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 2024 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 2024 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 2024 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 2024 Form 10-K and our Q2 2025 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

To support these efforts, in July 2024 we began to evolve our GTM operating model by, among other things, transitioning to a general manager model, with general managers for our North America, Europe, Asia-Pacific, and Middle East regions and our public sector business, each of whom is empowered to assess and deploy the appropriate strategies and tactics for customers within their respective regions. We have also added new product and technical specialists to our GTM teams, who we believe can add value for our customers by matching the evolving needs of our customers’ diverse buyer personas with our products and services, and helping our customers understand and implement the full potential of our platform. Evolving our GTM operating model involves new investment, particularly as we continue to increase our sales headcount, ramp and invest in additional enablement for our sales teams, and add the new specialists to our teams. We believe that these investments will allow us to build stronger and deeper customer relationships, improve our operating efficiency over time and ultimately allow us to better scale our business, all of which, in turn, will result in better customer experiences and provide additional value to our customers, some of whom continue to face macroeconomic and other pressures that have negatively impacted their spending decisions. We have seen and anticipate continuing to see some disruptions and adverse impacts to our financial and operating results in the near-term as we invest in and implement the evolved GTM operating model. Over the longer term, if we fail to successfully implement, or realize the benefits of, our evolved GTM operating model, or otherwise fail to acquire new customers, retain existing customers, or expand existing customers’ use of our products, services, and platform, our business, financial condition, results of operations, and prospects will be adversely affected, potentially materially. Notwithstanding these risks, we believe that implementing the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our large market opportunity.

Current wording

To support these efforts, in July 2024 we began to evolve our GTM operating model by, among other things, transitioning to a general manager model, with general managers for our North America, Europe, Asia-Pacific, and Middle East regions and our public sector business, each of whom is empowered to assess and deploy the appropriate strategies and tactics for customers within their respective regions. We have also added new product and technical specialists to our GTM teams, who we believe can add value for our customers by matching the evolving needs of our customers’ diverse buyer personas with our products and services, and helping our customers understand and implement the full potential of our platform. Evolving our GTM operating model involved new investment, particularly as we increased our sales headcount, ramped and invested in additional enablement for our sales teams, and added the new specialists to our teams. We believe that these investments will allow us to build stronger and deeper customer relationships, improve our operating efficiency over time and ultimately allow us to better scale our business, all of which, in turn, will result in better customer experiences and provide additional value to our customers, some of whom continue to face macroeconomic and other pressures that have negatively impacted their spending decisions. We have seen and anticipate continuing to see some disruptions and adverse impacts to our financial and operating results in the near-term in connection with our investment in, and implementation of, the evolved GTM operating model. Over the longer term, if we fail to successfully implement, or realize the benefits of, our evolved GTM operating model, or otherwise fail to acquire new customers, retain existing customers, or expand existing customers’ use of our products, services, and platform, our business, financial condition, results of operations, and prospects will be adversely affected, potentially materially. Notwithstanding these risks, we believe that the evolved GTM operating model will improve our long-term operating efficiency, best position us for sustainable long-term growth, and enhance our ability to capture our large market opportunity.

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 2,191 as of June 30, 2024 to 2,517 as of June 30, 2025, reflecting a year-over-year growth rate of 15%. The number of customers on our platform has increased from 16,750 as of June 30, 2024 to 17,501 as of June 30, 2025, reflecting a year-over-year growth rate of 4%. All aforementioned customer counts 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 2,261 as of September 30, 2024 to 2,602 as of September 30, 2025, reflecting a year-over-year growth rate of 15%. The number of customers on our platform has increased from 16,975 as of September 30, 2024 to 17,623 as of September 30, 2025, reflecting a year-over-year growth rate of 4%. All aforementioned customer counts 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, 2025, cRPO increased by $154.7 million, or 21%, year-over-year. Approximately 36% of the increase was attributable to existing customers and 64% was attributable to new customers acquired during the twelve months ended June 30, 2025.

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, 2025, cRPO increased by $172.4 million, or 23%, year-over-year. Approximately 45% of the increase was attributable to existing customers and 55% was attributable to new customers acquired during the twelve months ended September 30, 2025.

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% and 15% for the six months ended June 30, 2025 and 2024, 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.

