Dynatrace, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. We prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United State of America (“U.S. GAAP”) and applicable rules and regulation of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in the section titled “Risk Factors” included elsewhere in this Form 10-Q and in our Form 10-K for the fiscal year ended March 31, 2024 (the “Annual Report”). These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Our fiscal year ends on March 31. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. We prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United State of America (“GAAP”) and applicable SEC rules and regulations regarding interim financial reporting. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in the section titled “Risk Factors” included elsewhere in this Form 10-Q and in our Form 10-K for the fiscal year ended March 31, 2025 (the “Annual Report”). These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Our fiscal year ends on March 31. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period.

Previous wording

We generate revenue primarily by selling subscriptions, which we define as Software-as-a-Service (“SaaS”) agreements, term-based licenses, perpetual licenses, and maintenance and support agreements. The majority of our customers deploy Dynatrace as a SaaS solution to get the latest Dynatrace features and updates with greatly reduced administrative effort. We also provide options to deploy our platform in customer-provisioned infrastructure.

Current wording

We generate revenue primarily by selling subscriptions, which we define as Software-as-a-Service (“SaaS”) agreements, term-based licenses, and maintenance and support agreements. The majority of our customers deploy Dynatrace as a SaaS solution to get the latest Dynatrace features and updates with greatly reduced administrative effort. We also provide options to deploy our platform in customer-provisioned infrastructure.

Previous wording

Under our Dynatrace Platform Subscription ("DPS”) model, which provides customers with more modern pricing with flexibility and transparency, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card. Any platform capability can be used in any quantity at any time based on the customer’s evolving needs.

Current wording

The Dynatrace Platform Subscription (“DPS”) licensing model provides customers with a flexible, scalable, and transparent subscription for the modern cloud. Under the DPS licensing model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card. Any platform capability can be used in any quantity at any time based on the customer’s evolving needs.

Previous wording

•Our annual recurring revenue (“ARR”) was $1,647 million as of December 31, 2024, which reflected 16% growth year-over-year;

Current wording

•Our annual recurring revenue (“ARR”) was $1,822 million as of June 30, 2025, which reflected 18% growth year-over-year;

Previous wording

•We delivered GAAP income from operations of $47 million and non-GAAP income from operations(1) of $131 million; and

Current wording

•We delivered GAAP income from operations of $62 million and non-GAAP income from operations(1) of $143 million; and

Previous wording

•Our net cash provided by operating activities and free cash flow(1) was $42 million and $38 million, respectively.

Current wording

•Our net cash provided by operating activities and free cash flow(1) was $270 million and $262 million, respectively.

Previous wording

We believe in a disciplined and balanced approach to operating our business. We plan to continue driving innovation to meet customers’ needs and grow our customer base. We also plan to invest in future growth opportunities that we expect will drive long-term value, while leveraging our global partner ecosystem, optimizing costs, and improving efficiency and profitability.

Current wording

We believe in a disciplined and balanced approach to operating our business. We plan to continue driving innovation to meet customers’ needs and grow our customer relationships. We also plan to invest in future growth opportunities that we expect will drive long-term value, while leveraging our global partner ecosystem, optimizing costs, and improving efficiency and profitability.

Previous wording

We believe this approach is even more important at this time as we navigate the current macroeconomic environment, which can include geopolitical considerations, fluctuations in credit, equity, and foreign currency markets, changes in inflation, interest rates, consumer confidence and spending, and other factors that may affect the buying patterns of our customers and prospective customers, including the size of transactions and length of sales cycles. In the ongoing dynamic macroeconomic landscape, we have seen resiliency in our industry and we remain confident in our ability to execute in this environment. Please see the section titled “Risk Factors” included under Part II, Item 1A of this Quarterly Report for further discussion of the possible impact of macroeconomic conditions on our business and regarding fluctuations in our annual and quarterly operating results.

Current wording

We believe this approach is even more important at this time as we navigate the current macroeconomic environment, which can include geopolitical considerations, tariffs and trade policies, fluctuations in credit, equity, and foreign currency markets, changes in inflation, interest rates, consumer confidence and spending, and other factors that may affect the buying patterns of our customers and prospective customers, including the size of transactions and length of sales cycles. In the ongoing dynamic macroeconomic landscape, we have seen resiliency in our industry and we remain confident in our ability to execute in this environment. Please see the section titled “Risk Factors” included under Part II, Item 1A of this Quarterly Report for further discussion of the possible impact of macroeconomic conditions on our business and regarding fluctuations in our annual and quarterly operating results.

