VARONIS SYSTEMS INC

Previous wording

We sell substantially all of our products and services to channel partners, including distributors and resellers, which sell to end-user customers, which we refer to in this report as our customers. We believe that our sales model, which combines the leverage of a channel sales model with our highly trained and professional sales force, has and will continue to play a major role in our ability to grow and to successfully deliver our unique value proposition for enterprise data. While our products serve customers of all sizes, across industries and across geographies, the marketing focus and majority of our sales focus is on targeting larger organizations who can make sizable initial purchases with us and, over time, have a greater potential lifetime value. Our customers span leading firms in the financial services, public, healthcare, industrial, insurance, energy and utilities, technology, consumer and retail, education and construction and engineering sectors. We believe our existing customer base serves as a strong source of future incremental revenues given our broad platform of products, their growing volumes and complexity of enterprise data and related security concerns. We will continue our focus on targeting larger organizations who can make sizable purchases with us initially and over time. We are also focused on maintaining a high renewal rate by investing in the quality and reliability of our customer service and support teams to ensure our customers receive value from our products and providing software upgrades and enhancements when and if they are available. Our product offering currently contains coverage for most mission critical cloud and on-premises data stores and cloud infrastructure environments, and many critical SaaS applications. Our renewal rate continued to be over 90% for the three months ended March 31, 2025.

Current wording

We sell substantially all of our products and services to channel partners, including distributors and resellers, which sell to end-user customers, which we refer to in this report as our customers. We believe that our sales model, which combines the leverage of a channel sales model with our highly trained and professional sales force, has and will continue to play a major role in our ability to grow and to successfully deliver our unique value proposition for enterprise data. While our products serve customers of all sizes, across industries and across geographies, the marketing focus and majority of our sales focus is on targeting larger organizations who can make sizable initial purchases with us and, over time, have a greater potential lifetime value. Our customers span leading firms in the financial services, public, healthcare, industrial, insurance, energy and utilities, technology, consumer and retail, education and construction and engineering sectors. We believe our existing customer base serves as a strong source of future incremental revenues given our broad platform of products, their growing volumes and complexity of enterprise data and related security concerns. We will continue our focus on targeting larger organizations who can make sizable purchases with us initially and over time. We are also focused on maintaining a high renewal rate by investing in the quality and reliability of our customer service and support teams to ensure our customers receive value from our products and providing software upgrades and enhancements when and if they are available. Our product offering currently contains coverage for most mission critical cloud and on-premises data stores and cloud infrastructure environments, and many critical SaaS applications. Our renewal rate continued to be over 90% for the six months ended June 30, 2025.

Previous wording

We believe there is a significant long-term growth opportunity in both domestic and international markets, which could include any organization that relies on data stored in SaaS applications, IaaS environments, NAS devices, file shares, databases and email servers. For the three months ended March 31, 2025, approximately 70% of our revenues were derived from the United States, while approximately 21% of our revenues were derived from EMEA and approximately 9% from ROW. Additionally, despite the revenue recognition variations from the accounting treatment associated with the positive trend of our increase in SaaS sales and existing customer conversions to SaaS, total revenues still grew approximately 20% for the three months ended March 31, 2025 compared with the three months ended March 31, 2024. We continue to expect expansion in both domestic and international markets to be key components of our long-term growth strategy. Over the last few years, we have seen changes in customer buying patterns including, some budgetary tightening and additional scrutiny on enterprise spending as a result of a higher inflation and interest rate environment.

Current wording

We believe there is a significant long-term growth opportunity in both domestic and international markets, which could include any organization that relies on data stored in SaaS applications, IaaS environments, NAS devices, file shares, databases and email servers. For the three and six months ended June 30, 2025, approximately 71% and 70% of our revenues were derived from the United States, respectively, while approximately 21% of our revenues were derived from EMEA and approximately 8% and 9% from ROW, respectively. Additionally, despite the revenue recognition variations from the accounting treatment associated with the positive trend of our increase in SaaS sales and existing customer conversions to SaaS, total revenues still grew approximately 18% for the six months ended June 30, 2025 compared with the six months ended June 30, 2024. We continue to expect expansion in both domestic and international markets to be key components of our long-term growth strategy. Over the last few years, we have seen changes in customer buying patterns including, some budgetary tightening and additional scrutiny on enterprise spending as a result of a higher inflation and interest rate environment.

