Hinge Health, Inc.

Previous wording

Hinge Health leverages software, including AI, to automate care for joint and muscle health, delivering an outstanding member experience, improved member outcomes, and cost reductions for our clients. We have designed our platform to address a broad spectrum of MSK care—from acute injury, to chronic pain, to post-surgical rehabilitation. Members receive personalized and automated MSK care through our AI-powered motion tracking technology and a proprietary electrical nerve stimulation wearable device, all designed and monitored by our AI-supported care team of licensed physical therapists, physicians, and board-certified health coaches. Our platform can help to ease members’ pain, improve their function, and reduce their need for surgeries, all while driving health equity by allowing members to engage in their exercise therapy sessions from anywhere and embrace movement as a way of life.

Current wording

Hinge Health leverages software, including AI, to automate care for joint and muscle health and migraine, delivering an outstanding member experience, improved member outcomes, and cost reductions for our clients. We have designed our platform to address a broad spectrum of MSK and MSK-related care —from acute injury, to chronic pain, to post-surgical rehabilitation. Members receive personalized and automated care through our AI-powered motion tracking technology and a proprietary electrical nerve stimulation wearable device, all designed and monitored by our AI-supported care team of licensed physical therapists, physicians, and board-certified health coaches. Our platform can help to ease members’ pain, improve their function, and reduce their need for surgeries, all while driving health equity by allowing members to engage in their exercise therapy sessions from anywhere and embrace movement as a way of life.

Previous wording

We have developed an efficient go-to-market model by working directly with our partners and clients. We seek to be the most validated and the easiest to buy solution on the market. Our clients are primarily self-insured employers and include many of the nation’s leading enterprises across a broad range of industries and sizes. Within this segment, we also serve many public sector self-insured employers, such as state and local city governments and labor unions. In most instances, for our self-insured clients, we partner with clients’ health plans, TPAs, PBMs, or other ecosystem entities to reduce the friction of contracting, procurement, security and IT reviews, onboarding, and billing. We also serve health plans’ fully-insured and Medicare Advantage populations and federal insurance plans.

Current wording

We have developed an efficient go-to-market model by working directly with our partners and clients. We seek to be the most validated and the easiest to buy solution on the market. Our clients are primarily self-insured employers and include many of the nation’s leading enterprises across a broad range of industries and sizes. Within this market, we also serve many public sector self-insured employers, such as state and local city governments and labor unions. In most instances, for our self-insured clients, we partner with clients’ health plans, TPAs, PBMs, or other ecosystem entities to streamline contracting, onboarding, and billing. We also serve health plans’ fully-insured and Medicare Advantage populations and federal insurance plans.

Previous wording

We believe that we grow efficiently because of our scalable, repeatable go-to-market model. We sell through our direct sales force and our partners. Once we contract with a client, we are most often the sole digital MSK care provider offered to their contracted lives for an average contract term of three years. For the term of each contract, we are able to enroll, engage, and re-engage the client’s eligible lives, driving a recurring, repeatable revenue model. As of March 31, 2026, we had over 60 partners. Our partners include the five largest national health plans by self-insured lives, and the top three PBMs by market share.

Current wording

We believe that we grow efficiently because of our scalable, repeatable go-to-market model. We sell through our direct sales force and our partners. Once we contract with a client, we are most often the sole digital MSK or migraine care provider offered to their contracted lives for an average contract term of three years. For the term of each contract, we are able to enroll, engage, and re-engage the client’s eligible lives, driving a recurring, repeatable revenue model. As of June 30, 2026, we had over 60 partners. Our partners include the five largest national health plans by self-insured lives, and the top three PBMs by market share.

Previous wording

Our software-led, AI-powered delivery model not only aims to provide a better experience for our members and a less expensive alternative for our clients, but also allows us to innovate and continuously improve our platform. Our AI-powered motion tracking technology, TrueMotion, allows us to deliver highly scalable care remotely and reduce the human hours associated with traditional physical therapy. According to our estimates based on data from 2025, our platform reduced the number of human care team hours associated with traditional physical therapy by approximately 97%. We have done this while improving our high member satisfaction over time. We are a research-led organization and routinely expand our platform with new programs, capabilities, and features. Over the last four years, we launched new programs to address six additional affected areas; launched Enso to deliver a non-addictive, non-invasive alternative for pain relief; developed HingeConnect for real-time targeted care support and external provider coordination; and integrated TrueMotion, our proprietary AI-powered motion tracking technology, to replace wearable sensors for our members. In 2022, we launched women’s pelvic health, a specialized care program within our chronic program, and, in 2023, we launched a fall prevention program for eligible lives in our Medicare Advantage population. In 2025, we launched our high-performance in-person provider network for MSK care, HingeSelect, which allows us to now provide members with end-to-end MSK care while further reducing costs for members, employers, and health plans.

