Trade Desk, Inc.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, our business strategy (including anticipated trends and developments in, and management plans for, our business and the markets in which we operate), financial results, the impact of macroeconomic uncertainty on our business, operations, and the markets and communities in which we, our clients, and partners operate, results of operations, revenues, operating expenses, taxes, capital expenditures including share repurchases, sales and marketing initiatives and competition. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “suggests,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, our business strategy (including anticipated trends and developments in, and management plans for, our business and the markets in which we operate), financial results, the impact of macroeconomic uncertainty on our business, operations, and the markets and communities in which we, our clients, and partners operate, results of operations, revenues, operating expenses, taxes, capital expenditures including share repurchases, restructuring plans, option repricings, sales and marketing initiatives and competition. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “suggests,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Previous wording

Our recent growth has been largely driven by expanding our share of spend by our existing clients and adding new clients. Our clients include some of the largest advertising agencies and advertisers in the world, and we believe there is significant room for us to expand further within these clients, including room to expand the aperture of clients we support across the mid-market. As a result, future revenue growth depends, in large part, upon our ability to retain our existing clients and to gain a larger amount of their spend through our platform in a highly competitive advertising market. This includes our ability to differentiate to clients our platform’s overall value from competitors’ platforms that may offer artificially low prices, which are enabled by inherent conflicts of interest and a lack of objectivity that come with also selling advertising inventory. We believe that we offer differentiated offerings with superior value to new and existing clients.

Current wording

Our historical growth has been largely driven by expanding our share of spend by our existing clients and adding new clients. Our clients include some of the largest advertising agencies and advertisers in the world, and we believe there is significant room for us to expand further within these clients, including room to expand the aperture of clients we support across the mid-market. As a result, future revenue growth depends, in large part, upon our ability to retain our existing clients and to gain a larger amount of their spend through our platform in a highly competitive advertising market. This includes our ability to differentiate to clients our platform’s overall value from competitors’ platforms that may offer artificially low prices, which are enabled by inherent conflicts of interest and a lack of objectivity that come with also selling advertising inventory. We believe that we offer differentiated offerings with superior value to new and existing clients.

Previous wording

We remain focused on operating efficiently while investing in significant opportunities to contribute toward long-term growth. We anticipate that our platform operations and technology and development operating expenses will continue to increase as we invest in platform operations for our hosting capabilities as well as technology and development to enhance our platform and related offerings, including our continued focus on the development and incorporation of AI. We also aim for balanced investments in sales and marketing activities in order to acquire new clients and reinforce our relationships with existing clients. In addition, we expect to continue making disciplined investments in our infrastructure, including our information technology, financial and administrative systems and controls to support our growing operations.

Current wording

We remain focused on operating efficiently as an agile, scalable organization while investing in significant opportunities that we believe will contribute the most toward long-term growth. We anticipate that our platform operations will continue to increase as we scale our hosting capabilities to support the anticipated growth of queries per second (“QPS”) on our platform and to support AI and machine learning capabilities on the platform. We also anticipate that we will make focused, strategic investments in technology and development to enhance our platform and related offerings, including our continued focus on the development and incorporation of AI. We also aim for balanced investments in sales and marketing activities in order to acquire new clients and reinforce our relationships with existing clients. In addition, we expect to optimize our investments in our infrastructure, including our information technology, financial and administrative systems and controls to support our operations.

Previous wording

Changes in interest rates, foreign currency exchange rates, trade policies and practices, inflation and other geopolitical developments have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services in various industries, including those provided by our clients, while also disrupting supply chains, sales channels and advertising and marketing activities for an unknown period of time until economic activity normalizes. In addition, due to high demand for hosting infrastructure components, their prices have become increasingly inelastic and the cost for such components has been rising. As a result of the current uncertainty in economic activity, we are unable to predict the size and duration of the impact on our revenue and our results of operations. The extent of the impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, and the duration and extent of geopolitical and global economic disruption and their respective impacts on our clients, partners, industry and employees, all of which are uncertain at this time and cannot be accurately predicted. See “Item 1A. Risk Factors” in Part II. Other Information for further discussion of the adverse impacts of macroeconomic uncertainty on our business.

