Duolingo, Inc.
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
DUOL$160.42+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-053603
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001628280-26-069692
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 103 current paragraphs.
57 unchanged; 32 reworded; 14 added; 10 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
(2) During the three months ended September 30, 2025, the Company released the valuation allowance previously recorded against its federal and state deferred tax assets, resulting in a one-time income-tax benefit, net of a return-to-provision adjustment, in the period of $222.7 million.
Current report
For the three months ended September 30, 2026 and 2025, we generated $316.1 million and $281.9 million of total bookings, respectively, representing an increase of $34.2 million, or 12%. For the nine months ended September 30, 2026 and 2025, we generated $913.6 million and $821.6 million of total bookings, respectively, representing an increase of $92.1 million, or 11%. Both increases were primarily driven by growth in subscription bookings.
Current report
(1)During the three months ended September 30, 2025, the Company released the valuation allowance previously recorded against its federal and state deferred tax assets, resulting in a one-time income-tax benefit, net of a return-to-provision adjustment, in the period of $222.7 million.
Current report
For the three months ended September 30, 2026 and 2025, we generated net income of $27.2 million and $292.2 million, respectively, representing a decrease of $265.0 million. For the nine months ended September 30, 2026 and 2025, we generated net income of $103.8 million and $372.1 million, respectively, representing a decrease of $268.3 million. The decrease in net income for both periods was primarily due to the one-time income tax benefit of $222.7 million recognized in the three months ended September 30, 2025, resulting from the release of the valuation allowance previously recorded against our federal and state deferred tax assets, net of a return-to-provision adjustment.
Current report
For the three months ended September 30, 2026 and 2025, we generated Adjusted EBITDA of $78.7 million and $80.0 million, respectively, representing a decrease of $1.3 million. For the nine months ended September 30, 2026 and 2025, we generated Adjusted EBITDA of $239.5 million and $221.5 million, respectively, representing an increase of $17.9 million. Adjusted EBITDA was relatively flat in the three months ended September 30, 2026 as revenue growth was largely offset by increased costs. In the nine months ended September 30, 2026, the increase was primarily driven by revenue growth that outpaced increases in costs.
Current report
For the three months ended September 30, 2026 and 2025, we generated $89.4 million and $84.2 million of net cash provided by operating activities, respectively, representing an increase of $5.2 million. For the nine months ended September 30, 2026 and 2025, we generated $328.5 million and $280.5 million of net cash provided by operating activities, respectively, representing an increase of $47.9 million with the majority of the increase attributable to the year-over-year improvement in working capital contributions. The remaining change is primarily the net effect of noncash adjustments and net income.
Current report
For the three months ended September 30, 2026 and 2025, we generated $75.3 million and $77.4 million of free cash flow, respectively, representing a decrease of $2.0 million. For the nine months ended September 30, 2026 and 2025, we generated $301.8 million and $266.7 million of free cash flow, respectively, representing an increase of $35.1 million. Changes in free cash flow for both periods were primarily driven by changes in cash provided by operating activities and higher capital expenditures related to the expansion of our office footprints and capitalized software development costs. Higher capital expenditures more than offset the change in operating cash flows for the three-month period and partially offset it for the nine-month period.
Current report
Revenue increased by $37.3 million, or 14%, to $309.0 million during the three months ended September 30, 2026, from revenue of $271.7 million in the prior-year period. Revenue increased by $144.7 million, or
Current report
19%, to $899.4 million during the nine months ended September 30, 2026, from revenue of $754.7 million in the prior-year period.
Current report
Sales and marketing expense increased by $30.1 million, or 33%, to $121.4 million during the nine months ended September 30, 2026, from $91.3 million in the prior-year period. This increase was mainly due to increased personnel costs of $6.8 million, including $1.1 million related to a bonus plan tied to DAU growth and increased advertising costs of $21.7 million.
Current report
General and Administrative. General and administrative expense increased by $7.1 million, or 16%, to $51.0 million during the three months ended September 30, 2026, from $44.0 million in the prior-year period. This increase was primarily due to higher personnel costs of $5.1 million, including $1.5 million related to a bonus plan tied to DAU growth.
