Freshworks Inc.

Previous wording

We provide people-first, AI service software that organizations use to deliver exceptional customer and employee experiences. We provide our solutions in two product families: Customer Experience (CX) and Employee Experience (EX). CX products include Freshdesk, Freshdesk Omni, Freshchat, Freshsales, and Freshmarketer. EX products include Freshservice, Freshservice for Business Teams and Device42. Our latest generative AI solutions, Freddy AI Agent and Freddy AI Copilot, further enhance the customer and employee experience. Freddy AI Agent offers always-on, autonomous, personalized resolutions to customer and employee queries. Freddy AI Copilot provides always-on contextual assistance for customer support, employee support, marketing and sales use cases to boost productivity.

Current wording

We build uncomplicated service software that delivers exceptional customer and employee experiences. Our people-first approach to AI eliminates friction, making employees more effective and organizations more productive. We provide our solutions in two product families: Customer Experience (CX) and Employee Experience (EX). CX products include Freshdesk, Freshdesk Omni, Freshchat, Freshsales, and Freshmarketer. EX products include Freshservice, Freshservice for Business Teams and Device42. Our latest generative AI solutions, Freddy AI Agent, Freddy AI Copilot and Freddy AI Insights, further enhance the customer and employee experience. Freddy AI Agent offers always-on, autonomous, personalized resolutions to customer and employee queries. Freddy AI Copilot provides contextual assistance for customer support, employee support, marketing and sales use cases to boost productivity. Freddy AI Insights empowers leaders with proactive, data-driven intelligence to make fast and informed decisions that help businesses optimize customer and employee service delivery.

Previous wording

Our customer base and operations have scaled over time. Our total revenue was $204.7 million and $174.1 million in the three months ended June 30, 2025 and 2024, respectively, representing year-over-year growth of 18%; and $401.0 million and $339.3 million in the six months ended June 30, 2025 and 2024, respectively, representing year-over-year growth of 18%. We incurred operating losses of $8.7 million and $43.8 million for three months ended June 30, 2025 and 2024, respectively; and $19.1 million and $76.0 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Our customer base and operations have scaled over time. Our total revenue was $215.1 million and $186.6 million in the three months ended September 30, 2025 and 2024, respectively, representing year-over-year growth of 15%; and $616.1 million and $525.8 million in the nine months ended September 30, 2025 and 2024, respectively, representing year-over-year growth of 17%. We incurred operating losses of $7.5 million and $38.9 million for three months ended September 30, 2025 and 2024, respectively; and $26.5 million and $114.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Current macroeconomic uncertainties, including inflationary pressures, significant volatility in global markets, tariffs, the threat of new or increased tariffs, escalating trade tensions, and geopolitical developments have impacted and may continue to impact business spending and the overall economy, and in turn our business. These macroeconomic events could adversely affect demand for our products and services. For example, during the recent quarters, our net dollar retention rate was adversely impacted by lower expansion within existing customers driven by macroeconomic pressures and we expect these pressures to persist for the foreseeable future. Additionally, foreign currency exchange rate fluctuations negatively impacted our revenue growth historically and volatility in the foreign currency market still exist. For each of the quarters ended June 30, 2025, March 31, 2025, and June 30, 2024, we had approximately 27% of revenue exposure related to the euro and British Pound. If adverse conditions arise, they could have a material adverse impact on our results and our ability to accurately predict our future results and earnings.

Current wording

Current macroeconomic uncertainties, including inflationary pressures, significant volatility in global markets, tariffs, the threat of new or increased tariffs, escalating trade tensions, and geopolitical developments have impacted and may continue to impact business spending and the overall economy, and in turn our business. These macroeconomic events could adversely affect demand for our products and services. For example, during the recent quarters, our net dollar retention rate was adversely impacted by lower expansion within existing customers driven by macroeconomic pressures and we expect these pressures to persist for the foreseeable future. Additionally, foreign currency exchange rate fluctuations negatively impacted our revenue growth historically and volatility in the foreign currency market still exist. For the quarters ended September 30, 2025, June 30, 2025, and September 30, 2024, we had approximately 28%, 27% and 27%, respectively, of revenue exposure related to the euro and British Pound. If adverse conditions arise, they could have a material adverse impact on our results and our ability to accurately predict our future results and earnings.