Current wording

Changes in interest rates, foreign currency exchange rates, trade policies and practices, inflation and other geopolitical developments have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services in various industries, including those provided by our clients, while also disrupting supply chains, sales channels and advertising and marketing activities for an unknown period of time until economic activity normalizes. In addition, high demand for hosting infrastructure components and third-party hosting services to support our AI efforts has increased the cost of these components and services for us. These increases have contributed to, and may continue to contribute to, higher platform operations expense and capital expenditures. As a result of the current uncertainty in economic activity, we are unable to predict the size and duration of the impact on our revenue and our results of operations. The extent of the impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, and the duration and extent of geopolitical and global economic disruption and their respective impacts on our clients, partners, industry and employees, all of which are uncertain at this time and cannot be accurately predicted. See “Item 1A. Risk Factors” in Part II. Other Information for further discussion of the adverse impacts of macroeconomic uncertainty on our business.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2026 Compared with the Three and Six Months Ended June 30, 2025

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2026 Compared with the Three and Nine Months Ended September 30, 2025

Previous wording

Revenue increased by $21 million, or 3%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily due to an increase in gross spend on our platform, which was primarily driven by more overall advertising campaigns executed by new clients, partially offset by a decrease in gross spend from existing clients. The increase in revenue was also driven by a higher proportion of revenue earned from client spend due to increased pricing associated with value-added services, as well as the continued evolution of certain value-added services and data offerings, including changes to the use of supplier-provided components within those offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue. These increases were partially offset by volume and other discounts in connection with joint business plans and other strategic partnerships in an effort to drive future growth.

Current wording

Revenue decreased by $3 million, or 0.5%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily due to an overall decrease in gross spend on our platform driven by lower gross spend from existing clients partially offset by gross spend from new clients. The decrease in revenue was also driven by lower utilization of certain data offerings and an increase in discounts associated with joint business plans and other strategic partnerships in an effort to drive future growth. These decreases were partially offset by a higher proportion of revenue earned from client spend due to the continued evolution of certain value-added services and data offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue, as well as increased pricing associated with value-added services. The decreases were also partially offset by $15 million of incremental revenue earned from a strategic partner that we do not expect to recur.

Previous wording

Revenue increased by $94 million, or 7%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily due to an increase in gross spend on our platform, which was primarily driven by more overall advertising campaigns executed by new and existing clients and increased application of and changes in the mix of revenue-generating value-added services. The increase in revenue was also driven by a higher proportion of revenue earned from client spend due to increased pricing associated with value-added services; the continued evolution of certain value-added services and data offerings, including changes to the use of supplier-provided components within those offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue; and higher utilization of our value-added services. These increases were partially offset by volume and other discounts in connection with joint business plans and other strategic partnerships in an effort to drive future growth.

Current wording

Revenue increased by $90 million, or 4%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily driven by a higher proportion of revenue earned from client spend due to increased pricing associated with value-added services and the continued evolution of certain value-added services and data offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue, and higher utilization of other related offerings. In addition, the increase in revenue was also driven by $15 million of incremental revenue earned from a strategic partner that we do not expect to recur. These increases in revenue were partially offset by lower gross spend from existing clients, an increase in discounts associated with joint business plans and other strategic partnerships in an effort to drive future growth and lower utilization of certain data offerings.

Previous wording

Enhancements to our platform and the value-added services available to clients, including from Kokai and other features, and increased pricing associated with value-added services, enabled both our clients and us to capture increased value and drove higher utilization of our value-added services.

Current wording

Enhancements to our platform and related offerings and to the value-added services available to clients, including from Kokai and other features, and increased pricing associated with value-added services, enabled both our clients and us to capture increased value.

Previous wording

Revenue earned from our clients’ gross spend on our platform may fluctuate from period to period based on the types of services rendered and the extent to which our platform’s value-added services and data are utilized by clients; our client and channel mix; changes in our platform or related offerings; pricing; volume and other discounts; and the amount of certain costs of supplier-provided components of value-added services and data recorded as reductions to revenue versus as expenses in platform operations. We expect that our revenue earned from our clients’ gross spend will fluctuate in the future pursuant to these factors, especially as our platform evolves and we introduce new and enhanced platform features and related offerings that may be adopted by our clients, expand our omnichannel capabilities, continue to enter into joint business plans and other strategic partnerships, extend our reach to more CTV and other inventory and add additional clients whose businesses may have different underlying business models.

Current wording

Revenue earned from our clients’ gross spend on our platform may fluctuate from period to period based on the types of services rendered and the extent to which our platform’s value-added services, data and other offerings are utilized by clients; our client and channel mix; changes in our platform or related offerings; pricing; volume and other discounts; and the amount of certain costs of supplier-provided components of value-added services and data recorded as reductions to revenue versus as expenses in platform operations. We expect that our revenue earned from our clients’ gross spend will fluctuate in the future pursuant to these factors, especially as our platform evolves and we introduce new and enhanced platform features and related offerings that may be adopted by our clients, expand our omnichannel capabilities, continue to enter into joint business plans and other strategic partnerships, extend our reach to more CTV and other inventory and add additional clients whose businesses may have different underlying business models.

