ZIPRECRUITER INC

Previous wording

For the three months ended June 30, 2024, our revenue was $123.7 million and we generated net income of $7.0 million and Adjusted EBITDA of $27.8 million. For the three months ended June 30, 2023, our revenue was $170.4 million, and we generated net income of $14.4 million and Adjusted EBITDA of $43.3 million. For the six months ended June 30, 2024, our revenue was $245.9 million and we generated net income of $0.5 million and Adjusted EBITDA of $48.6 million. For the six months ended June 30, 2023, our revenue was $354.2 million, and we generated net income of $19.4 million and Adjusted EBITDA of $78.5 million. Adjusted EBITDA is a financial measure not presented in accordance with GAAP. For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure and a reconciliation of net income to Adjusted EBITDA, see the section titled “Key Operating Metrics and Non-GAAP Financial Measures.”

Current wording

For the three months ended September 30, 2024, our revenue was $117.1 million and we had a net loss of $2.6 million and Adjusted EBITDA of $15.0 million. For the three months ended September 30, 2023, our revenue was $155.6 million, and we generated net income of $24.1 million and Adjusted EBITDA of $54.4 million. For the nine months ended September 30, 2024, our revenue was $363.0 million and we had a net loss of $2.1 million and Adjusted EBITDA of $63.6 million. For the nine months ended September 30, 2023, our revenue was $509.8 million, and we generated net income of $43.5 million and Adjusted EBITDA of $132.9 million. Adjusted EBITDA is a financial measure not presented in accordance with GAAP. For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure and a reconciliation of net income (loss) to Adjusted EBITDA, see the section titled “Key Operating Metrics and Non-GAAP Financial Measures.”

Previous wording

In the quarter ended June 30, 2024, Quarterly Paid Employers decreased slightly when compared to the quarter ended March 31, 2024. The U.S. labor market continued to be impacted by high inflation and high interest rates, which posed challenges for many businesses. Employers continued to moderate hiring plans given the uncertainty in the economy.

Current wording

In the quarter ended September 30, 2024, Quarterly Paid Employers decreased when compared to the quarter ended June 30, 2024. Employers continued to moderate hiring plans given the uncertainty in the economy, in part driven by high interest rates. With those currently employed leaving their jobs at a low rate, the reduced churn among employees further drove down hiring levels.

Previous wording

The following table presents a reconciliation of net income to Adjusted EBITDA for each of the periods indicated:

Current wording

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated:

Previous wording

(1)Net income includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%. Restructuring costs were $8.3 million for both the three and six months ended June 30, 2023. No restructuring costs were recorded during the three and six months ended June 30, 2024.

Current wording

(1)Net income (loss) includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%. Restructuring activity for the three months ended September 30, 2023 reflects $0.7 million in costs reversed when it was determined such costs would not need to be paid, partially offset by restructuring costs of $0.3 million related to employee severance and continuation of health benefits. Restructuring activity for the nine months ended September 30, 2023 reflects $7.9 million of net costs primarily related to employee severance and continuation of health benefits. No restructuring costs were recorded during the three and nine months ended September 30, 2024.

Previous wording

The following tables present net income margin and Adjusted EBITDA margin for each of the periods indicated:

Current wording

The following tables present net income (loss) margin and Adjusted EBITDA margin for each of the periods indicated:

Previous wording

We had a lower number of Quarterly Paid Employers in our marketplace in the quarter ended June 30, 2024 compared to the prior year period. In the quarter ended June 30, 2024, we delivered $123.7 million in revenue, which is a 27% decrease compared to the quarter ended June 30, 2023. Despite Revenue per Paid Employer being higher in the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023 as our products and services continued to improve and offered more value for employers, we saw employers significantly pull back on spend on products and services in our marketplace during the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023 amidst the continuing challenging macroeconomic conditions .

Current wording

We had a lower number of Quarterly Paid Employers in our marketplace in the quarter ended September 30, 2024 compared to the prior-year period. In the quarter ended September 30, 2024, we delivered $117.1 million in revenue, which is a 25% decrease compared to the quarter ended September 30, 2023. Despite Revenue per Paid Employer being higher in the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023 as our products and services continued to improve and offered more value for employers, we saw employers significantly reduce spend on products and services in our marketplace during the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023 amidst the continuing challenging macroeconomic conditions.

Previous wording

Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that support our marketplace technology and the cost of certain third-party service providers. We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expenses based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.

Current wording

Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that supports our marketplace technology and the cost of certain third-party service providers. We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expenses based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.