Previous wording

Our net dollar retention rate remained flat at 106% as of June 30, 2025, compared to 106% as of June 30, 2024, primarily due to lower expansion within existing customers driven by macroeconomic pressures, offset by a favorable foreign currency impact and slight improvement on overall churn rate. We expect our net dollar retention rate may fluctuate in future periods due to a number of factors, including, but not limited to, difficult macroeconomic conditions, our expected growth, the level of penetration within our customer base, our ability to upsell and cross-sell products to existing customers, and our ability to retain our customers.

Current wording

Our net dollar retention rate decreased to 105% as of September 30, 2025, compared to 107% as of September 30, 2024, primarily due to lower expansion within existing customers driven by macroeconomic pressures. We expect our net dollar retention rate may fluctuate in future periods due to a number of factors, including, but not limited to, difficult macroeconomic conditions, our expected growth, the level of penetration within our customer base, our ability to upsell and cross-sell products to existing customers, and our ability to retain our customers.

Previous wording

We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, restructuring charges, and amortization of acquired intangibles, and income tax adjustments.

Current wording

We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, restructuring charges, amortization of acquired intangibles, gain on sale of non-marketable equity investments and income tax adjustments.

Previous wording

(1) Free cash flow includes $0.7 million and $2.2 million of restructuring costs paid during the three and six months ended June 30, 2025.

Current wording

(1) Free cash flow includes $2.2 million of restructuring costs paid during the nine months ended September 30, 2025.

Previous wording

Interest and other income (expense), net primarily consists of interest income from our investment portfolios, amortization of premium or discount on marketable securities, and foreign currency gains and losses.

Current wording

Interest and other income (expense), net primarily consists of interest income from our investment portfolios, amortization of premium or discount on marketable securities, gain realized on sale of non-marketable equity investments, and foreign currency gains and losses.

Previous wording

(2) General and administrative expense includes stock-based compensation associated with RSUs and PRSUs granted to our Executive Chairman of $10.4 million and $12.7 million for the three months ended June 30, 2025 and 2024, respectively and $21.7 million and $26.2 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(2) General and administrative expense includes stock-based compensation associated with RSUs and PRSUs granted to our Executive Chairman of $10.1 million and $12.1 million for the three months ended September 30, 2025 and 2024, respectively and $31.8 million and $38.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Revenue increased by $30.5 million, or 18%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Of the total increase in revenue, approximately $11.4 million was attributable to revenue from existing customers as of June 30, 2024, net of contraction and churn, and approximately $19.1 million was attributable to revenue from new customers acquired during the twelve months ended June 30, 2025, net of contraction and churn. Our net dollar retention rate of 106% as of June 30, 2025 reflects the expansion within existing customers and the sale of additional products to these customers. Our net dollar retention rate remained flat from 106% as of June 30, 2024 primarily due to lower expansion within existing customers driven by macroeconomic pressures, offset by a favorable foreign currency impact and a slight improvement in our overall churn rate. The majority of our revenue continues to be generated from subscription services.

Current wording

Revenue increased by $28.5 million, or 15%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Of the total increase in revenue, approximately $9.7 million was attributable to revenue from existing customers as of September 30, 2024, net of contraction and churn, and approximately $18.8 million was attributable to revenue from new customers acquired during the twelve months ended September 30, 2025, net of contraction and churn. Our net dollar retention rate of 105% as of September 30, 2025 reflects the expansion within existing customers and the sale of additional products to these customers. Our net dollar retention rate decreased from 107% as of September 30, 2024 primarily due to lower expansion within existing customers driven by macroeconomic pressures. The majority of our revenue continues to be generated from subscription services.