Previous wording

Platform operations expense increased by $72 million, or 25%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily due to increases of $31 million in hosting costs, $26 million in costs from supplier-provided components of value-added services and data and $7 million in personnel costs. The increase in hosting costs was primarily attributable to support costs relating to the increased use of our platform to query ad opportunities and purchase ad impressions while leveraging the AI and machine learning capabilities of our platform; investment in new data centers to support the continued growth of our platform; and increased use of features by our technical teams in support of our platform. The increase in hosting costs was partially offset by a gain on the sale of computing and networking equipment in connection with a normal-course decommissioning of certain data center assets as well as a change in the estimated useful lives of certain other data center computing and networking equipment. Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesfor additional information. The increase in costs from supplier provided-components of value-added services and data was primarily attributable to the continued evolution of certain value-added services and data offerings, including changes to the use of supplier-provided components within those offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue. The increase in personnel costs was primarily due to headcount growth.

Current wording

Platform operations expense increased by $38 million, or 23%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily due to increases of $14 million in hosting costs, $13 million in costs from supplier-provided components of value-added services and data, $4 million in restructuring costs and $3 million in data-related costs. The increase in hosting costs was primarily attributable to the increased use of our platform to query ad opportunities and purchase ad impressions while leveraging the AI and machine learning capabilities of our platform; increased use of features by our technical teams in support of our platform; and investment in data centers to support our platform. The increase in hosting costs was partially offset by a change in the estimated useful lives of certain data center computing and networking equipment. Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesfor additional information. The increase in costs from supplier-provided components of value-added services and data was primarily attributable to the continued evolution of certain value-added services and data offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the three months ended September 30, 2025. The increase in data-related costs was driven by new investments in data providers.

Previous wording

Platform operations expense increased by $33 million, or 22%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily due to increases of $18 million in costs from supplier-provided components of value-added services and data, $8 million in hosting costs and $3 million in personnel costs. The increase in costs from supplier provided-components of value-added services and data was primarily attributable to the continued evolution of certain value-added services and data offerings, including changes to the use of supplier-provided components within those offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue. The increase in hosting costs was primarily attributable to support costs relating to the increased use of our platform to query ad opportunities and purchase ad impressions while leveraging the AI and machine learning capabilities of our platform; investment in new data centers to support the continued growth of our platform; and increased use of features by our technical teams in support of our platform. The increase in hosting costs was partially offset by a gain on the sale of computing and networking equipment in connection with a normal-course decommissioning of certain data center assets as well as a change in the estimated useful lives of certain other data center computing and networking equipment. Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesfor additional information. The increase in personnel costs was primarily due to headcount growth.

Current wording

Platform operations expense increased by $110 million, or 24%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily due to increases of $45 million in hosting costs, $38 million in costs from supplier-provided components of value-added services and data, $10 million in personnel costs, $10 million in data-related costs and $4 million in restructuring costs. The increase in hosting costs was primarily attributable to the increased use of our platform to query ad opportunities and purchase ad impressions while leveraging the AI and machine learning capabilities of our platform; increased use of features by our technical teams in support of our platform; and investment in data centers to support our platform. The increase in hosting costs was partially offset by a gain on the sale of computing and networking equipment primarily in connection with a normal-course decommissioning of certain data center assets as well as a change in the estimated useful lives of certain other data center computing and networking equipment. Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesfor additional information. The increase in costs from supplier-provided components of value-added services and data was primarily attributable to the continued evolution of certain value-added services and data offerings, which resulted in the recognition of certain costs in platform operations rather than as reductions to revenue. The increase in personnel costs was primarily due to headcount growth prior to the 2026 Restructuring Plan as well as salary increases in connection with regular merit and promotion cycles. The increase in data-related costs was driven by new investments in data providers. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the nine months ended September 30, 2025.

Previous wording

We expect platform operations expense will fluctuate period to period, including as a percentage of revenue. We expect to experience an increased volume of queries per second (“QPS”) and media impressions purchased through our platform and invest in our hosting capabilities, including to support new technical features and functionality of our platform and related offerings and our growing AI and machine learning capabilities, subject to rising prices for data center components. We expect to invest in hiring and retaining top talent to support our clients while balancing platform support needs with other strategic priorities. Platform operations expense also may vary due to the amount of certain costs of supplier-provided components of value-added services and data recorded as platform operations expense versus as reductions to revenue.

