PROCORE TECHNOLOGIES, INC.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K dated February 24, 2026 (our“2025 Form 10-K”). You should review the disclosures under the section titled“Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and under Part I, Item 1A,“Risk Factors” in our 2025 Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments, except as required by law.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K dated February 24, 2026 (our“2025 Form 10-K”). You should review the disclosures under the sections titled“Special Note Regarding Forward-Looking Statements” and Part II, Item 1A,“Risk Factors” in this Quarterly Report on Form 10-Q and under Part I, Item 1A,“Risk Factors” in our Quarterly Report on Form 10-Q dated July 31, 2026 (our“Q22026 Form 10-Q”)for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments, except as required by law.

Previous wording

Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which increased from 2,517 as of June 30, 2025 to 2,871 as of June 30, 2026, reflecting a year-over-year growth rate of 14%. The number of customers that contributed more than $100,000 of ARR represented 68% and 64% of our total ARR as of June 30, 2026 and 2025, respectively. As of June 30, 2026, 59%, 26%, and 15% of our ARR was generated from general contractors, owners, and specialty contractors, respectively. All aforementioned customer counts, and the customer ARR mix exclude customers acquired from business combinations that do not have standard Procore annual contracts.

Current wording

Despite macroeconomic challenges, we have seen an increase in the number of customers that contributed more than $100,000 of annual recurring revenue (“ARR”), which increased from 2,602 as of September 30, 2025 to 2,968 as of September 30, 2026, reflecting a year-over-year growth rate of 14%. The number of customers that contributed more than $100,000 of ARR represented 69% and 65% of our total ARR as of September 30, 2026 and 2025, respectively. As of September 30, 2026, 59%, 26%, and 15% of our ARR was generated from general contractors, owners, and specialty contractors, respectively. All aforementioned customer counts, and the customer ARR mix exclude customers acquired from business combinations that do not have standard Procore annual contracts.

Previous wording

We believe that cRPO is a key metric to track our ability to win fixed revenue commitments from new customers and to expand and retain existing customers. However, as our average contract duration continues to lengthen due to increased purchases of multi-year subscriptions, our cRPO growth rate may not directly correlate with our actual or expected revenue growth in current or future periods. As of June 30, 2026, cRPO increased by $193.0 million, or 22%, year-over-year. Approximately 42% of the increase was attributable to existing customers and 58% was attributable to new customers acquired during the twelve months ended June 30, 2026. We expect RPO to change from period to period primarily due to the size, timing, and duration of new customer contracts and customer renewals.

Current wording

We believe that cRPO is a key metric to track our ability to win fixed revenue commitments from new customers and to expand and retain existing customers. However, as our average contract duration continues to lengthen due to increased purchases of multi-year subscriptions, our cRPO growth rate may not directly correlate with our actual or expected revenue growth in current or future periods. As of September 30, 2026, cRPO increased by $263.0 million, or 29%, year-over-year. Approximately 39% of the increase was attributable to existing customers, 40% was attributable to new customers, and 21% was attributable to DroneDeploy customers acquired during the twelve months ended September 30, 2026. We expect RPO to change from period to period primarily due to the size, timing, and duration of new customer contracts and customer renewals.

Previous wording

We intend to continue to invest in building additional products, services, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform. For example, in January 2026, we acquired Toric Labs, Inc. (d/b/a Datagrid), a leader in agentic AI solutions for the construction industry, to accelerate our AI strategy, and in January 2025, we acquired Novorender AS, a leader in advanced building information modeling rendering technology, to enhance our capabilities for large-scale construction projects. In addition, in July 2026, we entered into the DroneDeploy Merger Agreement to acquire DroneDeploy, a leader in reality capture and robotic automation. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. While the impact of these developments are not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.

Current wording

We intend to continue to invest in building additional products, services, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform. For example, in September 2026, we acquired DroneDeploy, a leader in reality capture and robotic automation, in January 2026, we acquired Toric Labs, Inc. (d/b/a Datagrid), a leader in agentic AI solutions for the construction industry, to accelerate our AI strategy, and in January 2025, we acquired Novorender AS, a leader in advanced building information modeling rendering technology, to enhance our capabilities for large-scale construction projects. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. While the impact of these developments are not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.

