ZoomInfo Technologies Inc.
For the period ended Sep 30, 2025. Filed Nov 3, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 3, 2025
GTM$3.50+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-04.
0001794515-25-000167
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-03.
0001794515-25-000184
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 173 previous paragraphs and 169 current paragraphs.
93 unchanged; 62 reworded; 14 added; 17 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Provision for income taxes
Current report
Revenue. Revenue was $318.0 million for the three months ended September 30, 2025, an increase of $14.4 million, or 5%, as compared to $303.6 million for the three months ended September 30, 2024. The increase was primarily due to the effects of shifting the mix of business upmarket and the resulting improvement in net revenue retention.
Current report
Nine Months Ended September 30, 2025 and 2024
Current report
(1)Represents costs 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 and nine months ended September 30, 2025, this expense is primarily related to employee severance and termination benefits and lease restructuring activities. For the three and nine months ended September 30, 2024, this expense is primarily related to lease impairment and abandonment charges as well as lease restructuring activities. This expense is included in cost of service, sales and marketing, research and development, and general and administrative as follows:
Current report
(2)Represents charges associated with certain legal settlements. For the three and nine months ended September 30, 2024, these charges are related to costs incurred due to the Class Actions.
Current report
The following table presents a reconciliation of Net incometo Adjusted Net Income for the periods presented:
Current report
(1)Represents costs 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 and nine months ended September 30, 2025, this expense is primarily related to employee severance and termination benefits and lease restructuring activities. For the three and nine months ended September 30, 2024, this expense is primarily related to lease impairment and abandonment charges as well as lease restructuring activities. This expense is included in cost of service, sales and marketing, research and development, and general and administrative as follows:
Current report
(2)Represents charges associated with certain legal settlements. For the three and nine months ended September 30, 2024, these charges are related to costs incurred due to the Class Actions.
Current report
Adjusted Net Income for the three months ended September 30, 2025 was $95.0 million compared to $103.7 million, representing a decrease of $8.7 million, or 8%, relative to the three months ended September 30, 2024. This decrease was primarily due to higher income tax expense and increased interest expense.
Current report
Adjusted Net Income for the nine months ended September 30, 2025 was $263.0 million compared to $270.2 million, representing a decrease of $7.2 million, or 3%, relative to the nine months ended September 30, 2024. This decrease was primarily due to higher income tax expense and increased interest expense.
Current report
The following table presents a reconciliation of Net income to Adjusted EBITDA for the periods presented:
Current report
(4)Represents charges associated with certain legal settlements. For the three and nine months ended September 30, 2024, these charges are related to costs incurred due to the Class Actions.
Current report
Adjusted EBITDA for the three months ended September 30, 2025 was $125.9 million compared to $118.0 million, representing an increase of $7.9 million, or 7%, relative to the three months ended September 30, 2024. This increase was primarily due to increased revenue partially offset by increased hosting and infrastructure expense, technology expense, and payroll tax and benefits expense.
Current report
Adjusted EBITDA for the nine months ended September 30, 2025 was $344.9 million compared to $329.9 million, representing an increase of $15.0 million, or 5%, relative to the nine months ended September 30, 2024. This increase 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, mostly offset by increased employee compensation expense, technology expense, hosting and infrastructure expense, and payroll tax and benefits expense.
Removed paragraphs (17)
Previous report
First Lien Revolver
Previous report
In May 2025, the Company drew $100.0 million of the $250.0 million available under its First Lien Revolver. The proceeds from this borrowing are intended to be used to fund the Share Repurchase Program.
Previous report
Restructuring
Previous report
In June 2025, the Company announced a reduction in force (the “Plan”) to support the Company’s broader efforts to move upmarket and support durable and efficient growth. The Plan included a reduction of employees by approximately 6% in the second quarter of 2025. The Plan was substantially completed as of June 30, 2025.
