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 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.

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 2025 Form 10-K. You should review the disclosures under the section titled“Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and under Part I, Item 1A,“Risk Factors” in our 2025 Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments, except as required by law.

Previous wording

We are the leading global provider of cloud-based construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world. We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location, on any internet-connected device. Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as the system of record for the construction industry. We are also continuing to develop other products and services to address related challenges faced by the construction industry’s key stakeholders. Adoption of our products, services, and platform helps our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.

Current wording

We are the leading global provider of construction management software, and are helping transform one of the oldest, largest, and least digitized industries in the world. We focus exclusively on connecting and empowering the construction industry’s key stakeholders, such as owners, general contractors, and specialty contractors, to collaborate and access our capabilities from any location on any connected device. Our platform is modernizing and digitizing construction management by enabling timely access to critical project information, simplifying complex workflows, and facilitating seamless communication among relevant stakeholders, all of which we believe positions us to serve as a critical system of record and collaboration for the construction industry. We also continue to develop other products and services to address related challenges faced by the construction industry’s key stakeholders. Our products, services, and platform help our customers increase productivity and efficiency, reduce rework and costly delays, improve safety and compliance, and enhance financial transparency and accountability.

Previous wording

We generate substantially all of our revenue from subscriptions to access our products. We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products a customer subscribes to and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as annual construction volume. As our customers subscribe to additional products or increase the annual construction volume contracted to run on our platform, we generate more revenue. We do not provide refunds for unused construction volume, or charge customers based on consumption or on a per-project basis. Our business model is designed to encourage rapid, widespread adoption of our products by generally allowing for unlimited users, meaning we generally do not charge a per-seat or per-user fee. Customers can, and often do, invite all project participants, including owners, general contractors, specialty contractors, architects, and engineers, to engage with our platform as part of a project team without incurring additional fees. These collaborators engage with our platform for the duration of their involvement in a project, but do not pay us for such use. However, multiple participants can be customers on the same project, which allows each of them to retain access to project information for the duration of their subscription and allows us to receive revenue from multiple customers on the same project.

Current wording

We generate substantially all of our revenue from subscriptions to access our products. We primarily sell our products on a subscription basis for a fixed fee with pricing generally based on the number and mix of products a customer subscribes to and the fixed aggregate dollar volume of construction work contracted to run on our platform annually, which we refer to as annual construction volume. As our customers subscribe to additional products or increase the annual construction volume contracted to run on our platform, we generate more revenue. We do not provide refunds for unused construction volume. We generally do not charge customers based on consumption or on a per-project basis. Our business model is designed to encourage rapid, widespread adoption of our products by generally allowing for unlimited users. We typically do not charge a per-seat or per-user fee, meaning that customers can invite all project participants, including owners, general contractors, specialty contractors, architects, and engineers, to engage with our platform as part of a project team without incurring additional fees. We offer access to our products on a per-user basis to certain of our owner customers who have preferred to purchase access on a per-user basis. Customers are able to invite project participants to join our platform, including their employees and collaborators, who are other project participants that engage with our platform but do not pay us for such use. Multiple participants can be customers on the same project, which allows each of them to manage their own discrete workflows for the project and retain access to project information for the duration of their subscription while allowing us to receive revenue from multiple customers on the same project independent of seat count.

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 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.

Current wording

To support these efforts, we evolved our GTM operating model by, among other things, transitioning to a general manager model. We added new product and technical specialists to our GTM teams to match the evolving needs of our customers’ diverse buyer personas with our products and services and to help our customers understand and implement the full potential of our platform. Evolving our GTM operating model required new investment 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 have allowed, and will continue to allow, us to build stronger and deeper customer relationships and provide additional value to our customers. We have seen, and may continue to see, some disruptions and adverse impacts to our financial and operating results in the near-term in connection with the evolved GTM operating model. Over the longer term, if we fail to 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 2,261 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.

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 2,418 as of March 31, 2025 to 2,795 as of March 31, 2026, reflecting a year-over-year growth rate of 16%. All aforementioned customer counts exclude customers acquired from business combinations that do not have standard Procore annual contracts.

Previous wording

In addition, our gross retention rate (“GRR”) was 95% as of September 30, 2025 and 94% as of September 30, 2024. Our GRR reflects only customer losses and does not reflect customer expansion or contraction. We believe our high GRR demonstrates that we serve a vital role in our customers’ operations, as the vast majority of our customers continue to use our products and platform and to renew their subscriptions. We believe that GRR is a key metric to understand our ability to retain our customer base, to evaluate whether our products and platform are addressing our customers’ needs throughout the year.

Current wording

In addition, our gross retention rate (“GRR”) was 95% as of both March 31, 2026 and March 31, 2025. Our GRR reflects only customer losses and does not reflect customer expansion or contraction. We believe our high GRR demonstrates that we serve a vital role in our customers’ operations, as the vast majority of our customers continue to use our products and platform and to renew their subscriptions. We believe that GRR is a key metric to understand our ability to retain our customer base, to evaluate whether our products and platform are addressing our customers’ needs throughout the year.