Previous wording

We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have an international sales and marketing presence with offices in Sydney, Australia; Toronto, Canada; London, England; Dublin, Ireland; and Dubai, United Arab Emirates (“UAE”). As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 15% for both the six months ended June 30, 2026 and 2025. We determine the percentage of non-U.S. revenue based on the billing location of each customer. Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.

Current wording

We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have an international sales and marketing presence with offices in Sydney, Australia; Toronto, Canada; London, England; Dublin, Ireland; and Dubai, United Arab Emirates (“UAE”). As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 16% and 15% for the nine months ended September 30, 2026 and 2025, respectively. We determine the percentage of non-U.S. revenue based on the billing location of each customer. Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.

Previous wording

Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflation and responses by governments to address it, changing interest rates, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, trade wars or shifting tariffs, evolving and potentially conflicting regulatory requirements, and wars and other conflicts may impact our customers’ spending as well as our operating expenses and cash flows. However, as such factors evolve, we continue to monitor the ways in which they may directly or indirectly impact our business, results of operations, and financial condition. See the section titled “Risk Factors” in Part I, Item 1A, of our 2025 Form 10-K for further discussion.

Current wording

Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflation and responses by governments to address it, changing interest rates, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, trade wars or shifting tariffs, evolving and potentially conflicting regulatory requirements, and wars and other conflicts may impact our customers’ spending as well as our operating expenses and cash flows. However, as such factors evolve, we continue to monitor the ways in which they may directly or indirectly impact our business, results of operations, and financial condition. See the section titled “Risk Factors” in Part II, Item 1A, of this Quarterly Report on Form 10-Q and our Q2 2026 Form 10-Q for further discussion.

Previous wording

Interest expense consists primarily of costs associated with our finance leases.

Current wording

Interest expense consists primarily of costs associated with our finance leases and the amortization of debt issuance costs associated with the 2031 Notes.

Previous wording

Other income, net primarily consists of gains or losses on foreign currency transactions, unrealized gains or losses on equity securities, and miscellaneous other income and expenses.

Current wording

Other income (expense), net primarily consists of gains or losses on foreign currency transactions, unrealized gains or losses on equity securities, and miscellaneous other income and expenses.

Previous wording

(Benefit from) provision for income taxes consists primarily of income taxes of U.S. state franchise taxes and certain foreign jurisdictions in which we conduct business, net of the release of valuation allowance as a result of deferred tax liabilities from acquisitions that are an available source of income to realize our deferred tax assets. As we expand our international operations, we expect to incur increased foreign tax expenses. We have a full valuation allowance for net U.S. deferred tax assets. The U.S. valuation allowance primarily includes net operating loss carryforwards and tax credits related primarily to research and development for our operations in the U.S. We expect to maintain this full valuation allowance for our net U.S. deferred tax assets for the foreseeable future.

Current wording

Provision for (benefit from) income taxes consists primarily of income taxes of U.S. state franchise taxes and certain foreign jurisdictions in which we conduct business, net of the release of valuation allowance as a result of deferred tax liabilities from acquisitions that are an available source of income to realize our deferred tax assets. As we expand our international operations, we expect to incur increased foreign tax expenses. We have a full valuation allowance for net U.S. deferred tax assets. The U.S. valuation allowance primarily includes net operating loss carryforwards and tax credits related primarily to research and development for our operations in the U.S. We expect to maintain this full valuation allowance for our net U.S. deferred tax assets for the foreseeable future.

Previous wording

*Includes amortization of capitalized stock-based compensation of $3.8 million and $2.8 million, respectively, for the three months ended June 30, 2026 and 2025; and $7.3 million and $5.6 million, respectively, for the six months ended June 30, 2026 and 2025; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

Current wording

*Includes amortization of capitalized stock-based compensation of $3.7 million and $3.1 million, respectively, for the three months ended September 30, 2026 and 2025; and $11.0 million and $8.7 million, respectively, for the nine months ended September 30, 2026 and 2025, which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

Previous wording

During the three months ended June 30, 2026, our revenue increased by $51.3 million, or 16%, compared to the three months ended June 30, 2025, of which approximately 88% was attributable to revenue from existing customers and approximately 12% was attributable to revenue from new customers acquired during the three months ended June 30, 2026. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the second quarter of 2026 from customers that were newly acquired or expanded their subscriptions between the second quarter of 2025 and the first quarter of 2026 and continued or expanded their subscriptions, as applicable, in the second quarter of 2026.