Current wording

Our software-led, AI-powered delivery model not only aims to provide a better experience for our members and a less expensive alternative for our clients, but also allows us to innovate and continuously improve our platform. Our AI-powered motion tracking technology, TrueMotion, allows us to deliver highly scalable care remotely and reduce the human hours associated with traditional physical therapy. According to our estimates based on data from 2025, our platform reduced the number of human care team hours associated with traditional physical therapy by approximately 97%. We have done this while improving our high member satisfaction over time. We are a research-led organization and routinely expand our platform with new programs, capabilities, and features. Over the last four years, we launched new programs to address six additional affected areas; launched Enso to deliver a non-addictive, non-invasive alternative for pain relief; developed HingeConnect for real-time targeted care support and external provider coordination; and integrated TrueMotion, our proprietary AI-powered motion tracking technology, to replace wearable sensors for our members. In 2022, we launched women’s pelvic health, a specialized care program within our chronic program, and, in 2023, we launched a fall prevention program for eligible lives in our Medicare Advantage population. In 2025, we launched our high-performance in-person provider network for care, HingeSelect, which allows us to now provide members with end-to-end care while further reducing costs for members, employers, and health plans. In 2026, we launched our Migraine Care Program, our first expansion beyond joint and muscle pain, offering rapid drug-free pain relief, personalized trigger management, and expert-led prevention for members.

Previous wording

We have rapidly grown our client base, expanding to 2,849 clients as of March 31, 2026 compared to 2,311 clients as of March 31, 2025. This expansion has given us access to an increased number of contracted lives, which was 25 million as of December 31, 2025. There are two ways we increase our contracted lives: through new client additions and through accessing additional contracted lives within a current client.

Current wording

We have rapidly grown our client base, expanding to 2,929 clients as of June 30, 2026 compared to 2,359 clients as of June 30, 2025. This expansion has given us access to an increased number of contracted lives, which was 25 million as of December 31, 2025. There are two ways we increase our contracted lives: through new client additions and through accessing additional contracted lives within a current client.

Previous wording

Depending on a client’s needs, we have the ability to contract directly or through one of our many partners. Similarly, we are able to invoice a client directly or submit via claims through a client’s health plan. If a client chooses to pay via claims through a health plan, the cost typically comes directly out of their medical budget for the year and is embedded in their medical costs, rather than a separate discretionary budget. Allocation of the spend on Hinge Health to the client’s existing healthcare budget enables faster implementation as it avoids a potentially lengthy approval process. Our agreements with partners help us simplify contracting and implementation with clients. In the first quarter of 2026 and in 2025, the vast majority of our contracts were completed via our partners, negating the need for many clients to contract directly with us since many clients can leverage existing contracts through our partners. This is a significant strategic advantage for us as it enables implementation and launch of our platform as quickly as a few weeks after entering into a contract. As a result, most implementations are completed in a 40-100 day period.

Current wording

Depending on a client’s needs, we have the ability to contract directly or through one of our many partners. Similarly, we are able to invoice a client directly or submit via claims through a client’s health plan. If a client chooses to pay via claims through a health plan, the cost typically comes directly out of their medical budget for the year and is embedded in their medical costs, rather than a separate discretionary budget. Allocation of the spend on Hinge Health to the client’s existing healthcare budget enables faster implementation as it avoids a potentially lengthy approval process. Our agreements with partners help us simplify contracting and implementation with clients. In the first half of 2026 and in 2025, the vast majority of our contracts were completed via our partners, negating the need for many clients to contract directly with us since many clients can leverage existing contracts through our partners. This is a significant strategic advantage for us as it enables implementation and launch of our platform as quickly as a few weeks after entering into a contract. As a result, most implementations are completed in a 40-100 day period.

