Life360, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025 (“Annual Report”). In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a variety of factors, including but not limited to those discussed in “Risk Factors” under Part II, Item 1A in this Quarterly Report and Part I, Item 1A in our Annual Report.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025 (“Annual Report”). In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a variety of factors, including but not limited to those discussed in “Risk Factors” under Part II, Item 1A in this Quarterly Report, Part II, Item 1A in our previous Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and Part I, Item 1A in our Annual Report.

Previous wording

We generate revenue primarily from sales of subscriptions on our platform, including Life360, Jiobit and Tile. Revenue is recognized ratably over the related contractual term generally beginning on the date that our platform is made available to a customer. Our subscription agreements typically have monthly or annual contractual terms. Our agreements are generally non-cancellable during the contract term. We typically bill in advance for monthly and annual contracts. Amounts that have been billed are initially recorded as deferred revenue until the revenue is recognized.

Current wording

We generate revenue primarily from sales of subscriptions on our platform, including Life360, Jio, Inc. (“Jiobit”) and Tile, Inc. (“Tile”). Revenue is recognized ratably over the related contractual term generally beginning on the date that our platform is made available to a customer. Our subscription agreements typically have monthly or annual contractual terms. Our agreements are generally non-cancellable during the contract term. We typically bill in advance for monthly and annual contracts. Amounts that have been billed are initially recorded as deferred revenue until the revenue is recognized.

Previous wording

Other income, net consists of interest income earned on our cash and cash equivalents balances, foreign currency exchange gains/(losses) related to the remeasurement of certain assets and liabilities of our foreign subsidiaries that are denominated in currencies other than the functional currency of the subsidiary and foreign exchange transactions gains/(losses), interest expense primarily related to the Convertible Notes.

Current wording

Other income (expense), net consists of interest income earned on our cash and cash equivalents balances, foreign currency exchange gains/(losses) related to the remeasurement of certain assets and liabilities of our foreign subsidiaries that are denominated in currencies other than the functional currency of the subsidiary and foreign exchange transactions gains/(losses), and interest expense primarily related to the Convertible Notes.

Previous wording

The following tables set forth our condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2025 and 2024 (in thousands, except percentages).

Current wording

The following tables set forth our condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024 (in thousands, except percentages).

Previous wording

Subscription revenue increased $20.3 million, or 33%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a 26% growth in Paying Circles (as defined below) and a 19% growth in total subscriptions. Additionally, subscription revenue in the current period benefited from price increases for new and existing Life360 subscriptions implemented during the second half of 2024.

Current wording

Subscription revenue increased $22.9 million, or 35%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to 25% growth in Paying Circles (as defined below) and 18% growth in total subscriptions. Additionally, subscription revenue in the current period benefited from price increases for new and existing Life360 subscriptions implemented during the second half of 2024 and continuing into 2025.

Previous wording

Other revenue increased $6.4 million, or 99%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to a $4.5 million increase in partnership revenue, which includes advertising revenue, and a $1.9 million increase in data revenue, which was primarily attributable to the Amended and Restated Data Services and License Agreement with Placer.ai we entered into in July 2024.

Current wording

Other revenue increased $7.2 million, or 100%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to a $4.9 million increase in partnership revenue, which includes advertising revenue, and a $2.3 million increase in data revenue, which was primarily attributable to the Amended and Restated Data Services and License Agreement with Placer.ai we entered into in July 2024.

Previous wording

Hardware revenue decreased $1.3 million, or 13%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decline was primarily driven by a $0.9 million reduction in revenue related to bundled offerings as well as a $1.2 million increase in discounts. These impacts were partially offset by a $0.7 million decrease in returns and a $0.1 million increase in gross revenue, which was driven by a higher average selling price.

Current wording

Hardware revenue decreased $0.9 million, or 4%, during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The decline was primarily driven by a $2.2 million increase in discounts and a $1.9 million reduction in revenue related to bundled offerings. These impacts were partially offset by a $2.7 million increase in revenue primarily from online retail sales, in line with an 8% increase in net hardware units shipped, and a $0.5 million decrease in returns.

Previous wording

Subscription gross margin increased to 88% during the three months ended March 31, 2025 from 85% during the three months ended March 31, 2024, primarily due to price increases for new and existing Life360 subscriptions implemented during the second half of 2024.