Current wording

During the three months ended September 30, 2026, our revenue increased by $63.5 million, or 19%, compared to the three months ended September 30, 2025, of which approximately 80% was attributable to revenue from existing customers, approximately 11% was attributable to revenue from new customers, and approximately 9% was attributable to revenue from DroneDeploy customers acquired during the three months ended September 30, 2026. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the third quarter of 2026 from customers that were newly acquired or expanded their subscriptions between the second quarter of 2025 and the first quarter of 2026 and continued or expanded their subscriptions, as applicable, in the third quarter of 2026.

Previous wording

The increase in cost of revenue during the three months ended June 30, 2026 was primarily attributable to an increase of $4.4 million in amortization of capitalized software development costs. The increase in cost of revenue was also attributable to a $2.6 million increase in third-party cloud hosting and related services as we grow our customer base. We increased our cost of revenue headcount by 2% since June 30, 2025.

Current wording

The increase in cost of revenue during the three months ended September 30, 2026 was primarily attributable to a $3.2 million increase in third-party cloud hosting and related services as we grow our customer base. The increase in cost of revenue was also attributable to a $3.0 million increase in amortization of capitalized software development costs and a $1.8 million increase in amortization of developed technology intangible assets. Our cost of revenue headcount has remained relatively consistent since September 30, 2025.

Previous wording

The increase in sales and marketing expenses during the three months ended June 30, 2026 was primarily attributable to an increase of $5.5 million in personnel-related expenses, including increases of $5.1 million in salaries and wages and $0.6 million in stock-based compensation expense. The increases in sales and marketing expenses were partially offset by a $2.4 million decrease in amortization of customer relationship intangible assets due to certain customer relationship intangible assets becoming fully amortized in Q4 2025. We decreased our sales and marketing headcount by 4% since June 30, 2025.

Current wording

The increase in sales and marketing expenses during the three months ended September 30, 2026 was primarily attributable to an increase of $8.5 million in personnel-related expenses, including increases of $6.4 million in salaries and wages and $2.0 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to a $3.9 million increase in acquisition-related expenses. The increases in sales and marketing expenses were partially offset by a $5.7 million decrease in marketing program expenses. Our sales and marketing headcount has remained relatively consistent since September 30, 2025.

Previous wording

The increase in research and development expenses during the six months ended June 30, 2026 was primarily attributable to an increase of $3.9 million in acquisition-related expenses. The increase in research and development expenses was also attributable to a $2.4 million increase in computer software expenses. The increases in research and development expenses were partially offset by a $4.0 million decrease in personnel-related expenses for salaries and wages. We increased our research and development headcount by 6% since June 30, 2025.

Current wording

The increase in research and development expenses during the three months ended September 30, 2026 was primarily attributable to an increase of $8.7 million in acquisition-related expenses. The increase in research and development expenses was also attributable to an increase of $4.7 million in personnel-related expenses, including increases of $2.7 million in stock-based compensation expense and $2.0 million in salaries and wages. The increase in research and development expenses was also attributable to a $3.8 million increase in computer software expenses and a $2.8 million increase in professional fees related to temporary contractor labor. We increased our research and development headcount by 17% since September 30, 2025, largely driven by the DroneDeploy acquisition.

Previous wording

The increase in general and administrative expenses during the three months ended June 30, 2026 was primarily attributable to an increase of $5.5 million in professional fees, including a $3.4 million increase in legal fees, which were predominantly related to an ongoing lawsuit with Oracle. The increase in general and administrative expenses was also attributable to a $1.1 million increase in acquisition-related expenses. The increases in general and administrative expenses were partially offset by a $5.0 million decrease in rent expense, primarily related to a non-cash gain that was recognized in relation to modifications of leases in the second quarter of 2026. Our general and administrative headcount has remained relatively consistent since June 30, 2025.

Current wording

The increase in general and administrative expenses during the three months ended September 30, 2026 was primarily attributable to a $12.5 million increase in acquisition-related expenses. The increase in general and administrative expenses was also attributable to an increase of $5.6 million in professional fees, including a $3.8 million increase in legal fees, which were predominantly related to an ongoing lawsuit with Oracle. The increase in general and administrative expenses was also driven by a $3.5 million increase in rent expense. Our general and administrative headcount has remained relatively consistent since September 30, 2025.