Previous report
Provision for (Benefit from) income taxes
Previous report
Six Months Ended June 30, 2025 and 2024
Previous report
(1)Represents costs 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 and six months ended June 30, 2025, this expense is primarily related to employee severance and termination benefits and lease restructuring activities. For the three and six months ended June 30, 2024, this expense is primarily related to lease impairment and abandonment charges. This expense is included in cost of service, sales and marketing, research and development, and general and administrative as follows:
Previous report
(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 report
The following table presents a reconciliation of Net income (loss)to Adjusted Net Income for the periods presented:
Previous report
(1)Represents costs 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 and six months ended June 30, 2025, this expense is primarily related to employee severance and termination benefits and lease restructuring activities. For the three and six months ended June 30, 2024, this expense is primarily related to lease impairment and abandonment charges. This expense is included in cost of service, sales and marketing, research and development, and general and administrative as follows:
Previous report
(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 report
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 report
Adjusted Net Income for the six months ended June 30, 2025 was $168.0 million compared to $166.4 million, representing an increase of $1.6 million, or 1%, relative to the six months ended June 30, 2024. This increase was primarily due to the higher Adjusted Operating Income in the current period as described above.
Previous report
The following table presents a reconciliation of Net income (loss) to Adjusted EBITDA for the periods presented:
Previous report
(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 report
Adjusted EBITDA for the three months ended June 30, 2025 was $111.3 million, an increase of $23.9 million, or 27%, relative to the three months ended June 30, 2024. This increase 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 report
Adjusted EBITDA for the six months ended June 30, 2025 was $219.0 million, an increase of $7.0 million, or 3%, relative to the six months ended June 30, 2024. This increase 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 employee compensation costs, employee benefit costs, technology expenses, and facilities expenses.
Reworded paragraphs (62)
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 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.
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 53% 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 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.
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 annual contract value ("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 90% and 85% as of September 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 September 30, 2025 and 2024, our number of customers with over $100,000 in ACV was 1,887 and 1,809, respectively.
Previous wording
During the second quarter of 2024, we deployed a new business risk model to flag and require upfront pre-payment from prospects at the greatest risk of non-payment. This process was incorporated to mitigate the risk of future write-offs and invest in the long-term health of the Company. Concurrently, our efforts have shifted to customers more likely to pay, renew, and grow with us over time.
Current wording
During the second quarter of 2024, we deployed a new business risk model to flag and require upfront prepayment from prospects at the greatest risk of non-payment. This process was implemented to mitigate the risk of future write-offs and to invest in the long-term health of the Company. Concurrently, our efforts have shifted to customers more likely to pay, renew, and grow with us over time.
Previous wording
We anticipate continued investment in cost of service, with cost of service as a percentage of revenue expected to remain consistent or modestly increase. This is driven by rising AI consumption costs and customer onboarding expenses as we migrate existing customers to Copilot and acquire and onboard new Copilot customers.
Current wording
We anticipate continued investment in cost of service, with cost of service as a percentage of revenue expected to slightly increase in the near term. This is driven by rising AI consumption costs and customer onboarding expenses for offerings such as ZoomInfo Copilot and ZoomInfo GTM Studio.
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.
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, litigation settlements, and restructuring and transaction-related expenses. We anticipate that restructuring and transaction-related expenses, including potential impairments, will be influenced by activities related to potential future acquisitions, strategic restructuring efforts, and leased spaces that we plan to sublease, which could cause these costs to vary, potentially significantly, from our historic levels.
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 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.
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 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 (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.
Current wording
The value of our deferred tax assets are regularly remeasured to consider the impact of statutory changes and other guidance, such as the One Big Beautiful Bill Act (OBBBA) passed on July 4, 2025, 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 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 (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.
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 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 of the position. 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.
Previous wording
The following table presents our results of operations for the three and six months ended June 30, 2025 and 2024:
Current wording
The following table presents our results of operations for the three and nine months ended September 30, 2025 and 2024:
Previous 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.
Current wording
Cost of revenue. Cost of revenue was $51.7 million for the three months ended September 30, 2025, an increase of $4.4 million, or 9%, as compared to $47.3 million for the three months ended September 30, 2024. Excluding equity-based compensation expense, cost of revenue was $48.8 million for three months ended September 30, 2025, an increase of $4.2 million, or 9%, as compared to $44.6 million for three months ended September 30, 2024, primarily due to increased hosting and infrastructure expense and depreciation expense on internally developed capitalized software.
Previous 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.
Current wording
Gross profit. Gross profit for the three months ended September 30, 2025 was $266.3 million and represented a gross margin of 84%. Gross profit for the three months ended September 30, 2024 was $256.3 million and represented a gross margin of 84%. The increase in gross profit in the three months ended September 30, 2025 relative to the three months ended September 30, 2024 was $10.0 million, or 4%, primarily due to higher revenues, partially offset by increased hosting and infrastructure expense and depreciation expense on internally developed capitalized software.
Previous 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.