Current wording

Subscription gross margin increased to 85% during the three months ended June 30, 2025 from 84% during the three months ended June 30, 2024, primarily due to price increases for new and existing Life360 subscriptions implemented during the second half of 2024.

Previous wording

Cost of other revenue increased by $0.5 million, or 51%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to increases of $0.3 million in technology and other related expenses to support the existing customer base and $0.2 million in costs associated with the growth in partnership revenue, which includes advertising revenue.

Current wording

Cost of other revenue increased $0.7 million, or 78%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to increases of $0.5 million in technology and other related expenses to support the existing customer base, and $0.2 million in costs associated with the growth in partnership revenue, which includes advertising revenue.

Previous wording

Other gross margin increased to 90% during the three months ended March 31, 2025 from 86% during the three months ended March 31, 2024, primarily due to revenue outpacing the increase in costs.

Current wording

Other gross margin increased to 89% during the three months ended June 30, 2025 from 87% during the three months ended June 30, 2024, primarily due to revenue outpacing the increase in costs.

Previous wording

Hardware gross margin decreased to 3% during the three months ended March 31, 2025 from 21% during the three months ended March 31, 2024, primarily due to a $1.2 million increase in discounts, an increase in freight costs associated with the shift in channel mix, and an increase in fixed hardware costs in line with Company growth.

Current wording

Hardware gross margin decreased to 11% during the six months ended June 30, 2025 from 19% during the six months ended June 30, 2024, primarily due to a $2.2 million increase in discounts, an increase in freight costs associated with the shift in channel mix, an increase in tariff costs, and an increase in fixed hardware costs in line with Company growth.

Previous wording

Sales and marketing expenses increased $10.6 million, or 43%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This was primarily due to increases of $3.7 million in commissions to the Company’s third-party platforms and distribution channels (each a “Channel Partner”), which is in line with the increase in subscription revenue, and $3.3 million in growth media spend. Additional increases included $1.9 million in personnel-related and stock-based compensation costs, $1.0 million in other marketing spend, $0.4 million in technology costs, and $0.3 million in professional and outside services spend, all attributable to Company growth.

Current wording

Sales and marketing expenses increased $14.5 million, or 60%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This was primarily due to increases of $5.2 million in growth media spend and $4.2 million in commissions to the Company’s third-party platforms and distribution channels (each a “Channel Partner”), in line with the increase in subscription revenue. Additional increases included $3.3 million in personnel-related and stock-based compensation costs, $1.4 million in other marketing spend, and $0.4 million in technology costs, attributable to Company growth.

Previous wording

General and administrative expenses increased $1.2 million, or 9%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This was primarily due to increases of $1.6 million in personnel-related and stock-based compensation costs and $0.8 million in technology and other expenses, attributable to Company growth. The increases were partially offset by a decrease of $1.0 million in professional and outside services spend, primarily driven by lower Sarbanes-Oxley related compliance costs, and a $0.2 million increase in capitalized internally developed software.

Current wording

General and administrative expenses increased $2.8 million, or 19%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This was primarily due to increases of $3.3 million in personnel-related and stock-based compensation costs and $0.5 million in technology and other expenses, attributable to Company growth. These increases were partially offset by a $0.9 million decrease in professional and outside services, driven by lower Sarbanes-Oxley related compliance costs, and a $0.1 million increase in capitalized internally developed software.

Previous wording

In April and June 2024, the September 2021 Convertible Notes and the July 2021 Convertible Notes, respectively, were converted to common stock. As a result, the Company recorded no gain or loss associated with the convertible notes fair value adjustment for the three months ended March 31, 2025. A loss of $0.6 million associated with the convertible notes fair value adjustment was recorded for the three months ended March 31, 2024.

Current wording

In April and June 2024, the September 2021 Convertible Notes and the July 2021 Convertible Notes, respectively, were converted to common stock. As a result, the Company recorded no gain or loss associated with the Convertible Notes fair value adjustment for both the three and six months ended June 30, 2025. For the three and six months ended June 30, 2024, the Company recorded a loss associated with the Convertible Notes fair value adjustment of zero and $0.6 million, respectively.

Previous wording

In June 2024, the holders of the July 2021 Convertible Notes converted their notes and accrued interest to common stock and the embedded derivative liability was settled as a result of the conversion. As such, the Company recorded no gain or loss associated with the derivative liability fair value adjustment for the three months ended March 31, 2025. A loss of $1.7 million was recorded for the three months ended March 31, 2024.

