation expense of $23.2 million and $19.0 million, respectively. We generated net losses of $47.6 million and $46.4 million during the nine months ended September 30, 2024 and 2023, respectively, which included stock-based compensation expense of $61.9 million and $49.0 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

Our current and prospective customers are impacted by these worsening macroeconomic conditions to varying degrees. Potentially as a result of these various macroeconomic impacts on our current and prospective customers, we periodically have experienced more measured buying behavior by current and prospective customers and lengthening of the average sales cycle for certain types of customers and sales (including sales to prospective customers and expansion sales to current customers), which have contributed to a slowdown in our revenue growth as compared to historical levels. We believe macroeconomic uncertainty could persist, and as a result, we expect that some or all of these negative trends may emerge or recur during future quarters.

Current wording

Our current and prospective customers are impacted by these macroeconomic conditions to varying degrees. Potentially as a result of these various macroeconomic impacts on our current and prospective customers, we periodically have experienced more measured buying behavior by current and prospective customers and lengthening of the average sales cycle for certain types of customers and sales (including sales to prospective customers and expansion sales to current customers), which have contributed to a slowdown in our revenue growth as compared to historical levels. We believe macroeconomic uncertainty could persist, and as a result, we expect that some or all of these negative trends may emerge or recur during future quarters.

Previous 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).

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 revolving credit 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 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.

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 approximately 30,000 customers. For the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, while our total number of customers have decreased, 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 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.

Current wording

We see international expansion as a meaningful opportunity to grow our platform. Revenue generated from non-U.S. customers during the nine months ended September 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 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.

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 12% versus the prior year and customers contributing over $50,000 in ARR grew 29% 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

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.

Current wording

Fees paid to our data providers increased due to revenue growth. Personnel costs increased as we continue to invest in 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 other was primarily driven by hosting fees.

Previous 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.

Current wording

Personnel costs increased primarily as a result of a 15% 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 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.

Current wording

Personnel costs increased primarily as a result of a 9% 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. The decrease in sales commission expense was primarily driven by updating the period of benefit from three to five years which was accounted for as a change in accounting estimate. See Note 1 - “Nature of Operations and Summary of Significant Accounting Policies” for additional information on the change in accounting estimate.

Previous wording

The increase in general and administrative expense for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to the following:

Current wording

The decrease in general and administrative expense for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to the following:

Previous 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.

Current wording

The decrease in acquisition-related costs was driven by costs associated with the Tagger acquisition in August 2023. Personnel costs and stock-based compensation expense increased primarily as a result of a 3% increase in headcount as we continue to grow our business.

Previous wording

The change in other expense, net was primarily driven by foreign exchange transaction losses.

Current wording

The change in other expense, net was primarily driven by lower foreign exchange transaction losses.

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 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.

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 12% versus the prior year and customers contributing over $50,000 in ARR grew 29% 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

The increase in cost of subscription revenue for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the following:

Current wording

The increase in cost of subscription revenue for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to the following:

Previous 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. The increase in other was primarily driven by hosting fees.

Current wording

Fees paid to our data providers increased due to revenue growth. Personnel costs increased as we continue to invest in 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. The increase in other was primarily driven by hosting fees.

Previous wording

The increase in research and development expense for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the following:

Current wording

The increase in research and development expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to the following:

Previous 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.

Current wording

Personnel costs increased primarily as a result of a 15% 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

The increase in sales and marketing expense for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the following:

Current wording

The increase in sales and marketing expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to the following:

Previous 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.

Current wording

Personnel costs increased primarily as a result of a 9% 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. The decrease in sales commission expense was primarily driven by updating the period of benefit from three to five years which was accounted for as a change in accounting estimate. See Note 1 - “Nature of Operations and Summary of Significant Accounting Policies” for additional information on the change in accounting estimate.

Previous wording

The increase in general and administrative expense for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the following:

Current wording

The increase in general and administrative expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to the following:

Previous 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.

Current wording

Personnel costs and stock-based compensation expense increased primarily as a result of a 3% 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. The decrease in acquisition-related costs was driven by costs associated with the Tagger acquisition in August 2023.

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 and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP operating income (loss) 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 (loss) 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 (loss) 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 and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP net income (loss) as GAAP net loss, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger acquisition and tax benefits due to changes in valuation allowances from business acquisitions. We believe non-GAAP net income (loss) 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, amortization expense and tax benefits due to changes in valuation allowances from business acquisitions, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income (loss) to exclude acquisition-related expenses in connection with the Tagger acquisition, amortization expense associated with the acquired intangible assets from the Tagger acquisition and tax benefits recognized from changes in the valuation allowance associated with our acquisition of Tagger.

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 and amortization expense associated with the acquired intangible assets from the Tagger acquisition.