Current report
General and administrative expense increased by $14.6 million, or 11%, to $148.0 million during the nine months ended September 30, 2026, from $133.4 million in the prior-year period. This increase was primarily due to increased legal costs of $5.5 million, largely related to proposed legal settlement charges, and higher facilities and office expenses of $5.0 million. Personnel costs remained relatively flat, as a decrease of $1.7 million in stock-based compensation expense as a result of the PSU award modification was largely offset by an increase of $1.5 million driven by a bonus plan tied to DAU growth.
Current report
Other expense, net, increased by $0.6 million to $1.1 million during the three months ended September 30, 2026, from $0.5 million in the prior-year period. For the nine months ended September 30, 2026, we recorded other expense, net of $2.3 million, compared to other income, net of $2.2 million in the prior-year period. These changes were primarily due to foreign currency exchange fluctuations.
Current report
September 30, 2025, was primarily related to the release of our U.S. valuation allowance on certain deferred tax assets and other discrete tax items.
Removed paragraphs (10)
Previous report
For the three months ended June 30, 2026 and 2025, we generated $289.1 million and $268.0 million total bookings, respectively, representing an increase of $21.0 million or 8% from the prior year period. For the six months ended June 30, 2026 and 2025, we generated $597.5 million and $539.7 million total bookings, respectively, representing an increase of $57.9 million or 11% from the prior year period. We grew total bookings primarily through growth in subscription bookings.
Previous report
For the three months ended June 30, 2026 and 2025, we generated net income of $33.2 million and $44.8 million, respectively representing a decrease of $11.6 million. For the six months ended June 30, 2026 and 2025, we generated net income of $76.6 million and $79.9 million, respectively, representing a decrease of $3.3 million. The decrease in net income for the three months ended June 30, 2026, as compared to the comparative prior period was primarily due to operating expenses increasing slightly faster than revenue during the period. The increase in net income for the six months ended June 30, 2026, as compared to the comparative prior period was primarily due to revenue growth and gross margin expansion during the period.
Previous report
For the three months ended June 30, 2026 and 2025, we generated Adjusted EBITDA of $77.3 million and $78.7 million, respectively, representing a decrease of $1.4 million. For the six months ended June 30, 2026 and 2025, we generated Adjusted EBITDA of $160.7 million and $141.5 million, respectively, representing an increase of $19.3 million. Adjusted EBITDA changed as compared to the comparative periods for the reasons noted above in net income.
Previous report
For the three months ended June 30, 2026 and 2025, we generated $88.3 million and $90.7 million of net cash provided by operating activities, respectively, representing a decrease of $2.4 million. The decrease was primarily due to changes in working capital during the period. For the six months ended June 30, 2026 and 2025, we generated $239.0 million and $196.3 million of net cash provided by operating activities, respectively, representing an increase of $42.7 million. The increase was primarily due to higher operating income and changes in working capital.
Previous report
For the three months ended June 30, 2026 and 2025, we generated $78.6 million and $86.3 million of free cash flow, respectively, representing a decrease of $7.7 million. Free cash flow decreased in line with operating cash flow, reflecting the same underlying drivers of cash provided by operating activities and by higher capital investments as we expand our office footprints. For the six months ended June 30, 2026 and 2025, we generated $226.4 million and $189.3 million of free cash flow, respectively, representing an increase of $37.1 million. Free cash flow increased in line with operating cash flow, reflecting the same underlying drivers of cash provided by operating activities, partially offset by higher capital investments.
Previous report
Revenues increased by $46.2 million, or 18% to $298.5 million during the three months ended June 30, 2026, from revenues of $252.3 million during the three months ended June 30, 2025. Revenues increased by $107.4 million, or 22%, to $590.4 million during the six months ended June 30, 2026, from revenues of $483.0 million during the six months ended June 30, 2025.