Previous wording

We are subject to federal and state income taxes in the United States, as well as several international jurisdictions. The effective tax rates for the three and six months ended June 30, 2024 differed from the U.S. federal statutory rate of 21% primarily due to tax detriments relating to the settlement of restricted stock units, or RSUs, certain non-deductible expenses including limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits. The effective tax rate for the three and six months ended June 30, 2023 differed from the U.S. federal statutory tax rate of 21% primarily due to state taxes, tax detriments relating to the settlement of RSUs, certain non-deductible expenses including limitations on the amount of deductible officer compensation, partially offset by net tax benefits from research and development tax credits.

Current wording

We are subject to federal and state income taxes in the United States, as well as several international jurisdictions. The effective tax rate for the three and nine months ended September 30, 2024 differed from the U.S. federal statutory rate of 21% primarily due to tax detriments relating to the settlement of restricted stock units, or RSUs, limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits. The effective tax rate for the three and nine months ended September 30, 2023 differed from the U.S. federal statutory tax rate of 21% primarily due to state taxes, tax detriments relating to the settlement of RSUs, and limitations on the amount of deductible officer compensation, partially offset by net tax benefits from research and development tax credits.

Previous wording

(3)Includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%. Restructuring costs are presented as $3.9 million in sales and marketing, $3.4 million in research and development, and $1.0 million in general and administrative expenses for both the three and six months ended June 30, 2023.

Current wording

(3)Includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%. Restructuring activity for the three months ended September 30, 2023 reflects $0.7 million in costs reversed when it was determined such costs would not need to be paid, partially offset by restructuring costs of $0.3 million related to employee severance and continuation of health benefits. Restructuring activity for the nine months ended September 30, 2023 reflects $7.9 million of net costs primarily related to employee severance and continuation of health benefits, presented as $3.6 million in sales and marketing, $3.3 million in research and development, and $1.0 million in general and administrative expenses for the nine months ended September 30, 2023.

Previous wording

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

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Revenue decreased by $46.8 million, or 27%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, reflecting the lower number of Quarterly Paid Employers in our marketplace primarily due to the labor market continuing to be impacted by high inflation and high interest rates in the current period, which posed challenges to many businesses. Subscription revenue decreased by $40.6 million, or 30%, and performance-based revenue decreased by $6.1 million, or 18%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Despite Revenue per Paid Employer being higher in the current period as our products and services continued to improve and offered more value for employers, we saw employers significantly pull back on spend on products and services in our marketplace during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 amidst the continuing challenging macroeconomic conditions.

Current wording

Revenue decreased by $38.5 million, or 25%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, reflecting the lower number of Quarterly Paid Employers in our marketplace primarily due to the labor market continuing to be impacted by high interest rates in the current period, which posed challenges to many businesses. Subscription revenue decreased by $31.3 million, or 26%, and performance-based revenue decreased by $7.2 million, or 22%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Despite Revenue per Paid Employer being higher in the current period as our products and services continued to improve and offered more value for employers, we saw employers significantly reduce spend on products and services in our marketplace during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 amidst the continuing challenging macroeconomic conditions.

Previous wording

Revenue decreased by $108.3 million, or 31%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, reflecting the lower number of Quarterly Paid Employers in our marketplace primarily due to the labor market continuing to be impacted by high inflation and high interest rates in the current period, which posed challenges to many businesses. Subscription revenue decreased by $87.2 million, or 31%, and performance-based revenue decreased by $21.1 million, or 29%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Despite Revenue per Paid Employer being higher in the current period as our products and services continued to improve and offered more value for employers, we saw employers significantly pull back on spend on products and services in our marketplace during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 amidst the continuing challenging macroeconomic conditions.

Current wording

Revenue decreased by $146.8 million, or 29%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, reflecting the lower number of Quarterly Paid Employers in our marketplace primarily due to the labor market continuing to be impacted by high interest rates in the current period, which posed challenges to many businesses. Subscription revenue decreased by $118.5 million, or 29%, and performance-based revenue decreased by $28.3 million, or 26%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Despite Revenue per Paid Employer being higher in the current period as our products and services continued to improve and offered more value for employers, we saw employers significantly reduce spend on products and services in our marketplace during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 amidst the continuing challenging macroeconomic conditions.

Previous wording

Cost of revenue decreased by $2.7 million, or 17%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a decrease of $1.2 million in credit card processing fees, a decrease of $0.7 million in third-party hosting fees, and a decrease of $0.5 million in partner revenue share. Gross margin was 90% and 91% in the three months ended June 30, 2024 and June 30, 2023, respectively, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.