Previous wording

During the three months ended June 30, 2026, accretion income, net decreased by $1.3 million due to a decrease in the balance of our marketable securities portfolio year over year.

Current wording

During the three months ended September 30, 2026, accretion income, net decreased by $1.7 million due to a decrease in the balance of our marketable securities portfolio year over year.

Previous wording

During the six months ended June 30, 2026, our revenue increased by $99.9 million, or 16%, compared to the six months ended June 30, 2025, of which approximately 84% was attributable to revenue from existing customers and approximately 16% was attributable to revenue from new customers acquired during the six months ended June 30, 2026. The increase in revenue from existing customers includes the net benefit of a full six months of subscription revenue in the first half of 2026 from customers that were newly acquired or expanded their subscriptions in 2025 and continued or expanded their subscriptions, as applicable, in the first half of 2026.

Current wording

During the nine months ended September 30, 2026, our revenue increased by $163.4 million, or 17%, compared to the nine months ended September 30, 2025, of which approximately 67% was attributable to revenue from existing customers, approximately 30% was attributable to revenue from new customers, and approximately 3% was attributable to revenue from DroneDeploy customers acquired during the nine months ended September 30, 2026. The increase in revenue from existing customers includes the net benefit of a full nine months of subscription revenue in the first nine months of 2026 from customers that were newly acquired or expanded their subscriptions in 2025 and continued or expanded their subscriptions, as applicable, in the first nine months of 2026.

Previous wording

The increase in cost of revenue during the six months ended June 30, 2026 was primarily attributable to an increase of $8.3 million in amortization of capitalized software development costs. The increase in cost of revenue was also attributable to a $3.6 million increase in third-party cloud hosting and related services as we grow our customer base, and a $1.1 million increase in personnel-related expenses for salaries and wages. We increased our cost of revenue headcount by 2% since June 30, 2025.

Current wording

The increase in cost of revenue during the nine months ended September 30, 2026 was primarily attributable to an increase of $11.3 million in amortization of capitalized software development costs. The increase in cost of revenue was also attributable to a $6.9 million increase in third-party cloud hosting and related services as we grow our customer base, a $2.2 million increase in amortization of developed technology intangible assets, and a $1.8 million increase in personnel-related expenses for salaries and wages. Our cost of revenue headcount has remained relatively consistent since September 30, 2025.

Previous wording

The increase in sales and marketing expenses during the six months ended June 30, 2026 was primarily attributable to an increase of $18.2 million in personnel-related expenses, including increases of $12.5 million in salaries and wages and $6.2 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to a $2.9 million increase in travel-related costs, and a $1.2 million increase in computer software expenses. The increases in sales and marketing expenses were partially offset by a $4.6 million decrease in amortization of customer relationship intangible assets due to certain customer relationship intangible assets becoming fully amortized in Q4 2025, and a $2.4 million decrease in professional fees for temporary contractor labor. We decreased our sales and marketing headcount by 4% since June 30, 2025.

Current wording

The increase in sales and marketing expenses during the nine months ended September 30, 2026 was primarily attributable to an increase of $26.6 million in personnel-related expenses, including increases of $18.9 million in salaries and wages and $8.2 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to an increase of $4.2 million in travel and entertainment, an increase of $3.4 million in acquisition-related expenses, and an increase of $1.7 million in computer software. The increases in sales and marketing expenses were partially offset by a $6.4 million decrease in amortization of customer relationship intangible assets, a $6.3 million decrease in marketing program expenses, and a $3.1 million decrease in professional fees related to temporary contractor labor. Our sales and marketing headcount has remained relatively consistent since September 30, 2025.

Previous wording

The increase in research and development expenses during the three months ended June 30, 2026 was primarily attributable to an increase of $2.3 million in acquisition-related expenses. The increase in research and development expenses was also attributable to a $2.1 million increase in computer software expenses. We increased our research and development headcount by 6% since June 30, 2025.

Current wording

The increase in research and development expenses during the nine months ended September 30, 2026 was primarily attributable to an increase of $12.6 million in acquisition-related expenses. The increase in research and development expenses was also attributable to an increase of $6.2 million in computer software expenses, and an increase of $2.3 million in professional fees. We increased our research and development headcount by 17% since September 30, 2025, largely driven by the DroneDeploy acquisition.