Previous wording

Since inception, we have continued to scale our business and execute on strategic initiatives which we believe have positioned us for durable long-term growth. For the three months ended March 31, 2025, we have continued to grow our revenues despite revenue recognition accounting treatment variations associated with the increase in SaaS sales and existing customer conversions to SaaS. For the three months ended March 31, 2025 and 2024, SaaS revenues were $88.6 million and $34.0 million, respectively. For the three months ended March 31, 2025 and 2024, our total revenues were $136.4 million and $114.0 million, respectively. For the three months ended March 31, 2025 and 2024, we have operating losses of $43.8 million and $47.6 million and net losses of $35.8 million and $40.5 million, respectively.

Current wording

Since inception, we have continued to scale our business and execute on strategic initiatives which we believe have positioned us for durable long-term growth. For the three and six months ended June 30, 2025, we have continued to grow our revenues despite revenue recognition accounting treatment variations associated with the increase in SaaS sales and existing customer conversions to SaaS. For the three months ended June 30, 2025 and 2024, SaaS revenues were $105.9 million and $44.8 million, respectively. For the six months ended June 30, 2025 and 2024, SaaS revenues were $194.5 million and $78.8 million, respectively. For the three months ended June 30, 2025 and 2024, our total revenues were $152.2 million and $130.3 million, respectively. For the six months ended June 30, 2025 and 2024, our total revenues were $288.6 million and $244.4 million, respectively. For the three months ended June 30, 2025 and 2024, we have operating losses of $36.6 million and $28.8 million and net losses of $35.8 million and $23.9 million, respectively. For the six months ended June 30, 2025 and 2024, we have operating losses of $80.3 million and $76.5 million and net losses of $71.6 million and $64.4 million, respectively.

Previous wording

Due to the war that began on October 7, 2023, a portion of our employees in Israel have been called to active reserve duty and additional employees may be called in the future, if needed. We have a business continuity plan and will remain aware and responsive to the evolving situation; however, any deterioration in the situation might have a negative impact on our operations.

Current wording

Due to the war that began on October 7, 2023, a portion of our employees in Israel have been called to active reserve duty and additional employees may be called in the future, if needed. We have a business continuity plan and will remain aware and responsive to the evolving situation.

Previous wording

As of March 31, 2025 and 2024, ARR was $664.3 million and $560.3 million, respectively, an increase of 19% period over period. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of these contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. ARR is not a forecast of future revenues and can be impacted by contract start and end dates and renewal rates. We expect ARR to continue to increase in absolute dollars.

Current wording

As of June 30, 2025 and 2024, ARR was $693.2 million and $584.2 million, respectively, an increase of 19% period over period. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of these contracts is not determined by reference to historical revenues, deferred revenues or any other GAAP financial measure over any period. ARR is not a forecast of future revenues and can be impacted by contract start and end dates and renewal rates. We expect ARR to continue to increase in absolute dollars.

Previous wording

As of March 31, 2025, SaaS as a percentage of total ARR was approximately 61% and we expect this percentage to continue to increase throughout the transition to a SaaS delivery model.

Current wording

As of June 30, 2025, SaaS as a percentage of total ARR was approximately 69% and we expect this percentage to continue to increase throughout the transition to a SaaS delivery model.

Previous wording

Remaining performance obligations ("RPO") represent contracted revenues that have not yet been recognized, which includes deferred revenues and non-cancelable amounts that will be invoiced in the future. Our RPO was $788.7 million as of March 31, 2025. We expect RPO to increase in absolute dollars as we continue to transition to a SaaS delivery model.

Current wording

Remaining performance obligations ("RPO") represent contracted revenues that have not yet been recognized, which includes deferred revenues and non-cancelable amounts that will be invoiced in the future. Our RPO was $870.9 million as of June 30, 2025. We expect RPO to increase in absolute dollars as we continue to transition to a SaaS delivery model.

Previous wording

SaaS Revenues. SaaS revenues relate to the Company's SaaS platform. Over the last three years, the Company began to offer SaaS solutions to its customers, including its (i) flagship Data Security Platform as a SaaS that was previously only sold as a self-hosted solution and (ii) DatAdvantage Cloud product lines. Each of these products allow customers to use hosted software, and the related revenue from these products is recognized ratably over the associated contract period. Our SaaS solutions are the primary driver of our revenues and we expect SaaS revenues to continue to grow considerably. Conversions from a license sold on-premises to our SaaS offering during the original subscription period are accounted for on a prospective basis.