Previous wording

Cost of revenue increased by $3.0 million, or 11%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily due to increases of $0.9 million in amortization of acquired developed technologies from the acquisition of D42 Parent, Inc., $0.8 million in personnel-related costs primarily due to annual compensation adjustments and higher variable incentive compensation and $0.8 million in third-party hosting costs as we expand capacity to support our growing customer base. Our gross margin increased to 85% for the three months ended June 30, 2025 from 84% in the same period of the prior year, as we increased our revenue and continue to realize benefits from economies of scale primarily related to our third-party hosting costs.

Current wording

Cost of revenue increased by $3.1 million, or 11%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by increases of $1.1 million in third-party hosting costs and $1.1 million in cloud software fees attributable to higher usage as we expand capacity to support our growing customer base, and $0.7 million in amortization of internally capitalized software. Our gross margin increased to 85% for the three months ended September 30, 2025 from 84% in the same period of the prior year, as we increased our revenue and continue to realize benefits from economies of scale primarily related to our third-party hosting costs.

Previous wording

The $7.6 million or 4%, decrease in our operating expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, was primarily driven by lower headcount following the restructuring, which decreased stock-based compensation expenses and personnel-related costs. This decrease is partially offset by the impact of annual compensation adjustments and higher variable incentive compensation which increased personnel-related costs. Additionally, the acquisition of D42 Parent, Inc. resulted in higher amortization of acquired developed technologies.

Current wording

The $6.0 million or 3%, decrease in our operating expenses for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, was primarily driven by lower headcount following the restructuring, which decreased stock-based compensation expenses and personnel-related costs. This decrease is partially offset by the impact of annual compensation adjustments and higher variable incentive compensation which increased personnel-related costs.

Previous wording

Research and development expense decreased by $1.1 million, or 3%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily driven by lower stock-based compensation expense of $1.8 million from employee terminations and fully vested equity awards and $3.6 million of higher capitalized internally developed software costs as a result of increased development activity. The decreases are partially offset by an increase in personnel-related costs of $2.8 million due to annual compensation adjustments and higher variable incentive compensation.

Current wording

Research and development expense decreased by $6.4 million, or 13%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily driven by lower stock-based compensation expense of $4.5 million from employee terminations and fully vested equity awards and $3.4 million of higher capitalized internally developed software costs as more development efforts met the criteria for capitalization during the period. This decrease was partially offset by an increase of $1.0 million in software licensing fees, web hosting costs for product development, and travel expenses.

Previous wording

General and administrative expense increased by $2.5 million, or 6%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily driven by increases of $2.7 million in stock-based compensation expense, mainly due to the transition of our President to CEO mid 2024 and $1.2 million in personnel-related costs primarily due to annual compensation adjustments and higher variable incentive compensation. The increases were partially offset by a decrease of $1.3 million in consulting fees, primarily related to acquisition-related expenses from the D42 Parent, Inc. acquisition.

Current wording

General and administrative expense increased by $0.7 million, or 1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by an increase of $2.2 million in personnel-related costs primarily due to higher variable incentive compensation and annual compensation adjustments, partially offset by a decrease of $1.8 million in stock-based compensation expense.

Previous wording

Interest income decreased by $3.6 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to lower balances maintained in our marketable securities portfolios.

Current wording

Interest income decreased by $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to reduction in average balances held in our marketable securities portfolios used for share repurchases.

Previous wording

Other income (expense), net changed by $2.9 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to changes in foreign exchange rates in British Pound and euro against the U.S. dollar.

Current wording

Other income (expense), net changed by $2.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a $4.7 million foreign exchange loss during the period, mostly from unfavorable changes in foreign exchange rates in Indian Rupee against the U.S. dollar, partially offset by a $1.8 million gain on sale of non-marketable equity investments.

Previous wording

We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. For the three months ended June 30, 2025 and 2024, we recorded an income tax provision (benefit) of $5.6 million and $(10.4) million on income (loss) before taxes of $3.9 million and $(30.5) million, respectively. The net increase in income tax provision of $15.9 million was primarily related to a tax benefit of $14.3 million from the Device42 acquisition as a result of releasing the valuation allowance due to sufficient income in prior year, and a higher pre-tax profit this year in certain foreign jurisdictions.