Previous wording

The increase in general and administrative expenses during the six months ended June 30, 2026 was primarily due to an increase of $15.9 million in professional fees, including an increase of $11.3 million in legal fees, which were predominantly related to an ongoing lawsuit with Oracle America, Inc. and certain of its affiliates (“Oracle”). The increase in general and administrative expenses was also attributable to a $2.0 million increase in acquisition-related expenses. The increases in general and administrative expenses were partially offset by a decrease of $3.2 million in rent expense, primarily related to modifications of leases in the second quarter of 2026; and a $0.9 million decrease in personnel-related expenses, including a decrease of $3.9 million in salaries and wages, partially offset by an increase of $3.5 million in stock-based compensation expense. Our general and administrative headcount has remained relatively consistent since June 30, 2025.

Current wording

The increase in general and administrative expenses during the nine months ended September 30, 2026 was primarily attributable to an increase of $21.5 million in professional fees, including a $15.1 million increase in legal fees, which were predominantly related to an ongoing lawsuit with Oracle. The increase in general and administrative expenses was also driven by $14.6 million in acquisition-related expenses. The increases in general and administrative expenses was partially offset by a $1.8 million decrease in personnel-related expenses, including a decrease of $3.2 million in salaries and wages, partially offset by an increase of $1.9 million in stock-based compensation expense. Our general and administrative headcount has remained relatively consistent since September 30, 2025.

Previous wording

During the six months ended June 30, 2026, accretion income, net decreased by $2.8 million due to a decrease in the balance of our marketable securities portfolio year over year.

Current wording

During the nine months ended September 30, 2026, accretion income, net decreased by $4.4 million due to a decrease in the balance of our marketable securities portfolio year over year.

Previous wording

During the three months ended June 30, 2026, other income, net increased by $3.9 million primarily due to unrealized gains on strategic investments.

Current wording

During the nine months ended September 30, 2026, other income increased by $3.6 million primarily due to unrealized gains on strategic investments.

Previous wording

(Benefit from) income taxes for the six months ended June 30, 2026, differs from provision for income taxes for the six months ended June 30, 2025, primarily due to the release of a portion of our valuation allowance as a result of acquired deferred tax liabilities from the Datagrid acquisition that are an available source of income to realize our deferred tax assets. Further, in the prior year, the Company recognized a one-time tax expense related to foreign tax on the realignment of intellectual property attributable to the Novorender acquisition.

Current wording

(Benefit from) income taxes for the nine months ended September 30, 2026, differs from provision for income taxes for the nine months ended September 30, 2025, primarily due to the release of a portion of our valuation allowance as a result of acquired deferred tax liabilities from the Datagrid and DroneDeploy acquisitions that are an available source of income to realize our deferred tax assets. Further, in the prior year, the Company recognized a one-time tax expense related to foreign tax on the realignment of intellectual property attributable to the Novorender acquisition.

Previous wording

Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between our operating results from period to period. The expense related to amortization of acquired intangible assets is a non-cash expense and dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, we believe that non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on restricted stock unit (“RSU”) settlements, option exercises, related stock price, and other factors that are beyond our control and that do not correlate to the operation of our business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Since the amount of employer payroll tax-related items on employee stock transactions is highly variable due to factors outside our control, and unrelated to our core operations, operating results, revenue-generating activities, business strategy, industry, or regulatory environment, management does not consider employer payroll tax on employee stock transactions in the evaluation of the business or in making operating plans. Accordingly, we believe this adjustment in arriving at our non-GAAP measures provides investors with a better understanding of the performance of our core business in a manner that is consistent with management’s view of the business. Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs, and retention or other compensation payments. These expenses are unpredictable and generally would not have otherwise been incurred in the periods presented as part of our continuing operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related expenses, may not be indicative of such future costs. We believe excluding acquisition-related expenses facilitates the comparison of our financial results to our hist…