Current wording

In June 2024, the holders of the July 2021 Convertible Notes converted their notes and accrued interest to common stock and the embedded derivative liability was settled as a result of the conversion. As such, the Company recorded no gain or loss associated with the derivative liability fair value adjustment for the three and six months ended June 30, 2025. For the three and six months ended June 30, 2024, the Company recorded a loss associated with the derivative liability fair value adjustment of zero and $1.7 million respectively.

Previous wording

Other income, net includes interest income, dividend income, foreign exchange losses, and interest expense associated with the July 2021 Convertible Notes. For the three months ended March 31, 2025, other income, net consists of $2.0 million in other income and for the three months ended March 31, 2024, consists of $0.9 million in other income and $0.6 million in other expense.

Current wording

Other income (expense), net includes interest income, dividend income, foreign exchange gains and losses, and interest expense associated with the July 2021 and June 2025 Convertible Notes.

Previous wording

Other income, net increased $1.7 million, or 535%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This was primarily driven by a $0.9 million increase in dividend and interest income resulting from higher average gross yields primarily due to an increased cash and cash equivalents balance. In addition, a $0.4 million favorable change in the impact of currency revaluation and a $0.4 million reduction in interest expense and other costs contributed to the increase.

Current wording

Other income (expense), net increased $9.6 million, or 224%, during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. This was primarily driven by a $5.6 million decrease in transaction costs incurred in connection with our U.S. IPO and a $2.4 million increase in dividend and interest income resulting from higher average gross yields primarily due to an increased cash and cash equivalents balance. In addition, a $1.6 million favorable change in the impact of currency revaluation contributed to the increase.

Previous wording

Benefit from income taxes increased $1.6 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The changes are due to the estimated growth in the Company’s annual estimated effective tax rate in the U.S. Provision for income taxes which consists of U.S. federal and state income taxes in jurisdictions in which we conduct business. The annual estimated effective tax rate in any quarter may be subject to fluctuations during the year as new information is obtained, which may positively or negatively affect the assumptions used to estimate the annual effective tax rate. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Current wording

Benefit from income taxes increased $5.9 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Benefit from income taxes increased $7.5 million during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The changes are due to the estimated growth in the Company’s annual estimated effective tax rate in the U.S. Provision for income taxes which consists of U.S. federal and state income taxes in jurisdictions in which we conduct business. The annual estimated effective tax rate in any quarter may be subject to fluctuations during the year as new information is obtained, which may positively or negatively affect the assumptions used to estimate the annual effective tax rate. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Previous wording

Excludes revenue related to bundled Life360 subscription and hardware offerings of $(0.4) million for the three months ended March 31, 2025, and $(1.2) million for the three months ended March 31, 2024.

Current wording

(1) Excludes revenue related to bundled Life360 subscription and hardware offerings of $(0.3) and $(0.7) for the three and six months ended June 30, 2025, respectively, and $(1.3) and $(2.6) for the three and six months ended June 30, 2024, respectively.

Previous wording

Excludes revenue related to bundled Life360 subscription and hardware offerings of $0.4 million for the three months ended March 31, 2025, and $1.2 million for the three months ended March 31, 2024.

Current wording

(2) Excludes revenue related to bundled Life360 subscription and hardware offerings of $0.3 and $0.6 for the three and six months ended June 30, 2025, respectively, and $1.3 and $2.5 for the three and six months ended June 30, 2024, respectively.

Previous wording

We use Annualized Monthly Revenue (“AMR”) to identify the annualized monthly value of active customer agreements at the end of a reporting period. AMR includes the annualized monthly value of subscription, data and partnership agreements. All components of these agreements that are not expected to recur are excluded. This does not represent revenue under GAAP on an annualized basis, as the operating metric can be impacted by start and end dates and renewal rates. AMR as of March 31, 2025, and 2024 was $393.0 million and $284.7 million, respectively, representing an increase of 38% year-over-year, which is largely attributable to continued subscriber growth.