Current wording

We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. For the three months ended September 30, 2025 and 2024, the income tax provision remained consistent.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing significant changes to the U.S. tax code, including the immediate expensing of domestic U.S. research and development costs, the immediate expensing of certain capital expenditures, and other tax code changes effective beginning in 2026. We continue to evaluate the overall impact of the legislation on our Consolidated Financial Statements and will evaluate the impact on future periods as further guidance becomes available.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing significant changes to the U.S. tax code, including the immediate expensing of U.S. research and development costs, the immediate expensing of certain capital expenditures, and other tax code changes effective beginning in 2026. Based on our assessment, the effects of the enactment were not material for the three and nine months ended September 30, 2025. While we expect the current year’s impact to be immaterial, we continue to evaluate the broader implications of the legislation on our financial position and future results of operations.

Previous wording

Revenue increased by $61.7 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Of the total increase in revenue, approximately $29.1 million was attributable to revenue from existing customers as of June 30, 2024, net of contraction and churn, and approximately $32.6 million was attributable to revenue from new customers acquired during the twelve months ended June 30, 2025, net of contraction and churn. The substantial majority of our revenue continues to be generated from subscription services.

Current wording

Revenue increased by $90.2 million, or 17%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Of the total increase in revenue, approximately $51.5 million was attributable to revenue from existing customers as of September 30, 2024, net of contraction and churn, and approximately $38.7 million was attributable to revenue from new customers acquired during the twelve months ended September 30, 2025, net of contraction and churn. The substantial majority of our revenue continues to be generated from subscription services.

Previous wording

Cost of revenue increased by $7.0 million, or 13%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily due to increases of $2.2 million in amortization of acquired developed technologies acquired from D42 Parent, Inc., $1.9 million in personnel-related costs primarily due to annual compensation adjustments and changes in retirement benefit obligations for employees in India and $1.3 million in third-party hosting costs as we expand capacity to support our growing customer base. Our gross margin increased to 85% for the six months ended June 30, 2025 from 84% in the same period of the prior year, as we increased our revenue and realized benefits from economies of scale primarily related to our third-party hosting costs.

Current wording

Cost of revenue increased by $10.1 million, or 12%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily due to increases of $2.3 million in third-party hosting costs as we expand capacity to support our growing customer base, $2.3 million in personnel-related costs driven by annual compensation adjustments, higher variable incentive compensation and changes in retirement benefit obligations for employees in India, partially offset by lower headcount, $2.2 million in amortization of developed technology, $2.2 million in cloud software fees, and $1.1 million in amortization of internally capitalized software. Our gross margin increased to 85% for the nine months ended September 30, 2025 from 84% in the same period of the prior year, as we increased our revenue and realized benefits from economies of scale primarily related to our third-party hosting costs.

Previous wording

The $2.2 million, or 1%, decrease in our operating expenses in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, was primarily driven by lower headcount following the restructuring which deceased stock-based compensation expenses and personnel-related costs. This decrease is partially offset by the impact of annual compensation adjustments, changes in retirement benefit obligations for employees in India, and higher variable incentive compensation. Additionally, the acquisition of D42 Parent, Inc. resulted in higher amortization of acquired intangible assets.

Current wording

The $8.2 million, or 1%, decrease in our operating expenses in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, was primarily driven by lower headcount following the restructuring which decreased stock-based compensation expenses and personnel-related costs. This decrease is partially offset by the impact of annual compensation adjustments, changes in retirement benefit obligations for employees in India, and higher variable incentive compensation.

Previous wording

Research and development expense increased by $4.3 million, or 6%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily driven by increases of $8.2 million in personnel-related costs, driven by annual compensation adjustments, changes in retirement benefit obligations for employees in India, and higher variable incentive compensation. These increases were partially offset by lower stock-based compensation expense of $1.2 million due to employee terminations and fully vested equity awards and higher capitalized internally developed software cost of $5.1 million as a result of increased development activity.