Previous wording

We are able to bill our clients once an eligible life enrolls in our platform and performs a billable activity, in accordance with our clients’ billing arrangements. Some of our clients are billed for the entirety of the members’ annual subscriptions, and some are billed in milestone-based payments, based on a subscription fee per member per year. We also offer an engagement-based pricing model in which clients are billed based on an annual upfront platform fee per member plus a fee per each completed session.

Current wording

We are able to bill our clients once an eligible life enrolls in our platform and performs a billable activity, in accordance with our clients’ billing arrangements. Most of our clients are billed through an engagement-based pricing model based on an annual upfront platform fee per member plus a fee per each completed billable session. We also have some clients that are billed for the entirety of the members’ annual subscriptions, and some that are billed in milestone-based payments, based on a subscription fee per member per year.

Previous wording

The majority of new clients enter into contracts with us in the second half of each calendar year, which aligns with the typical employee benefit enrollment period. We launch our platform for most of these clients in the first half of the following calendar year. We have seen varying levels of intra-year launches since our inception. While some clients choose to sign and launch within the same year, these are generally a much smaller percentage of our business. Due to these patterns and our annual subscription-based model, the timing of our revenue has generally been predictable. Our calculated billings, however, show seasonality with fluctuations based on the timing of new client launches and number of intra-year launches. Historically, our calculated billings are highest in the second quarter of the year, as this is when we are able to bill the majority of clients who entered into contracts in the preceding year. Consequently, our free cash flow is typically highest in the second or third quarter and is usually lowest in the first quarter due to increased new client onboarding expenses preceding cash inflows in the first quarter, and slowing billings associated with the holidays in the prior fourth quarter. We anticipate that this seasonality will continue, though may fluctuate year to year, and therefore focus on LTM calculated billings as a result. Given the annual subscription model and ratable revenue recognition, however, our quarterly revenue stream has historically been highly predictable and has not displayed the same seasonality trends.

Current wording

The majority of new clients enter into contracts with us in the second half of each calendar year, which aligns with the typical employee benefit enrollment period. We launch our platform for most of these clients in the first half of the following calendar year. While some clients choose to sign and launch within the same year, these are generally a much smaller percentage of our business. Due to these patterns and our annual subscription-based model, the timing of our revenue has generally been predictable. Our calculated billings, however, show seasonality with fluctuations based on the timing of new client launches. Historically, our calculated billings are highest in the second quarter of the year, as this is when we are able to bill the majority of clients who entered into contracts in the preceding year. Consequently, our free cash flow is typically highest in the second or third quarter and is usually lowest in the first quarter due to increased new client onboarding expenses preceding cash inflows. We anticipate that this seasonality will continue, though may fluctuate year to year, and therefore we focus on LTM calculated billings. Given the annual subscription model and ratable revenue recognition, however, our quarterly revenue stream has historically been highly predictable and has not displayed the same seasonality trends.

Previous wording

Our business model delivers value for our clients by lowering MSK care costs and driving positive member outcomes. We believe that our business performance and results of operations have been, and will continue to be, affected by many factors, including those below. While these key factors present significant opportunities, they also represent challenges that we must successfully address in order to sustain and grow our business and improve our results of operations.

Current wording

Our business model delivers value for our clients by lowering care costs and driving positive member outcomes. We believe that our business performance and results of operations have been, and will continue to be, affected by many factors, including those below. While these key factors present significant opportunities, they also represent challenges that we must successfully address in order to sustain and grow our business and improve our results of operations.

Previous wording

Adding new clients is one of the key pillars of our growth strategy. Our partners are a key part of this effort as they assist in the self-insured employer sales process with Hinge Health as their preferred partner. This partnership model allows for simplicity and speed in the contracting and implementation of new clients, including security and IT compliance, billing, and payments, and provides for efficiency in our sales motion as well. While these partnerships are important and enhance our operational efficiency, we can and do engage directly with clients. In addition to self-insured employers, which currently make up the majority of our business, we also serve the fully-insured employers market and the Medicare Advantage and federal insurance plans markets. Our growth and financial results will depend on our ability to efficiently expand access to or acquire more contracted lives in the market segments where we plan to focus our growth efforts, as well as retain our existing clients.

