Klaviyo, Inc.

Previous wording

We founded Klaviyo in 2012 to provide businesses of all sizes with powerful technology that captures, stores, analyzes, and predictively uses their own data to drive measurable, high-value outcomes. Klaviyo enables businesses to drive revenue growth by making it easy to bring their first-party data together and use it to create and deliver highly personalized consumer experiences across digital channels.

Current wording

We founded Klaviyo in 2012 to provide businesses of all sizes with powerful technology that captures, stores, analyzes, and predictively uses their own data to drive measurable, high-value outcomes. Today, Klaviyo enables over 169,000 businesses around the globe to efficiently drive revenue growth by making it easy to bring their first-party data together and use it to create and deliver highly personalized, omnichannel consumer experiences at scale. Our platform combines our proprietary data and application layers into one vertically-integrated solution with advanced machine learning and artificial intelligence capabilities and over 350 integrations.

Previous wording

Our platform combines our proprietary data and application layers into one vertically-integrated solution with advanced machine learning and artificial intelligence capabilities. This enables business users of any skill level to harness their data in order to send the right message at the right time across email, short message service (“SMS”), and push notifications, more accurately measure and predict performance, and deploy the specific actions and campaigns that drive the highest impact. Our reviews add-on allows our customers to collect product reviews within our platform to provide a seamless experience across the customer lifecycle, and our Customer Data Platform (“CDP”) offering gives customers user-friendly ways to track new types of data, transform and cleanse data, run more advanced reporting and predictive analysis to drive revenue growth, and sync data in to and out of Klaviyo at scale. We focused on marketing automation within eCommerce as our first application use case, and we believe our software is highly extensible across a broad range of functions and verticals. As of September 30, 2024, our platform had efficiently scaled to over 157,000 customers. Today, our customers primarily operate within the retail and eCommerce vertical. Due to the flexibility and adaptability of our technology, we also see organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from business-to-business (“B2B”) companies. See the section below titled “Key Performance Metrics – Customers” for additional information on how we define customers and customers outside of retail.

Current wording

Today, our customers primarily operate within the retail and eCommerce vertical. Due to the flexibility and adaptability of our technology, we also see organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from business-to-business (“B2B”) companies. As of March 31, 2025, our platform had efficiently scaled to over 169,000 customers. See the section titled “Key Performance Metrics – Customers” for additional information on how we define customers.

Previous wording

Our land-and-expand strategy is designed to align our success with that of our customers. As our customers’ businesses grow, they utilize more active consumer profiles and send more emails and SMS messages, which naturally increases their usage of our platform. Our revenue also expands when our customers add additional channels, such as SMS, and additional use cases, such as reviews and our CDP offering, or when their other brands, business units, and geographies start using the platform.

Current wording

Our land-and-expand strategy aligns our success with that of our customers. As our customers’ businesses grow, they utilize more active consumer profiles and send more emails and SMS messages, which naturally increases their usage of our platform. Our revenue also expands when our customers add additional marketing channels, such as SMS, additional use cases, such as Reviews, and additional applications such as Klaviyo Service and Klaviyo Analytics, or when their other brands, business units, and geographies start using our platform.

Previous wording

Attracting new customers to our platform is a key driver of our revenue growth strategy. We have successfully grown our retail and eCommerce customer base and believe we have significant room to expand within this vertical as well as expand into other industries, including education, events and entertainment, restaurants, wellness, and travel as well as from B2B customers. Our ability to attract new customers will depend on a number of factors, including our ability to innovate, the effectiveness and pricing of our new and existing products and capabilities, and the success of our selling and marketing efforts.

Current wording

Attracting new customers to our platform is a key driver of our revenue growth strategy. We have successfully grown our retail and eCommerce customer base and believe we have significant room to expand within this vertical as well as expand into other industries, including education, events and entertainment, restaurants, wellness, and travel as well as from B2B companies. Our ability to attract new customers will depend on a number of factors, including our ability to innovate, the effectiveness and pricing of our new and existing products and capabilities, and the success of our selling and marketing efforts.