Previous report
Sales and marketing expense increased by $23.0 million, or 41%, to $79.3 million during the six months ended June 30, 2026 from $56.2 million during the six months ended June 30, 2025. This increase was mainly due to increased advertising costs of $19.2 million.
Previous report
General and Administrative. General and administrative expense increased by $4.6 million, or 10%, to $50.6 million during the three months ended June 30, 2026, from $46.0 million during the three months ended June 30, 2025. This increase was primarily due to higher legal and accounting fees of $5.4 million and higher facilities and office expenses of $1.2 million, partially offset by a $3.7 million decrease in personnel costs. The decrease in personnel costs was primarily due to a $3.2 million decrease in stock-based compensation expense, including the impact of a PSU award modification described within Part I, Item 1 Financial Statements – Note 8, “Stockholders’ Equity”, and lower employer taxes related to stock-based compensation, partially offset by higher gross wages resulting from increased average headcount.
Previous report
General and administrative expense increased by $7.5 million, or 8%, to $96.9 million during the six months ended June 30, 2026, from $89.4 million during the six months ended June 30, 2025. This increase was primarily due to higher legal and accounting fees of $5.8 million, higher facilities and office expenses of $4.0 million, partially offset by a decrease in personnel costs of $4.8 million. The decrease in personnel costs was driven by the same factors described above for the three-month period, including lower stock-based compensation expense and employer taxes related to stock-based compensation, partially offset by higher gross wages resulting from increased average headcount.
Previous report
Other (expense) income, net was $0.4 million of expense during the three months ended June 30, 2026 and $1.7 million of income during the three months ended June 30, 2025, respectively, and $1.2 million of expense during the six months ended June 30, 2026 and $2.7 million of income during the six months ended June 30, 2025. The fluctuations were mainly from the impact from changes in foreign currency rates compared to prior periods.
Reworded paragraphs (32)
Previous wording
Our flagship app has become the world’s most popular way to learn languages and the top-grossing Education app in the App Stores, offering over 250 total language courses to over 58 million daily active users for the three months ended June 30, 2026. We believe that we have become the preeminent online destination for language learning due to our beautifully designed products, exceptional user engagement, and demonstrated learning efficacy.
Current wording
Our flagship app has become the world’s most popular way to learn languages and the top-grossing Education app in the App Stores, offering over 250 total language courses to over 64 million daily active users for the three months ended September 30, 2026. We believe that we have become the preeminent online destination for language learning due to our beautifully designed products, exceptional user engagement, and demonstrated learning efficacy.
Previous wording
(1) We primarily evaluate user engagement using DAUs, with MAUs as a supplementary metric. MAUs were 140.6 million and 128.3 million for the three months ended June 30, 2026 and 2025, respectively.
Current wording
(1) We primarily evaluate user engagement using DAUs, with MAUs as a supplementary metric. MAUs were 153.1 million and 135.3 million for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
We had approximately 58.7 million and 47.7 million DAUs for the three months ended June 30, 2026 and 2025, respectively, representing an increase of 23% from the prior year period, driven largely by an increase in retention of current users. We grew DAUs through a combination of product initiatives and marketing. Product improvements, such as making the app more social and engaging, helped attract new users, retain existing users, and reengage former users, while marketing expanded our reach.
Current wording
For the three months ended September 30, 2026 and 2025, we had approximately 64.9 million and 50.5 million DAUs, respectively, representing an increase of 29%, driven largely by an increase in retention of current users. We grew DAUs through a combination of product initiatives and marketing. Product improvements, such as making the app more social and engaging, helped attract new users, retain existing users, and reengage former users, while marketing expanded our reach.
Previous wording
As of June 30, 2026 and 2025, we had approximately 12.7 million and 10.9 million paid subscribers, respectively, representing an increase of 17% from the prior year period. We grew paid subscribers through product initiatives designed to make our subscription offerings more appealing, which helped attract new subscribers and retain existing subscribers.
Current wording
As of September 30, 2026 and 2025, we had approximately 13.1 million and 11.5 million paid subscribers, respectively, representing an increase of 14%. We grew paid subscribers through product initiatives designed to make our subscription offerings more appealing, which helped attract new subscribers and retain existing subscribers.