Current wording

SaaS Revenues. SaaS revenues relate to the Varonis Data Security Platform delivered as a SaaS model. Over the last three years, the Company began to offer SaaS-delivered solutions and strategically enhanced its platform to safeguard customers' most mission-critical assets, including cloud environments, SaaS applications and on-premises data. Each of these products allow customers to use hosted software, and the related revenue from these products is recognized ratably over the associated contract period. Our SaaS solutions are the primary driver of our revenues and we expect SaaS revenues to continue to grow considerably. Conversions from a license sold on-premises to our SaaS offering during the original subscription period are accounted for on a prospective basis.

Previous wording

Maintenance and Services Revenues. Maintenance and services revenues consist of revenues from maintenance agreements of past perpetual license sales and, to a lesser extent, professional services. Customers with maintenance agreements are entitled to receive support and unspecified upgrades and enhancements when and if they become available. We recognize the revenues associated with maintenance ratably over the associated contract period. We recognize the revenues associated with professional services as those services are delivered or once the service term has expired. Professional services have always been a small percentage of our total revenues and we expect it to continue to be a small percentage.

Current wording

Maintenance and Services Revenues. Maintenance and services revenues consist of revenues from maintenance agreements of past perpetual license sales and, to a lesser extent, professional services. Customers with maintenance agreements are entitled to receive support and unspecified upgrades and enhancements when and if they become available. We recognize the revenues associated with maintenance ratably over the associated contract period. We recognize the revenues associated with professional services as those services are delivered or once the service term has expired. Professional services have always been and we expect it to continue to be a small percentage of our total revenues.

Previous wording

Our renewal rate for each of the three months ended March 31, 2025 and 2024 continued to be over 90%. We measure the renewal rate for our customers over a 12-month period, based on a dollar renewal rate for contracts expiring during that time period. Due to the transition to a SaaS delivery model, the timing of renewals and renewal rates, we could produce significant variation in the revenues we recognize in a given period. We expect term license subscription revenues and perpetual license revenues, including the associated maintenance and support related to perpetual licenses, to continue to decline in the future, despite the strong renewal rates due to the transition to a SaaS delivery model.

Current wording

Our renewal rate for each of the six months ended June 30, 2025 and 2024 continued to be over 90%. We measure the renewal rate for our customers over a 12-month period, based on a dollar renewal rate for contracts expiring during that time period. The transition to a SaaS delivery model, combined with the timing of renewals and renewal rates, may result in significant variation in the revenues we recognize in a given period. We expect term license subscription revenues and perpetual license revenues, including the associated maintenance and support related to perpetual licenses, to continue to decline in the future, despite the strong renewal rates due to the transition to a SaaS delivery model.

Previous wording

For the three months ended March 31, 2025, our revenues increased 20% compared to the three months ended March 31, 2024 despite increased SaaS sales and existing customer conversions to SaaS which cause variations due to accounting treatment differences in revenue recognition for sales within the respective periods. SaaS revenues increased 161% from $34.0 million for the three months ended March 31, 2024 to $88.6 million for the three months ended March 31, 2025, as we continue to progress through our transition to a SaaS delivery model. The increase in SaaS revenues was driven by (i) new customer acquisitions, which are happening due to the simplicity of our SaaS platform and MDDR offering, as well as customer interest in Gen AI, (ii) existing customer conversions and upsells and (iii) our high renewal rates. Consequently, there was an expected decrease to term license subscriptions given the aforementioned transition and customer conversions, a trend we expect to continue in the coming years. ARR was $664.3 million and $560.3 million as of March 31, 2025 and 2024, respectively, representing an increase of 19%. The anticipated decrease in maintenance and services revenueswas due to the conversion of existing customers to SaaS and churn despite our renewal rate continuing to be over 90% for each of the three months ended March 31, 2025 and 2024. We continue to expect less associated maintenance and services revenues in the future.