Current wording

We define non-GAAP net income (loss) per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger acquisition and tax benefits due to changes in valuation allowances from business acquisitions. We believe non-GAAP net income (loss) 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, amortization expense and tax benefits due to changes in valuation allowances from business acquisitions, which are often unrelated to overall operating performance. In 2023, we revised our definition of non-GAAP net income (loss) per share to exclude acquisition-related expenses in connection with the Tagger acquisition, amortization expense associated with the acquired intangible assets from the Tagger acquisition and tax benefits recognized from changes in the valuation allowance associated with our acquisition of Tagger.

Previous 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.

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 and cash paid for interest on our revolving line of credit.

Previous 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.

Current wording

As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $82.9 million, marketable securities of $8.6 million and net accounts receivable of $54.4 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 nine months ended September 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 entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the banks and other financial institutions or entities party thereto as lenders and MUFG Bank, LTD. as administrative agent and collateral agent. The Credit Agreement provides for a $100 million senior secured revolving credit facility, maturing on August 1, 2028. Borrowings under the Facility may be used to finance acquisitions and other investments permitted under the terms of the Credit Agreement, to pay related fees and expenses and for general corporate purposes.

Current wording

On August 1, 2023, we entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the banks and other financial institutions or entities party thereto as lenders and MUFG Bank, LTD. as administrative agent and collateral agent. The Credit Agreement provides for a $100 million senior secured revolving credit facility (the “Facility”), maturing on August 1, 2028. Borrowings under the Facility may be used to finance acquisitions and other investments permitted under the terms of the Credit Agreement, to pay related fees and expenses and for general corporate purposes.

Previous 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.

Current wording

On August 1, 2023, we borrowed $75 million under the Credit Agreement in connection with the Tagger acquisition. As of September 30, 2024, $30 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. 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.

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 thenine months ended September 30, 2024 and 2023, we generated positive cash flows from operating activities.

Previous 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.

Current wording

Net cash provided by operating activities during thenine months ended September 30, 2024 was $22.2 million, which resulted from a net loss of $47.6 million adjusted for non-cash charges of $83.6 million and net cash outflow of $13.9 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $61.9 million of stock-based compensation expense, $11.6 million for amortization of deferred contract acquisition costs, which were primarily commissions, $7.5 million of depreciation and intangible asset amortization expense and $1.4 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 $21.1 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 $2.9 million decrease in operating lease liabilities and a$1.5 million decrease in accounts payable and accrued expenses. These outflows were primarily offset by a $8.8 million increase in deferred revenue and a $7.7 million decrease in accounts receivable.

Previous 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.

Current wording

Net cash provided by operating activities during the nine months ended September 30, 2023 was $9.1 million, which resulted from a net loss of $46.4 million adjusted for non-cash charges of $71.2 million and net cash outflow of $15.8 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $49.0 million of stock-based compensation expense, $19.1 million for amortization of deferred contract acquisition costs, which were primarily commissions, $1.1 million of amortization of right-of-use, or ROU, operating lease assets, and $4.2 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 $26.0 million increase in deferred commissions due to the addition of new customers and expansion of the business, a $3.5 million increase in prepaid expenses and other assets, a $2.6 million decrease in operating lease liabilities, and a $7.7 million increase in accounts receivable. These outflows were primarily offset by a $23.9 million increase in deferred revenue.

Previous 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.

Current wording

Net cash provided by investing activities for thenine months ended September 30, 2024 was $36.7 million, which was primarily due to $40.2 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 $2.1 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 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.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2023 was $118.8 million, which was primarily due to $145.8 million paid for the acquisitions of Tagger and Repustate and $63.1 million in purchases of marketable securities, partially offset by $91.5 million in proceeds from the maturities and sale of marketable securities.

Previous 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.

Current wording

Net cash used in financing activities for thenine months ended September 30, 2024 was $25.7 million, primarily driven by $25.0 million in repayments of the Facility and $2.0 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 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.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2023 was $73.8 million, primarily driven by $75.0 million in borrowings under the Facility and $1.4 million in proceeds from purchases under our employee stock purchase plan, partially offset by $1.8 million in payments related to employee withholding taxes as a result of the net settlement of stock-based awards and $0.8 million in issuance costs related to the Facility.

Previous 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.

Current wording

As of September 30, 2024, we have non-cancellable contractual obligations related primarily to operating leases and minimum guaranteed purchase commitments for data and services. As of September 30, 2024, the total obligation for operating leases was $18.9 million, of which $4.4 million is expected to be paid in the next twelve months. As of September 30, 2024, our purchase commitment for primarily data and services was $12.3 million, of which $7.7 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 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).

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 nine months ended September 30, 2024, except as noted in Note 1 of the Notes to the Financial Statements (Part I, Item 1 of this Quarterly Report).