Freshworks Inc.

Previous wording

We provide people-first AI service software that organizations use to deliver exceptional employee and customer experiences. Our employee experience (EX) products include Freshservice, Freshservice for Business Teams, Device42 and FireHydrant. Our customer experience (CX) products include our Freshdesk suite of products. Our AI offerings, which include Freddy AI Agent, Freddy AI Copilot and Freddy AI Insights, further enhance the employee and customer and employee experience and are designed to boost productivity.

Current wording

We provide people-first AI service software that organizations use to deliver exceptional employee and customer experiences. Our employee experience (EX) products include Freshservice, Freshservice for Business Teams, Device42 and FireHydrant. Our customer experience (CX) products include our Freshdesk suite of products. Our AI offerings, which include Freddy AI Agent, Freddy AI Copilot and Freddy AI Insights, further enhance the employee and customer experience and are designed to boost productivity.

Previous wording

In January 2026, the Company completed the acquisition of FireHydrant, Inc. (FireHydrant), a provider of AI-powered incident management software. The Company accounted for the transaction as a business combination and our consolidated financial statements and key business metrics include FireHydrant since the acquisition date.

Current wording

In January 2026, the Company completed the acquisition of FireHydrant, Inc. (FireHydrant), a provider of AI-powered incident management software. The Company accounted for the transaction as a business combination and our condensed consolidated financial statements and key business metrics include FireHydrant since the acquisition date.

Previous wording

Our customer base and operations have scaled over time. Our total revenue was $237.4 million and $204.7 million in the three months ended June 30, 2026 and 2025, respectively, representing year-over-year growth of 16%; and $466.0 million and $401.0 million in the six months ended June 30, 2026 and 2025, respectively, representing year-over-year growth of 16%. Our income (loss) from operations was $6.1 million and $(8.7) million for three months ended June 30, 2026 and 2025, respectively; and $(2.0) million and $(19.1) million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Our customer base and operations have scaled over time. Our total revenue was $245.4 million and $215.1 million in the three months ended September 30, 2026 and 2025, respectively, representing a year-over-year increase of 14%; and $711.4 million and $616.1 million in the nine months ended September 30, 2026 and 2025, respectively, representing a year-over-year increase of 15%. Our income (loss) from operations was $28.2 million and $(7.5) million for three months ended September 30, 2026 and 2025, and $26.2 million and $(26.5) million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Current macroeconomic uncertainties, including inflationary pressures, significant volatility in global markets, 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 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 exists. For the quarters ended June 30, 2026, March 31, 2026, and June 30, 2025, we had approximately 29%, 29% and 27%, respectively, of revenue exposure related to the euro and British pound. If adverse conditions persist, 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, 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 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 exists. For the quarters ended September 30, 2026, June 30, 2026, and September 30, 2025, we had approximately 29%, 29% and 28%, respectively, of revenue exposure related to the euro and British pound. If adverse conditions persist, they could have a material adverse impact on our results and our ability to accurately predict our future results and earnings.

Previous wording

Given our business model is primarily subscription-based, the effects of the macroeconomic conditions may not be fully reflected in our revenue until future periods. The ultimate impact on our business and operations remains highly uncertain, and it is not possible for us to predict the duration and extent to which this will affect our business, future results of operations, and financial condition. See the section titled “Risk Factors” in our Annual Report on

Current wording

Given our business model is primarily subscription-based, the effects of the macroeconomic conditions may not be fully reflected in our revenue until future periods. The ultimate impact on our business and operations remains highly uncertain, and it is not possible for us to predict the duration and extent to which this will affect our business, future results of operations, and financial condition. See the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion of the challenges and risks we have encountered and could encounter related to these macroeconomic events.

Previous wording

We define ARR as the sum total of subscription, software license, and maintenance revenue we would contractually expect to recognize over the next 12 months from all customers at a point in time, assuming no increases, reductions, or cancellations in their subscriptions, and assuming that revenues are recognized ratably over the term of subscription and maintenance contracts and upon delivery for software licenses. For monthly subscriptions, we take the recurring revenue run-rate of such subscriptions for the last month of the period and multiply it by 12 to get to ARR. While monthly subscribers as a group have historically maintained or increased their subscriptions over time, there is no guarantee that any particular customer on a monthly subscription will renew its subscription in any given month, and therefore the calculation of ARR for these monthly subscriptions may not accurately reflect revenue to be received over a 12-month period from such customers, and net dollar retention rate may reflect a higher rate than the actual rate if customers on monthly subscriptions choose not to renew during the course of the 12 months. Monthly subscriptions represented 12% and 13% of ARR as of June 30, 2026 and 2025, respectively. The net dollar retention rate for customers on monthly contracts has generally been lower than our overall net dollar retention rate. In addition, as part of our regular review of customer data that includes reviewing customers purchasing our products via resellers so we can properly attribute them as end customers, we may make adjustments that could impact the calculation of net dollar retention rate.