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 15% and 15% for the nine months ended September 30, 2025 and 2024, 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 inflationary pressures and responses by governments to address it, uncertainty related to or the actual impacts of tariffs and trade wars, higher interest rates than we’ve seen in recent history, elevated recession risk, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, 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. We believe that macroeconomic factors and uncertainty have resulted in cautious customer spending and increased customer pricing sensitivity, contributing to the decline in our cRPO annual growth rate, among other impacts. However, as these and other factors - including tariff policies - 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 2024 Form 10-K for further discussion.

Current wording

Macroeconomic factors and geopolitical events that impact the construction industry, such as elevated inflationary pressures and responses by governments to address it, uncertainty related to or the actual impacts of tariffs and trade wars, higher interest rates than we’ve seen in recent history, elevated recession risk, volatility in capital markets, bank failures, fluctuations in foreign exchange rates, global pandemics, 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. We believe that macroeconomic factors and uncertainty have resulted in cautious customer spending and increased customer pricing sensitivity, contributing to the decline in our cRPO annual growth rate, among other impacts. However, as these and other factors - including tariff policies - 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 2024 Form 10-K and Part I, Item 1A of our Q2 2025 Form 10-Q for further discussion.

Previous wording

Cost of revenue primarily consists of personnel-related compensation expenses for our customer support team, including salaries, benefits, stock-based compensation, payroll taxes, commissions, and bonuses. Additionally, cost of revenue includes non-personnel-related expenses, such as third-party hosting costs, amortization of capitalized software development costs related to our platform, amortization of acquired technology intangible assets, software license fees, and allocated overhead. We expect our cost of revenue to increase on an absolute dollar basis as our revenue and acquisition activities increase. We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business, evolve our GTM operating model, and ensure that our customers are realizing the full benefit of our products. The level and timing of investment in these areas could affect our cost of revenue in the future.

Current wording

Cost of revenue primarily consists of personnel-related compensation expenses for our customer support team, including salaries, stock-based compensation, benefits, payroll taxes, commissions, and bonuses. Additionally, cost of revenue includes non-personnel-related expenses, such as third-party hosting costs, amortization of capitalized software development costs related to our platform, amortization of acquired technology intangible assets, software license fees, and allocated overhead. We expect our cost of revenue to increase on an absolute dollar basis as our revenue and acquisition activities increase. We intend to continue to invest additional resources in platform hosting, customer support, and software development as we grow our business, support our GTM operating model, and ensure that our customers are realizing the full benefit of our products. The level and timing of investment in these areas could affect our cost of revenue in the future.

Previous wording

Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. For each of these categories of expense, personnel-related compensation expenses are the most significant component, which include salaries, stock-based compensation, commissions, payroll taxes, benefits, and bonuses.

Current wording

Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. For each of these categories of expense, personnel-related compensation expenses are the most significant component, which include salaries, stock-based compensation, commissions, benefits, bonuses, and payroll taxes.

Previous wording

Sales and marketing expenses primarily consist of personnel-related compensation expenses for our sales and marketing organizations. Additionally, sales and marketing expenses include non-personnel-related expenses, such as advertising costs, marketing events, travel, trade shows, and other marketing activities; contractor costs to supplement our staff levels; consulting services; amortization of acquired customer relationship intangible assets; and allocated overhead. We expense advertising and other promotional expenditures as incurred. We expect sales and marketing expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as our business continues to grow, as we evolve our GTM operating model, and as we increase our investment in sales and marketing to drive customer growth.

Current wording

Sales and marketing expenses primarily consist of personnel-related compensation expenses for our sales and marketing organizations. Additionally, sales and marketing expenses include non-personnel-related expenses, such as advertising costs, marketing events, travel, trade shows, and other marketing activities; contractor costs to supplement our staff levels; consulting services; amortization of acquired customer relationship intangible assets; and allocated overhead. We expense advertising and other promotional expenditures as incurred. We expect sales and marketing expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue, as our business continues to grow, as we support our GTM operating model, and as we increase our investment in sales and marketing to drive customer growth.

Previous wording

Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for audit, legal, tax, and other external consulting services; computer software expenses; costs associated with operating as a public company, including insurance costs, professional services, investor relations, and other compliance costs; property and use taxes; licenses; travel and entertainment costs; acquisition-related transaction expenses; and allocated overhead. We expect general and administrative expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue as our business continues to grow, including in relation to our international expansion.

