Workiva Inc: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2025. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.

Overview

The Workiva platform powers transparency, accountability, and trust. Finance, accounting, sustainability, risk, and audit teams from more than 6,500 organizations worldwide, including over 85% of FORTUNE® 1,000 companies, rely on Workiva for their mission-critical work. We transform how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered, collaborative platform.

From data to disclosure, the Workiva platform empowers customers by connecting and transforming data from hundreds of enterprise resource planning (“ERP”), human capital management (“HCM”), and customer relationship management (“CRM”) systems, as well as other third-party cloud and on-premise applications. Customers use our platform to create, review and publish data-linked documents, presentations, and reports with greater control, consistency, accuracy, and productivity. Our platform is flexible and scalable, so customers can easily adapt it to define, automate, and change their business processes in real time.

While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (financial reporting, sustainability management, and governance, risk and compliance (“GRC”)) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).

We operate our business on a SaaS model. Customers enter into annual and multi-year subscription contracts to gain access to our platform. Our subscription fee includes the use of our software and technical support. Our subscription pricing is based primarily on a solution-based licensing model. Under this model, operating metrics related to a customer’s expected use of each solution determine the price. We charge customers additional fees primarily for document setup and XBRL tagging services.

We generate sales primarily through our direct sales force. In addition, we augment our direct sales channel with partnerships. Our advisory and service partners offer a wider range of domain and functional expertise that broadens the capabilities of our platform, bringing scale and support to customers and prospects. Our technology partners enable more data and process integrations to help customers connect critical transactional systems directly to our platform.

We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,891 at September 30, 2025 from 2,751 at September 30, 2024, an increase of 5.1%.

We have achieved significant revenue growth in recent periods. Our revenue grew to $224.2 million and $645.6 million during the three and nine months ended September 30, 2025 from $185.6 million and $538.8 million during the three and nine months ended September 30, 2024. We generated net income of $2.8 million and incurred a net loss of $38.0 million during the three and nine months ended September 30, 2025, respectively compared to net losses of $17.0 million and $46.2 million during the three and nine months ended September 30, 2024.

We continue to invest for future growth and are focused on several key drivers, including focusing on multi-solution adoption by new and existing customers, further developing our partner program, accelerating international expansion and our fit-for-purpose solutions. These growth drivers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses.

Effects of Policy and Regulatory Uncertainty

Sales of our sustainability management solutions have been, and may continue to be, materially impacted by domestic and global policy uncertainties. Shifts in regulatory priorities, market sentiment and legal challenges to sustainability-related rules and regulations are affecting our market expansion opportunities in the U.S. and abroad. For example, the European Union’s Corporate Sustainability Reporting Directive (“CSRD”) standards used to identify and collect sustainability information and data are still developing and uncertain. In particular, the CSRD's "stop-the-clock" directive delayed reporting requirements for Wave 2 and Wave 3 companies. This has delayed compliance obligations and requirements. The extent of this global policy uncertainty, and its potential impact on our growth trajectory, cannot be accurately predicted.

Ongoing regulatory initiatives, including proposed changes to SEC reporting requirements intended to reduce burdens on public companies and enhance the attractiveness of capital markets, such as a potential shift in reporting frequency, could affect the performance of certain of our businesses. These developments may have positive or negative impacts on our business, but the scope and timing of any effects remain uncertain. We continue to monitor regulatory developments and assess potential effects across our business. The full scope of these potential regulatory developments, and their implications for our financial performance, cannot be predicted accurately at this time.

Effects of Volatility in the IPO/SPAC Markets

In the U.S., volatility in the public markets has led to a decrease in the number of initial public offerings (“IPOs”) and special-purpose acquisition companies (“SPACs”) since fiscal 2022. New sales of our SEC and capital markets solutions were adversely affected by this decline in the IPO and SPAC markets. Although there has been an increase recently in the number of IPOs in 2025, we continue to expect reduced valuation multiples caused by higher interest rates, inflation, global trade conflicts, the ongoing U.S. government shutdown, and geopolitical instability to continue to create uncertain impacts on the number of IPOs in fiscal year 2025. Whether and to what extent the IPO and SPAC markets will continue to moderate cannot be accurately predicted.

