What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 93 added, 107 removed, 351 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, December 31,

September 30, December 31,

Current assets

25 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value, 500,000,000 shares authorized;

and 98,985,370 and 96,722,098 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

and 100,496,654 and 96,722,098 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 806,962 760,210

6 unchanged sentences

(in thousands, except share and per share data)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

2024 2023 2024 2023

15 unchanged sentences

Interest expense ( 180 ) ( 1,931 ) ( 327 ) ( 5,514 )

(Loss) gain on financial instruments ( 112 ) 10 — 220

Gain on financial instruments — 201 — 421

Loss before income taxes ( 9,461 ) ( 15,437 ) ( 32,837 ) ( 49,877 )

Provision for income taxes 185 88 374 284

Provision (benefit) for income taxes ( 19 ) 39 355 323

Net loss $ ( 9,442 ) $ ( 15,476 ) $ ( 33,192 ) $ ( 50,200 )

3 unchanged sentences

Basic and diluted 99,435,002 94,675,358 98,165,903 93,477,486

(1) Includes amortization of acquired technology of $ 1.4 million for both the three months ended June 30, 2024 and 2023, and $ 2.7 million for both the six months ended June 30, 2024 and 2023.

(1) Includes amortization of acquired technology of $ 1.3 million for both the three months ended September 30, 2024 and 2023, and $ 4.0 million for both the nine months ended September 30, 2024 and 2023.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands, except share data)

Three months ended June 30, 2024

Three months ended September 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance March 31, 2024

Balance June 30, 2024

98,985,370 $ 99 $ 786,201 $ ( 459,116 ) $ 327,184

1 unchanged sentence

Issuance of common stock upon restricted stock unit vesting 716,460 1 ( 1 ) — —

Common stock issued under Employee Stock Purchase Plan (ESPP) 216,174 — 2,598 — 2,598

Exercised stock options 794,824 — 5,154 5,154

1 unchanged sentence

Net loss — — — ( 9,442 ) ( 9,442 )

Balance June 30, 2024

Balance September 30, 2024

100,496,654 $ 100 $ 806,962 $ ( 468,558 ) $ 338,504

Three months ended June 30, 2023

Three months ended September 30, 2023

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance March 31, 2023 92,864,741 $ 93 $ 717,450 $ ( 389,416 ) $ 328,127

Balance June 30, 2023 94,228,876 $ 94 $ 729,607 $ ( 407,177 ) $ 322,524

Stock-based compensation — — 14,326 — 14,326

Issuance of common stock upon restricted stock unit vesting 484,736 — ( 1 ) — ( 1 )

Common stock issued under ESPP 271,880 — 2,407 — 2,407

Exercised stock options 648,175 1 4,484 — 4,485

1 unchanged sentence

Net loss — — — ( 15,476 ) ( 15,476 )

Balance June 30, 2023

Balance September 30, 2023

95,361,787 $ 95 $ 744,212 $ ( 422,653 ) $ 321,654

Six months ended June 30, 2024

Nine months ended September 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

3 unchanged sentences

Issuance of common stock upon restricted stock unit vesting 1,737,951 2 ( 2 ) — —

Common stock issued under ESPP 216,174 2,598 — 2,598

Common stock issued under Employee Stock Purchase Plan (ESPP) 216,174 — 2,598 — 2,598

Exercised stock options 1,820,431 1 12,081 — 12,082

1 unchanged sentence

Net loss — — — ( 33,192 ) ( 33,192 )

Balance June 30, 2024

Balance September 30, 2024

100,496,654 $ 100 $ 806,962 $ ( 468,558 ) $ 338,504

Six months ended June 30, 2023

Nine months ended September 30, 2023

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

7 unchanged sentences

Net loss — — — ( 50,200 ) ( 50,200 )

Balance June 30, 2023

Balance September 30, 2023

95,361,787 $ 95 $ 744,212 $ ( 422,653 ) $ 321,654

3 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Gain on financial instruments — ( 430 )

Gain on lease modification — ( 375 )

Deferred taxes 61 118

20 unchanged sentences

Proceeds from stock option exercises 12,082 7,287

Net cash used in financing activities ( 3,269 ) ( 4,020 )

Net cash provided by (used in) financing activities 1,497 ( 4,801 )

Net increase (decrease) in cash and cash equivalents and restricted cash 40,029 ( 33,356 )

1 unchanged sentence

Cash and cash equivalents and restricted cash, end of period $ 80,956 $ 78,981

(1) See Note 3 for additional information regarding non-cash investing activities for the six months ended June 30, 2024 and 2023 related to capitalized software development costs.