Current wording

For the three months ended June 30, 2025, our revenues increased 17% compared to the three months ended June 30, 2024 despite increased SaaS sales and existing customer conversions to SaaS which cause variations due to accounting treatment differences in revenue recognition for sales within the respective periods. SaaS revenues increased 137% from $44.8 million for the three months ended June 30, 2024 to $105.9 million for the three months ended June 30, 2025, as we continue to progress through our transition to a SaaS delivery model. The increase in SaaS revenues was driven by (i) new customer acquisitions, which are happening due to the simplicity and automated outcomes of our SaaS platform and MDDR offering, as well as customer interest in Gen AI, (ii) existing customer conversions and upsells and (iii) our high renewal rates. Consequently, there was an expected decrease to term license subscriptions given the aforementioned transition and customer conversions, a trend we expect to continue in the near future. ARR was $693.2 million and $584.2 million as of June 30, 2025 and 2024, respectively, representing an increase of 19%. The anticipated decrease in maintenance and services revenueswas due to the conversion of existing customers to SaaS and churn, despite our renewal rate continuing to be over 90% for each of the three months ended June 30, 2025 and 2024. We continue to expect less associated maintenance and services revenues in the future.

Previous wording

The increase in cost of revenues was primarily related to a $4.1 million increase in third-party hosting costs associated with our transition to a SaaS delivery model. The increase is also due to a $3.5 million increase in salaries, benefits and stock-based compensation expense due to increased headcount for customer success personnel to assist with the transition to a SaaS delivery model, including our MDDR offering, to ensure high customer satisfaction and to maintain our strong renewal rates.

Current wording

The increase in cost of revenues was primarily related to a $4.8 million increase in third-party hosting costs associated with our transition to a SaaS delivery model. The increase was also due to a $3.2 million increase in salaries, benefits and stock-based compensation expense due to increased headcount for customer success personnel to assist with the transition to a SaaS delivery model, including our MDDR offering, to ensure high customer satisfaction and to maintain our strong renewal rates.

Previous wording

The increase in research and development expenses was primarily related to a $4.9 million increase in salaries, benefits and stock-based compensation expense primarily due to increased headcount and conditional consideration related to the business acquisition, an increase of $0.7 million in facilities and allocated overhead costs and a $0.6 million increase in third-party hosting costs associated with our transition to a SaaS delivery model.

Current wording

The increase in research and development expenses was primarily related to a $13.5 million increase in salaries and benefits and stock-based compensation expense primarily due to increased headcount and conditional consideration related to a business acquisition, an increase of $2.2 million in facilities and allocated overhead costs and a $1.8 million increase in third-party hosting costs associated with our transition to a SaaS delivery model.

Previous wording

The increase in sales and marketing expenses was primarily related to an increase of $2.5 million in general sales and marketing expenses, including increased travel, marketing events and third-party hosting costs associated with our transition to a SaaS delivery model. This was partially offset by a $0.9 million decrease in salaries, benefits and stock-based compensation expense.

Current wording

The increase in sales and marketing expenses was primarily related to an increase of $3.8 million in general sales and marketing expenses, including increased travel, marketing events and third-party hosting costs associated with our transition to a SaaS delivery model and a $3.6 million increase in salaries, benefits and stock-based compensation expense.

Previous wording

The increase in general and administrative expenses was primarily related to an increase of $1.2 million in salaries, benefits and stock-based compensation expense primarily due to increased headcount to support the overall growth of our business, a $0.6 million increase in acquisition-related costs associated with the business acquisition and a $0.4 million increase in facilities and allocated overhead costs.

Current wording

The increase in general and administrative expenses was primarily related to an increase of $3.6 million in salaries and benefits and stock-based compensation expense primarily due to increased headcount to support the overall growth of our business, a $1.3 million increase in consulting and services fees and a $0.6 million increase in acquisition-related costs associated with a business acquisition.

Previous wording

The increase in financial income, net was primarily due to higher interest income and foreign currency gains, partially offset by amortization of premiums on marketable securities and interest expense related to the 2029 convertible note.

Current wording

The increase in financial income, net was primarily due to higher interest income, partially offset by amortization of premiums on marketable securities, higher foreign currency loss and interest and issuance cost amortization expense related to the 2029 convertible note.

Previous wording

As of March 31, 2025, our cash and cash equivalents, short-term marketable securities and short-term deposits of $609.2 million were held for working capital purposes. We believe that our existing cash and cash equivalents, short-term marketable securities, short-term deposits and cash flow from operations will be sufficient to fund our operations and capital expenditures for at least the next 12 months. Additionally, as of March 31, 2025, we held $591.7 million in long-term marketable securities. Our future capital requirements will depend on many factors, including our rate of revenue growth, timing of renewals and renewal rates, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new geographic locations, the timing of introductions of new software products and enhancements to existing software products, the continuing market acceptance of our software offerings and our use of cash to pay for acquisitions or share repurchases, if any.

