ZoomInfo Technologies Inc.

Previous wording

We generate substantially all of our revenue from sales of subscriptions to our platform. Subscriptions include the use of our platform and access to customer support. Subscriptions generally range from one to three years in length. About 49% of customer contracts (based on annualized value) are multi-year agreements. We typically bill our customers at the beginning of each annual, semi-annual, or quarterly period and recognize revenue ratably over the term of the subscription period.

Current wording

We generate substantially all of our revenue from sales of subscriptions to our platform. Subscriptions include the use of our platform and access to customer support. Subscriptions generally range from one to three years in length. About 51% of customer contracts (based on annualized value) are multi-year agreements. We typically bill our customers at the beginning of each annual, semi-annual, or quarterly period and recognize revenue ratably over the term of the subscription period.

Previous wording

We believe that expanding the value that we provide to our customers and the corresponding revenue generated as a result is an important measure of the health of our business. We monitor net revenue retention to measure that growth. Net revenue retention is a metric that we calculate based on customers of ZoomInfo at the beginning of the twelve-month period, and is calculated as: (a) the total ACV for those customers at the end of the twelve-month period, divided by (b) the total ACV for those customers at the beginning of the twelve-month period. Our net revenue retention rate was 87% and 85% as of March 31, 2025 and 2024, respectively. In the near term, we expect our net retention rate to be impacted by macroeconomic conditions. See the caption above entitled “—Recent Developments — Impact of Macroeconomic Conditions.” Over the long term, we expect our net revenue retention rate to be influenced by our ability to move upmarket, as larger customers have historically exhibited higher net revenue retention. We also measure our success in expanding relationships with existing customers by the number of customers that contract for more than $100,000 in ACV. As of March 31, 2025 and 2024 our customers with over $100,000 in ACV was 1,868 and 1,760, respectively.

Current wording

We believe that expanding the value that we provide to our customers and the corresponding revenue generated as a result is an important measure of the health of our business. We monitor net revenue retention to measure that growth. Net revenue retention is a metric that we calculate based on customers of ZoomInfo at the beginning of the twelve-month period, and is calculated as: (a) the total ACV for those customers at the end of the twelve-month period, divided by (b) the total ACV for those customers at the beginning of the twelve-month period. Our net revenue retention rate was 89% and 85% as of June 30, 2025 and 2024, respectively. In the near term, we expect our net retention rate to be impacted by macroeconomic conditions. See the caption above entitled “—Recent Developments — Impact of Macroeconomic Conditions.” Over the long term, we expect our net revenue retention rate to be influenced by our ability to move upmarket, as larger customers have historically exhibited higher net revenue retention. We also measure our success in expanding relationships with existing customers by the number of customers that contract for more than $100,000 in ACV. As of June 30, 2025 and 2024, our customers with over $100,000 in ACV was 1,884 and 1,797, respectively.

Previous wording

As a result, we recorded an incremental charge during the second quarter of 2024 impacting our reported Revenue and General and administrative expenses. The charge represents a revision to our reserves for uncollectible accounts receivable, made up primarily of historical transactions with our SMB customers.

Current wording

As a result, we recorded an incremental charge during the second quarter of 2024 impacting our reported Revenue and General and administrative expenses on our Consolidated Statements of Operations. The charge represents a revision to our reserves for uncollectible accounts receivable, made up primarily of historical transactions with our SMB customers.

Previous wording

Cost of service. Cost of service includes direct expenses related to the support and operations of our services and research teams including salaries, benefits, equity-based compensation, and related expenses, such as employer taxes, allocated overhead for facilities, technology, third-party hosting fees, third-party data costs, and amortization of internally developed capitalized software.

Current wording

Cost of service. Cost of service includes direct expenses related to the support and operations of our services and research teams including salaries, benefits, equity-based compensation, and related expenses, such as employer taxes, allocated overhead for facilities, technology, third-party hosting fees, third-party data costs, amortization of internally developed capitalized software, and restructuring and transaction-related expenses.