Current wording
Operating expenses. Operating expenses were $198.8 million for the three months ended September 30, 2025, a decrease of $14.0 million, or 7%, as compared to $212.8 million for the three months ended September 30, 2024. Excluding equity-based compensation expense, operating expenses were $171.8 million for the three months ended September 30, 2025, a decrease of $7.1 million, or 4%, as compared to $178.9 million for the three months ended September 30, 2024.
Previous 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.
Current wording
•Sales and marketing for the three months ended September 30, 2025 was $101.6 million, representing an increase of $2.5 million, or 3%, as compared to $99.1 million for the three months ended September 30, 2024. Sales and marketing, excluding equity-based compensation expense, for the three months ended September 30, 2025 was $91.2 million, representing an increase of $4.4 million, or 5%, as compared to $86.8 million for the three months ended September 30, 2024, primarily due to increased employee compensation expense, technology expenses, and payroll tax and benefits expense, partially offset by lower restructuring facilities expense and marketing expense.
Previous 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.
Current wording
•Research and development for the three months ended September 30, 2025 was $44.1 million representing a decrease of $3.6 million, or 8%, as compared to $47.7 million for the three months ended September 30, 2024. Research and development, excluding equity-based compensation expense, for the three months ended September 30, 2025 was $35.6 million, representing a decrease of $1.6 million, or 4%, as compared to $37.2 million for the three months ended September 30, 2024, primarily due to increased capitalization of employee compensation expense, partially offset by increased technology expense.
Previous 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.
Current wording
•General and administrative for the three months ended September 30, 2025 was $47.9 million representing a decrease of $12.7 million, or 21%, as compared to $60.6 million for the three months ended September 30, 2024. General and administrative, excluding equity-based compensation expense, for the three months ended September 30, 2025 was $39.8 million, representing a decrease of $9.7 million, or 20%, as compared to $49.5 million for the three months ended September 30, 2024, primarily due to charges incurred in the comparative period related to lease impairment charges, partially offset by increased payroll tax and benefits expense.
Previous 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.
Current wording
•Amortization of other acquired intangibles was $5.2 million for the three months ended September 30, 2025, relatively flat as compared to $5.4 million for the three months ended September 30, 2024.
Previous wording
Equity-based compensation expense. Equity-based compensation expense was $29.7 million for the three months ended June 30, 2025, a decrease of $6.7 million, or 18%, as compared to $36.4 million for the three months ended June 30, 2024, primarily 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.
Current wording
Equity-based compensation expense. Equity-based compensation expense was $29.9 million for the three months ended September 30, 2025, a decrease of $6.7 million, or 18%, as compared to $36.6 million for the three months ended September 30, 2024, primarily due to lower weighted average grant date fair values of shares being amortized in the current period compared to those that were amortized in the prior period.
Previous 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.
Current wording
Income from operations. Income from operations was $67.5 million for the three months ended September 30, 2025, an increase of $24.0 million, as compared to income from operations of $43.5 million for the three months ended September 30, 2024. The increase is primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, as well as lower equity-based compensation expense and higher revenues in the current period. Operating income margin was 21% for three months ended September 30, 2025 as compared to operating income margin of 14% for the three months ended September 30, 2024.
Previous 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.
Current wording
Interest expense, net. Interest expense, net was $11.5 million for the three months ended September 30, 2025, an increase of $1.9 million, or 20%, as compared to $9.6 million for the three months ended September 30, 2024, primarily due to both lower interest income and increase expense from incremental borrowings, partially offset by lower interest rates.
Previous wording
Other income, net. Other income, net was $14.0 million for the three months ended June 30, 2025, which consists of $14.6 million of TRA remeasurement gain, partially offset by $0.6 million of loss on foreign currency transactions, as compared to other income, net of $5.9 million for the three months ended June 30, 2024, which primarily consists of $3.6 million investment income.
Current wording
Other income, net. Other income, net was $0.4 million for the three months ended September 30, 2025, which primarily consists of $0.8 million of TRA remeasurement gain and a $0.5 million loss on foreign currency transactions, as compared to other income, net of $1.0 million for the three months ended September 30, 2024, which primarily consists of $2.2 million of investment income and $0.7 million of TRA remeasurement loss.
Previous 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 three months ended June 30, 2025 was $33.0 million, representing an effective tax rate of 57.9%, as compared to income tax benefit of $0.2 million, representing an effective tax rate of 0.7%, for the three 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.