Current wording

We use Annualized Monthly Revenue (“AMR”) to identify the annualized monthly value of active customer agreements at the end of a reporting period. AMR includes the annualized monthly value of subscription, data and partnership agreements. All components of these agreements that are not expected to recur are excluded. This does not represent revenue under GAAP on an annualized basis, as the operating metric can be impacted by start and end dates and renewal rates. AMR as of June 30, 2025, and 2024 was $416.1 million and $304.8 million, respectively, representing an increase of 36% year-over-year, which is largely attributable to continued subscriber growth.

Previous wording

We have a large and growing global member base as of March 31, 2025. A Life360 monthly active user (“MAU”) is defined as a unique member who engages with our Life360 branded services each month, which includes both paying and non-paying members, and excludes certain members who have a delayed account setup. As of March 31, 2025 and 2024, we had approximately 83.7 million and approximately 66.4 million MAUs on the Life360 Platform, respectively, representing an increase of 26% year-over-year. We believe this has been driven by continued strong new member growth and retention.

Current wording

We have a large and growing global member base as of June 30, 2025. A Life360 monthly active user (“MAU”) is defined as a unique member who engages with our Life360 branded services each month, which includes both paying and non-paying members, and excludes certain members who have a delayed account setup. As of June 30, 2025 and 2024, we had approximately 88.0 million and approximately 70.6 million MAUs on the Life360 platform, respectively, representing an increase of 25% year-over-year. We believe this has been driven by continued strong new member growth and retention.

Previous wording

As of March 31, 2025 and 2024, we had approximately 2.4 million and 1.9 million paid subscribers to services under our Life360 brand, respectively, representing an increase of 26% year-over-year. We grow the number of Paying Circles by increasing our free member base, converting free members to subscribers, and retaining them over time with the provision of high-quality family connectivity and safety services.

Current wording

As of June 30, 2025 and 2024, we had approximately 2.5 million and 2.0 million paid subscribers to services under our Life360 brand, respectively, representing an increase of 25% year-over-year. We grow the number of Paying Circles by increasing our free member base, converting free members to subscribers, and retaining them over time with the provision of high-quality family connectivity and safety services.

Previous wording

We define Average Revenue per Paying Circle (“ARPPC”) as annualized subscription revenue recognized and derived from the Life360 mobile application, excluding revenue related to bundled Life360 subscription and hardware offerings, for the reported period, divided by the Average Paying Circles during the same period. Average Paying Circles are calculated by adding the number of Paying Circles as of the beginning of the period to the number of Paying Circles as of the end of the period, and then dividing by two.

Current wording

We define ARPPC as annualized subscription revenue recognized and derived from the Life360 mobile application, excluding revenue related to bundled Life360 subscription and hardware offerings, for the reported period, divided by the Average Paying Circles during the same period. Average Paying Circles are calculated by adding the number of Paying Circles as of the beginning of the period to the number of Paying Circles as of the end of the period, and then dividing by two.

Previous wording

For the three months ended March 31, 2025 and 2024, our ARPPC was $133.42 and $123.97, respectively, representing an 8% increase year-over-year.

Current wording

For the three months ended June 30, 2025 and 2024, our ARPPC was $135.42 and $125.96, respectively, representing an 8% increase year-over-year. For the six months ended June 30, 2025 and 2024, our ARPPC was $134.49 and $124.41, respectively, representing an 8% increase year-over-year.

Previous wording

ARPPC is a key indicator utilized by Life360 to determine our effectiveness at monetizing Paying Circles through tiered product offerings. U.S. ARPPC has benefited from price increases for new and existing subscribers implemented in September 2024 and October 2024, respectively, as well as a shift in product mix towards higher priced products. International ARPPC also benefited from price increases for legacy subscribers, as well as the launch of dual and triple tier memberships across certain international markets throughout 2024. The positive impacts seen from the price increases were partially offset by an increase in international subscribers, which overall, have lower priced subscriptions.

Current wording

ARPPC is a key indicator utilized by the Company to determine our effectiveness at monetizing Paying Circles through tiered product offerings. U.S. ARPPC has benefited from price increases for new and existing annual subscribers implemented in September 2024 and October 2024, respectively, as well as a shift in product mix towards higher priced products. International ARPPC also benefited from price increases for legacy subscribers, as well as the launch of higher priced tiers across select international markets throughout 2024.

Previous wording

As of March 31, 2025 and 2024, we had approximately 3.0 million and 2.5 million paid subscribers, respectively, to services under the Life360, Tile, and Jiobit brands, representing an increase of 19% year-over-year.