(1) See Note 3 for additional information regarding non-cash investing activities for the nine months ended September 30, 2024 and 2023 related to capitalized software development costs.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

18 unchanged sentences

Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2023, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2024.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2024.

The Company has no sources of other comprehensive income, and accordingly, net loss presented each period is the same as comprehensive loss.

4 unchanged sentences

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

14 unchanged sentences

Property and Equipment, Net

Depreciation and amortization expense was $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively, and $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2023, respectively.

Property and equipment, net, includes the following amounts at June 30, 2024 and December 31, 2023:

(in thousands) Useful Life June 30, 2024 December 31, 2023

Depreciation and amortization expense was $ 1.0 million and $ 2.8 million for the three and nine months ended September 30, 2024, respectively, and $ 1.0 million and $ 2.8 million for the three and nine months ended September 30, 2023, respectively.

Property and equipment, net, includes the following amounts at September 30, 2024 and December 31, 2023:

(in thousands) Useful Life September 30, 2024 December 31, 2023

Software 2 to 5 years

7 unchanged sentences

Property and equipment, net $ 21,038 $ 16,946

For both the six months ended June 30, 2024 and 2023, the Company had non-cash investing activities of $ 0.4 million for capitalized stock-based compensation related to capitalized software development costs.

Additionally, the Company recognized stock-based compensation expense on the amortization of capitalized stock-based compensation associated with capitalized software development costs of $ 0.1 million for both the three and six months ended June 30, 2024 and none for both the three and six months ended June 30, 2023.

For both the nine months ended September 30, 2024 and 2023, the Company had non-cash investing activities of $ 0.6 million for capitalized stock-based compensation related to capitalized software development costs.

Additionally, the Company recognized stock-based compensation expense through the amortization of capitalized stock-based compensation associated with capitalized software development costs of less than $ 0.1 million and $ 0.1 million for the three and nine months ended September 30, 2024, respectively, and none for both the three and nine months ended September 30, 2023.

Revenues and Deferred Costs

4 unchanged sentences

As these services are not distinct, they are bundled into the SaaS series of services, and the associated fees are recognized on a straight-line basis over the subscription term.

Other services includes professional services and custom development.

The following table disaggregates the Company's revenue by major source for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30,

Six months ended June 30,

Other services include professional services and custom development.

The following table disaggregates the Company's revenue by major source for the three and nine months ended September 30, 2024 and 2023:

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2024 2023 2024 2023

3 unchanged sentences

Total revenues $ 85,906 $ 67,703 $ 244,193 $ 193,462

The Company recognized approximately $ 4.7 million of revenue during the six months ended June 30, 2024 that was included in deferred revenues in the accompanying condensed consolidated balance sheets as of the beginning of the reporting period.

For those contracts that were wholly or partially unsatisfied as of June 30, 2024, minimum contracted subscription revenues to be recognized in future periods total approximately $ 1.2 billion.

The Company expects to recognize approximately 47.2 % of this amount as subscription services are transferred to customers over the next 24 months, an additional 35.4 % in the next 25 to 48 months, and the balance thereafter.

The Company recognized approximately $ 6.5 million of revenue during the nine months ended September 30, 2024 that was included in deferred revenues in the accompanying condensed consolidated balance sheets as of the beginning of the reporting period.

For those contracts that were wholly or partially unsatisfied as of September 30, 2024, the Company’s remaining performance obligation totaled approximately $ 1.3 billion.