Current wording

We expect platform operations expense will fluctuate period to period, including as a percentage of revenue. We expect to experience an increased volume of QPS and media impressions purchased through our platform. We expect to strategically invest in our hosting capabilities, including to support new technical features and functionality of our platform and related offerings and our growing AI and machine learning capabilities. We continue to evaluate the mix of owned data center computing capacity and capacity provided by third-party hosting providers, each of which may be subject to rising prices due to market demand. We expect to invest in retaining top talent to support our clients while balancing platform support needs with other strategic priorities. Platform operations expense also may vary due to the amount of certain costs of supplier-provided components of value-added services and data recorded as platform operations expense versus as reductions to revenue.

Previous wording

Sales and marketing expense increased by $33 million, or 10%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily due to increases of $29 million in personnel costs and $4 million in marketing costs. The increase in personnel costs was primarily due to an increase in incentive compensation driven by changes in incentive plan targets and structure, commissionable headcount growth and gross spend growth; salary increases in connection with regular merit and promotion cycles; and an increase in headcount to support our sales efforts and to continue to develop and maintain relationships with our clients. The increase in marketing costs was primarily due to an increase from marketing events.

Current wording

Sales and marketing expense increased by $47 million, or 10%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily due to increases of $25 million in personnel costs, $16 million in restructuring costs and $6 million in marketing costs. The increase in personnel costs was primarily due to an increase in incentive compensation driven by changes in incentive plan targets and structure in an effort to continually incentivize top talent and reinforce our efforts to develop and maintain relationships with our clients as well as salary increases in connection with regular merit and promotion cycles. This increase in personnel costs was partially offset by a $7 million decrease in stock-based compensation primarily driven by the impact of employee departures and the impact of our declining stock price on our ESPP, net of the impact of new equity awards. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the nine months ended September 30, 2025. The increase in marketing costs was primarily due to an increase from marketing events.

Previous wording

We expect sales and marketing expense will fluctuate in future periods, including as a percentage of revenue, as we expect to make disciplined investments in hiring, retaining and incentivizing top talent while balancing other needs across our business to optimize for our strategic priorities.

Current wording

We expect sales and marketing expense will fluctuate in future periods, including as a percentage of revenue, as we expect to focus our investments on retaining and incentivizing top talent while balancing other needs across our business to optimize for our strategic priorities.

Previous wording

Technology and development expense increased by $6 million, or 5%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was due to increases of $4 million in personnel costs and $2 million in third-party costs. The increase in personnel costs was primarily attributable to headcount growth to maintain and support further development of our platform and related offerings as well as salary increases in connection with regular merit and promotion cycles. The increase in third-party costs was primarily attributable to increased use of AI software tools to support our development efforts.

Current wording

Technology and development expense increased by $19 million, or 15%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was due to $15 million in restructuring costs and a $3 million increase in third-party costs. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the three months ended September 30, 2025. The increase in third-party costs was primarily attributable to increased use of AI software tools to support our development efforts.

Previous wording

Technology and development expense increased by $17 million, or 6%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was due to increases of $14 million in personnel costs and $3 million in third-party costs. The increase in personnel costs was primarily attributable to headcount growth to maintain and support further development of our platform and related offerings as well as salary increases in connection with regular merit and promotion cycles. The increase in third-party costs was primarily attributable to increased use of AI software tools to support our development efforts.

Current wording

Technology and development expense increased by $36 million, or 9%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was due to $15 million in restructuring costs as well as increases of $12 million in personnel costs and $7 million in third-party costs. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the nine months ended September 30, 2025. The increase in personnel costs was primarily attributable to salary increases in connection with regular merit and promotion cycles as well as headcount growth prior to the 2026 Restructuring Plan, partially offset by a $3 million decrease in stock-based compensation primarily driven by the impact of employee departures and the impact of our declining stock price on our ESPP, net of the impact of new equity awards. The increase in third-party costs was primarily attributable to increased use of AI software tools to support our development efforts.

Previous wording

We expect technology and development expense will fluctuate in future periods, including as a percentage of revenue, as we optimize our investments in the development of our platform and related offerings to support additional platform features and functionality, including AI and machine learning, the anticipated increase in advertising inventory and data suppliers and the anticipated increase in volume of QPS on our platform. We expect to invest in hiring and retaining top talent as well as utilizing other development tools, such as AI, to optimize for our business and focus development on offerings that support efficient and scalable growth.