Current wording

Research and development expense decreased by $2.2 million, or 2%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily driven by lower stock-based compensation of $5.7 million due to employee terminations and fully vested equity awards and $8.6 million of higher capitalized internally developed software costs as more development efforts met the criteria for capitalization during the period. These decreases were partially offset by increases of $8.1 million in personnel-related costs driven by annual compensation adjustments, higher variable incentive compensation and changes in retirement benefit obligations for employees in India, partially offset by lower headcount, $1.2 million in software licensing fees and $1.1 million in third-party hosting costs to support our development activities.

Previous wording

Sales and marketing expense decreased by $14.5 million, or 7%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was primarily driven by lower stock-based compensation of $10.5 million from employee terminations and the transition of our President to CEO mid 2024, $2.5 million driven by personnel-related costs from lower headcount, $5.6 million in advertisement, marketing and branding costs, and $1.5 million in consulting fees. These decreases were partially offset by increases of $3.6 million in amortization of acquired intangible assets from the D42 Parent, Inc. acquisition and $1.7 million in software license fees.

Current wording

Sales and marketing expense decreased by $14.8 million, or 5%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily driven by lower stock-based compensation of $14.0 million from employee terminations and the transition of our President to CEO mid 2024, a $5.2 million reduction in personnel-related costs from lower headcount, and a $3.3 million decrease in advertisement, marketing and branding costs. These decreases were partially offset by increases of $3.6 million in amortization of acquired intangible assets from the D42 Parent, Inc. acquisition, $3.0 million in software license fees, and $2.6 million in reseller commissions.

Previous wording

General and administrative expense increased by $7.7 million, or 9%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily driven by $3.2 million in personnel-related costs, mainly due to annual compensation adjustments and higher variable incentive compensation, and $5.3 million in stock-based compensation expense, mainly due to the transition of our President to CEO.

Current wording

General and administrative expense increased by $8.3 million, or 6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by increases of $5.4 million in personnel-related costs, mainly due to annual compensation adjustments and higher variable incentive compensation and $3.5 million in stock-based compensation expense, primarily from the transition of our President to CEO mid 2024.

Previous wording

Restructuring charges of $0.4 million for the six months ended June 30, 2025, consisted of employee severance and termination benefits related to the restructuring plan that we initiated in November 2024.

Current wording

Restructuring charges of $0.4 million for the nine months ended September 30, 2025, consisted of employee severance and termination benefits related to the restructuring plan that we initiated in November 2024.

Previous wording

Interest income decreased by $6.2 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to lower balances maintained in our marketable securities portfolios.

Current wording

Interest income decreased by $9.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to lower balances maintained in our marketable securities portfolios as a result of our share repurchase program.

Previous wording

We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. For the six months ended June 30, 2025 and 2024, we recorded an income tax provision (benefit) of $9.5 million and $(6.4) million, respectively. The net increase in tax benefit of $15.9 million was primarily related to a tax benefit of $14.3 million from the Device42 acquisition as a result of releasing the valuation allowance due to sufficient income in prior year, and a higher pre-tax profits this year in certain foreign jurisdictions.

Current wording

We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. For the nine months ended September 30, 2025 and 2024, we recorded an income tax provision (benefit) of $14.1 million and $(1.4) million, respectively. The net increase in tax benefit of $15.5 million was primarily related to a tax benefit of $14.3 million from the Device42 acquisition as a result of releasing the valuation allowance due to sufficient income in prior year, and a higher pre-tax profits this year in certain foreign jurisdictions.

Previous wording

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents of $486.0 million and marketable securities of $440.2 million, which were primarily held for working capital resources.

Current wording

As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $420.9 million and marketable securities of $392.3 million, which were primarily held for working capital resources.

Previous wording

As of June 30, 2025, we had an accumulated deficit of $3.7 billion. Our operating activities resulted in cash inflows of $116.6 million for the six months ended June 30, 2025.

Current wording

As of September 30, 2025, we had an accumulated deficit of $3.7 billion. Our operating activities resulted in cash inflows of $180.0 million for the nine months ended September 30, 2025.