Previous wording

•Extend our technology and market leadership position. We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. We also plan to evolve our AI capabilities to drive differentiation. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers.

Current wording

•Extend our technology and market leadership position. We intend to maintain our position as a leading AI-powered observability platform through increased investment in innovation, research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. For example, in fiscal 2026, we believe we are well positioned to grow our next generation log management offering, which integrates logs, traces, metrics, and other core observability and security data types into a single platform, providing customers with greater value than legacy log management solutions that are viewed as too expensive, providing too little value, or largely operating independently from existing monitoring tools. We also plan to evolve our AI capabilities to drive differentiation, with a focus on evolving into an agentic AI platform that can act autonomously to make decisions and take actions without human intervention. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers.

Previous wording

•Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations (notably, development teams) and expand the breadth of our platform capabilities to provide for expansion opportunities. In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions. While still in its early stages, we also believe that our DPS licensing model will drive further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model.

Current wording

•Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations and expand the breadth of our platform capabilities to provide for expansion opportunities. In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, with cloud-native and development teams, and into additional business units or divisions. We also believe that our DPS licensing model will drive broader consumption of the Dynatrace platform and further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model. Over 45% of our customer base and over 65% of our ARR leveraged this flexible, scalable, and transparent subscription approach as of June 30, 2025. With access to the full Dynatrace platform, DPS customers are able to adopt Dynatrace more broadly across their IT environments, which can lead to increased consumption.

Previous wording

•Grow our customer base. We intend to drive new customer growth through a focus on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. In particular, we are increasing the focus of our sales force on the largest 500 global companies and strategic enterprise accounts. In addition, we plan to expand our reach internationally to what we believe are large, mostly untapped markets for our company, while leveraging our sector specialization globally.

Current wording

•Grow our customer base. We intend to drive new customer growth through ongoing investments in our go-to-market strategy focused on customer segmentation, partner enablement, and continued expansion of our sales motion beyond application performance to include end-to-end observability, tool consolidation, and cloud modernization. We are focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. We have also increased the focus of our sales force on the largest 500 global companies and strategic enterprise accounts. In addition, we plan to expand our reach internationally to what we believe are large, mostly untapped, markets for our company, while leveraging our sector specialization globally.

Previous wording

Dollar-based net retention rate: We define the dollar-based net retention rate as the Dynatrace ARR at the end of a reporting period for the cohort of Dynatrace accounts as of one year prior to the date of calculation, divided by the Dynatrace ARR one year prior to the date of calculation for that same cohort. Our dollar-based net retention rate reflects customer renewals, expansion, contraction and churn, and excludes the benefit of Dynatrace ARR resulting from the conversion of Classic products to the Dynatrace platform. Beginning in fiscal 2023, we began to exclude the headwind associated with the Dynatrace perpetual license ARR given the diminishing impact of perpetual license ARR. We believe that eliminating the perpetual license headwind results in a dollar-based net retention rate metric that better reflects Dynatrace’s ability to expand existing customer relationships. Dollar-based net retention rate is presented on a constant currency basis.

Current wording

Dollar-based net retention rate: We define the dollar-based net retention rate as the ARR at the end of a reporting period for the cohort of Dynatrace accounts as of one year prior to the date of calculation, divided by the ARR one year prior to the date of calculation for that same cohort. Our dollar-based net retention rate reflects customer renewals, expansion, contraction and churn. Dollar-based net retention rate is presented on a constant currency basis.

Previous wording

Subscription. Our subscription revenue consists of (i) SaaS agreements, (ii) Dynatrace term-based licenses which are recognized ratably over the contract term, (iii) Dynatrace perpetual licenses that are recognized ratably over the term of the expected optional maintenance renewals, which is generally three years, and (iv) maintenance and support agreements. We typically invoice SaaS subscription fees and term licenses annually in advance and recognize subscription revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. Fees for our Dynatrace perpetual licenses are generally billed up front. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates-Revenue Recognition” included in Part II, Item 7 of our Annual Report for more information.