The Company expects to recognize approximately 47.0 % of these remaining obligations as revenue over the next 24 months, an additional 35.4 % in the next 25 to 48 months, and the remaining balance thereafter.

This estimate does not include estimated consideration for excess user and transaction processing fees that the Company expects to earn under its subscription contracts.

Contract assets totaled $ 1.3 million and $ 1.5 million as of June 30, 2024 and December 31, 2023, respectively, which are included in other assets in the accompanying condensed consolidated balance sheets.

Contract assets totaled $ 1.2 million and $ 1.5 million as of September 30, 2024 and December 31, 2023, respectively, which are included in other assets in the accompanying condensed consolidated balance sheets.

Deferred Cost Recognition

The Company capitalized $ 1.7 million and $ 2.9 million in deferred commissions costs during the three and six months ended June 30, 2024, respectively, and $ 2.0 million and $ 2.8 million for the three and six months ended June 30, 2023, respectively, and recognized amortization of $ 1.3 million and $ 2.5 million during the three and six months ended June 30, 2024, respectively, and $ 0.8 million and $ 1.7 million during the three and six months ended June 30, 2023, respectively.

The Company capitalized $ 3.1 million and $ 6.0 million in deferred commissions costs during the three and nine months ended September 30, 2024, respectively, and $ 1.6 million and $ 4.4 million for the three and nine months ended September 30, 2023, respectively, and recognized amortization of $ 1.3 million and $ 3.8 million during the three and nine months ended September 30, 2024, respectively, and $ 1.0 million and $ 2.7 million during the three and nine months ended September 30, 2023, respectively.

Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations.

Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 21.6 million and $ 21.2 million as of June 30, 2024 and December 31, 2023, respectively.

The Company capitalized implementation costs of $ 2.3 million and $ 5.2 million during the three and six months ended June 30, 2024, respectively, and $ 2.0 million and $ 4.1 million for the three and six months ended June 30, 2023, respectively, and recognized amortization of $ 1.3 million and $ 2.7 million during the three and six months ended June 30, 2024, respectively, and $ 1.2 million and $ 2.3 million for the three and six months ended June 30, 2023, respectively.

Amortization expense is included in cost of revenues in the accompanying condensed consolidated

statements of operations.

These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 22.4 million and $ 19.8 million as of June 30, 2024 and December 31, 2023, respectively.

Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 23.4 million and $ 21.2 million as of September 30, 2024 and December 31, 2023, respectively.

The Company capitalized implementation costs of $ 2.4 million and $ 7.6 million during the three and nine months ended September 30, 2024, respectively, and $ 2.3 million and $ 6.4 million for the three and nine months ended September 30, 2023, respectively, and recognized

amortization of $ 1.4 million and $ 4.1 million during the three and nine months ended September 30, 2024, respectively, and $ 1.3 million and $ 3.6 million for the three and nine months ended September 30, 2023, respectively.

Amortization expense is included in cost of revenues in the accompanying condensed consolidated statements of operations.

These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 23.4 million and $ 19.8 million as of September 30, 2024 and December 31, 2023, respectively.

The Company periodically reviews the carrying amount of deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

No material impairment losses were recognized in relation to these capitalized costs for the three and six months ended June 30, 2024 and 2023.

No material impairment losses were recognized in relation to these capitalized costs for the three and nine months ended September 30, 2024 and 2023.

Accounts Receivable

Accounts receivable includes the following amounts at June 30, 2024 and December 31, 2023:

June 30, December 31,

Accounts receivable includes the following amounts at September 30, 2024 and December 31, 2023:

September 30, December 31,

(in thousands) 2024 2023

6 unchanged sentences

Accrued Liabilities

Accrued liabilities consisted of the following at June 30, 2024 and December 31, 2023:

June 30, December 31,

Accrued liabilities consisted of the following at September 30, 2024 and December 31, 2023:

September 30, December 31,

(in thousands) 2024 2023

3 unchanged sentences

Accrued hosting services 1,739 428

Client refund liability 452 660

Client credit liability 484 660

Accrued consulting and professional fees 444 713

3 unchanged sentences

Total accrued liabilities $ 28,049 $ 19,763

On June 27, 2023, the Company entered into a First Amendment (the “First Amendment”) to the Company’s Amended and Restated Credit Agreement, dated as of April 29, 2022 (as amended by the First Amendment, the “Amended Credit Agreement”), with Silicon Valley Bank (“SVB”), Comerica Bank and Canadian Imperial Bank of Commerce.