Current wording

Adding new clients is one of the key pillars of our growth strategy. Our partners are a key part of this effort as they assist in the self-insured employer sales process with Hinge Health as their preferred partner. This partnership model allows for simplicity and speed in the contracting and implementation of new clients and provides for efficiency in our sales motion as well. While these partnerships are important and enhance our operational efficiency, we can and do engage directly with clients. In addition to self-insured employers, which currently make up the majority of our business, we also serve the fully-insured employers market and the Medicare Advantage and federal insurance plans markets. Our growth and financial results will depend on our ability to efficiently expand access to or acquire more contracted lives in the market segments where we plan to focus our growth efforts, as well as retain our existing clients.

Previous wording

Retaining our existing clients is also integral to our success. Our software-led, AI-powered delivery model aims to provide a better experience for our members and a less expensive alternative for our clients. Once we contract with a client, we are typically the sole digital MSK care provider to their contracted lives for an average contract term of three years. Our 12-month client retention rate was 97% as of December 31, 2025.

Current wording

Retaining our existing clients is also integral to our success. Our software-led, AI-powered delivery model aims to provide a better experience for our members and a less expensive alternative for our clients. Once we contract with a client, we are typically the sole digital MSK or migraine care provider to their contracted lives for an average contract term of three years. Our 12-month client retention rate was 97% as of December 31, 2025.

Previous wording

We are committed to continuous innovation at Hinge Health. We believe the market for digital MSK care is still in its early stages and intend to continue investing for long-term growth. We enable positive member outcomes and proven cost reductions by pairing AI-powered motion tracking technology and wearable pain relief and have continually driven innovations in MSK care since 2014.

Current wording

We are committed to continuous innovation at Hinge Health. We believe the market for automating care is still in its early stages and intend to continue investing for long-term growth. We enable positive member outcomes and proven cost reductions by pairing AI-powered motion tracking technology and wearable pain relief and have continually driven innovations in automating care since 2014.

Previous wording

These innovations include TrueMotion, our proprietary AI-powered motion tracking technology, Enso, our FDA-cleared, wearable device for lasting pain relief, and HingeConnect, our proprietary AI-driven database for real-time care interventions and external provider coordination. We also launched specialized care for women’s pelvic health and a fall prevention program to help adults aged 65 and older improve their physical abilities. In 2025, we launched HingeSelect, our high performance in-person provider network for MSK care. All of our programs are available for use from a single application, with members having the ability to treat multiple indications at once.

Current wording

These innovations include TrueMotion, our proprietary AI-powered motion tracking technology, Enso, our FDA-cleared, wearable device for lasting pain relief, and HingeConnect, our proprietary AI-driven database for real-time care interventions and external provider coordination. We also launched specialized care for women’s pelvic health and a fall prevention program to help adults aged 65 and older improve their physical abilities. In 2025, we launched HingeSelect, our high performance in-person provider network for care. In 2026, we launched our Migraine Care Program, our first expansion beyond joint and muscle pain, offering rapid drug-free pain relief, personalized trigger management, and expert-led prevention for members. All of our programs are available for use from a single application, with members having the ability to treat multiple indications at once.

Previous wording

We see opportunities to expand beyond our current markets of self-insured and fully-insured employers, Medicare Advantage plans, and federal insurance plans. We currently primarily cover eligible lives within the United States and we are in the early stages of our global expansion. We offer our global program in multiple international countries, focused on clients that are United States-based multinational corporations. We are also looking to expand into additional government agencies and government healthcare programs such as Medicare and Medicaid.

Current wording

We see opportunities to expand beyond our current markets of self-insured and fully-insured employers, Medicare Advantage plans, and federal insurance plans. We currently primarily cover eligible lives within the United States and also offer our global program in multiple international countries, focused on clients that are United States-based multinational corporations. We are also looking to expand into additional government agencies and government healthcare programs such as Medicare and Medicaid.

Previous wording

Given our typical sales cycle, we experience seasonality in our business that has historically resulted in higher calculated billings and related costs during certain periods. A majority of clients enter contracts with us in the second half of each calendar year, in line with the typical employee benefit enrollment period. Most of these clients are launched in the first half of the following calendar year. We have seen varying levels of intra-year launches since our inception. While some clients choose to sign and launch within the same year, these clients represent a much smaller percentage of our clients. We believe that any improvements in the speed at which we can sign and launch new clients can increase our revenue in a given year. Through strategic partnerships with health plans, PBMs, TPAs, and other ecosystem entities, we have streamlined our implementation process to enable activation in a 40–100 day period compared to what we believe is a typically much longer implementation period in healthcare.