Current wording

Subscription. Our subscription revenue consists of (i) SaaS agreements, (ii) term-based licenses which are recognized ratably over the contract term, and (iii) maintenance and support agreements. We typically invoice SaaS subscription fees and term licenses annually in advance and recognize subscription revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. See the section titled “Revenue Recognition” within the footnote titled “Significant Accounting Policies” included in Part II, Item 8 of our Annual Report for more information.

Previous wording

Amortization of acquired technology. Amortization of acquired technology includes amortization expense for technology acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations and asset acquisitions. During the three months ended December 31, 2024, the acquired technology from the Thoma Bravo Funds' acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.

Current wording

Amortization of acquired technology. Amortization of acquired technology includes amortization expense for technology acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations and asset acquisitions. During the year ended March 31, 2025, the acquired technology from the Thoma Bravo Funds’ acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.

Previous wording

General and administrative. General and administrative expenses primarily consist of the personnel and facility-related costs for our executive, finance, legal, human resources and administrative personnel, and other corporate expenses, including those associated with our ongoing public reporting obligations. We anticipate continuing to incur additional expenses as we continue to invest in the growth of our operations.

Current wording

General and administrative. General and administrative expenses primarily consist of the personnel and facility-related costs for our executive, finance, legal, people and culture and administrative personnel, and other corporate expenses, including those associated with our ongoing public reporting obligations. We anticipate continuing to incur additional expenses as we continue to invest in the growth of our operations.

Previous wording

Amortization of other intangibles. Amortization of other intangibles primarily consists of amortization of customer relationships and tradenames acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations. During the three months ended December 31, 2024, the customer relationships and tradenames acquired from the Thoma Bravo Funds' acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.

Current wording

Amortization of other intangibles. Amortization of other intangibles primarily consists of amortization of customer relationships and tradenames acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations. During the year ended March 31, 2025, the customer relationships and tradenames acquired from the Thoma Bravo Funds' acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.

Previous wording

Interest income, net, consists primarily of interest income, primarily from money market funds, bank deposits, debt securities held as investments and certificates of deposits, fees on our Credit Facility (as defined later in this section), and amortization of debt issuance costs.

Current wording

Interest income, net, consists primarily of interest income from money market funds, bank deposits, debt securities held as investments, and certificates of deposits, partially offset by interest expense associated with fees on our Credit Facility (as defined later in this section) and amortization of debt issuance costs.

Previous wording

Other expense, net, consists primarily of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Current wording

Other income (expense), net, consists primarily of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Previous wording

Our income tax benefit (expense), deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax benefit (expense).

Current wording

We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

Previous wording

Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) recognition of a deferred tax benefit for the IP Transfer (as defined below), (2) the foreign derived intangibles deduction, and (3) the generation of U.S. foreign tax credits, partially offset by (4) foreign withholding taxes and (5) nondeductible executive compensation. We expect these items to continue to affect our income tax rate and income tax expense, except for the impact of recognizing the deferred tax benefit for the IP Transfer.

Current wording

Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) the net global intangible low-taxed income (“GILTI”) inclusion, (2) foreign withholding taxes, and (3) nondeductible executive compensation. We expect these items to continue to affect our income tax rate and income tax expense.

Previous wording

Many countries have enacted or are in the process of enacting laws based on the Pillar Two proposal relating to a 15% global minimum tax issued by the Organization for Economic Cooperation and Development (“OECD”). For fiscal year 2025, we expect to meet the Transitional Country-by-Country (CbCR) Safe Harbor rules for most, if not all, the jurisdictions that have adopted the rules. Based on the guidance available thus far, we do not expect these provisions to have a material impact on our consolidated financial statements. We will continue to monitor ongoing developments and evaluate any potential impact on future periods.

Current wording

Many countries have enacted or are in the process of enacting laws based on the Pillar Two proposal relating to a 15% global minimum tax issued by the Organization for Economic Cooperation and Development (“OECD”). For fiscal 2026, we do not expect these provisions to have a material impact on our condensed consolidated financial statements based on the guidance available thus far. We will continue to monitor ongoing developments and evaluate any potential impact on future periods.