Current wording

We expect technology and development expense will fluctuate in future periods, including as a percentage of revenue, as we optimize our investments in the development of our platform and related offerings to support additional platform features and functionality, including AI and machine learning, the anticipated increase in advertising inventory and data suppliers and the anticipated increase in volume of QPS on our platform. We expect to invest in retaining top talent as well as utilize other development tools, such as AI, to optimize for our business and focus development on offerings that support efficient and scalable growth.

Previous wording

General and administrative expense decreased by $17 million, or 13%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to a $20 million decrease in stock-based compensation, partially offset by an increase of $3 million in personnel costs. The decrease in stock-based compensation was primarily due to a $19 million decrease relating to the CEO Performance Option, which was fully recognized by the end of the first quarter of 2026. The increase in personnel costs was primarily attributable to salary increases in connection with regular merit and promotion cycles as well as increased headcount to support our growth.

Current wording

General and administrative expense decreased by $6 million, or 5%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to a $17 million decrease in stock-based compensation, partially offset by $9 million in restructuring costs. The decrease in stock-based compensation was primarily due to a $14 million decrease relating to the 2021 CEO Performance Option, which was fully recognized by the end of the first quarter of 2026. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the three months ended September 30, 2025.

Previous wording

General and administrative expense decreased by $25 million, or 10%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to a $36 million decrease in stock-based compensation, partially offset by an increase of $11 million in personnel costs. The decrease in stock-based compensation was primarily due to a $38 million decrease relating to the CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life. The increase in personnel costs was primarily attributable to increased headcount to support our growth as well as salary increases in connection with regular merit and promotion cycles.

Current wording

General and administrative expense decreased by $31 million, or 8%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to a $53 million decrease in stock-based compensation, partially offset by increases of $11 million in personnel costs and $9 million in restructuring costs. The decrease in stock-based compensation was primarily due to a $52 million decrease relating to the 2021 CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life. The increase in personnel costs was primarily attributable to salary increases in connection with regular merit and promotion cycles as well as headcount growth prior to the 2026 Restructuring Plan. The restructuring costs were for severance and other termination benefits under our 2026 Restructuring Plan, and there was no comparable restructuring plan in the nine months ended September 30, 2025.

Previous wording

Excluding the prior impact of the CEO Performance Option, we expect general and administrative expense will fluctuate period to period, including as a percentage of revenue, as we make disciplined investments in corporate infrastructure. We expect general and administrative expenses will also fluctuate based upon various litigation, regulatory and governance matters. We expect to invest in hiring and retaining top talent while optimizing for our business and strategic priorities.

Current wording

We expect general and administrative expense will fluctuate period to period, including as a percentage of revenue, as we make disciplined investments in corporate infrastructure. We expect general and administrative expenses will also fluctuate based upon various litigation, regulatory and governance matters. We expect to invest in retaining top talent while optimizing for our business and strategic priorities.

Previous wording

Total other income, net, decreased by $14 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was primarily due to lower interest income on our cash and cash equivalents and short-term investments primarily driven by lower amounts invested and falling portfolio interest rates as well as foreign currency transaction losses driven by changes in foreign currency exchange rates against the U.S. Dollar, partially offset by gains on foreign currency forwards.

Current wording

Total other income, net, decreased by $4 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily due to lower interest income on our short-term investments primarily driven by lower amounts invested as well as losses on foreign currency forwards driven by changes in foreign currency exchange rates against the U.S. Dollar, partially offset by foreign currency transaction gains.

Previous wording

Total other income, net, decreased by $5 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease was primarily due to lower interest income on our cash and cash equivalents and short-term investments primarily driven by lower amounts invested and falling portfolio interest rates as well as foreign currency transaction losses driven by changes in foreign currency exchange rates against the U.S. Dollar, partially offset by gains on foreign currency forwards.

Current wording

Total other income, net, decreased by $18 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease was primarily due to lower interest income on our cash and cash equivalents and short-term investments primarily driven by lower amounts invested and falling portfolio interest rates as well as foreign currency transaction losses driven by changes in foreign currency exchange rates against the U.S. Dollar, partially offset by gains on foreign currency forwards.

Previous wording

The U.S. federal statutory tax rate was 21% for the three and six months ended June 30, 2026 and 2025.

Current wording

The U.S. federal statutory tax rate was 21% for the three and nine months ended September 30, 2026 and 2025.

Previous wording

The provision for income taxes increased by $19 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily due to tax detriments associated with employee stock-based awards, compared to tax benefits associated with employee stock-based awards in the six months ended June 30, 2025, partially offset by lower pre-tax profitability.