Current wording

Given our typical sales cycle, we experience seasonality in our business that has historically resulted in higher calculated billings and related costs during certain periods. A majority of clients enter contracts with us in the second half of each calendar year, in line with the typical employee benefit enrollment period. Most of these clients are launched in the first half of the following calendar year. While some clients choose to sign and launch within the same year, these clients represent a much smaller percentage of our clients. We believe that any improvements in the speed at which we can sign and launch new clients can increase our revenue in a given year. Through strategic partnerships with health plans, PBMs, TPAs, and other ecosystem entities, we have streamlined our implementation process to enable activation in a 40–100 day period compared to what we believe is a typically much longer implementation period in healthcare.

Previous wording

LTM Calculated Billings: We believe calculated billings on a last 12-months basis helps investors better understand our performance for a particular period given the seasonality in our model due to quarterly fluctuations based on the timing of new client launches and number of intra-year launches. We anticipate that this seasonality will continue and therefore focus on LTM calculated billings. Our revenue generally does not reflect this seasonality and these quarterly fluctuations given that we recognize revenue ratably over the term that members have access to our platform. LTM calculated billings are defined as total revenue, plus the change in deferred revenue, less the change in contract assets for a given 12-month period.

Current wording

LTM Calculated Billings: We believe calculated billings on a last 12-months basis helps investors better understand our performance for a particular period given the seasonality in our model due to quarterly fluctuations based on the timing of new client launches. We anticipate that this seasonality will continue and therefore focus on LTM calculated billings. Our revenue generally does not reflect this seasonality and these quarterly fluctuations given that we recognize revenue ratably over the term that members have access to our platform. LTM calculated billings are defined as total revenue, plus the change in deferred revenue, less the change in contract assets for a given 12-month period.

Previous wording

Revenue is the income generated from member subscription fees paid to access our technology platform to treat and prevent MSK pain. Revenue recognition begins once a billable activity is completed and is typically ratable over the 12-month member subscription period. Due to the timing of our sales cycle, revenue from new clients contracted in a given year is largely recognized in the following year.

Current wording

Revenue is the income generated from member subscription fees paid to access our technology platform to treat and prevent pain. Revenue recognition begins once a billable activity is completed and is typically ratable over the 12-month member subscription period. Due to the timing of our sales cycle, revenue from new clients contracted in a given year is largely recognized in the following year.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Revenue for the three months ended March 31, 2026 increased by $58.5 million, or 47%, compared to the three months ended March 31, 2025. The increase was primarily due to revenue growth from existing clients. Due to the timing of our sales cycle, revenue from new clients contracted in a given year is largely recognized in the following year. As such, the majority of our revenue growth during the three months ended March 31, 2026 came from existing clients that were contracted in 2025 or prior. The increase within existing clients was the result of retaining members within, and adding more members to, our existing client base.

Current wording

Revenue for the three months ended June 30, 2026 increased by $73.7 million, or 53%, compared to the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 increased by $132.2 million, or 50%, compared to the six months ended June 30, 2025. The increases were primarily due to revenue growth from existing clients. Due to the timing of our sales cycle, revenue from new clients contracted in a given year is largely recognized in the following year. As such, the majority of our revenue growth during the three and six months ended June 30, 2026 came from existing clients that were contracted in 2025 or prior. The increase within existing clients was the result of retaining members within, and adding more members to, our existing member base.

Previous wording

Cost of revenue for the three months ended March 31, 2026 increased by $4.5 million, or 19%, compared to the three months ended March 31, 2025. The increase was due to an increase of $3.7 million in inventory costs, $1.0 million in hosting costs and $0.8 million in stock-based compensation expense, partially offset by a decrease of $1.4 million in personnel-related costs.

Current wording

Cost of revenue for the three months ended June 30, 2026 decreased by $12.5 million, or 30%, compared to the three months ended June 30, 2025. The decrease was due to a decrease of $15.3 million in stock-based compensation expense, which was related to the satisfaction of certain vesting criteria for RSUs achieved in the second quarter of 2025 in connection with the IPO, and $0.9 million in employer payroll tax expense related to stock-based compensation expense, partially offset by an increase of $2.9 million in inventory costs, net of a tariff refund of $1.7 million, and $1.4 million in hosting costs.

Previous wording

Gross margin for the three months ended March 31, 2026 increased by four percentage points compared to the three months ended March 31, 2025. The increase was primarily due to an increase in efficiencies related to our care team and supply chain operations.