Current wording

Cost of revenue decreased by $2.2 million, or 15%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a decrease of $0.9 million in credit card processing fees, a decrease of $0.6 million in partner revenue share, and a decrease of $0.5 million in job distribution costs from performance-based revenue. Gross margin was 89% and 91% in the three months ended September 30, 2024 and September 30, 2023, respectively, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.

Previous wording

Cost of revenue decreased by $10.0 million, or 28%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to a decrease of $2.6 million in credit card processing fees, a decrease of $2.5 million in job distribution costs from performance-based revenue, a decrease of $2.1 million in third-party hosting fees, and a decrease of $1.6 million in partner revenue share. Gross margin was 89% and 90% in the six months ended June 30, 2024 and June 30, 2023, respectively, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.

Current wording

Cost of revenue decreased by $12.2 million, or 24%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a decrease of $3.5 million in credit card processing fees, a decrease of $3.0 million in job distribution costs from performance-based revenue, a decrease of $2.4 million in third-party hosting fees, and a decrease of $2.2 million in partner revenue share. Gross margin was 89% and 90% in the nine months ended September 30, 2024 and September 30, 2023, respectively, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.

Previous wording

Sales and marketing expenses decreased by $20.7 million, or 29%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily driven by a $8.4 million decrease in marketing and advertising compared to the prior-year period reflecting our discipline in proactively adjusting marketing spend levels in relation to the macroeconomic conditions. The decrease was also driven by a decrease of $7.3 million in personnel-related costs for our sales and marketing employees corresponding with lower headcount in the current period. The decrease was further driven by one-time restructuring costs of $3.9 million related to our May 2023 reduction in force incurred during the three months ended June 30, 2023.

Current wording

Sales and marketing expenses decreased by $0.7 million, or 1%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Personnel-related costs for our sales and marketing employees decreased by $2.0 million corresponding with lower headcount in the current period. The decrease was partially offset by an increase of $1.0 million in marketing and advertising spend compared to the prior-year period.

Previous wording

Sales and marketing expenses decreased by $54.4 million, or 34%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily driven by a $33.3 million decrease in marketing and advertising compared to the prior-year period reflecting our discipline in proactively adjusting marketing spend levels in relation to the macroeconomic conditions. The decrease was also driven by a decrease of $14.4 million in personnel-related costs for our sales and marketing employees corresponding with lower headcount in the current-year period. The decrease was further driven by one-time restructuring costs of $3.9 million related to our May 2023 reduction in force incurred during the six months ended June 30, 2023.

Current wording

Sales and marketing expenses decreased by $55.1 million, or 25%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily driven by a $32.3 million decrease in marketing and advertising compared to the prior-year period reflecting our discipline in proactively adjusting marketing spend levels in relation to the macroeconomic conditions. The decrease was also driven by a decrease of $16.7 million in personnel-related costs for our sales and marketing employees corresponding with lower headcount in the current-year period, and was further driven by one-time restructuring costs of $3.6 million related to our May 2023 reduction in force incurred during the nine months ended September 30, 2023.

Previous wording

Research and development expenses decreased by $5.3 million, or 14%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily driven by one-time restructuring costs of $3.4 million related to our May 2023 reduction in force incurred during the three months ended June 30, 2023, as well as a $1.6 million decrease in personnel-related costs for our research and development employees corresponding with lower headcount in the current period. Research and development expenses as a percentage of revenue increased 4% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by lower revenue. We expect to continue to invest in research and development activities, and we expect this expense may vary as a percentage of total revenue for the foreseeable future.

Current wording

Research and development expenses increased by $1.6 million, or 5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by a $1.5 million increase in personnel-related costs for our research and development employees reflecting salaries and other personnel-related costs in connection with Breakroom employees with no comparable expenses in the prior-year period, as we acquired 100% of the outstanding share capital in Breakroom in July 2024. Research and development expenses as a percentage of revenue increased 8% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by lower revenue. We expect to continue to invest in research and development activities, and we expect this expense may vary as a percentage of total revenue for the foreseeable future.

Previous wording

Research and development expenses decreased by $7.5 million, or 10%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily driven by one-time restructuring costs of $3.4 million related to our May 2023 reduction in force incurred during the six months ended June 30, 2023, as well as a $3.3 million decrease in personnel-related costs for our research and development employees corresponding with lower headcount in the current-year period. Research and development expenses as a percentage of revenue increased 6% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by lower revenue. We expect to continue to invest in research and development activities, and we expect this expense may vary as a percentage of total revenue for the foreseeable future.