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Current wording

Stock-based compensation expense includes the net effects of capitalization and amortization of stock-based compensation expense related to capitalized software and cloud-computing arrangement implementation costs. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for meaningful comparisons between our operating results from period to period. The expense related to amortization of acquired intangible assets is a non-cash expense and dependent upon estimates and assumptions, which can vary significantly and are unique to each asset acquired; therefore, we believe that non-GAAP measures that adjust for the amortization of acquired intangible assets provide investors a consistent basis for comparison across accounting periods. The amount of employer payroll tax-related items on employee stock transactions is dependent on RSU settlements, option exercises, related stock price, and other factors that are beyond our control and that do not correlate to the operation of our business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution than the accounting charges associated with such grants). Since the amount of employer payroll tax-related items on employee stock transactions is highly variable due to factors outside our control, and unrelated to our core operations, operating results, revenue-generating activities, business strategy, industry, or regulatory environment, management does not consider employer payroll tax on employee stock transactions in the evaluation of the business or in making operating plans. Accordingly, we believe this adjustment in arriving at our non-GAAP measures provides investors with a better understanding of the performance of our core business in a manner that is consistent with management’s view of the business. Acquisition-related expenses include external and incremental transaction costs, such as legal and due diligence costs, and retention or other compensation payments. These expenses are unpredictable and generally would not have otherwise been incurred in the periods presented as part of our continuing operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related expenses, may not be indicative of such future costs. We believe excluding acquisition-related expenses facilitates the comparison of our financial results to our historical operating results a…

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Previous wording

As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $655.9 million, which were held in money market funds, U.S. treasury securities, corporate notes and obligations, checking accounts, and savings accounts. Our investments in marketable securities are exposed to interest rate risk; however, due to the short-term nature of our investments, we do not anticipate being exposed to material risks due to changes in interest rates.

Current wording

As of September 30, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $613.9 million, which were held in money market funds, U.S. treasury securities, corporate notes and obligations, commercial paper, checking accounts, and savings accounts. Our investments in marketable securities are exposed to interest rate risk; however, due to the short-term nature of our investments, we do not anticipate being exposed to material risks due to changes in interest rates.

Previous wording

As of June 30, 2026, we had outstanding letters of credit, on an unsecured basis, totaling approximately $7.6 million to secure various leased office facilities in the U.S. and Australia.

Current wording

As of September 30, 2026, we had outstanding letters of credit, on an unsecured basis, totaling approximately $8.1 million to secure various leased office facilities in the U.S. and Australia.

Previous wording

Our cash sources primarily consist of cash generated from sales to our customers, maturities of our marketable securities, proceeds from employees through stock option exercises and our employee stock purchase plan (“ESPP”), and interest income on our marketable securities, money market funds, and savings account balances.

Current wording

Our cash sources primarily consist of cash generated from sales to our customers, proceeds from our 2031 Notes, maturities of our marketable securities, proceeds from employees through stock option exercises and our employee stock purchase plan (“ESPP”), and interest income on our marketable securities, money market funds, and savings account balances.

Previous wording

Our cash requirements are primarily for operating expenses, which include personnel-related costs, purchase obligations primarily for hosting and software licenses and other services, lease obligations, and capital expenditures for our employees and offices. We also fund investments which help drive our strategic business growth through acquisitions and investments in equity securities and limited partnership funds. In February 2025, we began using cash to fund withholding taxes due upon the vesting of employee RSUs by net share settlement, rather than our previous approach of selling shares of our common stock issued to employees to cover applicable withholding taxes. We also use working capital to fund repurchases under our stock repurchase program.

Current wording

Our cash requirements are primarily for operating expenses, which include personnel-related costs, purchase obligations primarily for hosting and software licenses and other services, lease obligations, and capital expenditures for our employees and offices. We also fund investments which help drive our strategic business growth through acquisitions and investments in equity securities and limited partnership funds. In February 2025, we began using cash to fund withholding taxes due upon the vesting of employee RSUs by net share settlement, rather than our previous approach of selling shares of our common stock issued to employees to cover applicable withholding taxes. We also use working capital to fund repurchases under our stock repurchase program. Our debt obligations consist of outstanding principal of $950.0 million under the 2031 notes as of September 30, 2026, which mature on August 15, 2031, and which may accrue special interest as described below.