Previous wording

We believe our product-led growth strategy enables us to efficiently expand penetration within our existing customer base. We focus on expansion in three primary ways. First, as our customers increase their usage of our platform through the number of active consumer profiles they have and email and SMS messages they send, they move to higher subscription tiers. Second, we cross-sell additional communication channels, such as SMS, to customers who started on our platform with our email offering, as well as add-ons, such as reviews and our CDP offering. Finally, we sell our platform to our customers’ other brands, business units, and geographies. Going forward, our ability to increase sales to existing customers will depend on a number of factors, including our customers’ satisfaction with our solutions and the ability of our customers to attract new consumers. We expect these three forms of revenue expansion to continue in the future.

Current wording

We believe our product-led growth strategy enables us to efficiently expand penetration within our existing customer base. We focus on expansion in three primary ways. First, as our customers increase their usage of our platform through the number of active consumer profiles they store and email and SMS messages they send, they move to higher subscription tiers. Second, we cross-sell additional offerings (e.g., Marketing Analytics) and marketing channels (e.g., SMS) to customers who started on our platform with our email offering, as well as add-ons, such as Reviews and our Advanced KDP offering. Finally, we offer our platform to our customers’ other brands, business units, and geographies. Going forward, our ability to increase sales to existing customers will depend on a number of factors, including our customers’ satisfaction with our solutions and the ability of our customers to attract new consumers. We expect these three forms of revenue expansion to continue in the future.

Previous wording

We believe we have significant expansion opportunities in international markets. We started by serving customers in North America and, in 2019, we expanded our operations to London, England to penetrate the European region. In 2022, we opened our office in Sydney, Australia to capitalize on the opportunities in Asia Pacific. We have already experienced significant growth with international sales outside of the Americas accounting for 32.2% of our revenue for the nine months ended September 30, 2024. We continue to expand our product offerings to better serve the international market. As of the date of this Quarterly Report on Form 10-Q, we offer our SMS capabilities in more than 15 countries, and we offer our platform in seven languages, including English, French, German, Portuguese, Korean, Spanish and Italian. We believe that the introduction of additional languages and currencies to our platform will increase our efficacy and ease of use in other regions.

Current wording

We believe we have significant expansion opportunities in international markets. We started by serving customers in North America and, in 2019, we expanded our operations to London, England to penetrate the European region. In 2022, we opened our office in Sydney, Australia to capitalize on the opportunities in Asia Pacific. In 2024, we expanded our presence in the European region by adding operations in Dublin, Ireland. We have already experienced significant growth with international sales outside of the Americas accounting for 33.7% of our revenue for the three months ended March 31, 2025. We also continue to expand our product offerings to better serve the international market. As of the date of this Quarterly Report on Form 10-Q, we offer SMS capabilities in more than 15 countries, and we offer our platform in

Previous wording

Since our inception, we have been focused on product innovation, seeking to create what we believe is the best software solution for our customers. We originally launched our platform with email messaging as our first channel. Since then, we have successfully added other channels, such as SMS and push notifications, as well additional use cases, such as reviews and our CDP offering. More recently, we have also launched Klaviyo AI, a suite of features that provide customers with AI-powered tools that help segment data, create and orchestrate campaigns, and drive better engagement. Our continued success depends on our ability to sustain product and technology innovation to continue delivering value to our customers. As technology and consumer preferences change, we believe that our ability to drive continuous product innovation will be critical to attract and retain customers and drive revenue growth.

Current wording

Since our inception, we have been focused on product innovation, seeking to create what we believe is the best software solution for our customers. We originally launched our platform with email messaging as our first marketing channel. Since then, we have successfully added other marketing channels, such as SMS and Mobile Push, additional use cases, such as Reviews, and additional applications, such as Klaviyo Service and Klaviyo Analytics. We have also introduced Klaviyo AI, a suite of features that provide customers with AI-powered tools to streamline data segmentation, create and orchestrate campaigns, and drive better engagement.