Previous wording

Our operating expenses consist of sales and marketing, research and development, general and administrative, and amortization of other acquired intangibles. The most significant component of our operating expenses is personnel costs, which consists of salaries, bonuses, sales commissions, equity-based compensation, and other employee-related benefits. Operating expenses also include overhead costs for facilities, technology, professional fees, depreciation and amortization expense, marketing, and restructuring and transaction-related expenses. We anticipate that restructuring and transaction-related expenses, including potential impairments, will be influenced by future acquisition activity, strategic restructuring activities, and the commencement of new leases. Specifically, as new leases commence, we may face increased impairment expenses for spaces that we do not intend to occupy and/or that we plan to sublease, which could cause these costs to vary, potentially significantly, from our historic levels. Refer to Note 11 - Leases of our unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Current wording

Our operating expenses consist of sales and marketing, research and development, general and administrative, and amortization of other acquired intangibles. The most significant component of our operating expenses is personnel costs, which consists of salaries, bonuses, sales commissions, equity-based compensation, and other employee-related benefits. Operating expenses also include overhead costs for facilities, technology, professional fees, depreciation and amortization expense, marketing, and restructuring and transaction-related expenses. We anticipate that restructuring and transaction-related expenses, including potential impairments, will be influenced by future acquisition activity, strategic restructuring activities, and the commencement of new leases. Specifically, as new leases commence, we may face increased impairment expenses for spaces that we do not intend to occupy and/or that we plan to sublease, which could cause these costs to vary, potentially significantly, from our historic levels.

Previous wording

Sales and marketing. Sales and marketing expenses primarily consist of employee compensation such as salaries, bonuses, sales commissions, equity-based compensation, and other employee-related benefits for our sales and marketing teams, as well as overhead costs, technology, and marketing programs. Sales commissions and related payroll taxes directly related to contract acquisition are capitalized and recognized as expenses over the estimated period of benefit.

Current wording

Sales and marketing. Sales and marketing expenses primarily consist of employee compensation such as salaries, bonuses, sales commissions, equity-based compensation, and other employee-related benefits for our sales and marketing teams, as well as overhead costs, technology, marketing programs, and restructuring and transaction-related expenses. Sales commissions and related payroll taxes directly related to contract acquisition are capitalized and recognized as expenses over the estimated period of benefit.

Previous wording

We anticipate that we will continue to invest in sales and marketing capacity to enable future growth. We anticipate that sales and marketing expense excluding equity-based compensation as a percentage of revenue will fluctuate from period to period depending on the interplay of our growing investments in sales and marketing capacity excluding equity-based compensation, the recognition of revenue, and the amortization of deferred commissions costs.

Current wording

We anticipate that we will continue to invest in sales and marketing capacity to enable future growth. We anticipate that sales and marketing expense excluding equity-based compensation and restructuring and transaction-related expenses as a percentage of revenue will fluctuate from period to period depending on the interplay of our growing investments in sales and marketing capacity, the recognition of revenue, and the amortization of deferred commissions costs.

Previous wording

Research and development. Research and development expenses support our efforts to enhance our existing platform and develop new software products. Research and development expenses primarily consist of employee compensation such as salaries, bonuses, equity-based compensation, and other employee-related benefits for our engineering and product management teams, as well as overhead costs, and technology. Research and development expenses do not reflect amortization of internally developed capitalized software. We believe that our core technologies and ongoing innovation represent a significant competitive advantage for us.

Current wording

Research and development. Research and development expenses support our efforts to enhance our existing platform and develop new software products. Research and development expenses primarily consist of employee compensation such as salaries, bonuses, equity-based compensation, and other employee-related benefits for our engineering and product management teams, as well as overhead costs, technology, and restructuring and transaction-related expenses. Research and development expenses do not reflect amortization of internally developed capitalized software. We believe that our core technologies and ongoing innovation represent a significant competitive advantage for us.

Previous wording

Other loss, net consists primarily of the remeasurement of TRA liabilities, investment income, and realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency.

Current wording

Other income, net consists primarily of the remeasurement of TRA liabilities, investment income, and realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency.

Previous wording

Changes to existing tax law, including changes to corporate income tax rates or the Company’s state tax footprint could lead to substantial remeasurement of the TRA liability recorded through Other loss, net. Additionally, the magnitude of Other loss, net may increase as we expand operations internationally and add complexity to our operations. Refer to the Provision for income taxes section below for further information regarding remeasurement of TRA liability and deferred tax assets.

