MAGNITE INC

Previous wording

The percentage of our revenue and Contribution ex-TAC (as defined in section "Key Operating and Financial Performance Metrics") attributable to CTV has increased significantly in recent years. Because CTV is largely transacted through reserve auctions, these types of auctions have become a more significant portion of the transactions on our platform. In addition, as newer entrants to programmatic advertising, the largest publishers and broadcasters have tended to transact almost exclusively through reserve auctions and have lower overall take rates. These publishers have continued to increase their focus and investment in programmatic CTV, and in recent periods have grown as a percentage of our CTV business. Accordingly, the increase in share among these publishers on our platform has driven a decrease in our aggregate CTV take rates.

Current wording

The percentage of our revenue and Contribution ex-TAC (as defined in section "Key Operating and Financial Performance Metrics") attributable to CTV has increased significantly in recent years. Because CTV is largely transacted through reserve auctions, reserve auctions have become a more significant portion of the transactions on our platform. In addition, as newer entrants to programmatic advertising, the largest publishers and broadcasters have tended to transact almost exclusively through reserve auctions and have lower overall take rates. These publishers have continued to increase their focus and investment in programmatic CTV, and in recent periods have grown as a percentage of our CTV business. Accordingly, the increase in share among these publishers on our platform has driven a decrease in our aggregate CTV take rates.

Previous wording

Despite these potential near-term challenges, in the longer term we believe that the elimination of third-party cookies has the potential to shift the programmatic ecosystem from an identity model powered by buyers that are able to aggregate and target audiences through cookies to one enabled by sellers that have direct relationships with consumers and are therefore better positioned to obtain user data and consent for implementing first party identifiers. In CTV, this identity model already largely exists with publishers more tightly controlling access to identifiers and user data, while offering proprietary first party data segments for reaching desired audiences. We believe that our scale and expertise in CTV position us well to take a leadership position in advancing this shift to a first party identity model and creating additional value opportunities for our clients. Accordingly, we have invested and intend to further invest in the development and enhancement of industry leading identity and audience solutions.

Current wording

In the long term, we believe that a decreased reliance on third-party cookies and other non-transparent tracking methods are a positive for the industry, and offer the potential to shift the programmatic ecosystem from an identity model powered by buyers that are able to aggregate and target audiences through cookies to one enabled by sellers that have direct relationships with consumers and are therefore better positioned to obtain user data and consent for implementing first party identifiers. In CTV, where third-party cookies do not exist, this identity model already largely exists with publishers more tightly controlling access to identifiers and user data, while offering proprietary first-party data segments for reaching desired audiences. We believe that our scale and expertise in CTV position us well to take a leadership position in advancing this shift to a first-party identity model and creating additional value opportunities for our clients. Accordingly, we have invested and intend to further invest in the development and enhancement of industry leading identity and audience solutions.

Previous wording

Our business has been negatively impacted as a result of macroeconomic challenges, such as inflation, high interest rates, global conflict, capital market disruptions and instability of financial institutions, the risk of a recession, labor strikes, and other macroeconomic factors, which have generally negatively impacted ad budgets, and in turn have led to slower ad spend growth through our platform. Any worsening of macroeconomic conditions in future periods would likely have a negative effect on our financial results, the magnitude of which is difficult to predict. In addition, continued inflation could result in an increase in our cost base relative to our revenue.

Current wording

Recent macroeconomic challenges, such as inflation, high interest rates, global conflicts, the risk of a recession, labor strikes, and other macroeconomic factors, have generally negatively impacted ad budgets, which in turn may lead to slower ad spend growth through our platform. Any worsening of macroeconomic conditions in future periods would likely have a negative effect on our financial results, the magnitude of which is difficult to predict. In addition, continued inflation could result in an increase in our cost base relative to our revenue. We expect our results for the second-half of 2024 to include revenue from political advertising, the magnitude of which is uncertain and depends on factors outside of our control.