The First Amendment provided for Citibank, N.A.

to join as a new lender, increased the amount of the Revolving Facility (as defined below) commitment by $ 20.0 million and extended the maturity date of the Amended Credit Agreement to April 29, 2026, as well as other changes discussed below.

The Amended Credit Agreement, inclusive of changes established by the First Amendment, includes the following, among other features:

• Revolving Facility:

The Amended Credit Agreement provides $ 60.0 million in aggregate commitments for secured revolving loans (“Revolving Facility”), of which there were no outstanding borrowings as of June 30, 2024.

A term loan of $ 85.0 million (the “Term Loan”) was borrowed on April 29, 2022, the proceeds of which were used to replenish cash used to fund the acquisition of Segmint, which closed on April 25, 2022.

On December 29, 2023, the Company paid the remaining outstanding principal balance of its term loan of $ 82.9 million.

• Accordion Feature:

The Amended Credit Agreement also permits the Company, subject to certain conditions, to request additional revolving loan commitments in an aggregate principal amount of up to $ 50.0 million, of which there were no outstanding borrowings as of June 30, 2024.

On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, and other lenders party thereto.

The Second Amendment, among other things, (i) extended the maturity date of the Revolving Facility from April 29, 2026 to April 29, 2027, (ii) increased the amount of the Revolving Facility commitment by $ 65.0 million, for a total revolving loan commitment of $ 125.0 million, (iii) increased the accordion feature from $ 50.0 million to $ 100.0 million, (iv) modified certain existing covenants, including increasing the minimum trailing four quarters free cash flow requirement to $( 25.0 ) million, and (v) for any fiscal quarter ending after the financial covenant trigger date (which was extended to April 28, 2026 or such earlier date as designated by the Company) (the “Financial Covenant Trigger Date”), replaced compliance with a fixed charge coverage ratio with compliance of a minimum interest coverage ratio of 3.0 x.

Revolving Facility loans under the Amended Credit Agreement may be voluntarily prepaid and re-borrowed.

Principal payments on the Term Loan are due in quarterly installments equal to an initial amount of approximately $ 1.1 million, beginning on June 30, 2023 and continuing through March 31, 2024, and increasing to approximately $ 2.1 million beginning on June 30, 2024 through the Amended Credit Agreement maturity date.

Once repaid or prepaid, the Term Loan may not be re-borrowed.

The First Amendment added additional covenants that begin each fiscal quarter ending on or after April 29, 2025 (the “Financial Covenant Trigger Date”).

Before the Financial Covenant Trigger Date, borrowings under the Amended Credit Agreement bear interest at a variable rate based upon the Secured Overnight Financing Rate (the “SOFR”) plus a margin of 3.00 % to 3.50 % per annum depending on the applicable recurring revenue leverage ratio.

After the Financial Covenant Trigger Date, borrowings under the Amended Credit Agreement bear interest at a variable rate based upon the SOFR plus a margin of 1.50 %, 2.00 %, 2.50 % or 3.00 % per annum depending on the applicable consolidated total leverage ratio.

If the SOFR is ever less than 0 %, then the SOFR shall be deemed to be 0 %.

The Amended Credit Agreement is subject to certain liquidity and operating covenants and includes customary representations and warranties, affirmative and negative covenants and events of default.

is required to pay a commitment fee of 0.25 % per annum on the undrawn portion available under the Revolving Facility and variable fees on outstanding letters of credit.

The Company has a standby letter of credit in the amount of $ 0.3 million, which serves as security under the lease relating to the Company’s office space that expires in 2033.

The Amended Credit Agreement previously provided for a term loan, which was fully repaid in December 2023 and cannot be re-borrowed.