Current wording

Changes to existing tax law, including changes to corporate income tax rates or the Company’s state tax footprint could lead to substantial remeasurement of the TRA liability recorded through Other income, net. Additionally, the magnitude of Other income, net may increase as we expand operations internationally and add complexity to our operations. Refer to the Provision for (Benefit from) income taxes section below for further information regarding remeasurement of TRA liability and deferred tax assets.

Previous wording

The value of our deferred tax assets are regularly remeasured to consider the impact of statutory changes and other guidance, as well as changes in our state income apportionment factors. Given the amount of our deferred tax assets, minor changes can materially affect our Provision for income taxes. A significant portion of our deferred tax assets are associated with our TRA, and upon a remeasurement of our deferred tax assets, the TRA liability is typically concurrently remeasured with a partially offsetting impact within Other loss, net on the Consolidated Statements of Operations.

Current wording

The value of our deferred tax assets are regularly remeasured to consider the impact of statutory changes and other guidance, as well as changes in our state income apportionment factors. Given the amount of our deferred tax assets, minor changes can materially affect our Provision for (Benefit from) income taxes. A significant portion of our deferred tax assets are associated with our TRA, and upon a remeasurement of our deferred tax assets, the TRA liability is typically concurrently remeasured with a partially offsetting impact within Other income, net on the Consolidated Statements of Operations.

Previous wording

We have regularly taken tax positions, including with respect to our various corporate events and restructurings, in the ordinary course of determining our Provision for income taxes. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position will be sustainable upon examination by the taxing authority based on the technical merits. We regularly review our tax positions with consideration of a number of factors, including changes in facts or circumstances, changes in tax law or guidance, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our Provision for income taxes in the period in which we make the change, which could have a material impact on our effective tax rate.

Current wording

We have regularly taken tax positions, including with respect to our various corporate events and restructurings, in the ordinary course of determining our Provision for (Benefit from) income taxes. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position will be sustainable upon examination by the taxing authority based on the technical merits. We regularly review our tax positions with consideration of a number of factors, including changes in facts or circumstances, changes in tax law or guidance, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our Provision for (Benefit from) income taxes in the period in which we make the change, which could have a material impact on our effective tax rate.

Previous wording

The following table presents our results of operations for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents our results of operations for the three and six months ended June 30, 2025 and 2024:

Previous wording

Revenue. Revenue was $305.7 million for the three months ended March 31, 2025, a decrease of $4.4 million, or 1%, as compared to $310.1 million for the three months ended March 31, 2024. The decrease was primarily due to the effects of the operational changes implemented during the second quarter of 2024. Refer to the “Factors Affecting the Comparability of Our Results of Operations” section above.

Current wording

Revenue. Revenue was $306.7 million for the three months ended June 30, 2025, an increase of $15.2 million, or 5%, as compared to $291.5 million for the three months ended June 30, 2024. The increase was primarily due to the effects of the operational changes implemented during the second quarter of 2024. Refer to the “Factors Affecting the Comparability of Our Results of Operations” section above.

Previous wording

Cost of revenue. Cost of revenue was $47.3 million for the three months ended March 31, 2025, an increase of $3.9 million, or 9%, as compared to $43.4 million for the three months ended March 31, 2024. Excluding equity-based compensation expense, cost of revenue was $44.5 million for the three months ended March 31, 2025, an increase of $3.6 million, or 9%, as compared to $40.9 million for the three months ended March 31, 2024, primarily due to increased depreciation expense on internally developed capitalized software, hosting fees, and employee benefit costs.

Current wording

Cost of revenue. Cost of revenue was $49.5 million for the three months ended June 30, 2025, an increase of $3.6 million, or 8%, as compared to $45.9 million for the three months ended June 30, 2024. Excluding equity-based compensation expense, cost of revenue was $46.7 million for three months ended June 30, 2025, an increase of $3.5 million, or 8%, as compared to $43.2 million for three months ended June 30, 2024, primarily due to increased hosting fees and depreciation expense on internally developed capitalized software.

Previous wording

Gross profit. Gross profit for the three months ended March 31, 2025 was $258.4 million and represented a gross margin of 85%. Gross profit for the three months ended March 31, 2024 was $266.7 million and represented a gross margin of 86%. The decrease in gross profit in the three months ended March 31, 2025 relative to the three months ended March 31, 2024 was $8.3 million, or 3%, primarily due to lower revenues, as described above, increased depreciation expense on internally developed capitalized software, and increased hosting fees.