Current wording

We define ARR as the sum total of subscription, software license, and maintenance revenue we would contractually expect to recognize over the next 12 months from all customers at a point in time, assuming no increases, reductions, or cancellations in their subscriptions, and assuming that revenues are recognized ratably over the term of subscription and maintenance contracts and upon delivery for software licenses. For monthly subscriptions, we take the recurring revenue run-rate of such subscriptions for the last month of the period and multiply it by 12 to get to ARR. While monthly subscribers as a group have historically maintained or increased their subscriptions over time, there is no guarantee that any particular customer on a monthly subscription will renew its subscription in any given month, and therefore the calculation of ARR for these monthly subscriptions may not accurately reflect revenue to be received over a 12-month period from such customers, and net dollar retention rate may reflect a higher rate than the actual rate if customers on monthly subscriptions choose not to renew during the course of the 12 months. Monthly subscriptions represented 11% and 13% of ARR as of September 30, 2026 and 2025, respectively. The net dollar retention rate for customers on monthly contracts has generally been lower than our overall net dollar retention rate. In addition, as part of our regular review of customer data that includes reviewing customers purchasing our products via resellers so we can properly attribute them as end customers, we may make adjustments that could impact the calculation of net dollar retention rate.

Previous wording

Our net dollar retention rate was 104% as of June 30, 2026, compared to 106% as of June 30, 2025. This decrease was primarily due to unfavorable fluctuations in foreign exchange rates. We expect our net dollar retention rate may fluctuate more in future periods due to a number of factors, including, but not limited to, difficult macroeconomic conditions, volatility in foreign exchange rates, 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 was 104% as of September 30, 2026, compared to 105% as of September 30, 2025. This decrease was primarily due to unfavorable fluctuations in foreign currency exchange rates. We expect our net dollar retention rate may fluctuate more in future periods due to a number of factors, including, but not limited to, difficult macroeconomic conditions, volatility in foreign currency exchange rates, 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

(1) Free cash flow includes $0.7 million of acquisition costs paid during the six months ended June 30, 2026 and $5.6 million of restructuring costs paid during the three and six months ended June 30, 2026. There were no acquisition costs paid during the three months ended June 30, 2026. Additionally, 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, respectively.

Current wording

(1) Free cash flow includes acquisition costs paid of $0.7 million during the nine months ended September 30, 2026. Additionally, free cash flow includes restructuring costs paid of $1.1 million and $6.8 million during the three and nine months ended September 30, 2026, respectively, and $2.2 million during the nine months ended September 30, 2025.

Previous wording

We are subject to income taxes in U.S. states and in foreign jurisdictions. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions as well as non-deductible expenses, such as stock-based compensation, and changes in our valuation allowance.

Current wording

We are subject to federal and state income taxes in United States and in foreign jurisdictions. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions as well as non-deductible expenses, such as stock-based compensation, and changes in our valuation allowance.

Previous wording

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

Current wording

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

Previous wording

Total revenue increased by $32.7 million, or 16%, for thethree months ended June 30, 2026 compared to thethree months ended June 30, 2025. Of the total increase in revenue, approximately $16.0 million was attributable to revenue from existing customers as of June 30, 2025, net of contraction and churn, and approximately $16.7 million was attributable to revenue from new customers acquired during the twelve months ended June 30, 2026, net of contraction and churn.

Current wording

Total revenue increased by $30.3 million, or 14%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Of the total increase in revenue, approximately $14.8 million was attributable to revenue from existing customers as of September 30, 2025, net of contraction and churn, and approximately $15.5 million was attributable to revenue from new customers acquired during the twelve months ended September 30, 2026, net of contraction and churn.

Previous wording

Cost of revenue increased by $5.0 million, or 16%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a $4.6 million increase in third-party hosting costs, which was driven by the increased capacity and volume required to support new customers. . Our gross margin remained flat at 85% for the three months ended June 30, 2026 and 2025.

Current wording

Cost of revenue increased by $3.0 million, or 9%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by a $2.3 million increase in software license fees and third-party hosting costs, which was driven by the increased capacity and volume required to support new customers, and $0.9 million in amortization of internally capitalized software. Our gross margin remained flat at 85% for the three months ended September 30, 2026 and 2025.