Current wording

Research and development expenses decreased by $6.0 million, or 5%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily driven by one-time restructuring costs of $3.3 million related to our May 2023 reduction in force incurred during the nine months ended September 30, 2023, as well as a $1.8 million decrease in personnel-related costs and a $1.0 million decrease in stock-based compensation expense for our research and development employees corresponding with lower headcount in the current-year period. Research and development expenses as a percentage of revenue increased 7% for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by lower revenue. We expect to continue to invest in research and development activities, and we expect this expense may vary as a percentage of total revenue for the foreseeable future.

Previous wording

General and administrative expenses decreased by $11.4 million, or 24%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by a $4.1 million decrease in stock-based compensation expense, a $3.4 million decrease in personnel-related costs for our general and administrative employees corresponding with lower headcount in the current-year period, and a $1.0 million decrease due to one-time restructuring costs related to our May 2023 reduction in force incurred during the six months ended June 30, 2023.

Current wording

General and administrative expenses decreased by $12.7 million, or 19%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by a $6.6 million decrease in stock-based compensation expense, a $3.4 million decrease in personnel-related costs for our general and administrative employees corresponding with lower headcount in the current-year period, and a $1.0 million decrease due to one-time restructuring costs related to our May 2023 reduction in force incurred during the nine months ended September 30, 2023.

Previous wording

Income tax expense decreased $5.2 million, or 89%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease in income tax expense is primarily attributable to a decrease in income before income taxes partially offset by an increase in income tax expense associated with stock-based compensation.

Current wording

Income tax expense (benefit) decreased by $7.8 million, or 131%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease in income tax expense (benefit) is primarily attributable to a decrease in income before income taxes partially offset by an increase in income tax expense associated with stock-based compensation.

Previous wording

Income tax expense decreased $5.7 million, or 60%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in income tax expense is primarily attributable to a decrease in income before income taxes partially offset by an increase in income tax expense associated with stock-based compensation.

Current wording

Income tax expense (benefit) decreased by $13.4 million, or 87%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in income tax expense (benefit) is primarily attributable to a decrease in income before income taxes partially offset by an increase in income tax expense associated with stock-based compensation.

Previous wording

As of June 30, 2024, we had cash, cash equivalents, and marketable securities totaling $523.3 million and $247.4 million available in unused borrowing capacity under our credit facility. We have financed our operations and capital expenditures primarily through cash generated from operations, sales of shares of common and preferred stock and from our senior unsecured notes, bank loans, and convertible notes. As of June 30, 2024, we had no amounts outstanding under our credit facility and were in compliance with the financial covenants. In addition, in July 2024, we entered into a supplement to our credit facility agreement which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. Subsequent to the execution of the supplement, we continued to have no amounts outstanding under our credit facility.

Current wording

As of September 30, 2024, we had cash, cash equivalents, and marketable securities totaling $497.6 million and $287.6 million available in unused borrowing capacity under our credit facility. We have financed our operations and capital expenditures primarily through cash generated from operations, sales of shares of common and preferred stock and from our senior unsecured notes, bank loans, and convertible notes. As of September 30, 2024, we had no amounts outstanding under our credit facility.

Previous wording

In April 2021, we entered into a $250.0 million credit facility agreement with a syndicate of banks. In July 2024, we entered into a supplement to the credit facility agreement which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon our Net Leverage Ratio. Our Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash expenses and other nonrecurring transactions. We are also obligated to pay other customary fees including a commitment fee on a quarterly basis based on amounts committed but unused under the credit facility at a rate between 0.25% to 0.35%, depending on our Net Leverage Ratio. The amount available under the credit facility is reduced by letters of credit outstanding, which totaled $2.6 million as of June 30, 2024. The letters of credit outstanding relate to various leased office spaces.

Current wording

In April 2021, we entered into a $250.0 million credit facility agreement with a syndicate of banks. In July 2024, we entered into a supplement to the credit facility agreement which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon our Net Leverage Ratio. Our Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash expenses and other nonrecurring transactions. We are also obligated to pay other customary fees including a commitment fee on a quarterly basis based on amounts committed but unused under the credit facility at a rate between 0.25% to 0.35%, depending on our Net Leverage Ratio. The amount available under the credit facility is reduced by letters of credit outstanding, which totaled $2.4 million as of September 30, 2024. The letters of credit outstanding relate to various leased office spaces.