Previous wording

Our material cash requirements from known contractual obligations consists primarily of our obligations under operating leases for office space and contractual obligations for third-party cloud infrastructure, service subscription, and sponsorship arrangement to promote our brand and services. See Note 7 — Leases and Note 8 — Commitments and Contingencies for additional discussion of our principal contractual commitments.

Current wording

Our material cash requirements from known contractual obligations consist primarily of our obligations under operating leases for office space and contractual obligations for third-party cloud infrastructure, service subscription, and sponsorship arrangement to promote our brand and services. See Note 7 — Leases and Note 8 — Commitments and Contingencies for additional discussion of our principal contractual commitments.

Previous wording

In November 2024, our board of directors approved the share repurchase program, which authorized the repurchase of up to $400 million of our outstanding Class A common stock. For the six months ended June 30, 2025, we repurchased a total of 14.9 million shares of Class A common stock under this program in open market transactions for an aggregate purchase price of $225.4 million. As of June 30, 2025, $159.1 million remained available for future share repurchases.

Current wording

In November 2024, our board of directors approved the share repurchase program, which authorized the repurchase of up to $400 million of our outstanding Class A common stock. For the nine months ended September 30, 2025, we repurchased a total of 26.9 million shares of Class A common stock under this program in open market transactions for an aggregate purchase price of $384.5 million. As of September 30, 2025, the share repurchase program is complete.

Previous wording

Net cash provided by operating activities of $116.6 million for the six months ended June 30, 2025 reflects our net loss of $3.0 million, adjusted for non-cash items such as stock-based compensation of $100.9 million, amortization of deferred contract acquisition costs of $15.4 million, depreciation and amortization of $12.6 million, and non-cash lease expense of $4.6 million; offset by $3.7 million from discount amortization of marketable securities. Additionally, net cash outflows from changes in operating assets and liabilities were $10.3 million. The net cash outflows from changes in operating assets and liabilities were primarily due to increases of $22.7 million in prepaid expenses and other assets and $18.8 million in deferred contract acquisition costs; offset by increases of $15.4 million in deferred revenue and $7.8 million in accrued and other liabilities, and a decrease of $7.0 million in accounts receivable.

Current wording

Net cash provided by operating activities of $180.0 million for the nine months ended September 30, 2025 reflects our net loss of $7.7 million, adjusted for non-cash items such as stock-based compensation of $149.5 million, amortization of deferred contract acquisition costs of $23.4 million, depreciation and amortization of $19.2 million, and non-cash lease expense of $7.0 million; offset by $5.5 million from discount amortization of marketable securities and $1.8 million gain on sale of non-marketable equity investments. Additionally, net cash outflows from changes in operating assets and liabilities were $4.3 million. The net cash outflows from changes in operating assets and liabilities were primarily due to increases of $29.4 million in deferred contract acquisition costs and $15.4 million in prepaid expenses and other assets, and a decrease of $5.7 million in operating lease liabilities; offset by increases of $24.3 million in deferred revenue, $13.2 million in accrued and other liabilities, $5.6 million in accounts payable and a decrease of $3.0 million in accounts receivable.

Previous wording

Net cash provided by operating activities of $77.0 million for the six months ended June 30, 2024 reflects our net loss of $43.5 million, adjusted for non-cash items such as stock-based compensation of $107.6 million, amortization of deferred contract acquisition costs of $13.5 million, depreciation and amortization of $6.7 million and non-cash lease expense of $4.4 million; offset by $13.8 million from changes in deferred income taxes and $8.7 million from discount amortization of marketable securities. Additionally, net cash inflows from changes in operating assets and liabilities were $11.0 million. The net cash inflows from changes in operating assets and liabilities were due to a decrease of $4.9 million in accounts receivable and increases in operating liabilities of $17.2 million in deferred revenue, $8.9 million in accrued and other liabilities and $6.0 million in accounts payable; offset by increases in operating assets of $16.9 million in deferred contract acquisition costs and $7.2 million in prepaid expenses and other assets; and a decrease of $2.0 million in operating lease liabilities.