Previous wording
For the three months ended June 30, 2026 and 2025, we generated $250.3 million and $227.3 million of subscription bookings, respectively, representing an increase of $23.1 million or 10%, driven by growth in volume and price of subscriptions sold. For the six months ended June 30, 2026 and 2025, we generated $518.4 million and $459.4 million of subscription bookings, respectively, representing an increase of $58.9 million or 13%, driven by growth in volume and price of subscriptions sold.
Current wording
For the three months ended September 30, 2026 and 2025, we generated $278.4 million and $240.3 million of subscription bookings, respectively, representing an increase of $38.1 million, or 16%. For the nine months ended September 30, 2026 and 2025, we generated $796.7 million and $699.7 million of subscription bookings, respectively, representing an increase of $97.0 million, or 14%. Both increases were driven by growth in volume and price of subscriptions sold.
Previous wording
We had approximately 140.6 million and 128.3 million MAUs for the three months ended June 30, 2026 and 2025, respectively, representing an increase of 10% from the prior year period. We grew MAUs through the same product and marketing initiatives as DAUs.
Current wording
For the three months ended September 30, 2026 and 2025, we had approximately 153.1 million and 135.3 million MAUs, respectively, representing an increase of 13%. We grew MAUs through the same product and marketing initiatives as DAUs.
Previous wording
(1)In addition to stock-based compensation expense of $38.2 million and $34.6 million for the three months ended June 30, 2026 and 2025, respectively, and $72.9 million and $65.6 million for the six months ended June 30, 2026 and 2025, respectively, this includes costs incurred related to taxes paid on equity transactions as follows:
Current wording
(2)In addition to stock-based compensation expense of $47.5 million and $35.6 million for the three months ended September 30, 2026 and 2025, respectively, and $120.3 million and $101.2 million for the nine months ended September 30, 2026 and 2025, respectively, this includes costs incurred related to taxes paid on equity transactions as follows:
Previous wording
(2)Represents costs incurred related to acquisitions, which are included in General and administration expense within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Current wording
(3)Represents costs incurred related to acquisitions, which are included in our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income:
Previous wording
(3)Represents costs incurred related to the earn-out payments on acquisitions, which is included within General and administrative expense within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Current wording
(4)Represents costs incurred related to the earn-out payments on acquisitions, which are included within General and administrative expense within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Previous wording
(4)Represents impairment of capitalized software, which is included within Research and development expense within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Current wording
(5)Represents impairment of capitalized software, which is included within Research and development expense within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Previous wording
Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, less capitalized software development costs and purchases of property and equipment. We believe that free cash flow is a measure of liquidity that provides useful information to our management, investors and others in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. Free cash flow has certain limitations in that it does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments. The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow:
Current wording
Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, less capitalized software development costs and purchases of intangible assets, and less purchases of property and equipment. We believe that free cash flow is a measure of liquidity that provides useful information to our management, investors and others in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. Free cash flow has certain limitations in that it does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments. The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow:
Previous wording
We generate revenues primarily from the sale of subscriptions. The term-length of our subscription agreements are primarily monthly or annual, with the family plan offered as an annual subscription. We also generate revenue from advertising, the in-app sale of virtual goods, and the Duolingo English Test. We may run experiments that result in a different mix of revenue from these levers in the future.
Current wording
We generate revenue primarily from the sale of subscriptions. Our subscription agreements are primarily monthly or annual, with the family plan offered as an annual subscription. We also generate revenue from advertising, the in-app sale of virtual goods, and the Duolingo English Test. We may run experiments that result in a different mix of revenue from these levers in the future.
Previous wording
Gross profit represents revenues less cost of revenues. Gross margin is gross profit expressed as a percentage of revenues. Our gross profit may fluctuate from period to period as our revenues fluctuate, and also as a result of the timing and amount of investments we make in items related to cost of revenues.
Current wording
Gross profit represents revenues less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit may fluctuate from period to period as our revenues fluctuate, and also as a result of the timing and amount of investments we make in items related to cost of revenue.