Previous wording

We have seen notable success in the expansion of our platform with our SMS offering, which launched in 2021. Once customers adopt our SMS offering, they typically grow their usage over time as they gain comfort and confidence in the new channel. Our SMS offering has higher associated communication sending costs, and as the number of SMS messages sent by our customers increases, we expect our gross margin to decline modestly. SMS messaging is particularly concentrated in the fourth quarter of each year due to the holiday shopping season, and as a result, we expect our gross margin to be most heavily impacted in that quarter. This gross margin impact could be partially offset by our continued work on data storage architecture and gaining further leverage on costs with our increased scale. We believe we will see our overall gross profit dollars increase as customers send more SMS messages if our SMS offering continues to gain traction.

Current wording

We have seen notable success in the expansion of our platform with our SMS offering, which launched in 2021. Once customers adopt our SMS offering, they typically grow their usage over time as they gain comfort and confidence in the new channel. Our SMS offering has higher associated communication sending costs, and as the number of SMS messages sent by our customers increases, we expect our gross margin to decline modestly. SMS messaging is particularly concentrated in the fourth quarter of each year due to the holiday shopping season, and as a result, we expect our gross margin to be most heavily impacted in that quarter. This gross margin impact could be partially offset by gaining further leverage on costs with our increased scale, increased usage of higher margin products by our customers, and ongoing efforts to drive infrastructure efficiency. We believe we will see our overall gross profit dollars increase as customers send more SMS messages if our SMS offering continues to gain traction.

Previous wording

As more customers use our platform, we are seeing organic demand from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from B2B companies. While we started with consumer engagement as our initial use case in the retail and eCommerce vertical, we see a large opportunity into other products and verticals. Without an active sales motion, we have attracted customers from verticals other than retail and eCommerce, which indicates the strong interest and applicability of our platform to new verticals. We have begun to explore ways to serve these new verticals more intentionally. In the future, we intend to more actively invest in addressing new industry verticals and product use cases.

Current wording

As more customers use our platform, we are seeing organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from B2B companies. While we started with consumer engagement as our initial use case in the retail and eCommerce vertical, we see a large opportunity into other products and verticals. Without an active sales motion, we have attracted customers from verticals other than retail and eCommerce, which indicates the strong interest and applicability of our platform to new verticals. We continue to explore ways to serve these new verticals more intentionally. In the future, we intend to more actively invest in addressing new industry verticals and product use cases.

Previous wording

Customers. We define a customer as a distinct paid subscription to our platform. A single organization could have multiple discrete contracting divisions or subsidiaries or brands each with paid subscriptions to our platform, which would, in general, constitute multiple distinct customers. In some cases at the customer’s request, we allow subscriptions under the same parent organization to be consolidated into a single paid subscription in which case such consolidated paid subscriptions would constitute a single customer. We measure our total number of customers as a point-in-time calculation measured as of the end of a particular period. Customers do not include persons or entities that use our platform on a free trial basis. We define customers outside of retail as those customers who have an identified industry outside of retail, either through in-product selection or as part of the sales process.

Current wording

Customers. We define a customer as a distinct paid subscription to our platform. A single organization could have multiple discrete contracting divisions or subsidiaries or brands each with paid subscriptions to our platform, which would, in general, constitute multiple distinct customers. In some cases at the customer’s request, we allow subscriptions under the same parent organization to be consolidated into a single paid subscription in which case such consolidated paid subscriptions would constitute a single customer. We measure our total number of customers as a point-in-time calculation measured as of the end of a particular period. Customers do not include persons or entities that use our platform on a free trial basis.

Previous wording

As of September 30, 2024, we had 2,619 customers generating over $50,000 of ARR, compared to 1,699 customers generating over $50,000 of ARR as of September 30, 2023, representing growth of 54% year-over-year.