Current wording

Gross margin for the three months ended June 30, 2026 increased by 16 percentage points compared to the three months ended June 30, 2025. Gross margin for the six months ended June 30, 2026 increased by 11 percentage points compared to the six months ended June 30, 2025. The increases were primarily due to a decrease in stock-based compensation expense and an increase in efficiencies related to our care team operations.

Previous wording

Sales and marketing expenses for the three months ended March 31, 2026 increased by $22.1 million, or 47%, compared to the three months ended March 31, 2025. The increase was primarily due to an increase of $6.6 million in commissions, $6.2 million in marketing and promotion costs, and $4.0 million in stock-based compensation expense. In addition, there was an increase of $3.9 million in personnel-related costs, and $0.4 million in employer payroll tax expense related to stock-based compensation expense.

Current wording

Sales and marketing expenses for the three months ended June 30, 2026 decreased by $65.8 million, or 45%, compared to the three months ended June 30, 2025. The decrease was primarily due to a decrease of $89.1 million in stock-based compensation expense, which was related to the satisfaction of certain vesting criteria for RSUs and PRSUs achieved in the second quarter of 2025 in connection with the IPO and employer payroll tax expense related to stock-based compensation expense of $2.3 million. These decreases in costs were offset by an increase of $13.3 million in marketing and promotion costs, $9.5 million in commissions and $3.9 million in personnel-related costs.

Previous wording

Other income, net for the three months ended March 31, 2026 decreased $1.1 million, compared to the three months ended March 31, 2025. The decrease was primarily due to lower cash, cash equivalents, and marketable securities balances held in interest-bearing accounts, which resulted in less interest income during the period.

Current wording

Other income, net for the three months ended June 30, 2026 decreased $0.7 million, compared to the three months ended June 30, 2025. The decrease was primarily due to lower cash, cash equivalents, and marketable securities balances held in interest-bearing accounts, which resulted in less interest income during the period.

Previous wording

We define non-GAAP income from operations as income from operations presented in accordance with GAAP, adjusted to exclude non-cash, non-operational and non-recurring items, including stock-based compensation expense, employer payroll tax expense related to stock-based compensation, amortization of intangible assets and acquisition-related expenses. We define non-GAAP operating margin as non-GAAP income from operations divided by revenue.

Current wording

We define non-GAAP income from operations as income (loss) from operations presented in accordance with GAAP, adjusted to exclude non-cash, non-operational and non-recurring items, including stock-based compensation expense, employer payroll tax expense related to stock-based compensation, amortization of intangible assets and acquisition-related expenses. We define non-GAAP operating margin as non-GAAP income from operations divided by revenue.

Previous wording

The following table provides a reconciliation of non-GAAP income from operations and operating margin to income from operations and operating margin, the most directly comparable financial measures presented in accordance with GAAP:

Current wording

The following table provides a reconciliation of non-GAAP income from operations and operating margin to income from operations (loss) and operating margin, the most directly comparable financial measures presented in accordance with GAAP:

Previous wording

We define free cash flow as net cash provided by (used in) operating activities plus cash used for employer payroll taxes at IPO related to stock-based compensation less purchases of property, equipment and software (including capitalized internal-use software). We believe that free cash flow is a helpful indicator of liquidity that provides information to management and investors about the amount of cash generated or used by our operations that, after taking into account the employer payroll taxes paid as part of the vesting of shares at IPO as well as investments in property, equipment and software (including capitalized internal-use software), can be used for strategic initiatives, including investing in our business and strengthening our financial position. The principal limitation of free cash flow is that it does not represent the total increase or decrease in our cash balance for a given period. We define free cash flow margin as free cash flow divided by revenue.

Current wording

We define free cash flow as net cash provided by operating activities plus cash used for employer payroll taxes at IPO related to stock-based compensation less purchases of property, equipment and software (including capitalized internal-use software). We believe that free cash flow is a helpful indicator of liquidity that provides information to management and investors about the amount of cash generated or used by our operations that, after taking into account the employer payroll taxes paid as part of the vesting of shares at IPO as well as investments in property, equipment and software (including capitalized internal-use software), can be used for strategic initiatives, including investing in our business, acquisitions, and strengthening our financial position. The principal limitation of free cash flow is that it does not represent the total increase or decrease in our cash balance for a given period. We define free cash flow margin as free cash flow divided by revenue.