Current wording

Gross profit. Gross profit for the three months ended June 30, 2025 was $257.2 million and represented a gross margin of 84%. Gross profit for the three months ended June 30, 2024 was $245.6 million and represented a gross margin of 84%. The increase in gross profit in the three months ended June 30, 2025 relative to the three months ended June 30, 2024 was $11.6 million, or 5%, primarily due to lower revenues in the comparative period as described above, partially offset by increased hosting fees and amortization expense on internally developed capitalized software.

Previous wording

Operating expenses. Operating expenses were $208.1 million for the three months ended March 31, 2025, a decrease of $15.6 million, or 7%, as compared to $223.7 million for the three months ended March 31, 2024. Excluding equity-based compensation expense, operating expenses were $181.3 million for the three months ended March 31, 2025, a decrease of $13.7 million, or 7%, as compared to $195.0 million for the three months ended March 31, 2024.

Current wording

Operating expenses. Operating expenses were $203.5 million for the three months ended June 30, 2025, a decrease of $62.1 million, or 23%, as compared to $265.6 million for the three months ended June 30, 2024. Excluding equity-based compensation expense, operating expenses were $176.6 million for the three months ended June 30, 2025, a decrease of $55.3 million, or 24%, as compared to $231.9 million for the three months ended June 30, 2024.

Previous wording

•Sales and marketing for the three months ended March 31, 2025 was $106.0 million, representing an increase of $6.4 million, or 6%, as compared to $99.6 million for the three months ended March 31, 2024. Sales and marketing, excluding equity-based compensation expense, for the three months ended March 31, 2025 was $94.6 million, representing an increase of $6.8 million, or 8%, as compared to $87.8 million for the three months ended March 31, 2024, primarily due to increased employee compensation costs, employee benefit costs, and facilities expenses, partially offset by decreased marketing costs.

Current wording

•Sales and marketing for the three months ended June 30, 2025 was $106.3 million, representing an increase of $5.8 million, or 6%, as compared to $100.5 million for the three months ended June 30, 2024. Sales and marketing, excluding equity-based compensation expense, for the three months ended June 30, 2025 was $94.9 million, representing an increase of $8.4 million, or 10%, as compared to $86.5 million for the three months ended June 30, 2024, primarily due to increased employee compensation costs, marketing costs, employee benefit costs, and severance costs, partially offset by lower facilities expense.

Previous wording

•Research and development for the three months ended March 31, 2025 was $51.1 million representing an increase of $7.4 million, or 17%, as compared to $43.7 million for the three months ended March 31, 2024. Research and development, excluding equity-based compensation expense, for the three months ended March 31, 2025 was $42.5 million, representing an increase of $7.6 million, or 22%, as compared to $34.9 million for the three months ended March 31, 2024, primarily due to increased employee compensation costs, employee benefit costs, severance costs, facilities, and depreciation expense.

Current wording

•Research and development for the three months ended June 30, 2025 was $44.6 million representing a decrease of $3.7 million, or 8%, as compared to $48.3 million for the three months ended June 30, 2024. Research and development, excluding equity-based compensation expense, for the three months ended June 30, 2025 was $36.2 million, representing a decrease of $1.9 million, or 5%, as compared to $38.1 million for the three months ended June 30, 2024, primarily due to increased capitalization of employee compensation costs, partially offset by increased severance costs and technology expense.

Previous wording

•General and administrative for the three months ended March 31, 2025 was $45.8 million representing a decrease of $29.3 million, or 39%, as compared to $75.1 million for the three months ended March 31, 2024. General and administrative, excluding equity-based compensation expense, for the three months ended March 31, 2025 was $39.0 million, representing a decrease of $28.0 million, or 42%, as compared to $67.0 million for the three months ended March 31, 2024, primarily due to the charges related to Class Actions in the prior period as well as lower bad debt expense, partially offset by increased employee compensation costs, employee benefit costs, technology expenses, severance costs, and facilities expenses.

Current wording

•General and administrative for the three months ended June 30, 2025 was $47.3 million representing a decrease of $64.0 million, or 58%, as compared to $111.3 million for the three months ended June 30, 2024. General and administrative, excluding equity-based compensation expense, for the three months ended June 30, 2025 was $40.2 million, representing a decrease of $61.6 million, or 61%, as compared to $101.8 million for the three months ended June 30, 2024, primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges as well as incremental bad debt expense resulting from a change in the accounting estimate.