Previous wording

For the three months ended March 31, 2024 and 2023, our revenue reported on a gross basis was 19% and 17% of total revenue for the respective periods. Any mix shift that causes an increase in the relative percentage of our revenue accounted for on a gross basis would result in a higher revenue contribution and an associated decrease in our gross margin percentage (with no underlying impact on gross profit or Contribution ex-TAC, as defined in section "Key Operating and Financial Performance Metrics"). Our revenue recognition policies are discussed in more detail in our audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K and in Note 3 of the accompanying Notes to the Condensed Consolidated Financial Statements.

Current wording

For the three and six months ended June 30, 2024, our revenue reported on a gross basis was 16% and 17%, respectively, of total revenue, and for the three and six months ended June 30, 2023, our revenue reported on a gross basis was 19% and 18%, respectively, of total revenue. Any mix shift that causes an increase in the relative percentage of our revenue accounted for on a gross basis would result in a higher revenue contribution and an associated decrease in our gross margin percentage (with no underlying impact on gross profit or Contribution ex-TAC, as defined in section "Key Operating and Financial Performance Metrics"). Our revenue recognition policies are discussed in more detail in our audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K and in Note 3 of the accompanying Notes to the Condensed Consolidated Financial Statements.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

Revenue increased $19.2 million, or 15%, for the three months ended March 31, 2024 compared to the prior year period. Our revenue growth was primarily driven by growth in CTV and mobile. Revenue from CTV and mobile increased by $13.5 million, or 23%, and $5.8 million, or 12%, respectively.

Current wording

Revenue increased $29.5 million, or 10%, for the six months ended June 30, 2024 compared to the prior year period. Our revenue growth was primarily driven by growth in CTV and mobile. Revenue from CTV and mobile increased by $19.5 million, or 15%, and $9.3 million, or 9%, respectively.

Previous wording

Cost of revenue decreased $58.9 million, or 47%, for the three months ended March 31, 2024 compared to the prior year period primarily due to a decrease of $69.7 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in the third quarter of 2023. This decrease was partially offset by increases of $5.6 million in cloud hosting, data center, and bandwidth expenses and $4.7 million in traffic acquisition costs, primarily due to revenue growth.

Current wording

Cost of revenue decreased $67.6 million, or 52%, for the three months ended June 30, 2024 compared to the prior year period, primarily due to a decrease of $69.9 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in the third quarter of 2023. The decrease was partially offset by increases of $3.1 million in cloud hosting, data center, and bandwidth expenses, primarily due to revenue growth.

Previous wording

We expect cost of revenue to decrease through the remainder of 2024 compared to 2023 in absolute dollars primarily due to certain acquired intangible assets becoming fully amortized in 2023 and due to the change in estimated useful life of our network hardware assets. On January 1, 2024, we extended theestimated useful lives of our network hardware assets from three years to five years, which was due to actual and expected longer refresh cycles for these assets. Based on the related asset balance as of December 31, 2023 and those placed in service during the three months ended March 31, 2024, the effect of this change is estimated to reduce depreciation expense by $11.4 million for the full year ending December 31, 2024 when compared to what depreciation expense would have been based on the original expected useful lives of three years.

Current wording

We expect cost of revenue to decrease through the remainder of 2024 compared to 2023 in absolute dollars primarily due to certain acquired intangible assets becoming fully amortized in 2023 and due to the change in estimated useful life of our network hardware assets. On January 1, 2024, we extended theestimated useful lives of our network hardware assets from three years to five years, which was due to actual and expected longer refresh cycles for these assets. Based on the related asset balance as of December 31, 2023 and those placed in service during thesix months ended June 30, 2024, the effect of this change is estimated to reduce depreciation expense by $12.0 million for the full year ending December 31, 2024 when compared to what depreciation expense would have been based on the original expected useful lives of three years.

Previous wording

Sales and marketing expenses decreased $9.4 million, or 18%, for the three months ended March 31, 2024 compared to the prior year period primarily due to a decrease of $12.4 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in 2023. This decrease was partially offset by increases of $1.9 million of personnel related expenses and $1.7 million of event and travel-related expenses.