Current wording

As of March 31, 2025, we had 3,030 customers generating over $50,000 of ARR, compared to 2,157 customers generating over $50,000 of ARR as of March 31, 2024, representing growth of 40% year-over-year.

Previous wording

As of September 30, 2024 and 2023, our NRR was 110% and 119%, respectively. We implemented a price increase in September 2022, which positively increased revenue growth in 2022 and 2023. This price increase also impacted the various measures we use to assess our usage and subscription levels based on revenue, such as NRR, and our revenue growth rate, and following its implementation, those measures experienced corresponding increases as a result. The decrease in these measures from September 30, 2023 to September 30, 2024 was largely driven by lapping the one-year anniversary of this price increase in September 2023.

Current wording

As of March 31, 2025 and 2024, our NRR was 108% and 114%, respectively. The decrease in this metric from March 31, 2024 to March 31, 2025 was largely driven by relatively lower comparable expansion of existing customer plans.

Previous wording

A significant majority of our revenues are derived from sales of subscriptions, which are comprised of fees paid by customers to access our cloud-based software platform for storing consumer’s first-party data and using it to create and deliver personalized and targeted email and SMS marketing services. A small portion of our revenue is currently derived from professional services.

Current wording

A significant majority of our revenues are derived from sales of subscriptions, which are comprised of fees paid by customers to access our cloud-based software platform for storing first-party consumer data and using it to create and deliver personalized and targeted consumer experiences across digital channels. A small portion of our revenue is currently derived from professional services.

Previous wording

Our cost of revenue primarily consist of cloud-based infrastructure costs, outbound communication sending costs, employee-related costs including payroll, benefits, bonuses, and stock-based compensation expense related to our customer support team, amortization of capitalized internal-use software development costs, and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology.

Current wording

Our cost of revenue primarily consists of cloud-based infrastructure costs, outbound communication sending costs, employee-related costs including payroll, benefits, bonuses, and stock-based compensation expense related to our customer support team, amortization of capitalized internal-use software development costs, and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology.

Previous wording

We expect our cost of revenue to increase in dollar amount as we continue to invest in our platform infrastructure and support, acquire new customers, and existing customers increase their usage of our platform.

Current wording

We expect our cost of revenue to increase in dollar amount as we continue to invest in our platform infrastructure and support, acquire new customers, and drive existing customers to expand their usage of our platform.

Previous wording

We expect our gross profit to increase over time due to an increase in revenue. We expect our gross margin to decline modestly in the near term as the volume of SMS messages sent through our platform increases, and it could fluctuate in the long term due to timing of investments and expected increases in our cloud-based infrastructure costs and outbound communication sending costs, including email and SMS, as our customers increase usage of our platform and capabilities. We expect to continue to optimize inputs to our cost of revenue through continued work on data storage architecture and gaining further leverage on costs with our increased scale.

Current wording

We expect our gross profit to increase over time due to an increase in revenue. We expect our gross margin to decline modestly in the near term as the volume of SMS messages sent through our platform increases and as our cloud-based infrastructure costs and outbound communication sending costs increase as our customers increase usage of our platform and capabilities. This gross margin impact could be partially offset by gaining further leverage on costs with our increased scale, increased usage of higher margin products by our customers, and ongoing efforts to drive infrastructure efficiency.

Previous wording

Our selling and marketing costs primarily consist of employee-related costs including payroll, benefits, bonuses, and stock-based compensation; sales commissions and partnership expenses for revenue sharing agreements, including to Shopify Inc. (“Shopify”), other commerce platform partners, and agency partners; costs associated with advertising and marketing activities; and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology. Sales commissions are considered an incremental cost to obtain contracts with customers and these costs are deferred and amortized over the expected benefit period. On July 28, 2022, we entered into a collaboration agreement and strategic partnership with Shopify pursuant to which we issued warrants to Shopify (and certain of its affiliates) (the “Shopify Warrants”), in exchange for promotion of our marketing services with customers within the Shopify ecosystem. In accordance with relevant accounting policies, we recognize a prepaid marketing expense in connection with the Shopify Warrants. This prepaid marketing expense represents the probable future economic benefit being amortized over a seven-year expected benefit period and is recorded based on the fair value of the warrants on the grant date.