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 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.

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 March 31, 2026, cRPO increased by $176.9 million, or 21%, year-over-year. Approximately 41% of the increase was attributable to existing customers and 59% was attributable to new customers acquired during the twelve months ended March 31, 2026. We expect RPO to change from period to period primarily due to the size, timing, and duration of new customer contracts and customer renewals.

Previous wording

We plan to continue to invest in technology innovation and product development to enhance the capabilities of our platform. Additional features and products will also enable customers and collaborators to manage new workflows on our platform and allow us to attract a broader set of stakeholders. We have introduced and continue to develop new products and services organically and through our acquisitions.

Current wording

We plan to continue to invest in technology innovation and product development, including Procore AI, which includes tools and products that are purpose-built for the construction industry, to enhance the capabilities of our platform. Additional capabilities will also enable customers and collaborators to manage new workflows on our platform and allow us to attract a broader set of stakeholders. We have introduced and continue to develop new products and services organically and through our acquisitions.

Previous wording

We intend to continue to invest in building additional products, services, offerings, features, and functionality that expand our capabilities and facilitate the extension of our platform. For example, in January 2025, we acquired Novorender AS, a 3D viewer and building information modeling platform; in May 2024, we acquired Intelliwave Technologies Inc., a construction materials management company that enhances our Resource Management solution; and in September 2023, we launched Procore Pay, a payment solution that handles all aspects of the payment processes between general contractors and subcontractors. We also intend to continue to evaluate strategic acquisitions and investments in businesses and technologies to drive product and market expansion. While the impact of these developments, including Procore Pay, are not yet material to our business, our future success is dependent on our ability to successfully develop or acquire, market, and sell existing and new products and services to both new and existing customers.

Current wording

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

Previous wording

We see international expansion as a major, and largely greenfield, opportunity for growth as we look to capture a larger part of the worldwide construction market. We have an international sales and marketing presence with offices in Sydney, Australia; Toronto, Canada; London, England; Dublin, Ireland; and Dubai, United Arab Emirates (“UAE”). As a result of our international efforts, we support multiple languages and currencies. Non-U.S. revenue as a percentage of our total revenue was 15% 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.

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% for both of the three month periods ended March 31, 2026 and 2025. We determine the percentage of non-U.S. revenue based on the billing location of each customer. Fluctuations in foreign currencies may positively or negatively impact the amount of revenue that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars.

Previous wording

Furthermore, we believe global demand for our products, services, and platform will continue to increase as we expand our international sales and marketing efforts, and the awareness of our products, services, and platform grows. However, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, currencies, cultures, customs, and commercial markets, as well as differing legal, tax, regulatory, and alternative dispute systems. We have made, and plan to continue to make, significant investments in international markets. While these investments may adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.

Current wording

Furthermore, we believe global demand for our products, services, and platform will continue to increase as we expand our international sales and marketing efforts, and the awareness of our products, services, and platform grows. However, our ability to conduct our business operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, currencies, cultures, customs, and commercial markets, as well as differing legal, tax, regulatory, and alternative dispute systems. We have made, and plan to continue to make, significant investments in international markets. While these investments may adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.

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 and Part I, Item 1A of our Q2 2025 Form 10-Q for further discussion.

Current wording

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

Previous 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.

Current 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, 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, benefits, bonuses, and payroll taxes.

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, payroll taxes, and bonuses.

Previous 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.

Current wording

General and administrative expenses primarily consist of personnel-related compensation expenses for our finance, human resources, information technology, legal, executive, and other administrative functions. Additionally, general and administrative expenses include non-personnel-related expenses, such as professional fees for legal, audit, 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

Interest income consists primarily of interest income earned on our money market funds, cash savings accounts, and marketable securities.

Current wording

Interest income consists primarily of interest income earned on our marketable securities, money market funds, and cash savings accounts.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous 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.

Current wording

*Includes amortization of capitalized stock-based compensation of $3.5 million and $2.7 million, respectively, for the three months ended March 31, 2026 and 2025 which was initially capitalized as capitalized software and cloud-computing arrangement implementation costs.

Previous 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.

Current wording

During the three months ended March 31, 2026, our revenue increased by $48.7 million, or 16%, compared to the three months ended March 31, 2025, of which approximately 87% was attributable to revenue from existing customers and approximately 13% was attributable to revenue from new customers acquired during the three months ended March 31, 2026. The increase in revenue from existing customers includes the net benefit of a full quarter of subscription revenue in the first quarter of 2026 from customers that were newly acquired or expanded their subscriptions between the beginning of the first quarter of 2025 and the end of the fourth quarter of 2025 and continued or expanded their subscriptions, as applicable, in the first quarter of 2026.

Previous 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.

Current wording

The increase in cost of revenue during the three months ended March 31, 2026 was primarily attributable to an increase of $3.8 million in amortization of capitalized software development costs. The increase in cost of revenue was also attributable to a $1.0 million increase in third-party cloud hosting and related services as we grow our customer base; and a $0.9 million increase in personnel-related expenses for salaries and wages. Our cost of revenue headcount remained relatively consistent since March 31, 2025.