Current wording

Sales and marketing expenses decreased $2.9 million, or 6%, for the three months ended June 30, 2024 compared to the prior year period, primarily due to a decrease of $4.7 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in the third quarter of 2023. The decrease was partially offset by an increase of $1.7 million of personnel related expenses.

Previous wording

We expect sales and marketing expenses to increase through the remainder of 2024 compared to 2023 in absolute dollars primarily due to increases in personnel related expenses partially offset by decreases in amortization related to previously acquired intangible assets.

Current wording

We expect sales and marketing expenses to increase through the remainder of 2024 compared to 2023 in absolute dollars primarily due to increases in personnel related expenses.

Previous wording

Technology and development expenses increased $2.7 million, or 11%, for the three months ended March 31, 2024 compared to the prior year period primarily due to increases of $1.3 million of event and travel-related expenses and $1.1 million of software license expenses.

Current wording

Technology and development expenses increased $5.1 million, or 11%, for the six months ended June 30, 2024 compared to the prior year period, primarily due to increases of $3.0 million in software license expenses, $1.3 million of event and travel-related expenses, and $1.1 million of personnel related expenses.

Previous wording

We expect technology and development expenses to increase through the remainder of 2024 compared to 2023 in absolute dollars due to increases in personnel related expenses and software license expenses.

Current wording

We expect technology and development expenses to increase through the remainder of 2024 compared to 2023 in absolute dollars due to increases in software license expenses.

Previous wording

General and administrative expenses increased $5.6 million, or 26%, for the three months ended March 31, 2024 compared to the prior year period primarily due to increases of $3.1 million in expenses associated with refinancing our 2021 Credit Agreement (defined below) and $2.2 million in personnel expenses.

Current wording

General and administrative expenses increased $2.6 million, or 5%, for the six months ended June 30, 2024, compared to the prior year period, primarily due to increases of $3.9 million in personnel costs and $3.1 million in expenses associated with refinancing our 2021 Credit Agreement (defined below). The increase was partially offset by a decrease of $4.4 million in bad debt expense due to the same reason above.

Previous wording

Merger, acquisition, and restructuring costs decreased $7.5 million, or 100% for the three months ended March 31, 2024 compared to the prior year period. There were no costs incurred for the three months ended March 31, 2024. Merger, acquisition, and restructuring costs incurred during the three months ended March 31, 2023 included $3.4 million of severance related expenses, $2.2 million of facilities related loss contracts, and $1.4 million of exit costs, all due to restructuring activities as a result of consolidating our legacy CTV and SpotX CTV platforms following the acquisition of SpotX, Inc.

Current wording

We did not incur any merger, acquisition, and restructuring costs for the six months ended June 30, 2024. Merger, acquisition, and restructuring costs incurred during the six months ended June 30, 2023 were $7.5 million, and included $3.4 million of severance related expenses, $2.2 million of facilities related loss contracts, and $1.4 million of exit costs, all due to restructuring activities as a result of consolidating our legacy CTV and SpotX CTV platforms following the acquisition of SpotX, Inc.

Previous wording

Interest expense, net decreased $0.2 million for the three months ended March 31, 2024 compared to the prior year period.

Current wording

Interest expense, net decreased $1.7 million and $1.9 million for the three and six months ended June 30, 2024, compared to the prior year periods, respectively. The net decrease is due to an increase in interest income and a decrease in interest expense as a result of lower convertible debt outstanding in 2024 as compared to the prior year period.

Previous wording

Foreign exchange (gain) loss, net increased $2.5 million for the three months ended March 31, 2024 compared to the prior year period, respectively, due to movements in foreign currency exchange rates and the amount of foreign currency-denominated cash, receivables, and payables, which were impacted by our billings to buyers, payments to sellers, and intercompany balances.

Current wording

Foreign exchange (gain) loss, net changed by $0.8 million and $1.7 million for the three and six months ended June 30, 2024 compared to the prior year periods, respectively, due to movements in foreign currency exchange rates and the amount of foreign currency-denominated cash, receivables, and payables, which were impacted by our billings to buyers, payments to sellers, and intercompany balances.