Previous wording

The following table provides a reconciliation of free cash flow and free cash flow margin to net cash provided by (used in) operating activities and operating cash flow margin, the most directly comparable financial measures presented in accordance with GAAP:

Current wording

The following table provides a reconciliation of free cash flow and free cash flow margin to net cash provided by operating activities and operating cash flow margin, the most directly comparable financial measures presented in accordance with GAAP:

Previous wording

We have historically financed our operations primarily through net proceeds from the sale of our redeemable convertible preferred stock and payments received from our clients.

Current wording

We have historically financed our operations primarily through payments received from our clients and net proceeds from the sale of our redeemable convertible preferred stock.

Previous wording

As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $186.7 million, and marketable securities of $219.0 million. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Our marketable securities consist of U.S. treasury securities, investment-grade corporate bonds, government agency securities, and commercial paper. Our primary uses of cash are personnel-related, inventory and selling, marketing and related costs.

Current wording

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $286.2 million, and marketable securities of $187.9 million. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Our marketable securities consist of U.S. treasury securities, investment-grade corporate bonds, government agency securities, and commercial paper. Our primary uses of cash are personnel-related, inventory and selling, marketing and related costs.

Previous wording

We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, though we may require additional capital resources in the future. Our future capital requirements will depend on many factors, including our growth rate, headcount, sales and marketing activities, research and development activities, the introduction of new features and programs, and acquisitions. If we require additional capital, we may not be able to raise such capital on reasonable terms, or at all.

Current wording

We believe our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, though we may require additional capital resources in the future. Our future capital requirements will depend on many factors, including our growth rate, headcount, sales and marketing activities, research and development activities, the introduction of new features and programs, tax withholding on settlement of RSUs and PRSUs and acquisitions. If we require additional capital, we may not be able to raise such capital on reasonable terms, or at all.

Previous wording

Net cash provided by operating activities was $43.1 million for the three months ended March 31, 2026. This primarily related to our net income of $35.1 million adjusted for non-cash charges of $30.1 million and offset by net cash outflows of $22.2 million due to changes in operating assets and liabilities. The change in operating assets and liabilities was driven by an increase in accounts receivable of $48.9 million, an increase in deferred commissions of $20.6 million, an increase in prepaid expense and other current assets of $4.2 million, and a decrease in operating lease liabilities of $1.1 million, partially offset by an increase in deferred revenue of $39.9 million, an increase in accounts payable and accrued liabilities of $11.2 million, and a decrease in inventory of $1.5 million. The changes were primarily due to the growth of our business, timing of cash receipts from clients, and timing of cash payments to our vendors.

Current wording

Net cash provided by operating activities was $144.5 million for the six months ended June 30, 2026. This primarily related to our net income of $78.8 million adjusted for non-cash charges of $72.5 million and offset by net cash outflows of $6.8 million due to changes in operating assets and liabilities. The change in operating assets and liabilities was driven by an increase in accounts receivable of $61.0 million, an increase in deferred commissions of $49.1 million, an increase in prepaid expense and other current assets of $11.6 million, a decrease in operating lease liabilities of $2.2 million, and an increase in inventory of $1.1 million, partially offset by an increase in deferred revenue of $115.6 million, and an increase in accounts payable and accrued liabilities of $2.6 million. The changes were primarily due to the growth of our business, timing of cash receipts from clients, and timing of cash payments to our vendors.

Previous wording

Net cash provided by operating activities was $4.9 million for the three months ended March 31, 2025. This primarily related to our net income of $17.1 million and net cash outflows of $24.5 million due to changes in operating assets and liabilities, adjusted for non-cash charges of $12.3 million. The change in operating assets and liabilities was driven by an increase in accounts receivable of $34.3 million, an increase in deferred commissions of $10.6 million, and an increase in inventory of $1.9 million, partially offset by an increase in accounts payable and accrued liabilities of $15.7 million and a decrease in prepaid expenses of $8.1 million. The changes were primarily due to the growth of our business, timing of cash receipts from clients, and timing of cash payments to our vendors.