Current wording

The provision for income taxes increased by $4 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily due to higher tax detriments associated with employee stock-based awards, partially offset by lower pre-tax profitability.

Previous wording

The provision for income taxes increased by $6 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily due to tax detriments associated with employee stock-based awards, compared to tax benefits associated with employee stock-based awards in the three months ended June 30, 2025, partially offset by lower pre-tax profitability.

Current wording

The provision for income taxes increased by $24 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily due to tax detriments associated with employee stock-based awards, compared to tax benefits associated with employee stock-based awards in the nine months ended September 30, 2025, partially offset by lower pre-tax profitability.

Previous wording

As of June 30, 2026, we had working capital of $2.0 billion, which included $1.1 billion in cash and cash equivalents, $92 million of which was held by our international subsidiaries, and $362 million in short-term investments in marketable securities. Additionally, as of June 30, 2026, we had $745 million available under our Revolving Facility (refer to “— Credit Facility” below). For the six months ended June 30, 2026, we generated $545 million in cash flows from operating activities.

Current wording

As of September 30, 2026, we had working capital of $2.1 billion, which included $1.2 billion in cash and cash equivalents, $116 million of which was held by our international subsidiaries, and $420 million in short-term investments in marketable securities. Additionally, as of September 30, 2026, we had $745 million available under our Revolving Facility (refer to “— Credit Facility” below). For the nine months ended September 30, 2026, we generated $804 million in cash flows from operating activities.

Previous wording

We believe our existing cash and cash equivalents, cash flow from operations, and our undrawn available balance under our Revolving Facility (refer to “— Credit Facility” below) will be sufficient to meet our working capital requirements and investments we make from time to time for at least the next 12 months. We believe our existing cash and cash equivalents, short-term investments and cash flow from operations will be sufficient to fund our share repurchase program. Further, we have a shelf registration statement on Form S-3 on file with the SEC (the “Shelf Registration”), which permits us to issue equity securities and equity-linked securities from time to time, subject to certain limitations. The Shelf Registration is intended to provide us with additional flexibility to access capital markets for general corporate purposes, subject to market conditions and our capital needs. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in“Item 1A. Risk Factors” within this Quarterly Report on Form 10-Q.

Current wording

We believe our existing cash and cash equivalents, cash flow from operations, and our undrawn available balance under our Revolving Facility (refer to “— Credit Facility” below) will be sufficient to meet our working capital requirements, including our 2026 Restructuring Plan, and investments we make from time to time for at least the next 12 months. We believe our existing cash and cash equivalents, short-term investments and cash flow from operations will be sufficient to fund our share repurchase program. Further, we have a shelf registration statement on Form S-3 on file with the SEC (the “Shelf Registration”), which permits us to issue equity securities, debt securities and equity-linked securities from time to time, subject to certain limitations. The Shelf Registration is intended to provide us with additional flexibility to access capital markets for general corporate purposes, subject to market conditions and our capital needs. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in“Item 1A. Risk Factors” within this Quarterly Report on Form 10-Q.

Previous wording

As of December 31, 2025, $150 million remained available and authorized for repurchases. In February 2026, an additional $350 million was authorized under this program, bringing the total amount available for future repurchases to $500 million. During the three months ended June 30, 2026, we repurchased and subsequently retired 3 million shares of our Class A common stock for an aggregate repurchase amount of $59 million. During the six months ended June 30, 2026, we repurchased and subsequently retired 10 million shares of our Class A common stock for an aggregate repurchase amount of $233 million. The aggregate repurchase amounts for the three and six months ended June 30, 2026, included immaterial amounts relating to the 1% excise tax on share repurchases, net of share issuances, from the Inflation Reduction Act of 2022 (“IRA”). As of June 30, 2026, $269 million remained available and authorized for repurchases.

Current wording

As of December 31, 2025, $150 million remained available and authorized for repurchases. In February 2026, an additional $350 million was authorized under this program, bringing the total amount available for future repurchases to $500 million. During the three months ended September 30, 2026, we did not repurchase shares of our Class A common stock. During the nine months ended September 30, 2026, we repurchased and subsequently retired 10 million shares of our Class A common stock for an aggregate repurchase amount of $233 million. The aggregate repurchase amounts included in the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2026, included immaterial amounts relating to the 1% excise tax on share repurchases, net of share issuances, from the Inflation Reduction Act of 2022 (“IRA”). As of September 30, 2026, $269 million remained available and authorized for repurchases. In November 2026, an additional $731 million was authorized under our share repurchase program, bringing the total amount available for future repurchases to $1 billion.