Current 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 September 30, 2025 was $17.7 million, representing an effective tax rate of 31.5%, as compared to income tax provision of $11.1 million, representing an effective tax rate of 31.7%, for the three months ended September 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
Net income (loss). Net income was $50.8 million for three months ended June 30, 2025, an increase of $60.1 million, as compared to net loss of $9.3 million for the three months ended June 30, 2024. The increase was primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, charges related to Class Actions, as well as incremental bad debt expense resulting from a change in the accounting estimate, and higher revenue, partially offset by increased income tax expense.
Current wording
Net income. Net income was $38.7 million for three months ended September 30, 2025, an increase of $14.9 million, as compared to net income of $23.8 million for the three months ended September 30, 2024. The increase was primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, as well as lower equity-based compensation expense and higher revenues in the current period, partially offset by increased income tax expense.
Previous 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.
Current wording
Revenue. Revenue was $930.4 million for the nine months ended September 30, 2025, an increase of $25.2 million, or 3%, as compared to $905.2 million for the nine months ended September 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 $96.8 million for the six months ended June 30, 2025, an increase of $7.5 million, or 8%, as compared to $89.3 million for the six months ended June 30, 2024. Excluding equity-based compensation expense, cost of revenue was $91.2 million for the six months ended June 30, 2025, an increase of $7.1 million, or 8%, as compared to $84.1 million for the six months ended June 30, 2024, primarily due to increased hosting fees, depreciation expense on internally developed capitalized software, and employee benefit costs.
Current wording
Cost of revenue. Cost of revenue was $148.5 million for the nine months ended September 30, 2025, an increase of $11.9 million, or 9%, as compared to $136.6 million for the nine months ended September 30, 2024. Excluding equity-based compensation expense, cost of revenue was $140.0 million for the nine months ended September 30, 2025, an increase of $11.3 million, or 9%, as compared to $128.7 million for the nine months ended September 30, 2024, primarily due to increased hosting and infrastructure expense and depreciation expense on internally developed capitalized software.
Previous wording
Gross profit. Gross profit for the six months ended June 30, 2025 was $515.6 million and represented a gross margin of 84%. Gross profit for the six months ended June 30, 2024 was $512.3 million and represented a gross margin of 85%. The decrease in gross profit in the six months ended June 30, 2025 relative to the six months ended June 30, 2024 was $3.3 million, or 1%, primarily due to increased revenue as described above mostly offset by increased hosting fees, depreciation expense on internally developed capitalized software, and employee benefit costs.
Current wording
Gross profit. Gross profit for the nine months ended September 30, 2025 was $781.9 million and represented a gross margin of 84%. Gross profit for the nine months ended September 30, 2024 was $768.6 million and represented a gross margin of 85%. The increase in gross profit in the nine months ended September 30, 2025 relative to the nine months ended September 30, 2024 was $13.3 million, or 2%, primarily due to lower revenues in the comparative period as described above, partially offset by increased hosting and infrastructure expense and depreciation expense on internally developed capitalized software.
Previous wording
Operating expenses. Operating expenses were $411.6 million for the six months ended June 30, 2025, a decrease of $77.7 million, or 16%, as compared to $489.3 million for the six months ended June 30, 2024. Excluding equity-based compensation expense, operating expenses were $357.9 million for the six months ended June 30, 2025, a decrease of $69.0 million, or 16%, as compared to $426.9 million for the six months ended June 30, 2024.
Current wording
Operating expenses. Operating expenses were $610.4 million for the nine months ended September 30, 2025, a decrease of $91.7 million, or 13%, as compared to $702.1 million for the nine months ended September 30, 2024. Excluding equity-based compensation expense, operating expenses were $529.7 million for the nine months ended September 30, 2025, a decrease of $76.1 million, or 13%, as compared to $605.8 million for the nine months ended September 30, 2024.
Previous wording
•Sales and marketing for the six months ended June 30, 2025 was $212.3 million, representing an increase of $12.2 million, or 6%, as compared to $200.1 million for the six months ended June 30, 2024. Sales and marketing, excluding equity-based compensation expense, for the six months ended June 30, 2025 was $189.5 million, representing an increase of $15.2 million, or 9%, as compared to $174.3 million for the six months ended June 30, 2024, primarily due to increased employee compensation costs, employee benefit costs, technology expenses, and severance costs.