Previous wording

The $13.0 million or 7%, increase in our operating expenses for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to restructuring charges, higher marketing sponsorship costs, and merit-driven salary increases, partially offset by lower stock-based compensation expense from the departure of our former Executive Chairman in December 2025.

Current wording

The $8.4 million or 4%, decrease in our operating expenses for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to lower stock-based compensation expenses from the departure of our former Executive Chairman in December 2025, personnel-related costs due to lower average headcount resulting from the impact of restructuring in May 2026 and costs associated with marketing activities. The overall decrease in operating expenses was partially offset by higher software license fees and acquisition-related professional fees.

Previous wording

General and administrative expense decreased by $9.1 million, or 19%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by $11.3 million in stock-based compensation expense primarily due to the departure of our former Executive Chairman in December 2025 partially offset by an increase of $1.6 million in personnel-related costs primarily due to annual compensation adjustments and lower average headcount resulting from the impacts of restructuring.

Current wording

General and administrative expense decreased by $9.0 million, or 19%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was primarily driven by $11.4 million in stock-based compensation expense primarily due to the departure of our former Executive Chairman in December 2025. The overall decrease in general and administrative was partially offset by an increase of $1.4 million in acquisition-related professional fees and $0.7 million in software license fees.

Previous wording

Interest income decreased by $3.9 million, or 39%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to reduction in average balances held in our marketable securities portfolios used for share repurchases.

Current wording

Interest income decreased by $3.0 million, or 34%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to reduction in average balances held 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 three months ended June 30, 2026 and 2025, we recorded a provision for income taxes of $7.0 million and $5.6 million on income before taxes of $10.3 million and $3.9 million, respectively. The increase in the provision for income taxes for the three months ended June 30, 2026, was largely driven by higher income before income taxes in the period compared to the same quarter of 2025 and lower excess tax benefits from stock-based compensation during the three months period ended June 30, 2026.

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, 2026 and 2025, we recorded a provision for income taxes of $14.3 million and $4.6 million on income (loss) before provision for income taxes of $32.5 million and $(0.1) million, respectively. The increase in the provision for income taxes for the three months ended September 30, 2026, was largely driven by higher income before provision for income taxes in the period compared to the same quarter of 2025 and lower excess tax benefits from stock-based compensation during the three months period ended September 30, 2026.

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 U.S. research and development costs, the immediate expensing of certain capital expenditures, and other tax code changes effective beginning in 2026, which were not material to our tax expense.

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.

Previous wording

Revenue increased by $65.1 million, or 16%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Of the total increase in revenue, approximately $34.8 million was attributable to revenue from existing customers as of June 30, 2025, net of contraction and churn, and approximately $30.3 million was attributable to revenue from new customers acquired during the twelve months ended June 30, 2026, net of contraction and churn. The substantial majority of our revenue continues to be generated from subscription services.

Current wording

Revenue increased by $95.4 million, or 15%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Of the total increase in revenue, approximately $58.5 million was attributable to revenue from existing customers as of September 30, 2025, net of contraction and churn, and approximately $36.9 million was attributable to revenue from new customers acquired during the twelve months ended September 30, 2026, 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 $9.8 million, or 16%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Of the total increase, approximately $6.0 million is attributable to third-party hosting costs and cloud software fees driven by the increased capacity and volume required to support new customers. Additionally, the increase was also driven by $1.9 million in amortization of internally capitalized software. Our gross margin remained relatively flat at 85% for the six months ended June 30, 2026 and 2025.

Current wording

Cost of revenue increased by $12.8 million, or 14%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Of the total increase, approximately $8.0 million is attributable to third-party hosting costs and software license fees, driven by the increased capacity and volume required to support new customers, $2.9 million in amortization of internally capitalized software, and $1.1 million in amortization of developed technology. Our gross margin remained flat at 85% for the nine months ended September 30, 2026 and 2025.

Previous wording

The $38.2 million, or 11%, increase in our operating expenses in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, was primarily driven by higher personnel related costs due to annual compensation adjustments, marketing sponsorship costs and restructuring costs, partially offset by lower stock-based compensation expense from the departure of our former Executive Chairman in December 2025 and lower average headcount resulting from the impacts of restructuring.

Current wording

The $29.8 million, or 5%, increase in our operating expenses in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, was primarily driven by higher personnel related costs due to annual compensation adjustments and internally capitalized software costs, marketing sponsorship costs, restructuring costs, software licensing fees and third-party hosting costs, professional service fees, and losses from hedging activities. The overall increase in operating expenses was partially offset by lower stock-based compensation expense from the departure of our former Executive Chairman in December 2025 and an average lower headcount resulting from the impact of restructuring in May 2026.