Previous 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.

Current wording

The increase in sales and marketing expenses during the three months ended March 31, 2026 was primarily attributable to an increase of $12.6 million in personnel-related expenses, including increases of $7.4 million in salaries and wages and $5.6 million in stock-based compensation expense. The increases in sales and marketing expenses were partially offset by a $2.2 million decrease in amortization of customer relationship intangible assets due to certain customer relationship intangible assets becoming fully amortized in 2025; and a $1.8 million decrease in professional fees for temporary contractor labor . We decreased our sales and marketing headcount by 5% since March 31, 2025.

Previous 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.

Current wording

The decrease in research and development expenses during the three months ended March 31, 2026 was primarily attributable to a decrease of $3.1 million in personnel-related expenses for salaries and wages. The decrease in research and development expenses was also attributable to a $1.9 million decrease in professional fees for temporary contractor labor. The decreases in research and development expenses were partially offset by a $1.5 million increase in acquisition-related expenses. We increased our research and development headcount by 11% since March 31, 2025.

Previous 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.

Current wording

The increase in general and administrative expenses during the three months ended March 31, 2026 was primarily due to an increase of $8.8 million in legal fees, which were predominantly related to an ongoing lawsuit with Oracle. The increase in general and administrative expenses was also attributable to a $1.6 million increase in rent expense; a $0.9 million increase in acquisition-related expenses; and a $0.2 million increase in personnel-related expenses, including an increase of $3.0 million in stock-based compensation expense, partially offset by a decrease of $2.8 million in salaries and wages. Our general and administrative headcount remained relatively consistent since March 31, 2025.

Previous wording

Interest Income, Interest Expense, Accretion Income, Net, Other Income (Expense), Net, and (Benefit from) provision for Income Taxes

Current wording

Interest Income, Interest Expense, Accretion Income, Net, Other (Expense) Income, Net, and (Benefit from) Provision for Income Taxes

Previous 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.

Current wording

During the three months ended March 31, 2026, accretion income, net decreased by $1.5 million due to a decrease in the balance of our marketable securities portfolio year over year.

Previous wording

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

Excerpt shortened here; the source contains the full paragraph.

Current wording

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

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

Current wording

As of March 31, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $591.5 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

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

Current wording

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

Previous 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.

Current wording

During the three months ended March 31, 2026, we had additional contractual commitments beyond those disclosed in our 2025 Form 10-K, primarily related to new lease obligations. In the next 12 months, we have operating lease obligations of $0.5 million related to leases that commenced during the three months ended March 31, 2026. Beyond the next 12 months, we have net contractual commitments for operating lease obligations of $20.8 million related to leases that commenced during the three months ended March 31, 2026. There have been no other material changes to our contractual obligations from those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our needs for at least the next 12 months. While we have generated positive cash flows from operations in recent years, we have continued to generate losses from operations, as reflected in our accumulated deficit of $1.4 billion as of March 31, 2026. 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 $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:

Current wording

Net cash provided by operating activities was $76.8 million during the three months ended March 31, 2026 which resulted from a net loss of $9.1 million, adjusted for non-cash charges of $86.3 million and a net cash outflow of $0.4 million from changes in operating expenses and liabilities. The $0.4 million of net cash outflows provided as a result of changes in our operating assets and liabilities primarily reflected the following:

Previous 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;

Current wording

•a $51.2 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 $15.3 million decrease in deferred revenue primarily due to timing of billings and seasonality;

Current wording

•a $33.6 million decrease in deferred revenue primarily due to timing of billings and seasonality;

Previous wording

•a $12.1 million increase in prepaid expenses and other assets primarily due to timing of cash payments to our vendors;

Current wording

•a $10.7 million increase in prepaid expenses and other assets primarily due to timing of cash payments to our vendors;

Previous wording

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

Current wording

•a $6.9 million decrease in accounts payable primarily due to timing of cash payments to our vendors; and

Previous 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;

Current wording

•a $1.3 million increase in deferred contract cost assets related to commissions as a result of additional customer contracts closed and a higher capitalization rate during the period.

Previous wording

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

Current wording

These changes in our operating assets and liabilities were partially offset by a $103.9 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers.

Previous 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:

Current wording

Net cash provided by operating activities was $66.0 million during the three months ended March 31, 2025, which resulted from a net loss of $33.0 million, adjusted for non-cash charges of $75.0 million and net cash inflows of $24.0 million from changes in operating assets and liabilities. The $24.0 million of net cash inflows provided as a result of changes in our operating assets and liabilities primarily reflected an $86.3 million decrease in accounts receivable primarily due to timing of billings and cash receipts from customers, which was partially offset by the following:

Previous wording

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

Current wording

•a $26.6 million decrease in deferred revenue primarily due to timing of billings and seasonality;

Previous wording

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

Current wording

•a $11.1 million decrease in accounts payable primarily due to timing of cash payments to our vendors.