The Company has no outstanding borrowings as of September 30, 2024 related to the Amended Credit Agreement.

Obligations under the Amended Credit Agreement are guaranteed by the Company’s subsidiaries and secured by all or substantially all of the assets of the Company and its subsidiaries pursuant to an Amended and Restated Guarantee and Collateral Agreement.

The Company has a standby letter of credit in the amount of $ 0.3 million, which serves as security under the lease relating to the Company’s office space that expires in 2033.

The Amended Credit Agreement contains customary affirmative and negative covenants.

4 unchanged sentences

(i) a consolidated total leverage ratio requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 3.50 :1.00;

and (ii) a consolidated fixed charge ratio requiring the ratio, for any fiscal quarter ending as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be more than 1.25 :1.00.

The First Amendment also added, applicable beginning June 30, 2023, a free cash flow covenant requiring, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, free cash flow to be not less than $( 75.0 ) million for the fiscal quarters ended June 30, 2023 and September 30, 2023, respectively, and $( 50.0 ) million for the fiscal quarter ended December 31, 2023 and each fiscal quarter ending thereafter.

and (ii) a consolidated interest coverage ratio requiring the

ratio, for any fiscal quarter ending as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be more than 3.00 :1.00.

The Second Amendment revised the free cash flow covenant, as calculated at the last day of each fiscal quarter for the period of 12 consecutive months then ending, requiring free cash flow to be not less than $( 25.0 ) million for the fiscal quarter ended September 30, 2024 and each fiscal quarter ending thereafter.

The Amended Credit Agreement also contains customary events of default, which if they occur, could result in the termination of commitments under the Amended Credit Agreement, the declaration that all outstanding loans are immediately due and payable in whole or in part, and the requirement to maintain cash collateral deposits in respect of outstanding letters of credit.

The Company was in compliance with all covenants as of June 30, 2024.

The Company was in compliance with all covenants as of September 30, 2024.

Stockholders' Equity

1 unchanged sentence

Stock-based compensation expense was included in the condensed consolidated statements of operations as follows:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

Total stock-based compensation expenses $ 15,257 $ 13,918 $ 43,822 $ 37,914

The Company recorded income tax expense of $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2024, respectively, resulting in an effective tax rate of ( 1.5 )% and ( 1.6 )%, respectively, compared to income tax expense of $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2023, respectively, resulting in an effective tax rate of ( 0.5 )% and ( 0.8 )%, respectively.

The Company’s effective tax rate for the three and six months ended June 30, 2024 and 2023 differs from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense.

The Company recorded an income tax benefit of less than $0.1 million and income tax expense of $ 0.4 million for the three and nine months ended September 30, 2024, respectively, resulting in an effective tax rate of 0.2 % and ( 1.1 )%, respectively, compared to income tax expense of less than $0.1 million and $ 0.3 million for the three and nine months ended September 30, 2023, respectively, resulting in an effective tax rate of ( 0.3 )% and ( 0.6 )%, respectively.

The Company’s effective tax rate for the three and nine months ended September 30, 2024 and 2023 differs from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense.

The Company recognizes deferred tax assets and liabilities based on the estimated future tax effects of temporary differences between the financial statement basis and tax basis of assets and liabilities given the provisions of enacted tax law.

5 unchanged sentences

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, restricted cash and cash equivalents, marketable securities, accounts receivable and accounts payable.

The carrying values of cash, restricted cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these instruments.

The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts receivable and accounts payable.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these instruments.

Cash equivalents include amounts held in money market accounts that are measured at fair value using observable market prices.

5 unchanged sentences

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.

The following tables summarize the Company’s financial assets measured at fair value as of June 30, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation:

The following tables summarize the Company’s financial assets measured at fair value as of September 30, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation:

Fair Value at Reporting Date Using

(in thousands) June 30, 2024 Level 1 Level 2 Level 3

(in thousands) September 30, 2024 Level 1 Level 2 Level 3

Cash equivalents (1)

4 unchanged sentences

Treasury debt securities 14,932 14,932 — —

International debt securities 2,196 — 2,196 —

Total marketable securities 20,033 14,932 5,101 —

24 unchanged sentences

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Because the Company has reported a net loss for the three and six months ended June 30, 2024 and 2023, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.