Previous wording

The loss on extinguishment of debt of $7.4 million for the three months ended March 31, 2024, was due to the refinancing of our 2021 Credit Agreement (defined below). The gain on extinguishment of debt of $8.5 million during the three months ended March 31, 2023 was due to the repurchase of portions of our Convertible Senior Notes (defined below).

Current wording

The loss on extinguishment of debt of $7.4 million for the six months ended June 30, 2024, was due to the refinancing of our 2021 Credit Agreement (defined below). The gain on extinguishment of debt of $5.4 million and $14.0 million during the three and six months ended June 30, 2023, respectively, was due to the repurchase of portions of our Convertible Senior Notes (defined below).

Previous wording

We recorded an income tax benefit of $7.8 million for the three months ended March 31, 2024 and an income tax benefit of $0.3 million for the three months ended March 31, 2023. The tax benefit for the three months ended March 31, 2024 was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance, Base Erosion and Anti-Abuse Tax (BEAT), and the foreign income tax provision. The tax benefit for the three months ended March 31, 2023 was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance and the foreign income tax provision.

Current wording

We recorded an income tax provision of $4.6 million and a tax benefit of $3.2 million for the three and six months ended June 30, 2024, respectively, and an income tax provision of $0.7 million and $0.4 million for the three and six months ended June 30, 2023, respectively. The tax provision and benefit for the three and six months ended June 30, 2024, respectively, was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance and the foreign income tax provision. The tax provision for the three and six months ended June 30, 2023 was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance and the foreign income tax provision.

Previous wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three and six months ended June 30, 2024 and 2023:

Previous wording

Contribution ex-TAC increased $14.5 million, or 12%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase in Contribution ex-TAC was primarily due to the growth drivers described above for revenue.

Current wording

Contribution ex-TAC increased $12.1 million, or 9%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase in Contribution ex-TAC was primarily due to the growth drivers described above for revenue.

Previous wording

The following table presents a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table presents a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Adjusted EBITDA increased by $1.7 million during the three months ended March 31, 2024 compared to the prior year period, primarily due to increases in revenue exceeding increases in operating expenses, such as increases in cloud hosting, data center, and bandwidth costs, traffic acquisition costs, event and travel-related expenses, and personnel expenses, which are discussed in section "Comparison of the Three Months Ended March 31, 2024 and 2023."

Current wording

Adjusted EBITDA increased by $7.4 million during the three months ended June 30, 2024 compared to the prior year period, primarily due to increases in revenue described above, which were partially offset by increases in expenses to support this revenue growth. Refer to discussion in section "Comparison of the Three and Six Months Ended June 30, 2024 and 2023."

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $252.8 million, of which $40.3 million was held in foreign currency denominated cash accounts, and an aggregate gross principal amount of $570.1 million of indebtedness outstanding under our 2024 Term Loan B Facility (as defined below) and our Convertible Senior Notes (as defined below). In addition, we were party to a $175.0 million 2024 Revolving Credit Facility (as defined below), of which approximately $5.2 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $326.5 million, of which $51.5 million was held in foreign currency denominated cash accounts, and an aggregate gross principal amount of $569.2 million of indebtedness outstanding under our 2024 Term Loan B Facility (as defined below) and our Convertible Senior Notes (as defined below). In addition, we were party to a $175.0 million 2024 Revolving Credit Facility (as defined below), of which approximately $5.2 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.

Previous wording

In March 2021, we sold convertible senior notes ("Convertible Senior Notes") for gross proceeds of $400.0 million. The Convertible Senior Notes are senior, unsecured obligations with interest payable semi-annually in cash at a rate of 0.25% per annum in arrears on March 15 and September 15. The Convertible Senior Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased. The initial conversion rate is 15.6539 shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $63.88 per share of the Company’s common stock and is subject to adjustment as described in the Offering Memorandum. At March 31, 2024, the balance of the Convertible Senior Notes was $202.8 million, net of unamortized debt issuance costs of $2.3 million. Accrued interest for the Convertible Senior Notes at March 31, 2024 was immaterial.