Previous wording

Sales and marketing expense increased by $34.4 million, or 19%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to increases in personnel-related costs of $15.9 million primarily from annual compensation adjustment, partially offset by lower average headcount resulting from the impacts of restructuring, $12.1 million in marketing sponsorship costs, $1.7 million in professional service fees, $1.7 million in tools and subscription costs, and $1.5 million in reseller commissions

Current wording

Sales and marketing expense increased by $31.9 million, or 11%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by $15.9 million in personnel-related costs primarily from annual compensation adjustments, partially offset by lower average headcount resulting from the impact of restructuring, $10.3 million in marketing sponsorship costs, $2.4 million in software licensing fees, $1.5 million in reseller commissions, $1.2 million related to losses from hedging activities, $1.2 million in professional service fees, and $1.1 million in amortization of intangible assets. The overall increase in sales and marketing was partially offset by a $2.5 million decrease in stock-based compensation expense driven by an average lower headcount.

Previous wording

General and administrative expense decreased by $15.9 million, or (17)%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by $(21.8) million in stock-based compensation expense primarily due to the departure of our former Executive Chairman in December 2025; partially offset by $4.3 million in personnel-related costs primarily due to annual compensation adjustments, partially offset by lower average headcount resulting from the impacts of restructuring.

Current wording

General and administrative expense decreased by $24.9 million, or 18%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease was primarily driven by $33.2 million in stock-based compensation expense primarily due to the departure of our former Executive Chairman in December 2025. The overall decrease in general and administrative was partially offset by a $3.9 million increase in personnel-related costs primarily from annual compensation adjustments net of the impact from lower average headcount resulting from restructuring, $1.6 million in acquisition-related expenses, $1.6 million in software licensing costs, and $0.9 million in professional service fees.

Previous wording

Restructuring charges of $7.0 million for the three months ended June 30, 2026, consisted of employee severance and termination benefits related to the restructuring plan that we initiated in May 2026. See Note 12—Restructuring Charges.

Current wording

Restructuring charges of $6.8 million for the nine months ended September 30, 2026, consisted of employee severance and termination benefits related to the restructuring plan that we initiated in May 2026. See Note 12 —Restructuring Charges.

Previous wording

Interest income decreased by $8.2 million, or (38)%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to lower balances maintained in our marketable securities portfolios as a result of our share repurchase program.

Current wording

Interest income decreased by $11.2 million, or 37%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to lower balances maintained in our marketable securities portfolios as a result of our share repurchase program.

Previous wording

Other income (expense), net changed by $4.4 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to a $4.2 million unrealized foreign exchange loss during the period, mostly from unfavorable changes in foreign exchange rates in the Indian rupee against the U.S. dollar.

Current wording

Other (expense) income, net changed by $11.8 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to a $9.5 million foreign exchange loss during the period related to unfavorable changes in foreign currency exchange rates primarily in Indian rupee against the U.S. dollar, and $1.8 million from a gain on the sale of investments in the nine months ended September 30, 2025.

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, 2026 and 2025, we recorded a provision for income taxes of $5.2 million and $9.5 million on income before income taxes of $3.6 million and $6.4 million, respectively. The decrease in the provision for income taxes for the six months ended June 30, 2026 was largely driven by lower income before income taxes in the period compared to the corresponding period of 2025, offset by lower excess tax benefits from stock based compensation during the six months period ended June 30, 2026.

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, 2026 and 2025, we recorded a provision for income taxes of $19.5 million and $14.1 million on income (loss) before provision for income taxes of $36.2 million and $6.4 million, respectively. The increase in the provision for income taxes for the nine months ended September 30, 2026 was largely driven by higher income before provision for income taxes in the period compared to the corresponding period of 2025, offset by lower excess tax benefits from stock-based compensation during the nine months ended September 30, 2026.

Previous wording

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $494.7 million and marketable securities of $169.4 million, which were primarily held for working capital resources.

Current wording

As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents of $466.7 million and marketable securities of $229.5 million, which were primarily held for working capital resources.

Previous wording

As of June 30, 2026, we had an accumulated deficit of $3.6 billion. Our operating activities resulted in cash inflows of $120.9 million for the six months ended June 30, 2026. In May 2026, we announced a restructuring plan that incurred restructuring charges of $7.0 million in the second quarter of 2026, consisting primarily of cash expenditures for separation-related and other employee benefits costs. See Note 12—Restructuring Charges.

Current wording

As of September 30, 2026, we had an accumulated deficit of $3.5 billion. Our operating activities resulted in cash inflows of $198.6 million for the nine months ended September 30, 2026. In May 2026, we announced a restructuring plan that incurred restructuring charges of $6.8 million in the nine months ended September 30, 2026, consisting primarily of cash expenditures for separation-related and other employee benefits costs. The restructuring plan is complete as of September 30, 2026. See Note 12—Restructuring Charges.