Current wording

Our selling and marketing costs primarily consist of employee-related costs including payroll, benefits, bonuses, and stock-based compensation; sales commissions and partnership expenses for revenue sharing agreements, including to Shopify Inc. and certain of its affiliates (collectively, “Shopify”), other commerce platform partners, and agency partners; costs associated with advertising and marketing activities; and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology. Sales commissions are considered an incremental cost to obtain contracts with customers and these costs are deferred and amortized over the expected benefit period. On July 28, 2022, we entered into a collaboration agreement and strategic partnership with Shopify pursuant to which we issued warrants to Shopify (the “Shopify Warrants”), in exchange for promotion of our marketing services with customers within the Shopify ecosystem. In accordance with relevant accounting policies, we recognize a prepaid marketing expense in connection with vesting of the Shopify Warrants. This prepaid marketing expense represents the probable future economic benefit being amortized over a seven-year expected benefit period and is recorded based on the fair value of the warrants on the grant date.

Previous wording

Our research and development costs primarily consist of employee-related costs associated with research and development staff, including payroll, benefits, bonuses, stock-based compensation, and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology. We capitalize a portion of our research and development costs that meets the criteria for capitalization of internal-use software. All other research and development costs are expensed as incurred.

Current wording

Our research and development costs primarily consist of employee-related costs associated with research and development staff, including payroll, benefits, bonuses, stock-based compensation, and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology. We capitalize a portion of our research and development costs that meet the criteria for capitalization of internal-use software. All other research and development costs are expensed as incurred.

Previous wording

We expect general and administrative expenses to increase in the near term as a result of operating as a public company, including expenses associated with compliance with the rules and regulations governing public companies, such as Section 404 of the Sarbanes-Oxley Act, and an increase in legal, audit, insurance, investor relations, professional services, and other administrative expenses. Further, we expect an increase in dollar amount of credit card processing fees in line with the expected increase in revenue for the foreseeable future. As a result, we expect our general and administrative expenses to increase in dollar amount for the foreseeable future but to generally decrease as a percentage of our revenue over the longer term as we scale our business. This percentage may fluctuate from period to period depending on the timing and amount of our general and administrative expenses, including in the short term due to heightened compliance requirements associated with operating as a public company. These expenses include increased professional service costs, the increased cost of directors’ and officers’ liability insurance, and costs associated with increasing our employee headcount in certain departments, such as accounting, internal audit, and investor relations.

Current wording

We incur expenses as a result of operating as a public company, including expenses to comply with the rules and regulations governing public companies, such as Section 404 of the Sarbanes-Oxley Act, and expenses for legal, audit, insurance, investor relations, and related professional services. Further, we expect an increase in dollar amount of credit card processing fees in line with the expected increase in revenue for the foreseeable future. As a result, we expect our general and administrative expenses to increase in dollar amount for the foreseeable future but to generally decrease as a percentage of our revenue over the longer term as we scale our business. This percentage may fluctuate from period to period depending on the timing and amount of our general and administrative expenses.

Previous wording

The Organization for Economic Co-operation and Development (“OECD”) is coordinating negotiations among more than 140 countries with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%. While various countries have implemented the legislation as of January 1, 2024, we do not expect a resulting material change to our income tax provision for the 2024 fiscal year. As additional jurisdictions enact such legislation, we expect our effective tax rate and cash tax payments could increase in future years.

Current wording

The Organisation for Economic Co-operation and Development (“OECD”) is coordinating negotiations among more than 140 countries with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%. Various countries have implemented or are in the process of implementing the legislation, which does not currently apply to us. As additional jurisdictions enact such legislation, we expect our effective tax rate and cash tax payments could increase in future years.