Previous wording
Sales and Marketing. Sales and marketing expenses are expensed as incurred and consists primarily of new user acquisition, brand marketing, digital and social media content, and employee-related compensation, including stock-based compensation, for personnel engaged in sales and marketing functions, amortization of non-revenue generating capitalized software used to promote Duolingo and depreciation of certain property and equipment.
Current wording
Sales and Marketing. Sales and marketing expenses are expensed as incurred and consist primarily of new user acquisition, brand marketing, digital and social media content, and employee-related compensation, including stock-based compensation, for personnel engaged in sales and marketing functions, amortization of non-revenue-generating capitalized software used to promote Duolingo and depreciation of certain property and equipment.
Previous wording
General and Administrative. General and administrative expenses primarily consist of employee-related compensation, including stock-based compensation, for management and administrative functions, including our finance and accounting, legal, and people teams. General and administrative expenses also include certain professional services fees, general corporate and director and officer insurance, our facilities costs, public company costs to comply with the rules and regulations of the Securities and Exchange Commission (“SEC”) and the Listing Rules of the Nasdaq Global Select Market, and other general overhead costs that support our operations.
Current wording
General and Administrative. General and administrative expenses primarily consist of employee-related compensation, including stock-based compensation, for management and administrative functions, including our finance and accounting, legal, and people teams. General and administrative expenses also include certain professional services fees, general corporate and director and officer insurance, our facilities costs, public company costs to comply with the rules and regulations of the Securities and Exchange Commission (“SEC”) and the Listing Rules of the Nasdaq Stock Market LLC, and other general overhead costs that support our operations.
Previous wording
Comparison of the three and six months ended June 30, 2026 and 2025
Current wording
Comparison of the three and nine months ended September 30, 2026 and 2025
Previous wording
•Subscription revenue increased $47.4 million, or 22%, to $258.0 million during the three months ended June 30, 2026, and subscription revenue increased $107.3 million, or 27%, to $508.9 million during the six months ended June 30, 2026, primarily due to growth in the average number of paid subscribers, and to a lesser extent, an increase in average revenue per user.
Current wording
•Subscription revenue increased by $40.5 million, or 18%, to $270.0 million during the three months ended September 30, 2026, and by $147.8 million, or 23%, to $778.9 million during the nine months ended September 30, 2026, primarily due to growth in the average number of paid subscribers.
Previous wording
•Other revenue decreased $1.2 million, or 3%, to $40.4 million during the three months ended June 30, 2026, and other revenue increased $0.1 million to $81.5 million during the six months ended June 30, 2026. The decrease in the three months ended June 30, 2026 was primarily due to decreased IAP revenue. The increase in the six months ended June 30, 2026 was primarily driven by higher advertising revenue and, to a lesser extent, higher revenue from partnerships, partially offset by lower IAP revenue.
Current wording
•Other revenue decreased by $3.2 million, or 8%, to $39.0 million during the three months ended September 30, 2026, and by $3.1 million, or 2%, to $120.5 million during the nine months ended September 30, 2026. The decrease in the three months ended September 30, 2026 was primarily due to decreased IAP revenue. The decrease in the nine months ended September 30, 2026 was primarily driven by lower IAP revenue, partially offset by higher advertising revenue.
Previous wording
Cost of Revenues and Gross Margin. Total gross margin increased to 72.6% from 72.4% during the three months ended June 30, 2026 and 2025, and total gross margin increased to 72.8% from 71.8% during the six months ended June 30, 2026 and 2025. The increase was primarily attributable to an increase in subscription gross margin, reflecting continued reductions in per-unit third-party AI costs.
Current wording
Cost of Revenues and Gross Margin. Total gross margin increased to 72.9% during the three months ended September 30, 2026, from 72.5% in the prior-year period. Gross margin increased to 72.8% during the nine months ended September 30, 2026, from 72.0% in the prior-year period. The increase in both periods was primarily attributable to an increase in subscription gross margin, reflecting lower feature based AI costs.