Previous wording

For the six months ended June 30, 2026, cash provided by operating activities of $545 million resulted primarily from net income adjusted for noncash items of $418 million and a net increase from our operating assets and liabilities of $127 million. The net increase from our operating assets and liabilities was due to a $548 million decrease in accounts receivable and a $60 million decrease in prepaid expenses and other assets, partially offset by a $428 million decrease in accounts payable, a $36 million decrease in operating lease liabilities and a $17 million decrease in accrued expenses and other liabilities. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients. The decrease in prepaid expenses and other assets was primarily due to a reduction in income taxes receivable driven by the current tax provision, net of tax payments, and the receipt of a tax refund. The decrease in accounts payable was due to the timing and seasonality of payments for Supplier Components. The decrease in operating lease liabilities was primarily due to rent payments. The decrease in accrued expenses and other liabilities was primarily due to the timing and seasonality of payments for certain personnel costs and a reduction of the liability relating to the ESPP due to the purchase of shares in accordance with the plan.

Current wording

For the nine months ended September 30, 2026, cash provided by operating activities of $804 million resulted primarily from net income adjusted for noncash items of $601 million and a net increase from our operating assets and liabilities of $203 million. The net increase from our operating assets and liabilities was due to a $675 million decrease in accounts receivable, a $57 million decrease in prepaid expenses and other assets and a $27 million increase in accrued expenses and other liabilities, partially offset by a $501 million decrease in accounts payable and a $54 million decrease in operating lease liabilities. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients and a decrease in Gross Billings apart from seasonality. The decrease in prepaid expenses and other assets was primarily due to a reduction in income taxes receivable driven by the current tax provision, net of tax payments, and the receipt of a tax refund. The increase in accrued expenses and other liabilities was primarily due to accrued restructuring charges under the 2026 Restructuring Plan that remain unpaid. Refer to Note 12— Restructuring for further information. The decrease in accounts payable was due to the timing and seasonality of payments for Supplier Components and a decrease in Supplier Components associated with the decrease in Gross Billings apart from seasonality. The decrease in operating lease liabilities was primarily due to rent payments.

Previous wording

For the six months ended June 30, 2025, cash provided by operating activities of $456 million resulted primarily from net income adjusted for noncash items of $470 million and a net decrease from our operating assets and liabilities of $14 million. The net decrease from our operating assets and liabilities was due to a $32 million decrease in operating lease liabilities, a $24 million decrease in accrued expenses and other liabilities, a $20 million decrease in accounts payable and an $18 million increase in prepaid expenses and other assets, partially offset by an $80 million decrease in accounts receivable. The decrease in operating lease liabilities was due primarily to rent payments. The decrease in accrued expenses and other liabilities was primarily due to tax payments against the prior year income tax liability and a reduction of the liability relating to the ESPP due to the purchase of shares in accordance with the plan, partially offset by the timing of payment for certain personnel costs. The decrease in accounts payable was due to the timing and seasonality of payments to suppliers for Supplier Components. The increase in prepaid expenses and other assets was primarily due to estimated tax payments, partially offset by the current tax provision and the timing of payment for employee engagement costs, including for travel and in-person events that occurred in the first quarter of 2025. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients.

Current wording

For the nine months ended September 30, 2025, cash provided by operating activities of $681 million resulted primarily from net income adjusted for noncash items of $876 million and a net decrease from our operating assets and liabilities of $195 million. The net decrease from our operating assets and liabilities was due to a $149 million increase in accounts receivable, a $92 million increase in prepaid expenses and other assets, a $48 million decrease in operating lease liabilities and a $27 million decrease in accrued expenses and other liabilities, partially offset by a $120 million increase in accounts payable. The increase in accounts receivable was due to the timing of cash receipts from clients. The increase in prepaid expenses and other assets was primarily due to the recognition of income taxes receivable for domestic research and development expenses pursuant to the One Big Beautiful Bill Act and estimated tax payments, partially offset by the tax provision and the timing of payment for employee engagement costs, including for travel and in-person events that occurred in the first quarter of 2025. The decrease in operating lease liabilities was due primarily to rent payments. The decrease in accrued expenses and other liabilities was primarily due to tax payments against the prior year income tax liability. The increase in accounts payable was due to the timing of payments for Supplier Components.

Previous wording

For the six months ended June 30, 2026, cash provided by investing activities of $165 million primarily resulted from $283 million of net maturities and sales of short-term investments and $16 million of proceeds from the sale of property and equipment, partially offset by $126 million to purchase property and equipment and $7 million of investments in capitalized software.