Current wording

As of June 30, 2025, our cash and cash equivalents, short-term marketable securities and short-term deposits of $807.4 million were held for working capital purposes. We believe that our existing cash and cash equivalents, short-term marketable securities, short-term deposits and cash flow from operations will be sufficient to fund our operations and capital expenditures for at least the next 12 months. Additionally, as of June 30, 2025, we held $364.2 million in long-term marketable securities. Our future capital requirements will depend on many factors, including our rate of revenue growth, timing of renewals and renewal rates, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new geographic locations, the timing of introductions of new software products and enhancements to existing software products, the continuing market acceptance of our software offerings and our use of cash to pay for acquisitions or share repurchases, if any.

Previous wording

For the three months ended March 31, 2025, cash inflows from our operating activities were $68.0 million. We have observed two seasonal patterns that impact our net cash provided by operating activities. First, a majority of our sales are made during the last three weeks of the quarter. Second, the highest dollar amount of sales of our products and services occurs in the fourth quarter. Consequently, we end the fourth quarter with our highest accounts receivable balance of any quarter which in turn generates the greatest amount of collections in the following quarter. In addition, there is negative sequential sales in the first quarter, which results in a relatively lower amount collected during the second quarter. These seasonal trends also impact our operating loss because the majority of our expenses are relatively fixed in the short-term. For the three months ended March 31, 2025, cash inflows were $13.7 million from our net loss excluding non-cash charges. Additional sources of cash inflows were from changes in our working capital, including a $65.1 million decrease in accounts receivable. Our days sales outstanding (“DSO”) for the three months ended March 31, 2025 was 79. Other sources of cash inflows were from a $6.0 million increase in deferred revenues, a $2.0 million increase in trade payables and a $0.5 million increase in other long-term liabilities. This was partially offset by a $16.7 million decrease in accrued expenses and other short-term liabilities and a $2.5 million increase in prepaid expenses and other short-term assets (including deferred commissions).

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities were $89.3 million. We have observed two seasonal patterns that impact our net cash provided by operating activities. First, a majority of our sales are made during the last three weeks of the quarter. Second, the highest dollar amount of sales of our products and services occurs in the fourth quarter. Consequently, we end the fourth quarter with our highest accounts receivable balance of any quarter which in turn generates the greatest amount of collections in the following quarter. In addition, there is negative sequential sales in the first quarter, which results in a relatively lower amount collected during the second quarter. These seasonal trends also impact our operating loss because the majority of our expenses are relatively fixed in the short-term. For the six months ended June 30, 2025, cash inflows were $31.8 million from our net loss excluding non-cash charges. Additional sources of cash inflows were from changes in our working capital, including a $39.0 million decrease in accounts receivable. Our days sales outstanding (“DSO”) for the three and six months ended June 30, 2025 were 76 and 78, respectively. Other sources of cash inflows were from a $34.1 million increase in deferred revenues, a $16.0 million increase in accrued expenses and other short-term liabilities, a $2.8 million increase in trade payables and a $1.0 million increase in other long-term liabilities. This was partially offset by a $34.2 million increase in prepaid expenses and other short-term assets (including deferred commissions) and a $1.1 million increase in other long-term assets.

Previous wording

For the three months ended March 31, 2024, cash inflows from our operating activities were $56.7 million. For the three months ended March 31, 2024, cash inflows were $4.7 million from our net loss excluding non-cash charges. Additional sources of cash inflows were from changes in our working capital, including a $68.7 million decrease in accounts receivable. Our DSO for the three months ended March 31, 2024 was 78. Other sources of cash inflows were from a $3.6 million increase in deferred revenues, a $2.2 million increase in trade payables and a $0.2 million increase in other long-term liabilities. This was partially offset by a $16.8 million decrease in accrued expenses and other short-term liabilities, a $5.7 million increase in prepaid expenses and other current assets (including deferred commissions) and a $0.1 million increase in other long-term assets.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities were $68.4 million. For the six months ended June 30, 2024, cash inflows were $25.0 million from our net loss excluding non-cash charges. Additional sources of cash inflows were from changes in our working capital, including a $46.7 million decrease in accounts receivable. Our DSO for the three and six months ended June 30, 2024 were 72 and 75, respectively. Other sources of cash inflows were from a $27.0 million increase in deferred revenues, a $1.9 million increase in trade payables and a $0.1 million increase in other long-term liabilities. This was partially offset by a $27.8 million increase in prepaid expenses and other current assets (including deferred commissions), a $4.4 million decrease in accrued expenses and other liabilities and a $0.1 million increase in other long-term assets.