Previous wording
The following table provides the change in cost of revenues, along with related gross margins:
Current wording
The following table provides the change in cost of revenue, along with related gross margins:
Previous wording
Research and Development. Research and development expense increased by $18.5 million, or 25%, to $92.2 million during the three months ended June 30, 2026 from $73.7 million during the three months ended June 30, 2025. The increase was primarily due to higher net personnel costs of $13.8 million, driven primarily by growth in headcount, including increased stock-based compensation expenses related to equity awards of $5.0 million, and increased software and third-party AI costs of $3.3 million.
Current wording
Research and Development. Research and development expense increased by $25.0 million, or 30%, to $107.7 million during the three months ended September 30, 2026, from $82.7 million in the prior-year period. The increase was primarily due to higher net personnel costs of $19.8 million, driven by a bonus plan tied to DAU growth of $8.9 million, growth in headcount, and increased stock-based compensation expenses related to equity awards of $7.9 million, as well as increased software and third-party AI costs of $3.2 million.
Previous wording
Research and development expense increased by $31.1 million, or 22%, to $175.2 million during the six months ended June 30, 2026 from $144.1 million during the six months ended June 30, 2025. The increase was primarily due to higher net personnel costs of $23.6 million, driven primarily by the growth in headcount, including increased stock-based compensation expenses related to equity awards of $8.9 million, and increased software and third-party AI costs of $5.5 million.
Current wording
Research and development expense increased by $56.2 million, or 25%, to $282.9 million during the nine months ended September 30, 2026, from $226.8 million in the prior-year period. The increase was primarily due to higher net personnel costs of $43.4 million, driven by a bonus plan tied to DAU growth of $8.9 million, growth in headcount, and increased stock-based compensation expenses related to equity awards of $16.8 million, as well as increased software and third-party AI costs of $8.7 million.
Previous wording
Sales and Marketing. Sales and marketing expense increased by $10.4 million, or 35%, to $40.0 million during the three months ended June 30, 2026 from $29.6 million during the three months ended June 30, 2025. This increase was mainly due to increased advertising costs of $8.6 million.
Current wording
Sales and Marketing. Sales and marketing expense increased by $7.1 million, or 20%, to $42.2 million during the three months ended September 30, 2026, from $35.1 million in the prior-year period. This increase was mainly due to increased personnel costs of $3.7 million, including $1.1 million related to a bonus plan tied to DAU growth and increased advertising costs of $2.6 million.
Previous wording
Interest income increased by $0.4 million, or 4%, to $11.8 million during the three months ended June 30, 2026 from $11.4 million during the three months ended June 30, 2025. Interest income increased by $1.8 million, or 8%, to $23.6 million during the six months ended June 30, 2026, from $21.8 million during the six months ended June 30, 2025. Both period increases were due to higher average interest-bearing balances partially offset by lower interest rates.
Current wording
Interest income increased by $0.6 million, or 5%, to $12.4 million during the three months ended September 30, 2026, from $11.8 million in the prior-year period. Interest income increased by $2.4 million, or 7%, to $36.1 million during the nine months ended September 30, 2026, from $33.6 million in the prior-year period. Both increases were due to higher average interest-bearing balances, partially offset by lower interest rates.
Previous wording
The income tax provision was $12.2 million and $24.3 million during the three and six months ended June 30, 2026, respectively, and $1.7 million and $1.5 million during the three and six months ended June 30, 2025, respectively. This increase was primarily due to discrete tax expense related to stock-based compensation activity in the current period compared to benefits in the prior year period.
Current wording
The income tax provision was $8.4 million and $32.7 million during the three and nine months ended September 30, 2026, respectively, compared to a benefit of $245.7 million and $244.2 million during the three and nine months ended September 30, 2025, respectively. This current-year provision was primarily due to discrete tax expense related to stock-based compensation activity in the current period compared to benefits in the prior-year period. The income tax benefit for the three and nine months ended
Previous wording
We finance our operations primarily through revenues and the net proceeds we have received from the issuance of equity.