Current wording
•Sales and marketing for the nine months ended September 30, 2025 was $313.9 million, representing an increase of $14.7 million, or 5%, as compared to $299.2 million for the nine months ended September 30, 2024. Sales and marketing, excluding equity-based compensation expense, for the nine months ended September 30, 2025 was $280.7 million, representing an increase of $19.6 million, or 8%, as compared to $261.1 million for the nine months ended September 30, 2024, primarily due to increased employee compensation expense, payroll tax and benefits expense, and technology expense.
Previous wording
•Research and development for the six months ended June 30, 2025 was $95.7 million representing an increase of $3.7 million, or 4%, as compared to $92.0 million for the six months ended June 30, 2024. Research and development, excluding equity-based compensation expense, for the six months ended June 30, 2025 was $78.7 million, representing an increase of $5.7 million, or 8%, as compared to $73.0 million for the six months ended June 30, 2024, primarily due to increased severance costs, employee benefit costs, hosting fees, and technology expense, partially offset by the increased capitalization of employee compensation costs.
Current wording
•Research and development for the nine months ended September 30, 2025 was $139.8 million, relatively flat compared to $139.7 million for the nine months ended September 30, 2024. Research and development, excluding equity-based compensation expense, for the nine months ended September 30, 2025 was $114.3 million, representing an increase of $4.1 million, or 4%, as compared to $110.2 million for the nine months ended September 30, 2024, primarily due to increased severance costs, technology expense, hosting and infrastructure expense, and payroll tax and benefits expense, partially offset by the increased capitalization of employee compensation expense.
Previous wording
•General and administrative for the six months ended June 30, 2025 was $93.1 million representing a decrease of $93.3 million, or 50%, as compared to $186.4 million for the six months ended June 30, 2024. General and administrative, excluding equity-based compensation expense, for the six months ended June 30, 2025 was $79.2 million, representing a decrease of $89.6 million, or 53%, as compared to $168.8 million for the six months ended June 30, 2024, primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, charges related to Class Actions, as well as incremental bad debt expense resulting from a change in the accounting estimate.
Current wording
•General and administrative for the nine months ended September 30, 2025 was $141.0 million representing a decrease of $106.0 million, or 43%, as compared to $247.0 million for the nine months ended September 30, 2024. General and administrative, excluding equity-based compensation expense, for the nine months ended September 30, 2025 was $119.0 million, representing a decrease of $99.3 million, or 45%, as compared to $218.3 million for the nine months ended September 30, 2024, primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, charges related to Class Actions, as well as incremental bad debt expense resulting from the change in accounting estimate.
Previous wording
•Amortization of other acquired intangibles was $10.5 million for the six months ended June 30, 2025, relatively flat as compared to $10.8 million for the six months ended June 30, 2024.
Current wording
•Amortization of other acquired intangibles was $15.7 million for the nine months ended September 30, 2025, relatively flat as compared to $16.2 million for the nine months ended September 30, 2024.
Previous 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.
Current wording
Equity-based compensation expense. Equity-based compensation expense was $89.2 million for the nine months ended September 30, 2025, a decrease of $15.0 million, or 14%, as compared to $104.2 million for the nine months ended September 30, 2024, due to lower weighted average grant date fair values of shares 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
Income from operations. Income from operations was $104.0 million for the six months ended June 30, 2025, an increase of $81.0 million, as compared to income from operations of $23.0 million for the six months ended June 30, 2024. The increase is primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, charges related to Class Actions, and incremental bad debt expense resulting from a change in the accounting estimate. Operating income margin was 17% for six months ended June 30, 2025 as compared to operating income margin of 4% for the six months ended June 30, 2024.
Current wording
Income from operations. Income from operations was $171.5 million for the nine months ended September 30, 2025, an increase of $105.0 million, as compared to income from operations of $66.5 million for the nine months ended September 30, 2024. The increase is primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, Class Actions, and incremental bad debt expense resulting from a change in the accounting estimate. Operating income margin was 18% for nine months ended September 30, 2025 as compared to operating income margin of 7% for the nine months ended September 30, 2024.
Previous wording
Interest expense, net. Interest expense, net was $10.7 million for the three months ended June 30, 2025, an increase of $0.9 million, or 9%, as compared to $9.8 million for the three months ended June 30, 2024, primarily due to increased interest expense from the First Lien Revolver and lower interest income.