Current wording

For the nine months ended September 30, 2026, cash provided by investing activities of $21 million primarily resulted from $225 million of net maturities and sales of short-term investments and $34 million of proceeds from sales of property and equipment, partially offset by $227 million to purchase property and equipment and $12 million of investments in capitalized software.

Previous wording

For the six months ended June 30, 2025, we used $346 million of cash in investing activities, consisting of $232 million of net purchases of short-term investments, $104 million to purchase property and equipment, $6 million of investments in capitalized software and $4 million for the acquisition of certain assets accounted for as a business combination.

Current wording

For the nine months ended September 30, 2025, we used $413 million of cash in investing activities, consisting of $229 million of net purchases of short-term investments, $171 million to purchase property and equipment, $9 million of investments in capitalized software and $4 million for the acquisition of certain assets accounted for as a business combination.

Previous wording

For the six months ended June 30, 2026, we used $246 million of cash in financing activities, consisting of $241 million of cash paid for repurchases of our Class A common stock and $21 million of taxes paid for restricted stock settlements, partially offset by $12 million of proceeds from our ESPP and $5 million of proceeds from stock option exercises.

Current wording

For the nine months ended September 30, 2026, we used $253 million of cash in financing activities, consisting of $241 million of cash paid for repurchases of our Class A common stock and $30 million of taxes paid for restricted stock settlements, partially offset by $12 million of proceeds from our ESPP and $6 million of proceeds from stock option exercises.

Previous wording

For the six months ended June 30, 2025, we used $583 million of cash in financing activities, consisting of $647 million of cash paid for repurchases of our Class A common stock and $57 million of taxes paid for restricted stock settlements, partially offset by $74 million of proceeds from short-term borrowings, $32 million of proceeds from our ESPP and $14 million of proceeds from stock option exercises.

Current wording

For the nine months ended September 30, 2025, we used $985 million of cash in financing activities, consisting of $958 million of cash paid for repurchases of our Class A common stock and $80 million of taxes paid for restricted stock settlements, partially offset by $32 million of proceeds from our ESPP and $20 million of proceeds from stock option exercises.

Previous wording

We use Adjusted EBITDA to evaluate our financial performance, operational efficiency and profitability and for certain financial and operational decision-making purposes, including annual budgeting and evaluating the effectiveness of business strategies. We define Adjusted EBITDA as net income before depreciation and amortization expense; stock-based compensation expense; interest income, net; and provision for income taxes. Adjusted EBITDA is influenced primarily by fluctuations in our revenue and operating expenses, except for the income and expenses it excludes. Fluctuations impacting revenue and operating expenses are described above in “—Results of Operations”.

Current wording

We use Adjusted EBITDA to evaluate our financial performance, operational efficiency and profitability and for certain financial and operational decision-making purposes, including annual budgeting and evaluating the effectiveness of business strategies. We define Adjusted EBITDA as net income before depreciation and amortization expense; stock-based compensation expense; restructuring charges; interest income, net; and provision for income taxes. Adjusted EBITDA is influenced primarily by fluctuations in our revenue and operating expenses, except for the income and expenses it excludes. Fluctuations impacting revenue and operating expenses are described above in “—Results of Operations”.

Previous wording

•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs or contractual obligations, (2) the potentially dilutive impact of stock-based compensation, which will continue for the foreseeable future and represent recurring expense and a key part of our compensation strategy, (3) interest income earned from cash and cash equivalents and short-term investments or interest expense relating to our Amended Credit Facility or (4) tax payments that may represent a reduction in cash available to us;

Current wording

•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs or contractual obligations, (2) the potentially dilutive impact of stock-based compensation, which will continue for the foreseeable future and represent recurring expense and a key part of our compensation strategy, (3) the impact of charges under our 2026 Restructuring Plan which, while infrequent and not reflective of our ongoing operations or the underlying trends in our business, carry working capital needs to satisfy severance liabilities, (4) interest income earned from cash and cash equivalents and short-term investments or interest expense relating to our Revolving Facility or (5) tax payments that may represent a reduction in cash available to us;

Previous wording

•Although depreciation and amortization expense are non-cash expenses, the assets that are depreciated or amortized — such property and equipment and capitalized software development costs — may have to be replaced or expanded in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or expansions; and

Current wording

•Although depreciation and amortization expense are non-cash expenses, the assets that are depreciated or amortized — such as property and equipment and capitalized software development costs — may have to be replaced or expanded in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or expansions; and

Previous wording

The following table presents a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table presents a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA for the three and nine months ended September 30, 2026 and 2025 (in thousands):