Current wording

General and administrative expenses primarily consist of personnel-related compensation expenses for our information technology, human resources, finance, legal, executive, and other administrative functions. Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for audit, legal, tax, and other external consulting services; computer software expenses; costs associated with operating as a public company, including insurance costs, professional services, investor relations, and other compliance costs; property and use taxes; licenses; travel and entertainment costs; acquisition-related transaction expenses; and allocated overhead. We expect general and administrative expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue as our business continues to grow, including in relation to our international expansion.

Previous wording

*Includes amortization of capitalized stock-based compensation of $2.8 million and $1.7 million, respectively, for the three months ended June 30, 2025 and 2024; and $5.6 million and $3.3 million, respectively, for the six months ended June 30, 2025 and 2024; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

Current wording

*Includes amortization of capitalized stock-based compensation of $3.1 million and $2.3 million, respectively, for the three months ended September 30, 2025 and 2024; and $8.7 million and $5.5 million, respectively, for the nine months ended September 30, 2025 and 2024; which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

Previous wording

During the three months ended June 30, 2025, our revenue increased by $39.6 million, or 14%, compared to the three months ended June 30, 2024, of which approximately 82% was attributable to revenue from existing customers and approximately 18% was attributable to revenue from new customers acquired during the three months ended June 30, 2025. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the second quarter of 2025 from customers that were newly acquired or expanded their subscriptions between the second quarter of 2024 and the first quarter of 2025 and continued or expanded their subscriptions, as applicable, in the second quarter of 2025.

Current wording

During the three months ended September 30, 2025, our revenue increased by $43.0 million, or 15%, compared to the three months ended September 30, 2024, of which approximately 77% was attributable to revenue from existing customers and approximately 23% was attributable to revenue from new customers acquired during the three months ended September 30, 2025. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the third quarter of 2025 from customers that were newly acquired or expanded their subscriptions between the third quarter of 2024 and the second quarter of 2025 and continued or expanded their subscriptions, as applicable, in the third quarter of 2025.

Previous wording

The increase in cost of revenue during the three months ended June 30, 2025 was primarily attributable to an increase of $8.6 million in personnel-related expenses, including increases of $7.4 million in salaries and wages and $1.1 million in stock-based compensation expense. The increase in cost of revenue was also attributable to a $5.4 million increase in amortization of capitalized software development costs, a $3.1 million increase in third-party cloud hosting and related services as we grow our customer base, and a $1.9 million increase in amortization of developed technology intangible assets. We increased our cost of revenue headcount by 22% since June 30, 2024, as we continue to invest additional resources in customer support, implementation, and software development to grow our business, evolve our GTM operating model, and ensure that our customers are realizing the full benefit of our products.

Current wording

The increase in cost of revenue during the three months ended September 30, 2025 was primarily attributable to an increase of $6.2 million in personnel-related expenses, including increases of $5.2 million in salaries and wages and $1.0 million in stock-based compensation expense. The increase in cost of revenue was also attributable to a $4.0 million increase in amortization of capitalized software development costs, a $2.4 million increase in third-party cloud hosting and related services as we grow our customer base, and a $1.0 million increase in amortization of developed technology intangible assets. We increased our cost of revenue headcount by 24% since September 30, 2024, as we continue to invest additional resources in customer support, implementation, and software development to grow our business, support our GTM operating model, and ensure that our customers are realizing the full benefit of our products.

Previous wording

The increase in sales and marketing expenses during the three months ended June 30, 2025 was primarily attributable to an increase of $12.2 million in personnel-related expenses, including increases of $10.3 million in salaries and wages and $1.9 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to a $3.3 million increase in professional fees, including increases of $2.0 million for contractors to supplement our staff levels and $1.1 million for professional service fees. We increased our sales and marketing headcount by 7% since June 30, 2024 to support our GTM operating model.

Current wording

The increase in sales and marketing expenses during the three months ended September 30, 2025 was primarily attributable to an increase of $9.8 million in personnel-related expenses, including increases of $7.3 million in salaries and wages and $2.8 million in stock-based compensation expense. The increases in sales and marketing expenses were partially offset by decreases of $4.7 million in marketing events and expenses, and $1.3 million in professional service fees. We increased our sales and marketing headcount by 4% since September 30, 2024 to support our GTM operating model.