Previous wording

•Amortization of other acquired intangibles was $5.2 million for the three months ended March 31, 2025, relatively flat as compared to $5.3 million for the three months ended March 31, 2024.

Current wording

•Amortization of other acquired intangibles was $5.3 million for the three months ended June 30, 2025, relatively flat as compared to $5.5 million for the three months ended June 30, 2024.

Previous wording

Income from operations. Income from operations was $50.3 million for the three months ended March 31, 2025, an increase of $7.3 million, or 17%, as compared to income from operations of $43.0 million for the three months ended March 31, 2024. The increase is primarily due to charges related to the Class Actions in the prior period as well as lower bad debt expense, partially offset by lower revenues, increased employee compensation and benefit costs, increased facilities costs, increased severance costs, and increased hosting and contractor expenses. Operating income margin was 16% for the three months ended March 31, 2025 as compared to operating income margin of 14% for the three months ended March 31, 2024.

Current wording

Income (Loss) from operations. Income from operations was $53.7 million for the three months ended June 30, 2025, an increase of $73.7 million, as compared to loss from operations of $20.0 million for the three months ended June 30, 2024. The increase is primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges and incremental bad debt expense resulting from a change in the accounting estimate, and higher revenues. Operating income margin was 18% for three months ended June 30, 2025 as compared to operating loss margin of 7% for the three months ended June 30, 2024.

Previous wording

Equity-based compensation expense. Equity-based compensation expense was $29.6 million for the three months ended March 31, 2025, a decrease of $1.6 million, or 5%, as compared to $31.2 million for the three months ended March 31, 2024, due to lower weighted average grant date fair values of grants being amortized in the current period compared to those that were amortized in the prior period, and increased termination expense reversals, partially offset by increased amortization of expenditures for internal use developed software which were previously capitalized.

Current wording

Equity-based compensation expense. Equity-based compensation expense was $59.3 million for the six months ended June 30, 2025, a decrease of $8.3 million, or 12%, as compared to $67.6 million for the six months ended June 30, 2024, due to lower weighted average grant date fair values of grants being amortized in the current period compared to those that were amortized in the prior period, partially offset by increased amortization of expenditures for internal use developed software which were previously capitalized.

Previous wording

Interest expense, net. Interest expense, net was $9.8 million for the three months ended March 31, 2025, a decrease of $0.3 million, or 3%, as compared to $10.1 million for the three months ended March 31, 2024, primarily due to lower interest rates partially offset by lower interest income.

Current wording

Interest expense, net. Interest expense, net was $20.5 million for the six months ended June 30, 2025, an increase of $0.6 million, or 3%, as compared to $19.9 million for the six months ended June 30, 2024, primarily due to lower interest income, partially offset by lower interest rates.

Previous wording

Other loss, net. Other loss, net was $0.9 million for the three months ended March 31, 2025, which consists of $1.2 million of TRA remeasurement loss, partially offset by $0.2 million of gain on foreign currency transactions and $0.1 million of investment income, as compared to other loss, net of $3.4 million for the three months ended March 31, 2024, which consists of $9.4 million of TRA remeasurement loss, partially offset by $3.7 million of investment income and $2.3 million of gain on foreign currency transactions.

Current wording

Other income, net. Other income, net was $13.1 million for the six months ended June 30, 2025, which consists of $13.4 million of TRA remeasurement gain and $0.1 million of investment income, partially offset by $0.4 million of loss on foreign currency transactions, as compared to other income, net of $2.5 million for the six months ended June 30, 2024, which consists of $7.3 million of investment income and $2.6 million of other non-operating income, partially offset by $9.2 million of TRA remeasurement loss.

Previous wording

Provision for income taxes. The Company is subject to income taxes in the United States and various foreign jurisdictions. Provision for income taxes for the three months ended March 31, 2025 was $12.8 million, representing an effective tax rate of 32.2%, as compared to provision for income taxes of $14.4 million, representing an effective tax rate of 48.8%, for the three months ended March 31, 2024. The effective tax rate differed from the U.S. federal statutory rate of 21.0% due to non-deductible equity compensation costs, U.S. state taxes, foreign taxes, partially offset by research and development credits.