Current wording

Net cash provided by operating activities was $25.1 million for the six months ended June 30, 2025. This primarily related to our net loss of $558.5 million and net cash outflows of $34.7 million due to changes in operating assets and liabilities, adjusted for non-cash charges of $618.4 million. The change in operating assets and liabilities was driven by an increase in accounts receivable of $59.6 million, an increase in deferred commissions of $27.7 million, an increase in prepaid expenses and other current assets of $6.6 million, and an increase in inventory of $3.1 million, partially offset by an increase in deferred revenue of $57.5 million and an increase in accounts payable and accrued liabilities of $7.0 million. The changes were primarily due to the growth of our business, timing of cash receipts from clients, and timing of cash payments to our vendors.

Previous wording

Net cash provided by investing activities was $48.1 million for the three months ended March 31, 2026, driven by net maturities of marketable securities of $49.6 million, partially offset by $1.5 million used for purchases of property, equipment and capitalized internal-use software.

Current wording

Net cash provided by investing activities was $76.7 million for the six months ended June 30, 2026, driven by net maturities of marketable securities of $80.1 million, partially offset by $3.4 million used for purchases of property, equipment and capitalized internal-use software.

Previous wording

Net cash used in investing activities was $21.3 million for the three months ended March 31, 2025, driven by net purchases from marketable securities of $16.6 million, $4.0 million used to purchase a business and $0.8 million used for purchases of property, equipment and capitalized internal-use software.

Current wording

Net cash used in investing activities was $17.3 million for the six months ended June 30, 2025, driven by net purchases of marketable securities of $10.7 million, $4.0 million used to purchase a business and $2.6 million used for purchases of property, equipment and capitalized internal-use software.

Previous wording

Net cash used in financing activities was $112.8 million for the three months ended March 31, 2026, consisting of $105.0 million related to the share repurchase program described below, and $8.2 million used for employee taxes related to the net settlement of RSUs and PRSUs, partially offset by $0.4 million in proceeds from the exercise of employee stock options.

Current wording

Net cash used in financing activities was $143.3 million for the six months ended June 30, 2026, consisting of $131.5 million related to the share repurchase program described below, and $19.8 million used for employee taxes related to the net settlement of RSUs and PRSUs, partially offset by $7.3 million in proceeds from our employee share purchase plan and $0.7 million in proceeds from the exercise of employee stock options.

Previous wording

We expect a continued increase in our cash balances as our business continues to grow. We expect to maintain a diversified cash management strategy to primarily include money market funds, highly-liquid debt instruments such as U.S. treasury securities, investment-grade corporate bonds, government agency securities, and commercial paper to reduce our exposure on banking deposits.

Current wording

As our business continues to grow, we expect to maintain a strong cash balance. We expect to maintain a diversified cash management strategy to primarily include money market funds, highly-liquid debt instruments such as U.S. treasury securities, investment-grade corporate bonds, government agency securities, and commercial paper to reduce our exposure on banking deposits.

Previous wording

On November 10, 2025, our board of directors approved a share repurchase program with authorization to purchase up to $250.0 million of our Class A Common Stock.

Current wording

On November 10, 2025, our board of directors approved a share repurchase program with authorization to purchase up to $250 million of our Class A common stock. As of July 29, 2026, we had repurchased an aggregate of $196.5 million of our Class A common stock under the program. On July 29, 2026, our board of directors approved an increase to the program, resulting in $300.0 million of our Class A common stock available for future repurchase, for a total aggregate amount authorized under the program of $496.5 million as of such date.

Previous wording

Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions, or by other methods, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares under this authorization. The share repurchase program does not obligate us to acquire any particular amount of Class A Common Stock, andmay be modified, suspended, or terminated at any time at the discretion of our board of directors. We expect to fund repurchases with existing cash and cash equivalents and cash from operations.

Current wording

Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions, or by other methods, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares under this authorization. The share repurchase program does not obligate us to acquire any particular amount of Class A common stock, has no expiration date, andmay be modified, suspended, or terminated at any time at the discretion of our board of directors. We expect to fund repurchases with existing cash and cash equivalents and cash from operations.

Previous wording

We enter into various non-cancellable lease agreements for certain office space in the normal course of business. Our non-cancellable lease obligations as of March 31, 2026 were $7.0 million, of which $4.2 million is payable within 12 months.

Current wording

We enter into various non-cancellable lease agreements for certain office space in the normal course of business. Our non-cancellable lease obligations as of June 30, 2026 were $5.9 million, of which $4.3 million is payable within 12 months.

Previous wording

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition of results of operations.

Current wording

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition and results of operations.