Key Factors Affecting Our Performance

Generate Growth From Existing Customers. The Workiva platform can exhibit a powerful network effect within an enterprise, meaning that the usefulness of our platform attracts additional users. Since solution-based licensing offers our customers an unlimited number of seats for each solution purchased, we expect customers to add more seats over time. As more employees in an enterprise use our platform, additional opportunities for collaboration and automation drive demand among their colleagues for additional solutions.

Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and management reporting. In addition, we market to teams responsible for sustainability management and GRC programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.

Offer More Solutions. We intend to introduce new solutions to continue to meet growing demand for our platform. Our close and trusted relationships with our customers are a source for new use cases, features and solutions. We have a disciplined process for tracking, developing and releasing new solutions that are designed to have immediate, broad applicability, together with a strong value proposition and high return on investment for both Workiva and our customers. Our advance planning team assesses customer needs, conducts industry-based research and defines new markets. This vetting process involves our sales, product marketing, customer success, professional services, research and development, finance and senior management teams.

Expand Across Enterprises. Our success in delivering multiple solutions has created demand from customers for a broader-based, enterprise-wide Workiva platform. In response, we have been improving our technology and realigning sales and marketing to capitalize on our growing enterprise-wide opportunities. We believe this expansion will add new users, increase revenue and continue to support our high revenue retention rates. However, we expect that enterprise-wide deals will be larger and more complex, which tend to lengthen the sales cycle.

Add Partners. We continue to expand and deepen our relationships with global and regional partners, including consulting firms, system integrators, large and mid-sized independent software vendors, and implementation partners. Our advisory and service partners offer a wider range of domain and functional expertise that broadens our platform’s capabilities and promotes Workiva as part of the digital transformation projects they drive for their customers. Our technology partners enable powerful data and process integrations to help customers connect critical transactional systems directly to our platform, with powerful linking, auditability and control features. We believe that our partner ecosystem extends our global reach, accelerates the usage and adoption of our platform, and enables more efficient delivery of professional services.

Investment in growth. We plan to continue to invest in the development of our platform, fit-for-purpose solutions and application marketplace to enhance our current offerings and build new features. In addition, we expect to continue to invest in our sales, marketing, professional services and customer success organizations to drive additional revenue and support the needs of our growing customer base and to take advantage of opportunities that we have identified in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") regions.

Seasonality. Our revenue from professional services has some degree of seasonality. Many of our customers employ our professional services just before they file their Form 10-K, often in the first calendar quarter. Our sales and marketing expense also has some degree of seasonality. Sales and marketing expenses have historically been higher in the third quarter due to our annual user conference typically held in September. In addition, our operating cash flow may be affected by the timing of employee cash bonus payments during the first and fourth calendar quarters and by the timing of payouts under our commission plans in the first quarter.

Key Performance Indicators

(dollars in thousands)

Total customers. We believe total number of customers is a key indicator of our financial success and future revenue potential. We define a customer as an entity with an active subscription contract as of the measurement date. We define a customer as a separate and distinct buying entity, such as a company, a government institution, or a distinct business unit of a large company that has an active contract with us or one of our partners to access our platforms. Companies with publicly-listed securities account for a majority of our customers. As customers acquired through our Sustain.Life acquisition in 2024 renew their contracts with Workiva, they are added to our customer count above.

Gross retention rate. Our gross retention rate is based on subscription and support revenue. We calculate our gross retention rate based on all customers that were active at the end of the same calendar quarter of the prior year (“base customers”). We begin by annualizing the subscription and support revenue recorded in the same calendar quarter of the prior year for those base customers who are still active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers. We believe gross retention rates are an important metric to track how the Company retains its base revenue for each year.