Current wording

As of June 30, 2025 and 2024, we had approximately 3.1 million and 2.7 million paid subscribers, respectively, to services under the Life360, Tile, and Jiobit brands, representing an increase of 18% year-over-year.

Previous wording

ARPPS has increased year over year as a result of price increases for new and existing subscribers implemented in September 2024 and October 2024, respectively, as well as a shift in product mix towards higher priced products. International ARPPC also benefited from price increases for legacy subscribers, as well as the launch of dual and triple tier memberships across certain international markets throughout 2024. The positive impacts seen from the price increases were partially offset by an increase in international subscribers, which overall, have lower priced subscriptions.

Current wording

ARPPS has increased year-over-year as a result of price increases for new and existing annual U.S. subscribers implemented in September 2024 and October 2024, respectively, as well as a shift in product mix towards higher priced products in the U.S. ARPPS also benefited from price increases for legacy subscribers, as well as the launch of higher priced tiers across select international markets throughout 2024.

Previous wording

For the three months ended March 31, 2025 and 2024, the net ASP per unit was $16.99 and $16.50, respectively, representing an increase of 3% year-over-year. The increase in net ASP was primarily due to a shift in channel mix and fewer returns.

Current wording

For the three months ended June 30, 2025 and 2024, the net ASP per unit was $14.81 and $15.92, respectively, representing a decrease of 7% year-over-year. The decrease in net ASP was primarily due to a shift in channel mix and an increase in promotional discounts. For the six months ended June 30, 2025 and 2024, the net ASP per unit was $15.64 and $16.18, respectively, representing a decrease of 3% year-over-year. The decrease in net ASP was primarily due to a shift in channel mix and an increase in promotional discounts.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $168.9 million and restricted cash of $1.5 million. As of December 31, 2024, we had cash and cash equivalents of $159.2 million and restricted cash of $1.2 million.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $432.7 million and restricted cash of $1.5 million. As of December 31, 2024, we had cash and cash equivalents of $159.2 million and restricted cash of $1.2 million.

Previous wording

A number of our members pay in advance for annual subscriptions, while a majority pay in advance for monthly subscriptions. Deferred revenue consists of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. As of March 31, 2025 and December 31, 2024, we had deferred revenue of $46.6 million and $45.2 million, respectively, of which $41.8 million and $39.9 million is expected to be recorded as revenue in the next 12 months, respectively, provided all other revenue recognition criteria have been met.

Current wording

A number of our members pay in advance for annual subscriptions, while a majority pay in advance for monthly subscriptions. Deferred revenue consists of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. As of June 30, 2025 and December 31, 2024, we had deferred revenue of $47.3 million and $45.2 million, respectively, of which $42.8 million and $39.9 million is expected to be recorded as revenue in the next 12 months, respectively, provided all other revenue recognition criteria have been met.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities was $12.1 million. The primary factors affecting our operating cash flows during this period were our net income of $4.4 million, impacted by $13.1 million of non-cash adjustments, and $5.4 millionof cash used by changes in our operating assets and liabilities. The non-cash adjustments primarily consisted ofstock-based compensation, depreciation and amortization. The cash used by changes in our operating assets and liabilities was primarily due to decreases in accrued expenses and other current liabilities and increases in inventory and prepaid expenses and other assets, which was offset by decreases in accounts receivable, net, and deferred revenue.

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities was $25.4 million. The primary factors affecting our operating cash flows during this period were our net income of $11.4 million, impacted by $30.4 million of non-cash adjustments, and $16.4 millionof cash used by changes in our operating assets and liabilities. The non-cash adjustments primarily consist of stock-based compensation, depreciation and amortization. The cash used by changes in our operating assets and liabilities was primarily due to decreases in accounts payable and accrued expenses and other current liabilities, as well as increases in inventory and prepaid expenses and other assets. These cash outflows were offset by an increase in deferred revenue.