Current wording

In March 2021, we sold convertible senior notes ("Convertible Senior Notes") for gross proceeds of $400.0 million. The Convertible Senior Notes are senior, unsecured obligations with interest payable semi-annually in cash at a rate of 0.25% per annum in arrears on March 15 and September 15. The Convertible Senior Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased. The initial conversion rate is 15.6539 shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $63.88 per share of the Company’s common stock and is subject to adjustment as described in the Offering Memorandum. At June 30, 2024, the balance of the Convertible Senior Notes was $203.1 million, net of unamortized debt issuance costs of $2.0 million. Accrued interest for the Convertible Senior Notes at June 30, 2024 was immaterial.

Previous wording

On February 6, 2024, we entered into a credit agreement (the “2024 Credit Agreement”) with Morgan Stanley Senior Funding, Inc. as our term loan administrative agent and Citibank, N.A. as our revolving facility administrative agent and collateral agent, and other lender parties thereto. The 2024 Credit Agreement provided for a $365.0 million seven-year senior secured term loan facility (the "2024 Term Loan B Facility") and a $175.0 million five-year senior secured revolving credit facility (the "2024 Revolving Credit Facility"). The proceeds from the 2024 Term Loan B Facility were used, among other things, to terminate and to repay in full the outstanding facilities under the 2021 Credit Agreement. At March 31, 2024, amounts available under the 2024 Revolving Credit Facility were $169.8 million, net of letters of credit outstanding in the amount of $5.2 million. Accrued interest for the 2024 Term Loan B Facility at March 31, 2024 was $3.3 million.

Current wording

On February 6, 2024, we entered into a credit agreement (the “2024 Credit Agreement”) with Morgan Stanley Senior Funding, Inc. as our term loan administrative agent and Citibank, N.A. as our revolving facility administrative agent and collateral agent, and other lender parties thereto. The 2024 Credit Agreement provided for a $365.0 million seven-year senior secured term loan facility (the "2024 Term Loan B Facility") and a $175.0 million five-year senior secured revolving credit facility (the "2024 Revolving Credit Facility"). The proceeds from the 2024 Term Loan B Facility were used, among other things, to terminate and to repay in full the outstanding facilities under the prior credit agreement entered into in April 2021 (the "2021 Credit Agreement"), which included a term loan facility (the "2021 Term Loan B Facility") and a revolving facility (the "2021 Revolving Credit Facility"). At June 30, 2024, the balance of the 2024 Term Loan Facility was $349.6 million, net of unamortized debt discount and debt issuance costs of $14.5 million, and amounts available under the 2024 Revolving Credit Facility were $169.8 million, net of letters of credit outstanding in the amount of $5.2 million. Accrued interest for the 2024 Term Loan B Facility at June 30, 2024 was $1.6 million.

Previous wording

Repurchase Plan. Subsequently, on February 1, 2024, the Board of Directors approved a new repurchase plan (the "February 2024 Repurchase Plan"), which fully replaced the August 2023 Repurchase Plan, pursuant to which we are authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $125.0 million, through February 1, 2026.

Current wording

On February 1, 2024, the Board of Directors approved a new repurchase plan (the "February 2024 Repurchase Plan"), which fully replaced the prior repurchase plan, pursuant to which we are authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $125.0 million, through February 1, 2026.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $60.4 million compared to net cash used in operating activities of $30.9 million for the three months ended March 31, 2023. Our operating activities included our net loss of $17.8 million and $98.7 million for the three months ended March 31, 2024 and 2023, respectively, which were offset by non-cash adjustments of $30.8 million and $109.1 million, respectively. Net changes in our working capital resulted in $73.5 million and $41.3 million of cash used in operating activities for the three months ended March 31, 2024 and March 31, 2023, respectively. The net changes in working capital for both periods presented are primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities was $29.2 million compared to net cash provided by operating activities of $43.2 million for the six months ended June 30, 2023. Our operating activities included our net loss of $18.8 million and $172.6 million for the six months ended June 30, 2024 and 2023, respectively, which were offset by non-cash adjustments of $70.7 million and $217.7 million, respectively. Net changes in our working capital resulted in $22.7 million and $1.9 million of cash used in operating activities for the six months ended June 30, 2024 and June 30, 2023, respectively. The net changes in working capital for both periods presented are primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Previous wording

During the three months ended March 31, 2024 and 2023, our investing activities used net cash of $9.3 million and $7.5 million, respectively. During the three months ended March 31, 2024 and 2023, we used cash for purchases of property and equipment of $5.9 million and $4.4 million, respectively, and used cash for investments in our internally developed software of $3.4 million and $3.1 million, respectively.