Our gross retention rate was 97.3% as of September 30, 2025, down marginally from 97.5% as of September 30, 2024. We believe that our success in maintaining a high rate of revenue retention is attributable primarily to our robust technology platform and strong customer service. Customers whose securities were deregistered due to merger or acquisition or financial distress accounted for over half of our revenue attrition in the latest quarter.

Net retention rate. Our net retention rate is based on subscription and support revenue, and includes revenue from up-selling or cross-selling additional solutions, and pricing changes for existing customers and securing multi-year contract renewals containing periodic pricing term increases. We calculate our net retention rate by annualizing the subscription and support revenue recorded in the current quarter for our base customers that were active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers. We believe our net retention rate is an important metric to measure the long-term value of customer agreements and our ability to retain our customers.

Our net retention rate including add-ons was 113.6% as of the quarter ended September 30, 2025, up from 110.5% as of September 30, 2024.

Annual contract value. Our annual contract value (“ACV”) for each customer is calculated by annualizing the subscription and support revenue recognized during each quarter. We believe the increase in the number of larger contracts shows our progress in expanding our customers’ adoption of our platform. As customers acquired through our Sustain.Life acquisition in 2024 renew their contracts with Workiva, they are incorporated into our ACV metrics in the following table.

Components of Results of Operations

Revenue

We generate revenue through the sale of subscriptions to our cloud-based software and the delivery of professional services. We serve a wide range of customers in many industries, and our revenue is not concentrated with any single customer or small group of customers. For the nine months ended September 30, 2025 and 2024, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 10% of our revenue in the aggregate.

We generate sales directly through our sales force and partners. We also identify some sales opportunities with existing customers through our customer success and professional services teams.

Our customer contracts typically range in length from one year to three years. We typically invoice our customers for subscription fees annually in advance. For contracts with a two or three year term, customers sometimes elect to pay the entire multi-year subscription term in advance. Our arrangements do not contain general rights of return.

Subscription and Support Revenue. We recognize subscription and support revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Amounts that are invoiced are initially recorded as deferred revenue.

Professional Services Revenue. We believe our professional services facilitate the sale of our subscription service to certain customers. To date, most of our professional services have consisted of document set up, XBRL tagging, and consulting to help our customers with business processes and best practices for using our platform. Our professional services are not required for customers to utilize our solution. We recognize revenue for document set up when the service is complete and control has transferred to the customer. Revenue from XBRL tagging and consulting services are recognized as the services are performed.

Cost of Revenue

Cost of revenue consists primarily of personnel and related costs directly associated with our professional services, customer success teams and training personnel, including salaries, benefits, bonuses, travel, and stock-based compensation; the costs of contracted third-party vendors; the costs of third-party hosting fees for server usage by our customers; information technology costs; and facility costs.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, commissions, travel, and stock-based compensation. Other costs included in this expense are marketing and promotional events, our annual user conference, online marketing, product marketing, information technology costs, and facility costs. We pay sales commissions for initial contracts and expansions of existing customer contracts. When the relevant amortization period is one year or less, we expense sales commissions as incurred. All other sales commissions are considered incremental costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over a period of benefit that we have determined to be three years.

Research and Development Expenses

Research and development expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, travel, and stock-based compensation; costs of third-party hosting fees for server usage by our developers; information technology costs; and facility costs.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel and related costs for our executive, finance and accounting, legal, human resources, and administrative personnel, including salaries, benefits, bonuses, travel, and stock-based compensation; legal, accounting, and other professional service fees; other corporate expenses; information technology costs; and facility costs.

Results of Operations

The following table sets forth selected consolidated statement of operations data for each of the periods indicated:

(in thousands)

(1) Stock-based compensation expense included in these line items was as follows:

(in thousands)

28

The following table sets forth our consolidated statement of operations data as a percentage of revenue for each of the periods indicated:

Comparison of Three and Nine Months Ended September 30, 2025 and 2024

Revenue

(dollars in thousands)

Total revenue increased $38.5 million for the three months ended September 30, 2025 compared to the same quarter a year ago due to a $38.5 million increase in subscription and support revenue. Growth in subscription and support revenue in the third quarter was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services was relatively flat for the three months ended September 30, 2025 compared to the same quarter a year ago.