Previous wording

We operate our business through one reportable segment, as well as one business activity, providing software that brings consumers’ first-party data together and uses it to create and deliver highly personalized consumer experiences across digital channels.

Current wording

We operate our business through one reportable segment, as well as one business activity, providing software that brings first-party consumer data together and uses it to create and deliver highly personalized consumer experiences across digital channels.

Previous wording

Three and Nine Months Ended September 30, 2024 Compared to the Three and Nine Months Ended September 30, 2023

Current wording

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Previous wording

Revenue for the three months ended September 30, 2024 increased by $59.3 million or 33.7%, to $235.1 million compared to $175.8 million for the three months ended September 30, 2023. The increase was due to new business, expanded usage of our platform, and growth of our SMS channel. For the three months ended September 30, 2024, sales to existing customers accounted for approximately 41% of the increase in revenue, and approximately 59% of the increase in revenue was related to new customers. Sales to new customers represent the revenue recognized from new customers acquired in the 12 months prior to the period end.

Current wording

Revenue for the three months ended March 31, 2025 increased by $69.8 million or 33.3%, to $279.8 million compared to $210.0 million for the three months ended March 31, 2024. The increase was due to new business, expanded usage of our platform, and growth of our SMS channel. For the three months ended March 31, 2025, sales to existing customers accounted for approximately 40% of the increase in revenue while approximately 60% of the increase in revenue was related to new customers. Sales to new customers represent the revenue recognized from new customers acquired in the 12 months prior to the period end.

Previous wording

Cost of revenue for the nine months ended September 30, 2024 increased by $16.7 million or 12.6%, to $149.6 million compared to $132.9 million for the nine months ended September 30, 2023. This was primarily due to an increase of approximately $24.7 million in outbound communication sending costs on behalf of our customers due to increased usage, $5.5 million in salaries and personnel expenses as a result of increases in headcount, and $1.9 million in amortization expense associated with capitalized internal-use software development costs, offset by a decrease of $14.9 million of stock-based compensation expense related to the vesting of RSUs in connection with our IPO in September 2023.

Current wording

Cost of revenue for the three months ended March 31, 2025 increased by $22.8 million or 50.7%, to $67.7 million compared to $44.9 million for the three months ended March 31, 2024. This was primarily due to an increase of approximately $13.4 million in cloud-based infrastructure costs, $7.1 million in outbound communication sending costs on behalf of our customers due to increased usage, and $1.7 million in salaries and personnel expenses as a result of increases in headcount.

Previous wording

Gross profit for the three months ended September 30, 2024 increased by $63.8 million or 54.5%, to $180.7 million compared to $117.0 million for the three months ended September 30, 2023. This increase was primarily due to revenue growth and a decrease in stock-based compensation expense.

Current wording

Gross profit for the three months ended March 31, 2025 increased by $47.1 million or 28.5%, to $212.1 million compared to $165.1 million for the three months ended March 31, 2024. This increase was primarily due to revenue growth offset by an increase in cost of revenue due to increased usage.

Previous wording

Selling and marketing expenses for the three months ended September 30, 2024 decreased by $67.9 million or 40.4%, to $100.0 million compared to $167.9 million for the three months ended September 30, 2023. This was primarily due to a decrease of approximately $87.4 million of stock-based compensation expense related to the vesting of RSUs in connection with our IPO in September 2023, offset by an increase of $9.3 million in salaries and related personnel expenses as a result of increases in headcount, $3.4 million in professional services, $3.3 million in marketing expenses associated with our advertising campaigns across multiple channels of media, $2.4 million in partnership-related expenses across our ecosystem, and $1.0 million in technology expenses.