Current wording

During the six months ended June 30, 2024 and 2023, our investing activities used net cash of $22.6 million and $18.5 million, respectively. During the six months ended June 30, 2024 and 2023, we used cash for purchases of property and equipment of $15.0 million and $12.7 million, respectively, and used cash for investments in our internally developed software of $7.5 million and $5.8 million, respectively.

Previous wording

Our financing activities consisted of our debt refinancing activities, Convertible Senior Notes transactions, repayment of amounts borrowed under our 2021 Term Loan B Facility, and transactions related to our equity plans.

Current wording

Our financing activities consisted of our debt refinancing activities, Convertible Senior Notes transactions, repayment of amounts borrowed under our 2024 Term Loan B Facility and our 2021 Term Loan B Facility, and transactions related to our equity plans.

Previous wording

For the three months ended March 31, 2024 and 2023, net cash used in financing activities was $3.1 million and $51.8 million, respectively. Cash outflows from financing activities for the three months ended March 31, 2024 primarily included $351.0 million of payments related to paying off our 2021 Term Loan B Facility, $8.9 million for taxes paid related to net share settlement of stock-based awards, and a $4.5 million of payments related to debt issuance costs for our 2024 Term Loan B Facility and 2024 Revolver Facility. The outflows were partially offset by cash proceeds of $361.4 million from the issuance of our 2024 Term Loan B Facility, net of debt discount.

Current wording

For the six months ended June 30, 2024 and 2023, net cash used in financing activities was $5.6 million and $85.0 million, respectively. Cash outflows from financing activities for the six months ended June 30, 2024 primarily included $351.0 million of payments related to paying off our 2021 Term Loan B Facility, $12.7 million for taxes paid related to net share settlement of stock-based awards, and $4.5 million of payments related to debt issuance costs for our 2024 Term Loan B Facility and 2024 Revolver Facility. The outflows were partially offset by cash proceeds of $361.4 million from the issuance of our 2024 Term Loan B Facility, net of debt discount and cash proceeds from the employee stock purchase plan of $2.0 million.

Previous wording

Cash outflows from financing activities for the three months ended March 31, 2023 primarily included $40.8 million of payments related to repurchases of our Convertible Senior Notes, $9.0 million for taxes paid related to net share settlement of stock-based awards, $2.3 million for payment of our indemnification claims holdback related to historical acquisitions, and $0.9 million for repayment of our 2021 Term Loan B. The outflows were partially offset by cash proceeds from stock options exercised of $1.5 million.

Current wording

Cash outflows from financing activities for the six months ended June 30, 2023 primarily included $75.0 million of payments related to repurchases of our Convertible Senior Notes, $9.7 million for taxes paid related to net share settlement of stock-based awards, $2.3 million for payment of our indemnification claims holdback related to historical acquisitions, and $1.8 million for repayment of our 2021 Term Loan B. The outflows were offset by cash proceeds from stock options exercised of $2.1 million and cash proceeds from issuance of common stock from the employee stock purchase plan of $1.9 million.

Previous wording

Other non-cancelable obligations include agreements in the normal course of business that extend beyond a year as of March 31, 2024. The amounts above include commitments under a cloud-managed services agreement, under which the Company has a non-cancelable minimum spend commitment from July 2024 to June 2025 of $57.6 million. The minimum spend commitment reflected above approximates the manner in which we expect to fulfill the obligation.

Current wording

Other non-cancelable obligations above include agreements in the normal course of business that are in excess of one year as of June 30, 2024.