Total revenue increased $106.8 million for the nine months ended September 30, 2025 compared to the same period a year ago due primarily to a $106.5 million increase in subscription and support revenue. Growth in subscription and support revenue was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services increased $0.3 million for the nine months ended September 30, 2025 compared to the same period a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.

Cost of Revenue

(dollars in thousands)

Cost of revenue increased $2.7 million during the three months ended September 30, 2025 compared to the same quarter a year ago. Subscription and support cost of revenue increased $3.2 million due primarily to $2.6 million in higher cash-based compensation and benefits costs, $0.5 million of additional stock-based compensation, and a $0.8 million increase in the cost of licensed platform content partially offset by a $0.5 million decrease in travel expense. The increase in compensation was primarily driven by an increase in employee headcount. The increase in the cost of licensed platform content resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue decreased $0.5 million due primarily to a $0.6 million decrease in cash-based compensation and benefits costs partially offset by an increase of $0.2 million in stock-based compensation as we continue to transition consulting and other services to our partners.

Cost of revenue increased $17.9 million during the nine months ended September 30, 2025 compared to the same period a year ago. Subscription and support cost of revenue increased $16.7 million due primarily to $10.6 million in higher cash-based compensation and benefits costs, $1.9 million of additional stock-based compensation, a $2.2 million increase in the cost of licensed platform content, a $1.0 million increase in intangibles amortization related to Sustain.Life, and a $0.6 million increase in software expense. The increase in compensation was primarily driven by a modest increase in employee headcount. The increases in the cost of licensed platform content and software expense resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue increased $1.2 million due primarily to $0.3 million in higher cash-based compensation and benefits costs and $0.9 million of additional stock-based compensation. The change in compensation was primarily driven by standard compensation increases for existing headcount partially offset by our continued transition of consulting and other services to our partners.

Operating Expenses

(dollars in thousands)

Research and Development

Research and development expenses increased $3.0 million during the three months ended September 30, 2025 compared to the same quarter a year ago due primarily to $2.8 million in higher cash-based compensation and benefits, $0.9 million of additional stock-based compensation, and a $0.5 million increase in professional service fees partially offset by a $0.5 million decrease in the cost of cloud infrastructure services and a $0.4 million decrease in travel expense. The increase in compensation was primarily driven by an increase in employee headcount. The increase in professional service fees resulted primarily from our continued investment in and support of our platform and solutions.

Research and development expenses increased $17.7 million during the nine months ended September 30, 2025 compared to the same period a year ago due primarily to $13.7 million in higher cash-based compensation and benefits and $3.7 million of additional stock-based compensation. The increase in compensation was primarily driven by a modest increase in employee headcount.

Sales and Marketing

Sales and marketing expenses increased $11.4 million during the three months ended September 30, 2025 compared to the same quarter a year ago due primarily to $12.7 million in higher cash-based compensation and benefits partially offset by a $0.7 million decrease in travel expense and a $0.5 million decrease in advertising fees. The increase in compensation was primarily due to an increase in employee headcount and our continued investment in our go-to-market activities.

Sales and marketing expenses increased $49.7 million during the nine months ended September 30, 2025 compared to the same period a year ago due primarily to $38.3 million in higher cash-based compensation and benefits, $3.0 million of additional stock-based compensation, a $3.3 million increase in marketing and advertising, a $2.0 million increase in professional service fees, a $1.6 million increase in internal event costs, and a $0.9 million in software expense. The increases in compensation and internal event costs were primarily due to an increase in employee headcount as we continue to invest in our go-to-market activities. The increases in marketing and advertising, professional service fees, and software expense were the result of our continued investment in and support of our platform and solutions.

General and Administrative

General and administrative expenses increased $3.1 million during the three months ended September 30, 2025 compared to the same quarter a year ago due primarily to a $2.1 million increase in cash-based compensation and benefits and $1.2 million of additional stock-based compensation. The increase in compensation is primarily attributable to an executive transition and a modest increase in headcount.