Current wording

Provision for (Benefit from) income taxes. The Company is subject to income taxes in the United States and various foreign jurisdictions. Provision for income taxes for the six months ended June 30, 2025 was $45.8 million, representing an effective tax rate of 47.4%, as compared to provision for income taxes of $14.2 million, representing an effective tax rate of 288.9%, for the six months ended June 30, 2024. The effective tax rate differed from the U.S. federal statutory rate of 21.0% due to non-deductible equity compensation costs, U.S. state taxes, foreign taxes, partially offset by research and development credits.

Previous wording

The following table presents a reconciliation of Income from operations to Adjusted Operating Income for the periods presented:

Current wording

The following table presents a reconciliation of Income (Loss) from operations to Adjusted Operating Income for the periods presented:

Previous wording

(2)Represents charges associated with certain legal settlements. For the three months ended March 31, 2024, these charges are related to costs incurred due to the Class Actions.

Current wording

(2)Represents charges associated with certain legal settlements. For the three and six months ended June 30, 2024, these charges are related to costs incurred due to the Class Actions.

Previous wording

Adjusted Operating Income for the three months ended March 31, 2025 was $100.9 million and represented an Adjusted Operating Income Margin of 33%. Adjusted Operating Income for the three months ended March 31, 2024 was $119.4 million and represented an Adjusted Operating Income Margin of 39%. The decrease of $18.5 million, or 15%, in Adjusted Operating Income was primarily due to the increased employee compensation costs, employee benefit costs, technology expenses, facilities expenses, and lower revenue partially offset by lower bad debt expense and marketing expenses.

Current wording

Adjusted Operating Income for the three months ended June 30, 2025 was $104.7 million and represented an Adjusted Operating Income Margin of 34%. Adjusted Operating Income for the three months ended June 30, 2024 was $81.6 million and represented an Adjusted Operating Income Margin of 28%. The increase of $23.1 million, or 28%, in Adjusted Operating Income was primarily due to charges incurred in the comparative period related to a change in the accounting estimate of collectability of accounts receivable, and higher revenue in the current period, partially offset by increased technology expenses, marketing costs, hosting and contractor costs, and facilities expenses.

Previous wording

(3)Represents tax expense associated with Net income (GAAP) excluded from Adjusted Net Income (Non-GAAP). The Company calculates the tax impacts of adjustments to net income (loss) by taking the total gross value of the adjustments and multiplying it by the Company’s U.S. federal and state statutory tax rate. We then recalculate the tax impact of book-tax differences related to equity compensation, the tax receivable agreements, restructuring and transaction-related expenses, and items that are deemed to be unrelated to current year operating income or are one-time in nature, such as provision to return true-ups. For the three months ended March 31, 2025, these primarily relate to adjusting out $1.2 million of tax benefit from the effects of changes in state tax law and apportionment, recognizing $13.6 million of tax benefit related to the amortization of costs associated with corporate structure simplification, and adjusting out $3.0 million of tax expense from non-deductible stock-based compensation. For the three months ended March 31, 2024, these primarily relate to adjusting out $0.2 million of tax expense from the effects of changes in state tax law and apportionment, recognizing $14.6 million of tax benefit related to the amortization of costs associated with corporate structure simplification, and adjusting out $5.0 million of tax expense from non-deductible stock-based compensation. We believe the exclusion of these adjustments provides investors with useful information about the Company’s underlying results and trends, allowing them to better understand and compare net income (loss) related to ongoing operations and the related current and deferred income tax expense.