Previous wording

Subscription revenue increased by $68.9 million, or 20%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023, primarily due to the growth of the Dynatrace platform by adding new customers combined with existing customers expanding their use of our solutions.

Current wording

Subscription revenue increased by $75.9 million, or 20%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to existing customers expanding their use of the Dynatrace platform combined with the adoption of our solutions by new customers. In addition, variable on-demand consumption revenue increased $9.1 million as compared to the three months ended June 30, 2024, primarily driven by a $7.4 million benefit due to a variable consideration change in estimate.

Previous wording

Service revenue increased by $2.2 million, or 13%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily due to timing of delivery of services.

Current wording

Service revenue increased by $2.2 million, or 12%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.

Previous wording

Cost of subscription increased by $13.8 million, or 29%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. The increase was primarily due to increased cloud-based hosting costs of $6.9 million related to our growing cloud-based subscription revenue and increased personnel costs of $5.1 million, inclusive of a $2.1 million increase in share-based compensation, largely due to headcount growth to support our growing customer base.

Current wording

Cost of subscription increased by $11.4 million, or 21%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to increased cloud-based hosting costs of $7.1 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $4.1 million, inclusive of a $1.5 million increase in share-based compensation, largely due to headcount growth to support our growing customer base.

Previous wording

Cost of service increased by $1.4 million, or 8%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily the result of increased share-based compensation of $0.8 million.

Current wording

Cost of service increased by $2.6 million, or 15%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily the result of increased personnel costs of $3.1 million, inclusive of a $0.7 million increase in share-based compensation, as our service delivery organization has scaled to support our product enablement and adoption within our customer base.

Previous wording

Amortization of acquired technology decreased by $0.5 million, or 11%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. The decrease was primarily the result of certain acquired technology becoming fully amortized during the three months ended December 31, 2024.

Current wording

Amortization of acquired technology decreased by $3.5 million, or 81%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025.

Previous wording

Service gross profit increased by $0.8 million during the three months ended December 31, 2024 compared to the three months ended December 31, 2023. Service gross margin increased to 4% for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

Current wording

Service gross profit decreased by $0.4 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Service gross margin decreased to 2% for the three months ended June 30, 2025 compared to 5% for the three months ended June 30, 2024. The decrease in gross profit and gross margin was primarily due to increased share-based compensation expense.

Previous wording

Research and development expenses increased by $18.2 million, or 23%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily the result of increased personnel costs of $14.8 million, inclusive of a $7.9 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of the Dynatrace platform.

Current wording

Research and development expenses increased by $20.6 million, or 24%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily the result of increased personnel costs of $18.3 million, inclusive of a $5.3 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of the Dynatrace platform. Cloud-based hosting costs incurred in developing our platform also increased by $1.4 million.

Previous wording

General and administrative expenses increased $6.1 million, or 14%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily the result of increased personnel costs of $4.7 million, inclusive of a $1.8 million increase in share-based compensation.

Current wording

Sales and marketing expenses increased by $20.2 million, or 14%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to increased personnel costs of $19.5 million, inclusive of a $4.0 million increase in share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy.

Previous wording

Amortization of other intangibles decreased by $1.5 million, or 27%, for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The decrease was primarily the result of certain intangible assets becoming fully amortized during the three months ended December 31, 2024.

Current wording

Amortization of other intangibles decreased by $4.8 million, or 100%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decrease was primarily the result of certain intangible assets becoming fully amortized during fiscal 2025.

Previous wording

Interest income, net, was $11.7 million for the three months ended December 31, 2024 compared to $10.6 million for the three months ended December 31, 2023. The increase in interest income was primarily the result of increased cash, cash equivalent, and investment balances.

Current wording

Interest income, net, was $12.3 million for the three months ended June 30, 2025 compared to $12.8 million for the three months ended June 30, 2024. The decrease was primarily the result of lower interest rates, partially offset by increased cash, cash equivalents, and investment balances.

Previous wording

Other expense, net, was $2.1 million for the three months ended December 31, 2024 compared to $3.9 million for the three months ended December 31, 2023. The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Current wording

Other income, net, was $6.8 million for the three months ended June 30, 2025 compared to other expense, net, of $2.0 million for the three months ended June 30, 2024. The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Previous wording

We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value. Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities. From time to time, we may borrow under our Credit Facility (as defined below). As of December 31, 2024, we had $907.5 million of cash and cash equivalents, $146.5 million of investments, consisting of U.S. Treasury securities, corporate debt securities, commercial paper, and U.S. agency securities, that have maturities between one and 36 months, and $399.2 million available under our Credit Facility.