General and administrative expenses increased $8.6 million during the nine months ended September 30, 2025 compared to the same period a year ago due primarily to $4.7 million in higher cash-based compensation and benefits, $1.4 million of additional stock-based compensation, and a $2.6 million increase in internal event costs. The increase in compensation was due to a modest increase in employee headcount and an executive transition. The increase in internal event costs was due to a new internal event held in the second quarter.

Non-Operating Income (Expenses)

(dollars in thousands)

(*) Percentage is not meaningful.

Interest Income, Interest Expense, and Other Income (Expense), Net

During the three months ended September 30, 2025, interest income decreased $0.9 million compared to the same quarter a year ago primarily due to lower interest rates. Interest expense remained relatively flat compared to the same quarter a year ago. Other income, net increased $0.7 million compared to the same quarter a year ago due primarily to gains on foreign currency transactions.

During the nine months ended September 30, 2025, interest income decreased $4.6 million compared to the same period a year ago due primarily to lower interest rates. Interest expense remained relatively flat compared to the same period a year ago. Other expense, net increased $0.3 million compared to the same period a year ago due primarily to losses on foreign currency transactions.

Results of Operations for Fiscal 2024 Compared to 2023

For a comparison of our results of operations for the fiscal years ended December 31, 2024 and 2023, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025.

Liquidity and Capital Resources

Overview of Sources and Uses of Cash

As of September 30, 2025, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $856.8 million, which were held for working capital purposes. We have financed our operations primarily through cash generated from operations and issuances of convertible debt. We have generated significant operating losses as reflected in our accumulated deficit on our consolidated balance sheets. While we may incur operating losses and negative cash flows from operations in the future, we believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.

Convertible Debt

In August 2023, we issued $702.0 million aggregate principal amount of our 1.250% 2028 Notes. Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs. We used $396.9 million of the net proceeds from the 2028 Notes offering to repurchase $273.8 million principal amount, together with accrued and unpaid interest thereon, of our 1.125% 2026 Notes in separate and individually negotiated transactions with certain holders. As of September 30, 2025, we had outstanding debt relating to our 2026 Notes and 2028 Notes of $71.0 million and $695.7 million, with corresponding maturity dates of August 15, 2026 and August 15, 2028, respectively.

Share Repurchase Plan

On July 30, 2024, our board of directors authorized a share repurchase plan for up to $100.0 million of our outstanding Class A common stock (the “2024 Repurchase Plan”). The repurchases may be made in the open market or through privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means, each in compliance with Rule 10b-18 under the Exchange Act. The timing, manner, price, and amount of the repurchase will be subject to the discretion of the Company’s management, and it may be suspended or discontinued at any time. As of September 30, 2025, we have repurchased $60.1 million of our Class A common stock under the 2024 Repurchase Plan.

Cash Flows

(in thousands)

Operating Activities

Our largest source of operating cash is cash collections from customers for subscription and support access to our platform. Our primary uses of cash from operating activities are for personnel-related expenditures, marketing activities, and costs of cloud infrastructure services.

Cash provided by operating activities of $46.2 million for the three months ended September 30, 2025 consisted of a net income of $2.8 million adjusted for non-cash charges of $32.5 million and net cash inflows of $10.9 million from changes in operating assets and liabilities. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue and accounts receivable due in part to large contracts closed during the quarter coupled with growth in our customer base. The increase in accrued expenses and other liabilities was due in part to timing of accruals and payments. The increases in other receivables and prepaid expenses were attributable primarily to the timing of cash payments and collections.

Cash provided by operating activities of $18.9 million for the three months ended September 30, 2024 consisted of a net loss of $17.0 million adjusted for non-cash charges of $28.5 million and net cash inflows of $7.4 million from changes in operating assets and liabilities. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to an increase in large contracts signed in the period coupled with growth in our customer base. The increases in accounts receivable, other receivables, and accounts payable as well as the decrease in accrued expenses and other liabilities were attributable primarily to the timing of cash payments and collections.