Current wording

(3)Represents tax expense associated with Net income (GAAP) excluded from Adjusted Net Income (Non-GAAP). The Company calculates the tax impacts of adjustments to net income (loss) by taking the total gross value of the adjustments and multiplying it by the Company’s U.S. federal and state statutory tax rate. We then recalculate the tax impact of book-tax differences related to equity compensation, the tax receivable agreements, restructuring and transaction-related expenses, and items that are deemed to be unrelated to current year operating income or are one-time in nature, such as provision to return true-ups. For the three months ended June 30, 2025, these primarily relate to recognizing $15.2 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $14.6 million of tax expense from the effects of changes in state tax law and apportionment, and adjusting out $4.0 million of tax expense from non-deductible stock-based compensation. For three months ended June 30, 2024, these primarily relate to recognizing $9.9 million of tax benefit related to the amortization of costs associated with corporate structure simplification, and adjusting out $3.3 million of tax expense from non-deductible stock-based compensation, and adjusting out $1.3 million of tax expense from the effects of changes in state tax law and apportionment. For the six months ended June 30, 2025, these primarily relate to recognizing $28.8 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $13.4 million of tax expense from the effects of changes in state tax law and apportionment, and adjusting out $7.0 million of tax expense from non-deductible stock-based compensation. For six months ended June 30, 2024, these primarily relate to recognizing $24.5 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $8.3 million of tax expense from non-deductible stock-based compensation, and adjusting out $1.5 million of tax expense from the effects of changes in state tax law and apportionment. We believe the exclusion of these adjustments provides investors with useful information about the Company’s underlying results and trends, allowing them to better understand and compare net income (loss) related to ongoing operations and the related current and deferred income tax expense.

Previous wording

Adjusted Net Income for the three months ended March 31, 2025 was $81.9 million compared to $100.5 million, representing a decrease of $18.6 million, or 18%, relative to the three months ended March 31, 2024. This decrease was primarily due to the lower Adjusted Operating Income in the current period as described above, partially offset by the decrease in tax expense.

Current wording

Adjusted Net Income for the three months ended June 30, 2025 was $86.1 million compared to $66.0 million, representing an increase of $20.1 million, or 30%, relative to the three months ended June 30, 2024. This increase was primarily due to the higher Adjusted Operating Income in the current period as described above.

Previous wording

(1)The three months ended March 31, 2025 exclude the accelerated depreciation associated with the Waltham Lease Restructuring. Refer to Note 5 - Property and Equipment and Note 13 - Leases in our 2024 Form 10-K for further information.

Current wording

(1)The six months ended June 30, 2025 exclude the accelerated depreciation associated with the Waltham Lease Restructuring. Refer to Note 5 - Property and Equipment and Note 13 - Leases in our 2024 Form 10-K for further information.

Previous wording

(4)Represents charges associated with certain legal settlements. For the three months ended March 31, 2024, these charges are related to costs incurred due to the Class Actions.

Current wording

(4)Represents charges associated with certain legal settlements. For the three and six months ended June 30, 2024, these charges are related to costs incurred due to the Class Actions.

Previous wording

As of March 31, 2025, we had $138.5 million of cash and cash equivalents, $2.0 million of short-term investments, $2.0 million of long-term investments, and $250.0 million available under our first lien revolving credit facility. We have financed our operations primarily through cash generated from operations and financed various acquisitions through cash generated from operations supplemented with debt offerings.

Current wording

As of June 30, 2025, we had $171.0 million of cash and cash equivalents, $5.9 million of short-term investments, $0.5 million of long-term investments, and $150.0 million available under our first lien revolving credit facility. We have financed our operations primarily through cash generated from operations and financed various acquisitions through cash generated from operations supplemented with debt offerings.

Previous wording

We generally invoice our subscription customers for services annually, semi-annually, or quarterly in advance of delivery. Therefore, a substantial source of our cash is from such prepayments, which are included on our Consolidated Balance Sheets as unearned revenue. Unearned revenue consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy. As of March 31, 2025, we had unearned revenue of $484.4 million, of which $480.8 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Current wording

We generally invoice our subscription customers for services annually, semi-annually, or quarterly in advance of delivery. Therefore, a substantial source of our cash is from such prepayments, which are included on our Consolidated Balance Sheets as unearned revenue. Unearned revenue consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy. As of June 30, 2025, we had unearned revenue of $472.3 million, of which $469.4 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Previous wording

Net cash provided by operating activities was $119.2 million for the three months ended March 31, 2025 as a result of net income of $26.8 million, adjusted by non-cash charges of $90.4 million and the net change in our operating assets and liabilities of $2.0 million. The non-cash charges are primarily comprised of equity-based compensation of $29.6 million, depreciation and amortization of $22.1 million, amortization of deferred commission costs of $21.4 million, and a decrease in deferred tax assets net of deferred tax liabilities of $11.2 million. The net change in operating assets and liabilities was primarily the result of a decrease in accrued expenses and other liabilities of $20.2 million, an increase in deferred costs and other assets of $16.1 million, and an increase in prepaid and other current assets of $3.3 million, mostly offset by a decrease in accounts receivable of $37.9 million.