Previous wording

The increase in research and development expenses during the three months ended June 30, 2025 was primarily attributable to an increase of $13.0 million in personnel-related expenses, including increases of $9.2 million in salaries and wages and $3.6 million in stock-based compensation expense. The increase in research and development expenses was also attributable to a $2.5 million increase in computer software expenses. We increased our research and development headcount by 49% since June 30, 2024 in order to continue to build, enhance, maintain, and scale our products, services, and platform as part of our global workforce strategy.

Current wording

The increase in research and development expenses during the three months ended September 30, 2025 was primarily attributable to an increase of $8.2 million in personnel-related expenses, including increases of $5.5 million in salaries and wages and $2.6 million in stock-based compensation expense. The increase in research and development expenses was also attributable to a $1.9 million increase in computer software expenses. The increase in research and development expenses was partially offset by a decrease of $5.0 million in professional service fees related to temporary contractor labor. We increased our research and development headcount by 27% since September 30, 2024 in order to continue to build, enhance, maintain, and scale our products, services, and platform as part of our global workforce strategy.

Previous wording

The increase in general and administrative expenses during the three months ended June 30, 2025 was primarily attributable to an increase of $2.9 million in legal fees. The increase in general and administrative expenses was also attributable to a $1.7 million increase in personnel-related expenses for salaries and wages. We decreased our general and administrative headcount by 2% since June 30, 2024, as we continue to focus on operating efficiency.

Current wording

The decrease in general and administrative expenses during the three months ended September 30, 2025 was primarily attributable to a decrease of $1.4 million in rent expense, primarily related to modifications of leases in 2025; and a decrease of $1.2 million in professional service fees. The decrease in general and administrative expenses was partially offset by an increase of $1.6 million in personnel-related expenses for stock-based compensation expense. We decreased our general and administrative headcount by 5% since September 30, 2024, as we continue to focus on operating efficiency.

Previous wording

During the three months ended June 30, 2025, accretion income, net decreased by $1.7 million due to a decrease both in our purchases of marketable securities and the balance of our marketable securities portfolio year-over-year.

Current wording

During the three months ended September 30, 2025, accretion income, net decreased by $1.7 million due to a decrease both in our purchases of marketable securities and the balance of our marketable securities portfolio.

Previous wording

During the six months ended June 30, 2025, our revenue increased by $80.8 million, or 15%, compared to the six months ended June 30, 2024, of which approximately 70% was attributable to revenue from existing customers and approximately 30% was attributable to revenue from new customers acquired during the six months ended June 30, 2025. The increase in revenue from existing customers includes the net benefit of a full six months of subscription revenue in the first half of 2025 from customers that were newly acquired or expanded their subscriptions in 2024 and continued or expanded their subscriptions, as applicable, in the first half of 2025.

Current wording

During the nine months ended September 30, 2025, our revenue increased by $123.7 million, or 15%, compared to the nine months ended September 30, 2024, of which approximately 56% was attributable to revenue from existing customers and approximately 44% was attributable to revenue from new customers acquired during the nine months ended September 30, 2025. 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 2025 from customers that were newly acquired or expanded their subscriptions in 2024 and continued or expanded their subscriptions, as applicable, in the first nine months of 2025.

Previous wording

The increase in cost of revenue during the six months ended June 30, 2025 was primarily attributable to an increase of $16.7 million in personnel-related expenses, including increases of $14.6 million in salaries and wages and $2.0 million in stock-based compensation expense. The increase in cost of revenue was also attributable to a $10.7 million increase in amortization of capitalized software development costs, a $7.3 million increase in third-party cloud hosting and related services as we grow our customer base, and a $3.6 million increase in amortization of developed technology intangible assets. We increased our cost of revenue headcount by 22% since June 30, 2024, as we continue to invest additional resources in customer support, implementation, and software development to grow our business, evolve our GTM operating model, and ensure that our customers are realizing the full benefit of our products.

Current wording

The increase in cost of revenue during the nine months ended September 30, 2025 was primarily attributable to an increase of $22.9 million in personnel-related expenses, including increases of $19.8 million in salaries and wages and $3.0 million in stock-based compensation expense. The increase in cost of revenue was also attributable to a $14.7 million increase in amortization of capitalized software development costs, a $9.7 million increase in third-party cloud hosting and related services as we grow our customer base, and a $4.5 million increase in amortization of developed technology intangible assets. We increased our cost of revenue headcount by 24% since September 30, 2024, as we continue to invest additional resources in customer support, implementation, and software development to grow our business, support our GTM operating model, and ensure that our customers are realizing the full benefit of our products.