Current wording

Net cash provided by operating activities of $119.3 million for the nine months ended September 30, 2024 reflects our net loss of $73.5 million, adjusted for non-cash items such as stock-based compensation of $166.3 million, amortization of deferred contract acquisition costs of $20.7 million, depreciation and amortization of $13.1 million and non-cash lease expense of $6.6 million; offset by $13.8 million from changes in deferred income taxes and $13.0 million from discount amortization of marketable securities. Additionally, net cash inflows from changes in operating assets and liabilities were $12.6 million. The net cash inflows from changes in operating assets and liabilities were due to a decrease of $6.6 million in accounts receivable and increases in operating liabilities of $27.0 million in deferred revenue, $10.2 million in accrued and other liabilities and $3.1 million in accounts payable; offset by increases in operating assets of $24.7 million in deferred contract acquisition costs and $7.7 million in prepaid expenses and other assets; and a decrease of $1.8 million in operating lease liabilities.

Previous wording

Net cash provided by investing activities of $3.4 million for the six months ended June 30, 2025 consisted of $12.5 million in maturities and redemptions of marketable securities, net of purchases; offset by $7.4 million in capitalized internal-use software and $1.7 million in purchases of property and equipment.

Current wording

Net cash provided by investing activities of $48.9 million for the nine months ended September 30, 2025 consisted of $62.2 million in maturities and redemptions of marketable securities, net of purchases and $2.0 million in proceeds from sale of non-marketable securities; offset by $11.9 million in capitalized internal-use software and $3.5 million in purchases of property and equipment.

Previous wording

Net cash used in investing activities of $220.5 million for the six months ended June 30, 2024 consisted of $213.9 million cash paid for business combination, $1.2 million in purchases of marketable securities, net of proceeds from maturities and sales, $2.4 million in capitalized internal-use software and $3.1 million in purchases of property and equipment.

Current wording

Net cash used in investing activities of $170.3 million for the nine months ended September 30, 2024 consisted of $213.9 million cash paid for business combination, net of cash acquired, $4.1 million in purchases of property and equipment and $3.6 million in capitalized internal-use software, offset by $51.2 million in maturities and sales of marketable securities, net of purchases.

Previous wording

Net cash used in financing activities of $254.3 million for the six months ended June 30, 2025 consisted of $227.2 million cash paid to repurchase shares of our common stock, including $1.8 million of unsettled common stock repurchases as of December 31, 2024, and $30.5 million in payment of withholding taxes on net share settlement of equity awards; offset by $3.3 million of proceeds from the issuance of common stock under our employee stock purchase plan, net of taxes withheld.

Current wording

Net cash used in financing activities of $428.3 million for the nine months ended September 30, 2025 consisted of $386.3 million cash paid to repurchase shares of our common stock, including $1.8 million of unsettled common stock repurchases as of December 31, 2024, and $45.4 million in payment of withholding taxes on net share settlement of equity awards; offset by $3.3 million of proceeds from the issuance of common stock under our employee stock purchase plan, net of taxes withheld.

Previous wording

Net cash used in financing activities of $34.3 million for the six months ended June 30, 2024 consisted of $38.0 million in payment of withholding taxes on net share settlement of equity awards, offset by $3.6 million of proceeds from the issuance of common stock under our employee stock purchase plan, net of taxes withheld.

Current wording

Net cash used in financing activities of $46.0 million for the nine months ended September 30, 2024 consisted of $49.6 million in payment of withholding taxes on net share settlement of equity awards, offset by $3.6 million of proceeds from the issuance of common stock under our employee stock purchase plan, net of taxes withheld.

Previous wording

There have been no changes to our critical accounting policies and estimates during the three and six months ended June 30, 2025 as compared to those disclosed in our "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in our Annual Report on Form 10-K filed with the SEC on February 20, 2025.

Current wording

There have been no changes to our critical accounting policies and estimates during the three and nine months ended September 30, 2025 as compared to those disclosed in our "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in our Annual Report on Form 10-K filed with the SEC on February 20, 2025.