Current wording

Net cash provided by operating activities was $228.1 million for the six months ended June 30, 2025 as a result of net income of $50.8 million, adjusted by non-cash charges of $186.4 million and the net decrease in our operating and liabilities of $9.1 million. The non-cash charges are primarily comprised of equity-based compensation of $59.3 million, depreciation and amortization of $43.4 million, amortization of deferred commission costs of $43.4 million, and a decrease in deferred tax assets net of deferred tax liabilities of $42.6 million. The net change in operating assets and liabilities was primarily the result of an increase in deferred costs and other assets of $37.6 million, an increase in prepaid and other current assets of $7.5 million, and a decrease in unearned revenue of $5.6 million, partially offset by a decrease in accounts receivable of $44.2 million.

Previous wording

Net cash provided by operating activities was $115.9 million for the three months ended March 31, 2024 as a result of net income of $15.1 million, adjusted by non-cash charges of $101.1 million and the net change in our operating assets and liabilities of $0.3 million. The non-cash charges are primarily comprised of equity-based compensation of $31.2 million, depreciation and amortization of $20.0 million, amortization of deferred commission costs of $17.4 million, a decrease in deferred tax assets net of deferred tax liabilities of $13.2 million, TRA remeasurement of $9.6 million, and provision for bad debt expense of $9.2 million. The net change in operating assets and liabilities was primarily the result of an increase in deferred costs and other assets of $17.6 million, a decrease in accounts payable of $16.9 million, an increase in prepaid expenses and other current assets of $11.9 million, partially offset by a decrease in accounts receivable of $39.3 million and an increase in accrued expenses and other liabilities of $5.5 million.

Current wording

Net cash provided by operating activities was $242.2 million for the six months ended June 30, 2024 as a result of net loss of $9.3 million, adjusted by non-cash charges of $242.6 million and the net change in our operating assets and liabilities of $8.9 million. The non-cash charges are primarily comprised of equity-based compensation of $67.6 million, asset impairments and lease abandonment charges of $48.7 million, depreciation and amortization of $40.9 million, amortization of deferred commission costs of $33.6 million, provision for bad debt expense of $32.5 million, TRA remeasurement of $9.2 million, and a decrease in deferred tax assets net of deferred tax liabilities of $8.3 million. The net change in operating assets and liabilities was primarily the result of a decrease in accounts receivable of $49.6 million and an increase in accrued expenses and other liabilities of $18.3 million, partially offset by an increase in deferred costs and other assets of $35.5 million and a decrease in accounts payable of $15.1 million.

Previous wording

We may continue to make future acquisitions as part of our business strategy which may require the use of capital resources and drive additional future restructuring and transaction-related cash expenditures as well as integration and acquisition-related cash costs. During the three months ended March 31, 2025, and 2024, we incurred the following cash expenditures:

Current wording

We may continue to make future acquisitions as part of our business strategy which may require the use of capital resources and drive additional future restructuring and transaction-related cash expenditures as well as integration and acquisition-related cash costs. During the six months ended June 30, 2025, and 2024, we incurred the following cash expenditures:

Previous wording

(1)Represents cash payments directly associated with acquisition or disposal activities, including employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. For the three months ended March 31, 2025, these payments related primarily to Waltham lease restructuring charges and employee severance and termination benefits payments. For the three months ended March 31, 2024, these payments related primarily to obsolete software purchase commitments.

Current wording

(1)Represents cash payments directly associated with acquisition or disposal activities, including employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. For the six months ended June 30, 2025, these payments related primarily to employee severance and termination benefits payments and Waltham Lease Restructuring charges. For the six months ended June 30, 2024, these payments related primarily to obsolete software purchase commitments, Waltham sublease cost and various lease impairment charges.

Previous wording

(2)Represents cash payments directly associated with integration activities for acquisitions and acquisition-related compensation, which includes transaction bonuses and retention awards. For the three months ended March 31, 2024, these payments related to deferred compensation from the acquisition of Insent.

Current wording

(2)Represents cash payments directly associated with integration activities for acquisitions and acquisition-related compensation, which includes transaction bonuses and retention awards. For the six months ended June 30, 2024, these payments related to deferred compensation from the acquisition of Insent.