Previous wording

The increase in sales and marketing expenses during the six months ended June 30, 2025 was primarily attributable to an increase of $22.8 million in personnel-related expenses, including increases of $19.1 million in salaries and wages and $3.8 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to a $6.7 million increase in professional fees, including increases of $3.4 million for contractors to supplement our staff levels and $3.3 million for professional service fees, as well as a $3.4 million increase in travel-related costs. We increased our sales and marketing headcount by 7% since June 30, 2024 to support our GTM operating model.

Current wording

The increase in sales and marketing expenses during the nine months ended September 30, 2025 was primarily attributable to an increase of $32.6 million in personnel-related expenses, including increases of $26.4 million in salaries and wages and $6.6 million in stock-based compensation expense. The increase in sales and marketing expenses was also attributable to a $6.3 million increase in professional fees, including increases of $3.7 million for contractors to supplement our staff levels and $2.0 million for professional service fees; and a $2.5 million increase in travel-related costs. The increase in sales and marketing expenses was partially offset by a decrease of $4.5 million in marketing events and expenses. We increased our sales and marketing headcount by 4% since September 30, 2024 to support our GTM operating model.

Previous wording

The increase in research and development expenses during the six months ended June 30, 2025 was primarily attributable to an increase of $25.5 million in personnel-related expenses, including increases of $17.0 million in salaries and wages and $8.3 million in stock-based compensation expense. The increase in research and development expenses was also attributable to a $3.7 million increase in computer software expenses, a $2.4 million increase in professional fees for contractors to support our staff levels, and a $1.7 million increase in acquisition-related expenses. We increased our research and development headcount by 49% since June 30, 2024 in order to continue to build, enhance, maintain, and scale our products, services, and platform as part of our global workforce strategy.

Current wording

The increase in research and development expenses during the nine months ended September 30, 2025 was primarily attributable to an increase of $33.8 million in personnel-related expenses, including increases of $22.5 million in salaries and wages and $10.9 million in stock-based compensation expense. The increase in research and development expenses was also attributable to a $5.5 million increase in computer software expenses, and a $2.4 million increase in acquisition-related expenses. The increases in research and development expenses were partially offset by a decrease of $2.6 million in professional service fees related to temporary contractor labor. We increased our research and development headcount by 27% since September 30, 2024 in order to continue to build, enhance, maintain, and scale our products, services, and platform as part of our global workforce strategy.

Previous wording

The increase in general and administrative expenses during the six months ended June 30, 2025 was primarily due to an increase of $5.5 million in professional fees, including increases of $4.5 million for legal fees and $1.0 million for contractors to supplement our staff levels. The increase in general and administrative expenses was also attributable to a $3.4 million in personnel-related expenses, including increases of $3.2 million in salaries and wages and $0.4 million in stock-based compensation expense, as well as a $2.0 million increase in computer software expenses. The increases in general and administrative expenses were partially offset by a $3.0 million decrease in rent expense, primarily related to modifications of leases in the first quarter of 2025. We decreased our general and administrative headcount by 2% since June 30, 2024, as we continue to focus on operating efficiency.

Current wording

The increase in general and administrative expenses during the nine months ended September 30, 2025 was primarily due to an increase of $5.9 million in legal fees. The increase in general and administrative expenses was also attributable to a $4.4 million in personnel-related expenses, including increases of $2.6 million in salaries and wages and $2.0 million in stock-based compensation expense; and a $1.3 million increase in computer software expenses. The increase in general and administrative expenses was partially offset by a $2.7 million decrease in rent expense, primarily related to modifications of leases in 2025; and a $1.7 million decrease in professional service fees. We decreased our general and administrative headcount by 5% since September 30, 2024, as we continue to focus on operating efficiency.

Previous wording

During the six months ended June 30, 2025, accretion income, net decreased by $2.4 million due to a decrease both in our purchases of marketable securities and the balance of our marketable securities portfolio year over year.

Current wording

During the nine months ended September 30, 2025, accretion income, net decreased by $4.1 million due to a decrease both in our purchases of marketable securities and the balance of our marketable securities portfolio year over year.

Previous wording

During the three months ended June 30, 2025, other income (expense), net increased by $2.2 million primarily due to unrealized gains on foreign currency transactions.

Current wording

During the nine months ended September 30, 2025, other income (expense), net flipped from expense to income by $2.2 million primarily due to unrealized gains on foreign currency transactions.