Previous wording

Our board of directors authorized us to repurchase up to $550.0 million of our outstanding common stock, with no fixed expiration. During the six months ended June 30, 2024, we repurchased 1.4 million shares of our Class A common stock for an aggregate purchase price of $15.0 million through open market purchases under our share repurchase program.

Current wording

Our board of directors has authorized us to repurchase up to $550.0 million of our outstanding common stock, with no fixed expiration. During the nine months ended September 30, 2024, we repurchased 3.9 million shares of our Class A common stock for an aggregate purchase price of $37.6 million through open market purchases under our share repurchase program.

Previous wording

Approximately $48.4 million remains available for future repurchases of our Class A common stock under our share repurchase program as of June 30, 2024. For more information, see Note 9 – Share Repurchase Program to our condensed consolidated financial statements included in this report.

Current wording

Approximately $25.8 million remains available for future repurchases of our Class A common stock under our share repurchase program as of September 30, 2024. For more information, see Note 10 – Share Repurchase Program to our condensed consolidated financial statements included in this report.

Previous wording

During the three and six months ended June 30, 2024, we continued investing primarily in highly rated debt securities and money market mutual funds to manage our excess cash reserves. The primary objectives in investing our excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments. We consider all of our investments as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities within current assets in our condensed consolidated balance sheets.

Current wording

During the three and nine months ended September 30, 2024, we continued investing primarily in highly rated debt securities and money market mutual funds to manage our excess cash reserves. The primary objectives in investing our excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments. We consider all of our investments as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities within current assets in our condensed consolidated balance sheets.

Previous wording

As of June 30, 2024, we held $290.6 million in total investments, consisting of money market mutual funds and available-for-sale debt securities. These investments are included within cash and cash equivalents and marketable securities within our condensed consolidated balance sheets. For more information, see Note 8 – Financial Instruments to our condensed consolidated financial statements included in this report.

Current wording

As of September 30, 2024, we held $325.0 million in total investments, consisting of money market mutual funds and available-for-sale debt securities. These investments are included within cash and cash equivalents and marketable securities within our condensed consolidated balance sheets. For more information, see Note 6 – Financial Instruments to our condensed consolidated financial statements included in this report.

Previous wording

For the six months ended June 30, 2024, cash provided by operating activities was $23.9 million resulting from our net income of $0.5 million, adjusted by non-cash charges of $37.3 million and a net decrease of $13.9 million in our operating assets and liabilities. The non-cash charges primarily resulted from $34.2 million for stock-based compensation expense, $5.9 million pertaining to amortization of intangible assets and depreciation, and $2.0 million pertaining to non-cash lease expense, partially offset by $5.3 million in amortization and accretion of marketable securities and $0.9 million related to the change in our deferred tax assets driven by our current year capitalization of research costs from a tax perspective. The decrease of $13.9 million related to changes in our operating assets and liabilities was primarily driven by a $9.2 million decrease in our accounts payable and accrued expenses and other liabilities, a $2.8 million increase in prepaid expenses and other assets, and a $2.7 million decrease in our operating lease liabilities.

Current wording

For the nine months ended September 30, 2024, cash provided by operating activities was $33.2 million resulting from our net loss of $2.1 million, adjusted by non-cash charges of $54.7 million and a net decrease of $19.4 million in our operating assets and liabilities. The non-cash charges primarily resulted from $49.2 million for stock-based compensation expense, $9.1 million pertaining to amortization of intangible assets and depreciation, and $3.0 million pertaining to non-cash lease expense, partially offset by $8.0 million in amortization and accretion of marketable securities and $1.6 million related to the change in our deferred tax assets driven by our current year capitalization of research costs from a tax perspective. The decrease of $19.4 million related to changes in our operating assets and liabilities was primarily driven by an $8.1 million increase in prepaid expenses and other assets, a $6.8 million decrease in accrued interest, a $5.0 million decrease in our accounts payable and accrued expenses and other liabilities, and a $4.0 million decrease in our operating lease liabilities, partially offset by a $3.0 million decrease in accounts receivable and a $1.5 million decrease in deferred commissions, net.