Previous wording

For the three months ended March 31, 2024, net cash provided by operating activities was $10.7 million. The primary factors affecting our operating cash flows during this period were our net loss of $9.8 million, impacted by $13.0 million of non-cash adjustments and $7.5 million of cash provided by changes in our operating assets and liabilities. The non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization, and fair value adjustments for our convertible notes and derivative liability. The cash provided by changes in our operating assets and liabilities was primarily due to decreases in accounts receivable, net, and prepaid expenses and other assets, increases in accounts payable and deferred revenue, offset by a decrease in accrued expenses and other current liabilities and increases in inventory.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities was $13.9 million. The primary factors affecting our operating cash flows during this period were our net loss of $20.7 million, impacted by $24.5 million of non-cash adjustments and $10.1 million of cash provided by changes in our operating assets and liabilities, which was partially offset by a payment of $5.5 million for expenses paid on behalf of the selling stockholders in connection with the secondary offering completed during the second quarter of 2024. The non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization, and fair value adjustments for our convertible notes and derivative liability, non-cash interest expense, gain on settlement of derivative liability, and loss on settlement of convertible notes. The cash provided by changes in our operating assets and liabilities was primarily due to decreases in accounts receivable, net, and prepaid expenses and other assets, increases in accounts payable and deferred revenue, offset by a decrease in accrued expenses and other current liabilities and increases in costs capitalized to obtain contracts, net and inventory.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $4.3 million, which primarily related to cash paid for acquisitions. Refer to Note 6, "Business Combinations" for additional information. Net cash used in investing activities also included capitalization of internally developed software costs in accordance with ASC 350-40, Intangibles - Goodwill and Other, Internal-Use Software.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $32.1 million, which primarily related to the $25.0 million Convertible Note Investment. Net cash used in investing activities also included capitalization of internally developed software costs in accordance with ASC 350-40, Intangibles - Goodwill and Other, Internal-Use Software, and cash paid for an acquisition. Refer to Note 6, "Business Combinations" for additional information on the acquisition.

Previous wording

For the three months ended March 31, 2024, net cash used in investing activities was $1.1 million, which primarily related to the capitalization of internally developed software costs in accordance with ASC 350-40, Intangibles — Goodwill and Other, Internal-Use Software.

Current wording

For the six months ended June 30, 2024, net cash used in investing activities was $2.3 million, which primarily related to the capitalization of internally developed software costs in accordance with ASC 350-40, Intangibles — Goodwill and Other, Internal-Use Software.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing activities was $2.2 million, which primarily related to $10.6 million of taxes paid for the net settlement of equity awards, offset by $12.8 million of proceeds related to tax withholdings on restricted stock settlements and the exercise of stock options and warrants.

Current wording

For the six months ended June 30, 2025, net cash provided by financing activities was $280.5 million, which primarily related to proceeds of $320.0 million from the issuance of the June 2025 Convertible Notes offset by payments of $9.6 million for debt issuance costs. In connection with the issuance of the June 2025 Convertible Notes, the Company paid $33.7 million in capped call transactions. Refer to Note 8, "Convertible Notes" for more information on the June 2025 Convertible Notes and the June 2025 Capped Calls. Financing activities also included $25.8 million of taxes paid for the net settlement of equity awards, offset by $29.6 million of proceeds related to tax withholdings on restricted stock settlements and the exercise of stock options and warrants.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities was $5.7 million, which primarily related to $8.1 million, of taxes paid for the net settlement of equity awards, offset by $2.4 million of proceeds from the exercise of options.

Current wording

For the six months ended June 30, 2024, net cash provided by financing activities was $79.7 million, which primarily related to net proceeds of $93.0 million after deducting underwriting discounts and commissions from our U.S. IPO and $4.5 million of proceeds from the exercise of options and warrants, offset by $15.9 million of taxes paid for the net settlement of equity awards, and $1.8 million payment of U.S. IPO costs. As of June 30, 2024, $4.5 million of the incurred U.S. IPO costs were unpaid.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We base our estimates on historical experiences and on various other assumptions we believe to be reasonable under the circumstances. Actual results could differ materially from the estimates made by our management. Our significant accounting policies are discussed in Note 2, "Summary of Significant Accounting Policies" in our Annual Report. There were no significant changes to these policies during the three months ended March 31, 2025.

Current wording

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We base our estimates on historical experiences and on various other assumptions we believe to be reasonable under the circumstances. Actual results could differ materially from the estimates made by our management. Our significant accounting policies are discussed in Note 2, "Summary of Significant Accounting Policies" in our Annual Report. There were no significant changes to these policies during the six months ended June 30, 2025.