Current wording

We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value. Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities. From time to time, we may borrow under our Credit Facility (as defined below). As of June 30, 2025, we had $1,247.4 million of cash and cash equivalents, $149.7 million of investments, primarily consisting of U.S. Treasury securities, corporate debt securities, commercial paper, and U.S. agency securities, that have maturities between one and 30 months, and $399.0 million available under our Credit Facility.

Previous wording

Our billings and revenue mix may vary over time due to a number of factors, including the mix of subscriptions and services and the contract length of our customer agreements. Such variability in the timing and amounts of our billings could impact the timing of our cash collections from period to period.

Current wording

Our billings may vary over time due to a number of factors, including the mix of subscription and service revenue, the contract length of our customer agreements, and the timing of customer contracts, including renewals. Such variability in the timing and amounts of our billings could impact the timing of our cash collections from period to period.

Previous wording

Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations for cloud hosting support. As of December 31, 2024, total contractual commitments were $326.9 million, with $63.7 million committed within the next 12 months.

Current wording

Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations entered into in the ordinary course of business, primarily for cloud hosting support. As of June 30, 2025, total contractual commitments were $757.4 million, with $111.3 million committed within the next 12 months.

Previous wording

Cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in the section titled “Risk Factors” included under Part I, Item 1A of this Quarterly Report. However, we believe that our existing cash, cash equivalents, investments, funds available under our revolving credit facility, and cash generated from operations, will be sufficient to meet our cash requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the continued expansion of sales and marketing activities, the introduction of new and enhanced products, seasonality of our billing activities, timing and extent of spending to support our growth strategy, and the continued market acceptance of our products. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition would be adversely affected.

Current wording

Cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in the section titled “Risk Factors” included under Part II, Item 1A of this Quarterly Report. However, we believe that our existing cash, cash equivalents, investments, funds available under our Credit Facility, and cash generated from operations, will be sufficient to meet our cash requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the continued expansion of sales and marketing activities, the introduction of new and enhanced products, seasonality of our billing activities, timing and extent of spending to support our growth strategy, and the continued market acceptance of our products. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition would be adversely affected.

Previous wording

We announced a share repurchase program for up to $500.0 million of common stock on May 15, 2024. For the three and nine months ended December 31, 2024, we repurchased and retired 0.7 million and 2.7 million shares of our common stock for a total of $40.0 million and $130.1 million, respectively. As of December 31, 2024, $369.9 million remained available for future repurchases. For additional information, please see Part II, Item 2 of this Quarterly Report.

Current wording

We announced a share repurchase program for up to $500 million of common stock on May 15, 2024. For the three months ended June 30, 2025 and 2024, we repurchased and retired 0.9 million and 1.1 million shares of our common stock for a total of $45.0 million and $50.1 million, respectively. As of June 30, 2025, $282.4 million remained available for future repurchases. For additional information, please see Part II, Item 2 of this Quarterly Report.

Previous wording

In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (as amended to date, the “Credit Facility”). As of December 31, 2024, we had $399.2 million available under the Credit Facility with $0.8 million of letters of credit outstanding. As of December 31, 2024, we were in compliance with all applicable covenants pertaining to the Credit Facility. The Credit Facility is discussed further in Note 8, Long-term Debt, of the condensed consolidated financial statements in this Quarterly Report.

Current wording

In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (as amended to date, the “Credit Facility”). As of June 30, 2025, we had $399.0 million available under the Credit Facility with $1.0 million of letters of credit outstanding. As of June 30, 2025, we were in compliance with all applicable covenants pertaining to the Credit Facility. The Credit Facility is discussed further in Note 7, Long-term Debt, of the condensed consolidated financial statements in this Quarterly Report.

Previous wording

We prepare our condensed consolidated financial statements in accordance with GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Current wording

We prepare our condensed consolidated financial statements in accordance with GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the nine months ended December 31, 2024, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report, except with respect to Income Taxes.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended June 30, 2025, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.