Current wording
Interest expense, net. Interest expense, net was $32.0 million for the nine months ended September 30, 2025, an increase of $2.5 million, or 8%, as compared to $29.5 million for the nine months ended September 30, 2024, primarily due to both lower interest income and increase expense from incremental borrowings, partially offset by lower interest rates.
Previous 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.
Current wording
Other income, net. Other income, net was $13.5 million for the nine months ended September 30, 2025, which consists of $14.2 million of TRA remeasurement gain, $0.2 million of investment income, and a $0.9 million of loss on foreign currency transactions, as compared to other income, net of $3.5 million for the nine months ended September 30, 2024, which primarily consists of $9.5 million of investment income, $1.4 million of foreign currency gain, and $9.9 million of TRA remeasurement loss.
Previous 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.
Current 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 nine months ended September 30, 2025 was $63.5 million, representing an effective tax rate of 41.5%, as compared to provision for income taxes of $25.3 million, representing an effective tax rate of 63.4%, for the nine months ended September 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
Net income (loss). Net income was $24.0 million for three months ended June 30, 2025, an increase of $48.4 million, as compared to net loss of $24.4 million for the three months ended June 30, 2024. The increase was 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, and higher revenues, partially offset by increased income tax expense.
Current wording
Net income. Net income was $89.5 million for nine months ended September 30, 2025, an increase of $75.0 million, as compared to net income of $14.5 million for the nine months ended September 30, 2024. The increase was primarily due to charges incurred in the comparative period related to lease impairment and abandonment charges, Class Actions, and incremental bad debt expense resulting from the change in accounting estimate, partially offset by increased income tax expense.
Previous wording
The following table presents a reconciliation of Income (Loss) from operations to Adjusted Operating Income for the periods presented:
Current wording
The following table presents a reconciliation of Income from operations to Adjusted Operating Income for the periods presented:
Previous 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.
Current wording
Adjusted Operating Income for the three months ended September 30, 2025 was $117.7 million and represented an Adjusted Operating Income Margin of 37%. Adjusted Operating Income for the three months ended September 30, 2024 was $111.7 million and represented an Adjusted Operating Income Margin of 37%. The increase of $6.0 million, or 5%, in Adjusted Operating Income was primarily due to increased revenue partially offset by increased hosting and infrastructure expense, technology expense, and payroll tax and benefits expense.
Previous wording
Adjusted Operating Income for the six months ended June 30, 2025 was $205.6 million and represented an Adjusted Operating Income Margin of 34%. Adjusted Operating Income for the six months ended June 30, 2024 was $200.9 million and represented an Adjusted Operating Income Margin of 33%. The increase of $4.7 million, or 2%, 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, mostly offset by increased employee compensation costs, employee benefit costs, technology expenses, hosting and contractor costs, and facilities expenses.
Current wording
Adjusted Operating Income for the nine months ended September 30, 2025 was $323.3 million and represented an Adjusted Operating Income Margin of 35%. Adjusted Operating Income for the nine months ended September 30, 2024 was $312.6 million and represented an Adjusted Operating Income Margin of 35%. The increase of $10.7 million, or 3%, 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, mostly offset by increased employee compensation expense, technology expense, hosting and infrastructure expense, and payroll tax and benefits expense.
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 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.
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 September 30, 2025, these primarily relate to recognizing $15.8 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $0.1 million of tax expense from the effects of changes in state tax law and apportionment, and adjusting out $2.8 million of tax expense from non-deductible stock-based compensation. For three months ended September 30, 2024, these primarily relate to recognizing $20.6 million of tax benefit related to the amortization of costs associated with corporate structure simplification, and adjusting out $4.7 million of tax expense from non-deductible stock-based compensation, and adjusting out $0.3 million of tax expense from the effects of changes in state tax law and apportionment. For the nine months ended September 30, 2025, these primarily relate to recognizing $44.6 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $13.5 million of tax expense from the effects of changes in state tax law and apportionment, and adjusting out $9.8 million of tax expense from non-deductible stock-based compensation. For nine months ended September 30, 2024, these primarily relate to recognizing $45.1 million of tax benefit related to the amortization of costs associated with corporate structure simplification, adjusting out $13.0 million of tax expense from non-deductible stock-based compensation, and adjusting out $1.8 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.
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Previous report — wording carried elsewhere
Revenue. Revenue was $612.4 million for the six months ended June 30, 2025, an increase of $10.8 million, or 2%, as compared to $601.6 million for the six 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.