Cash provided by operating activities of $89.1 million for the nine months ended September 30, 2025 consisted of a net loss of $38.0 million adjusted for non-cash charges of $92.4 million and net cash inflows of $34.7 million from changes in operating assets and liabilities. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to large contracts closed during the quarter coupled with growth in our customer base. The decrease in accrued expenses and other liabilities was due in part to timing of accruals and payments. The increases in accounts payable and prepaid expenses as well as the decreases in other receivables and other assets were attributable primarily to the timing of our billings, cash collections, and cash payments.

Cash provided by operating activities of $43.7 million for the nine months ended September 30, 2024 consisted of a net loss of $46.2 million adjusted for non-cash charges of $75.9 million and net cash inflows of $14.0 million from changes in operating assets and liabilities. The adjustments for non-cash charges included a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to multi-year prepaid customer contracts coupled with growth in our customer base. The increase in deferred costs was primarily due to growth in subscription bookings. The increases in accounts receivable, other assets, accounts payable, and accrued expenses and other liabilities as well as the decreases in other receivables and prepaid expenses were attributable primarily to the timing of our billings, cash collections, and cash payments.

Investing Activities

Cash used in investing activities of $10.1 million for the three months ended September 30, 2025 consisted of $107.3 million in purchases of marketable securities partially offset by $97.4 million from the maturities of marketable securities.

Cash used in investing activities of $49.6 million for the three months ended September 30, 2024 consisted of $158.5 million in purchases of marketable securities and $0.2 million for the acquisition of Sustain.Life partially offset by $109.0 million from the maturities of marketable securities.

Cash used in investing activities of $23.5 million for the nine months ended September 30, 2025 consisted of $313.3 million in purchases of marketable securities and $1.8 million in purchases of fixed assets partially offset by $291.7 million from the maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of our work force.

Cash used in investing activities of $58.5 million for the nine months ended September 30, 2024 consisted of $310.1 million in purchases of marketable securities, $98.1 million for the acquisition of Sustain.Life, and $0.6 million in purchases of fixed assets partially offset by $345.7 million from the maturities of marketable securities and $4.6 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.

Financing Activities

Cash used in financing activities of $3.6 million for the three months ended September 30, 2025 consisted of $10.0 million in repurchases of our Class A common stock under the 2024 Repurchase Plan partially offset by $6.2 million in proceeds from shares issued in connection with our Employee Stock Purchase Plan ("ESPP") and $0.4 million in proceeds from option exercises.

Cash provided by financing activities of $8.7 million for the three months ended September 30, 2024 consisted of $6.7 million in proceeds from shares issued in connection with our ESPP and $3.3 million in proceeds from option exercises partially offset by $1.2 million in taxes paid related to net share settlements of stock-based compensation awards.

Cash used in financing activities of $57.5 million for the nine months ended September 30, 2025 consisted of $60.1 million in repurchases of our Class A common stock under the 2024 Repurchase Plan and $13.5 million in taxes paid related to net share settlements of stock-based compensation awards partially offset by $13.7 million in proceeds from shares issued in connection with our ESPP and $2.9 million in proceeds from option exercises.

Cash provided by financing activities of $5.9 million for the nine months ended September 30, 2024 consisted of $13.8 million in proceeds from shares issued in connection with our ESPP and $3.9 million in proceeds from option exercises partially offset by $11.4 million in taxes paid related to net share settlements of stock-based compensation awards.

Contractual Obligations and Commitments

There were no material changes in our contractual obligations and commitments from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 25, 2025.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, income taxes and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

During the nine months ended September 30, 2025, there were no significant changes to our critical accounting policies and estimates as described in the financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 25, 2025.

For quantitative and qualitative disclosures about market risk, see “Item 7A., Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2024. Our exposures to market risk have not changed materially since December 31, 2024.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2024 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. There have been no material changes during fiscal year 2025 to the risk factors that were included in the Form 10-K.