Current wording

Selling and marketing expenses for the three months ended March 31, 2025 increased by $31.7 million or 34.5%, to $123.5 million compared to $91.9 million for the three months ended March 31, 2024. This increase was primarily due to an increase of approximately $14.6 million in salaries and related personnel expenses as a result of increases in headcount and the introduction of a company-wide bonus program, $9.3 million in marketing expenses associated with our advertising campaigns across multiple channels of media, $3.2 million in partnership-related expenses across our ecosystem, $3.0 million in professional services, and $1.1 million in technology expenses.

Previous wording

Other income (expense) for the three months ended September 30, 2024 increased by an immaterial amount compared to the three months ended September 30, 2023.

Current wording

Interest income for the three months ended March 31, 2025 decreased by an immaterial amount compared to the three months ended March 31, 2024.

Previous wording

The Company recorded an income tax (benefit) of $1.2 million for the three months ended September 30, 2024 compared to income tax expense of $0.8 million for the three months ended September 30, 2023 representing a change of $2.0 million. This was primarily due to filings in foreign jurisdictions.

Current wording

The Company recorded an income tax benefit of $1.1 million for the three months ended March 31, 2025 compared to income tax expense of $0.4 million for the three months ended March 31, 2024 representing a change of $1.5 million. This was primarily due to stock based compensation windfalls.

Previous wording

As of September 30, 2024, our principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $827.9 million, with such amounts held for working capital purposes. Our cash equivalents were comprised of $274.9 million in money market funds.

Current wording

Since our inception through March 31, 2025, we have financed our operations primarily through payments received from our customers and sales of equity securities, including the completion of our initial public offering in September 2023. As of March 31, 2025, our principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $889.2 million, with such amounts held for working capital purposes. Our cash equivalents were comprised of $281.2 million in money market funds.

Previous wording

(1)Restricted cash related to our required collateral to fund payroll and credit card obligations in our Australia entity.

Current wording

(1)Restricted cash related to our required collateral to fund payroll and credit card obligations in the Australia entity.

Previous wording

Net cash provided by operating activities of $80.7 million for the nine months ended September 30, 2023 was primarily attributable to a net loss of $281.9 million adjusted for non-cash charges of $373.3 million and net cash outflows of $10.7 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $302.3 million of stock-based compensation expense, $39.7 million of prepaid marketing expense amortization, $11.4 million of amortization related to deferred contract acquisition costs, $9.8 million of depreciation and amortization expense, and $9.6 million of operating lease costs. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $19.0 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $11.5 million decrease in operating lease liabilities due to payments related to our operating lease obligations, a $7.0 million increase in accounts receivable due to an increase in customer billings, and a $5.5 million increase in prepaid expenses due to prepayments for cloud infrastructure and hosting costs. The cash outflow was offset by cash inflows primarily from a $19.1 million increase in accrued expenses and accounts payable due to timing of payments and a $7.8 million increase in deferred revenue resulting from increased billings for subscriptions.

Current wording

Net cash provided by operating activities of $14.4 million for the three months ended March 31, 2025 was primarily attributable to a net loss of $14.1 million adjusted for non-cash charges of $70.4 million and net cash outflows of $41.9 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $38.3 million of stock-based compensation expense, $13.2 million of prepaid marketing expense amortization, $6.6 million of amortization related to deferred contract acquisition costs, $5.8 million of operating lease costs, and $4.8 million of depreciation and amortization expense. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $18.1 million decrease in accrued expenses and accounts payable due to timing of payments, a $12.6 million increase in accounts receivable due to an increase in customer billings, a $11.0 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $5.9 million increase in prepaid expenses and other assets, and a $5.4 million decrease in operating lease liabilities due to payments related to our operating lease obligations. The cash outflow was offset by cash inflows primarily from a $11.7 million increase in deferred revenue resulting from increased billings for subscriptions.