Current wording
We finance our operations primarily through revenue and the net proceeds we have received from the issuance of equity.
Previous wording
As of June 30, 2026, we had $1,181 million in cash and cash equivalents and $133 million of short-term investments. Our cash and cash equivalents primarily consist of bank deposits and money market funds. Our short-term investments consist mainly of corporate debt securities, U.S. Treasury securities and commercial paper.
Current wording
As of September 30, 2026, we had $1,239.6 million in cash and cash equivalents and $134.3 million of short-term investments. Our cash and cash equivalents primarily consist of bank deposits and money market funds. Our short-term investments consist mainly of corporate debt securities, U.S. Treasury securities and commercial paper.
Previous wording
During the six months ended June 30, 2026, the Company repurchased a total of 694,630 shares of the Company’s Class A common stock through open market purchases at an average per share price of $101.15 for a total of $70.3 million.
Current wording
During the nine months ended September 30, 2026, the Company repurchased a total of 743,049 shares of the Company’s Class A common stock through open market purchases at an average per share price of $103.21 for a total of $76.7 million.
Previous wording
A substantial source of our cash from operations comes from deferred revenue, which is included in the liabilities section of our Unaudited Condensed Consolidated Balance Sheet. Deferred revenues consist of the unearned portion of customer billings, primarily related to subscription offerings, which is recognized as revenue in accordance with our revenue recognition policy. As of June 30, 2026, we had deferred revenues of $505.1 million, which is recorded as a current liability and expected to be recognized as revenue in the next 12 months, provided all other revenue recognition criteria have been met.
Current wording
A substantial source of our operating cash receipts comes from customer payments received in advance of revenue recognition, primarily related to subscriptions. These advance payments are recorded as deferred revenues within current liabilities on our Unaudited Condensed Consolidated Balance Sheets and subsequently recognized as revenue in accordance with our revenue recognition policy. As of September 30, 2026, our deferred revenues balance was $513.6 million and is expected to be recognized as revenue within the next 12 months, provided all other revenue recognition criteria have been met.
Previous wording
Cash provided by operating activities increased by $42.7 million, or 22%, to $239.0 million for the six months ended June 30, 2026 from $196.3 million for the six months ended June 30, 2025. This increase was primarily driven by higher operating income and changes in working capital.
Current wording
Cash provided by operating activities increased by $47.9 million, or 17%, to $328.5 million for the nine months ended September 30, 2026, from $280.5 million in the prior-year period. The increase was primarily driven by favorable changes in working capital. The remaining change is primarily the net effect of noncash adjustments and net income.
Previous wording
Cash used for investing activities decreased by $4.4 million to $8.5 million for the six months ended June 30, 2026, from $12.8 million for the six months ended June 30, 2025. This decrease was primarily due to higher net maturities of investments of $10.0 million during the six months ended June 30, 2026, partially offset by a $5.6 million increase in capital expenditures.
Current wording
Cash used for investing activities decreased by $28.0 million to $36.0 million for the nine months ended September 30, 2026, from $64.0 million in the prior-year period. This decrease was primarily due to lower acquisition activity of $28.1 million and higher net maturities of investments of $12.8 million during the nine months ended September 30, 2026, partially offset by a $12.9 million increase in capital expenditures.
Previous wording
Cash used for financing activities for the six months ended June 30, 2026 was due to repurchases of common stock of $69.6 million in addition to taxes paid on the net-share settlements of share-based compensation awards of $18.8 million. These amounts were partially offset by proceeds from exercises of stock options of $2.3 million. Cash provided by financing activities for the six months ended June 30, 2025 was due to proceeds from exercises of stock options of $7.0 million.
Current wording
Cash used for financing activities for the nine months ended September 30, 2026 was due to repurchases of common stock of $76.5 million in addition to taxes paid on the net-share settlements of share-based compensation awards of $18.8 million. These amounts were partially offset by proceeds from exercises of stock options of $6.0 million. Cash provided by financing activities for the nine months ended September 30, 2025 was due to proceeds from exercises of stock options of $9.7 million.