Previous wording

During the six months ended June 30, 2025, provision for income taxes increased by $4.1 million, primarily due to a foreign tax on the transfer from Norway to the U.S. of intellectual property acquired from Novorender.

Current wording

During the nine months ended September 30, 2025, provision for income taxes increased by $5.0 million, primarily due to a foreign tax on the transfer from Norway to the U.S. of intellectual property acquired from Novorender.

Previous wording

As of June 30, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $706.7 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.

Current wording

As of September 30, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $727.9 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

During the six months ended June 30, 2025, we had additional contractual commitments primarily related to our modified office leases in Austin, Texas to adjust the rent obligations, expand the leased premises, and extend the lease terms; and a hosting services renewal agreement resulting in a non-cancellable purchase commitment. In the next 12 months, we have a net benefit for tenant improvement reimbursement from operating leases of $14.1 million relating to the modified office leases in Austin, and non-cancellable purchase commitments of $30.0 million. Beyond the next 12 months, we have additional net contractual commitments for operating lease obligations of $53.6 million relating to the modified office leases in Austin, and non-cancellable purchase commitments of $64.0 million. 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 2024 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 continued to generate losses from operations, as reflected in our accumulated deficit of $1.3 billion as of June 30, 2025. We may not achieve profitability in the foreseeable future and may require additional capital resources to execute strategic initiatives to grow our business.

Current wording

During the nine months ended September 30, 2025, we had additional contractual commitments primarily related to our modified office leases in Austin, Texas to adjust the rent obligations, expand the leased premises, and extend the lease terms; and a hosting services renewal agreement resulting in a non-cancellable purchase commitment. In the next 12 months, we have a net benefit for tenant improvement reimbursement from operating leases of $10.0 million relating to the modified office leases in Austin, and non-cancellable purchase commitments of $30.0 million. Beyond the next 12 months, we have additional net contractual commitments for operating lease obligations of $49.5 million relating to the modified office leases in Austin, and non-cancellable purchase commitments of $64.0 million. 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 2024 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 continued to generate losses from operations, as reflected in our accumulated deficit of $1.3 billion as of September 30, 2025. We may not achieve profitability in the foreseeable future and may require additional capital resources to execute strategic initiatives to grow our business.

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 a net cash outflow of $6.8 million from changes in operating expenses and liabilities. The $6.8 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 $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 a net cash inflow of $4.4 million from changes in operating expenses 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

Previous wording

•a $11.6 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 cash payments to our vendors.

Current wording

•a $30.2 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 cash payments to our vendors.

Previous wording

•a $20.2 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period;

Current wording

•a $31.8 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed during the period;

Previous wording

•a $9.2 million increase in prepaid expenses and other current assets primarily due to timing of cash payments to our vendors; and

Current wording

•a $16.5 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 timing of billings and seasonality;

Current wording

•a $15.3 million decrease in deferred revenue primarily due to timing of billings and seasonality;

Previous wording

•a $13.0 million decrease in accounts payable primarily due to timing of cash payments to our vendors;

Current wording

•a $4.2 million decrease in accounts payable primarily due to timing of cash payments to our vendors; and

Previous wording

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

Current wording

•a $0.7 million decrease in operating lease liabilities related to lease payments.

Previous wording

Net cash provided by operating activities was $127.8 million during the six months ended June 30, 2024, which resulted from a net loss of $17.3 million, adjusted for non-cash charges of $129.6 million and net cash inflows of $15.6 million from changes in operating assets and liabilities. The $15.6 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 $167.1 million during the nine months ended September 30, 2024, which resulted from a net loss of $43.7 million, adjusted for non-cash charges of $201.7 million and net cash inflows of $9.0 million from changes in operating assets and liabilities. The $9.0 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected the following:

Previous wording

•a $49.0 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and

Current wording

•a $34.3 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers; and

Previous wording

•a $13.3 million increase in accounts payable primarily due to timing of cash payments to our vendors.

Current wording

•a $11.0 million increase in accounts payable primarily due to timing of cash payments to our vendors.

Previous wording

•a $30.4 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 $8.5 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;

Previous wording

•a $10.9 million increase in deferred revenue primarily due to the growth of our business and timing of billings;

Current wording

•a $6.3 million increase in deferred revenue primarily due to the growth of our business and timing of billings;