Previous wording

During the six months ended June 30, 2026, we had a $29.7 million decrease in contractual commitments beyond those disclosed in our 2025 Form 10-K, related to the Carpinteria lease modifications. The Company modified its office leases in Carpinteria, California to extend the term of its primary core lease space and decline renewal extensions for its remaining office suites. In the next 12 months, we have operating lease obligations of $1.7 million related to leases that commenced during the six months ended June 30, 2026. Beyond the next 12 months, we have additional net contractual commitments for operating lease obligations of $23.7 million related to leases that commenced during the six months ended June 30, 2026. There have been no other material changes to our contractual obligations from those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months. While we have generated positive cash flows from operations in recent years, we have a limited history of generating profit from operations, as reflected in our accumulated deficit of $1.3 billion as of June 30, 2026. We may not maintain profitability in future periods and may require additional capital resources to execute strategic initiatives to grow our business.

Current wording

During the nine months ended September 30, 2026, we had a $29.7 million decrease in contractual commitments beyond those disclosed in our 2025 Form 10-K, related to the Carpinteria lease modifications. The Company modified its office leases in Carpinteria, California to extend the term of its primary core lease space and decline renewal extensions for its remaining office suites. In the next 12 months, we have operating lease obligations of $0.5 million related to leases that commenced during the nine months ended September 30, 2026. Beyond the next 12 months, we have additional net contractual commitments for operating lease obligations of $29.4 million related to leases that commenced during the nine months ended September 30, 2026. There have been no other material changes to our contractual obligations from those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months. While we have generated positive cash flows from operations in recent years, we have a limited history of generating profit from operations, as reflected in our accumulated deficit of $1.3 billion as of September 30, 2026. We may not maintain profitability in future periods and may require additional capital resources to execute strategic initiatives to grow our business.

Previous wording

Net cash provided by operating activities was $164.6 million during the six months ended June 30, 2026 which resulted from net income of $7.8 million, adjusted for non-cash charges of $163.9 million and a net cash outflow of $7.1 million from changes in operating expenses and liabilities. The $7.1 million of net cash outflows as a result of changes in our operating assets and liabilities primarily reflected the following:

Current wording

Net cash provided by operating activities was $260.3 million during the nine months ended September 30, 2026 which resulted from net income of $3.2 million, which includes cash paid for transaction expenses and accelerated vesting related to our acquisitions, adjusted for non-cash charges of $258.1 million and a net cash inflow of $1.0 million from changes in operating expenses and liabilities. The $1.0 million of net cash inflow as a result of changes in our operating assets and liabilities primarily reflected the following:

Previous wording

•a $15.7 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period;

Current wording

•a $24.4 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period;

Previous wording

•a $6.6 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors; and

Current wording

•a $24.4 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors;

Previous wording

•a $28.3 million decrease in deferred revenue primarily due to the growth of our business and timing of billings;

Current wording

•a $11.0 million decrease in deferred revenue primarily due to timing of billings and seasonality; and

Previous wording

•a $2.3 million decrease in operating lease liabilities related to lease payments.

Current wording

•a $2.5 million decrease in operating lease liabilities related to lease payments.

Previous wording

•a $46.8 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and

Current wording

•a $38.5 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and

Previous wording

•a $8.2 million increase in accounts payable primarily due to timing of cash payments to our vendors.

Current wording

•a $18.2 million increase in accounts payable primarily due to timing of cash payments to our vendors.

Previous wording

•a $21.8 million decrease in accrued expenses and other liabilities primarily due to the size and timing of bonus and commission accruals and payouts, accrued ESPP contributions, payroll, and cash payments to our vendors;

Current wording

•a $4.7 million increase in accrued expenses and other liabilities primarily due to the size and timing of bonus and commission accruals and payouts, accrued ESPP contributions, payroll, and timing of cash payments to our vendors.

Previous wording

Net cash provided by operating activities was $96.9 million during the six months ended June 30, 2025, which resulted from a net loss of $54.1 million, adjusted for non-cash charges of $157.8 million and net cash inflows of $6.8 million from changes in operating assets and liabilities. The $6.8 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following:

Current wording

Net cash provided by operating activities was $185.3 million during the nine months ended September 30, 2025, which resulted from a net loss of $63.2 million, adjusted for non-cash charges of $244.2 million and net cash inflow of $4.4 million from changes in operating assets and liabilities. The $4.4 million of net cash inflows as a result of changes in our operating assets and liabilities primarily reflected the following:

Previous wording

•a $54.6 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and

Current wording

•a $42.6 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and