Previous wording

During the three months ended March 31, 2025, net cash used in investing activities of $25.0 million was primarily attributable to $18.6 million of cash paid for an acquisition, $2.3 million in capital expenditures to support our growth including hardware, software, office equipment and leasehold improvements mainly in connection with existing office space, net investments of $2.1 million in deposits, net investments of $1.7 million in marketable securities and $0.3 for capitalized internal-use software expenditures.

Current wording

For the six months ended June 30, 2025, net cash provided by investing activities of $44.9 million was primarily attributable to net proceeds of $68.3 million in marketable securities and net proceeds of $3.4 million in deposits. This was partially offset by $18.6 million of cash paid for an acquisition, $5.7 million in capital expenditures to support our growth including hardware, software, office equipment and leasehold improvements mainly in connection with existing office space, $1.0 million for capitalized internal-use software expenditures and $1.5 million for other investing activities

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities of $112.0 million was primarily attributable to net investments of $116.4 million in marketable securities and $0.3 million in capital expenditures to support our growth during the period including hardware, software, office equipment and leasehold improvements. This was partially offset by net proceeds of $4.7 million in deposits.

Current wording

For the six months ended June 30, 2024, net cash used in investing activities of $117.0 million was primarily attributable to net investments of $121.0 million in marketable securities and $1.1 million in capital expenditures to support our growth during the period including hardware, software, office equipment and leasehold improvements. This was partially offset by net proceeds of $5.1 million in deposits.

Previous wording

For the three months ended March 31, 2025, net cash used in financing activities of $75.5 million was attributable to $61.3 in repurchases of common stock, $21.4 million in taxes paid related to net share settlement of equity awards partially offset by $7.2 million of proceeds from employee stock plans.

Current wording

For the six months ended June 30, 2025, net cash used in financing activities of $120.6 million was attributable to $100.0 in repurchases of common stock, $27.8 million in taxes paid related to net share settlement of equity awards, partially offset by $7.2 million of proceeds from employee stock plans.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities of $28.4 million was attributable to $34.9 million in taxes paid related to net share settlement of equity awards, partially offset by $6.4 million of proceeds from employee stock plans.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities of $26.8 million was attributable to $36.6 million in taxes paid related to net share settlement of equity awards, partially offset by $9.8 million of proceeds from employee stock plans.

Previous wording

In February 2025, our board of directors authorized a share repurchase program of up to $100.0 million of the Company’s common stock (the “Share Repurchase Program”). Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. As of March 31, 2025, we have $38.7 million of capacity remaining under our Share Repurchase Program which will expire on February 10, 2026. The number of shares to be purchased and the timing of purchases will be based on our trading windows, available liquidity, and general business and market conditions.

Current wording

In February 2025, our board of directors authorized a share repurchase program of up to $100.0 million of the Company’s common stock (the “Share Repurchase Program”). Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. As of June 30, 2025, we have completed our Share Repurchase Program.

Previous wording

We have obligations related to unrecognized tax benefit liabilities totaling $35.7 million and others related to severance pay, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made. We also have a contractual minimum purchase commitment with a service provider through August 31, 2027 totaling $5.4 million due in the next 12 months and $21.0 million due thereafter, and an additional $25.9 million contractual minimum purchase commitment with another service provider through December 31, 2026, with no specified annual commitments. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.

Current wording

We have obligations related to unrecognized tax benefit liabilities totaling $42.1 million and others related to severance pay, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made. We also have a contractual minimum purchase commitment with a service provider through August 31, 2027 totaling $2.0 million due in the next 12 months and $21.0 million due thereafter, and an additional contractual minimum purchase commitment with another service provider through May 31, 2031 totaling $46.7 million due in the next 12 months and $377.6 million due thereafter, with no specified annual commitments. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.