Previous wording

For the six months ended June 30, 2023, cash provided by operating activities was $39.5 million resulting from our net income of $19.4 million, adjusted by non-cash charges of $35.2 million and a net decrease of $15.1 million in our operating assets and liabilities. The non-cash charges primarily resulted from $39.2 million for stock-based compensation expense, $5.8 million pertaining to amortization of intangible assets and depreciation, and $2.1 million pertaining to non-cash lease expense, partially offset by $8.3 million related to the change in our deferred tax assets driven by our current year capitalization of research costs from a tax perspective and the tax-related impact of stock-based compensation, and $5.8 million in amortization and accretion of marketable securities. The decrease of $15.1 million related to changes in our operating assets and liabilities was primarily driven by a $22.7 million decrease in our accrued expenses and other liabilities and accounts payable and a $3.1 million decrease in our operating lease liabilities, partially offset by a $10.2 million decrease in accounts receivable associated with a decrease in revenue due to a lower number of Quarterly Paid Employers in our marketplace compared to the prior-year period, and a $2.2 million decrease in prepaid expenses and other assets.

Current wording

For the nine months ended September 30, 2023, cash provided by operating activities was $68.8 million resulting from our net income of $43.5 million, adjusted by non-cash charges of $48.2 million and a net decrease of $23.0 million in our operating assets and liabilities. The non-cash charges primarily resulted from $58.3 million for stock-based compensation expense, $8.5 million pertaining to amortization of intangible assets and depreciation, and $3.2 million pertaining to non-cash lease expense, partially offset by $16.8 million related to the change in our deferred tax assets driven by our current year capitalization of research costs from a tax perspective and the tax-related impact of stock-based compensation, and $8.6 million in amortization and accretion of marketable securities. The decrease of $23.0 million related to changes in our operating assets and liabilities was primarily driven by an $18.6 million decrease in our accounts payable and accrued expenses and other liabilities, a $6.9 million decrease in our accrued interest associated with our senior unsecured notes, a $4.8 million decrease in our operating lease liabilities, and a $3.4 million decrease in our deferred revenue, partially offset by an $8.9 million decrease in accounts receivable associated with a decrease in revenue due to a lower number of Quarterly Paid Employers in our marketplace compared to the prior-year period, and a $1.1 million decrease in prepaid expenses and other assets.

Previous wording

For the six months ended June 30, 2024, cash used in investing activities was $15.4 million resulting from $297.8 million used in purchases of marketable securities and $5.3 million capitalized for software development costs, partially offset by $288.0 million received from paydowns, maturities and redemptions of marketable securities.

Current wording

For the nine months ended September 30, 2024, cash used in investing activities was $47.1 million resulting from $480.1 million used in purchases of marketable securities, $12.0 million paid for the

Previous wording

For the six months ended June 30, 2023, cash provided by investing activities was $84.6 million resulting from $292.0 million received from paydowns, maturities and redemptions of marketable securities, partially offset by $201.8 million used in purchases of marketable securities and an increase in capitalized software development costs of $5.2 million.

Current wording

For the nine months ended September 30, 2023, cash provided by investing activities was $89.4 million resulting from $421.5 million received from paydowns, maturities and redemptions of marketable securities, partially offset by $323.8 million used in purchases of marketable securities and an increase in capitalized software development costs of $7.5 million.

Previous wording

For the six months ended June 30, 2024, cash used in financing activities was $19.9 million which consisted of $15.0 million used for the repurchase of common stock and $8.1 million for the net settlement of taxes on equity awards, partially offset by $2.6 million of proceeds from the issuance of stock under the employee stock purchase plan, and $0.6 million of proceeds from the exercise of stock options.

Current wording

For the nine months ended September 30, 2024, cash used in financing activities was $43.6 million which consisted of $37.6 million used for the repurchase of common stock and $11.1 million for the net settlement of taxes on equity awards, partially offset by $3.6 million of proceeds from the issuance of stock under the employee stock purchase plan, and $1.5 million of proceeds from the exercise of stock options.

Previous wording

For the six months ended June 30, 2023, cash used in financing activities was $112.7 million which consisted of $110.9 million used for the repurchase of common stock and $9.1 million for the net settlement of taxes on RSUs, partially offset by $4.2 million of proceeds from the issuance of stock under the employee stock purchase plan, and $3.0 million of proceeds from the exercise of stock options.

Current wording

For the nine months ended September 30, 2023, cash used in financing activities was $142.2 million which consisted of $139.2 million used for the repurchase of common stock and $13.4 million for the net settlement of taxes on RSUs, partially offset by $6.4 million of proceeds from the issuance of stock under the employee stock purchase plan, and $4.0 million of proceeds from the exercise of stock options.

Previous wording

Our significant accounting policies are discussed in Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this report. There have been no changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates discussed in the 2023 Form 10-K.

Current wording

Our significant accounting policies are discussed in Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this report. There have been no changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates discussed in the 2023 Form 10-K, except as set forth below.