Previous wording

In February 2026, our board of directors approved the share repurchase program, which authorized the repurchase of up to $400.0 million of our outstanding Class A common stock. For the six months ended June 30, 2026, we repurchased a total of 24.0 million shares of Class A common stock under this program in open market transactions for an aggregate purchase price of $204.5 million. As of June 30, 2026, $195.5 million remained available for future share repurchases under the current program.

Current wording

In February 2026, our board of directors (the Board) approved the share repurchase program, which authorized the repurchase of up to $400.0 million of our outstanding Class A common stock. For the nine months ended September 30, 2026, we repurchased a total of 26.8 million shares of Class A common stock under this program in open market transactions for an aggregate purchase price of $231.7 million. As of September 30, 2026, $168.3 million remained available for future share repurchases under the current program.

Previous wording

Net cash provided by operating activities of $120.9 million for the six months ended June 30, 2026 reflects our net loss of $1.6 million, adjusted for non-cash items such as stock-based compensation of $81.8 million, amortization of deferred contract acquisition costs of $17.5 million, depreciation and amortization of $16.1 million, non-cash lease expense of $5.6 million and $9.4 million of other items, primarily related to effects of exchange rate changes on cash, cash equivalents and restricted cash; offset by $2.6 million change in deferred tax provision and $1.2 million from discount amortization of marketable securities. Additionally, net cash inflows from changes in operating assets and liabilities were $4.1 million. The net cash inflows from changes in operating assets and liabilities were primarily due to a decrease of $14.6 million in accounts receivable and increases of $15.6 million in accounts payable and $9.5 million in deferred revenue; offset by increases of $21.3 million in deferred contract acquisition costs, $10.3 million in prepaid expenses and other assets, and decreases of $6.4 million in operating lease liabilities and $5.7 million in accrued expenses and other liabilities.

Current wording

Net cash provided by operating activities of $198.6 million for the nine months ended September 30, 2026 reflects our net income of $16.7 million, adjusted for non-cash items such as stock-based compensation of $120.6 million, amortization of deferred contract acquisition costs of $26.8 million, depreciation and amortization of $25.1 million, net foreign currency loss of $10.3 million, non-cash lease expense of $8.1 million, change in deferred tax provision of $7.2 million and $1.0 million of other items; partially offset by $1.3 million from discount amortization on marketable securities. Additionally, net cash outflows from changes in operating assets and liabilities were $15.7 million. The net cash outflows from changes in operating assets and liabilities were primarily due to an increase of $30.9 million in deferred contract acquisition costs, decreases of $10.9 million in accrued and other liabilities and $8.6 million in operating lease liabilities, and an increase of $0.5 million in prepaid expenses and other assets; partially offset by a decrease of $14.7 million in accounts receivable and increases of $13.5 million in deferred revenue and $6.9 million in accounts payable.

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 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 on 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; partially 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 used in investing activities of $27.6 million for the six months ended June 30, 2026 consisted of $56.9 million paid for business combinations, net of cash acquired, $8.9 million in purchases of property and equipment, which primarily include construction and improvements at our major offices, and $4.9 million in capitalized internal-use software, partially offset by $43.1 million in maturities and redemption of marketable securities, net of purchases.

Current wording

Net cash used in investing activities of $94.2 million for the nine months ended September 30, 2026 consisted of $56.9 million paid for business combinations, net of cash acquired, $18.5 million in purchase of marketable securities, net of maturities and redemption, $11.8 million in purchases of property and equipment, which primarily include construction and improvements at our major offices, and $7.0 million in capitalized internal-use software.

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 equity investments; 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 financing activities of $221.3 million for the six months ended June 30, 2026 consisted of $207.4 million cash paid to repurchase shares of our common stock and $17.0 million in payment of withholding taxes on net share settlement of equity awards, partially offset by $3.1 million receipt of ESPP proceeds.

Current wording

Net cash used in financing activities of $260.2 million for the nine months ended September 30, 2026 consisted of $234.6 million cash paid to repurchase shares of our common stock and $28.7 million in payment of withholding taxes on net share settlement of equity awards, partially offset by $3.1 million receipt of ESPP proceeds.

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 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 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

There have been no changes to our critical accounting policies and estimates during the three and six months ended June 30, 2026 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 26, 2026.

Current wording

There have been no changes to our critical accounting policies and estimates during the three and nine months ended September 30, 2026 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 26, 2026.