Previous wording

Net cash provided by operating activities of $105.9 million for the nine months ended September 30, 2024 was primarily attributable to a net loss of $19.2 million adjusted for non-cash charges of $176.1 million and net cash outflows of $51.1 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $100.7 million of stock-based compensation expense, $39.7 million of prepaid marketing expense amortization, $13.8 million of amortization related to deferred contract acquisition costs, $12.8 million of depreciation and amortization expense, and $9.6 million of operating lease costs. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $24.5 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $14.0 million increase in prepaid expenses due to prepayments for cloud infrastructure and hosting costs, a $11.8 million decrease in operating lease liabilities due to payments related to our operating lease obligations, a

Current wording

Net cash provided by operating activities of $26.2 million for the three months ended March 31, 2024 was primarily attributable to a net loss of $12.9 million adjusted for non-cash charges of $59.8 million and net cash outflows of $20.7 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $35.6 million of stock-based compensation expense, $13.2 million of prepaid marketing expense amortization, $4.0 million of depreciation and amortization expense, $3.9 million of amortization related to deferred contract acquisition costs, and $3.1 million of operating lease costs. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $7.2 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $6.8 million increase in prepaid expenses due to prepayments for cloud infrastructure and hosting costs, a $5.3 million increase in accrued expenses and accounts payable due to timing of payments, and a $3.9 million decrease in operating lease liabilities due to payments related to our operating lease obligations. The cash outflow was offset by cash inflows primarily from a $2.4 million increase in deferred revenue resulting from increased billings for subscriptions.

Previous wording

Net cash used in investing activities of $11.6 million for the nine months ended September 30, 2024 consisted of $8.0 million of capitalized software development costs and $3.6 million purchases of property and equipment.

Current wording

Net cash used in investing activities of $7.7 million for the three months ended March 31, 2025 consisted of $5.1 million of capitalized software development costs and $2.7 million purchases of property and equipment.

Previous wording

Net cash used in investing activities of $5.4 million for the nine months ended September 30, 2023 consisted of $4.6 million of capitalized software development costs and $0.8 million purchases of property and equipment.

Current wording

Net cash used in investing activities of $3.2 million for the three months ended March 31, 2024 consisted of $2.0 million of capitalized software development costs and $1.3 million purchases of property and equipment.

Previous wording

Net cash provided by financing activities of $262.2 million for the nine months ended September 30, 2023 primarily consisted of approximately $321.0 million of IPO proceeds net of issuance costs and $4.0 million of proceeds from the exercise of stock options offset by $62.9 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards that vested in connection with our IPO in September 2023.

Current wording

Net cash used in financing activities was immaterial for the three months ended March 31, 2025 and primarily consisted of approximately $3.5 million of proceeds from our employee stock purchase plan and $0.9 million of proceeds from the exercise of stock options offset by $4.4 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Previous wording

Net cash used in financing activities of $6.0 million for the nine months ended September 30, 2024 primarily consisted of approximately $7.0 million of proceeds from the employee stock purchase plan and $6.2 million of proceeds from the exercise of stock options offset by $19.3 million used for the payment of employee tax obligations related to the vesting of stock-based compensation awards.

Current wording

Net cash used in financing activities of $5.7 million for the three months ended March 31, 2024 primarily consisted of approximately $3.6 million of proceeds from the exercise of stock options and $2.5 million of proceeds from our employee stock purchase plan offset by $11.9 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Previous wording

We enter into various noncancellable lease agreements for certain office space and equipment used in the normal course of business. Our noncancellable lease obligations as of September 30, 2024 were $46.1 million, with $13.4 million payable within 12 months. In addition, during the three months ended September 30, 2024, we entered into a lease in the

Current wording

We enter into various noncancellable lease agreements for certain office space and equipment used in the normal course of business. Our noncancellable lease obligations as of March 31, 2025 were $130.5 million, with $18.8 million payable within 12 months.

Previous wording

We enter into various noncancellable agreements with marketing vendors and various service providers. Our noncancellable obligations as of September 30, 2024 were $276.6 million.

Current wording

We enter into various noncancellable agreements with marketing vendors and various service providers. Our noncancellable obligations as of March 31, 2025 were $196.1 million.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2024 as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2025 as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 19, 2025.