The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30,

Six months ended June 30,

Because the Company has reported a net loss for the three and nine months ended September 30, 2024 and 2023, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.

The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three and nine months ended September 30, 2024 and 2023:

Three months ended September 30,

Nine months ended September 30,

(in thousands, except shares and per share amounts) 2024 2023 2024 2023

3 unchanged sentences

The following potential shares of common stock were excluded from diluted net loss per share as the Company had a net loss in each of the periods presented:

As of June 30,

As of September 30,

Stock options 2,058,570 4,688,972

20 unchanged sentences

(in thousands)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

2024 2023 2024 2023

5 unchanged sentences

$ 969 $ 723 $ 2,744 $ 2,924

(1) Other lease expense includes variable lease expense and sublease income.

(1) Other lease expense includes variable lease expense.

The three and nine months ended September 30, 2023 include sublease income and a gain on lease modification.

Supplemental Cash Flow Information

Six months ended June 30,

Nine months ended September 30,

Cash flow information (in thousands)

1 unchanged sentence

$ 1,993 $ 2,924

Non-cash adjustment to operating lease right-of-use assets from lease modification (1)

(1) For the nine months ended September 30, 2023, the non-cash adjustment includes an increase of $ 8.0 million related to the extension of the office space lease to 2033 for the remaining leased space, net of a $ 4.9 million decrease related to the reduction of the leased space effective December 31, 2023.

The future maturities of operating lease liabilities are as follows:

(in thousands) June 30, 2024

2024 (six months remaining) $ 1,341

(in thousands) September 30, 2024

2024 (three months remaining) $ 672

Thereafter 14,981

5 unchanged sentences

As part of the Company’s business planning cycle, the Company performs an annual goodwill impairment test in the fourth quarter of the fiscal year.

There were no indications of impairment of goodwill noted as of June 30, 2024.

Goodwill had a carrying value of $ 148.1 million as of both June 30, 2024 and December 31, 2023.

Total intangibles, net, consisted of the following as of June 30, 2024 and December 31, 2023:

As of June 30, 2024

There were no indications of impairment of goodwill noted as of September 30, 2024.

Goodwill had a carrying value of $ 148.1 million as of both September 30, 2024 and December 31, 2023.

Total intangibles, net, consisted of the following as of September 30, 2024 and December 31, 2023:

As of September 30, 2024

(in thousands) Carrying Value Accumulated Amortization Net Carrying Value

3 unchanged sentences

Tradenames 750 ( 219 ) 531

Subtotal amortizable intangible assets 48,920 ( 16,531 ) 32,389

Website domain name 25 — 25

Total amortizable intangible assets

48,920 ( 18,227 ) 30,693

Website domain name (Indefinite-lived)

Total intangible assets $ 48,945 $ ( 18,227 ) $ 30,718

5 unchanged sentences

Tradenames 750 ( 167 ) 583

Subtotal amortizable intangible assets 48,920 ( 13,138 ) 35,782

Website domain name 25 — 25

Total amortizable intangible assets

48,920 ( 13,138 ) 35,782

Website domain name (Indefinite-lived)

Total intangible assets $ 48,945 $ ( 13,138 ) $ 35,807

Amortization expense recognized on intangible assets was $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2024, respectively, and $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2023, respectively.

Amortization expense recognized on intangible assets was $ 1.7 million and $ 5.1 million for the three and nine months ended September 30, 2024, respectively, and $ 1.7 million and $ 5.1 million for the three and nine months ended September 30, 2023, respectively.

The following table shows the estimated annual amortization expense of the definite-lived intangible assets for the next five years and thereafter (in thousands):

2024 (six months remaining)

2024 (three months remaining)

Thereafter 11,059

Subsequent Event

On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Amended Credit Agreement.

Among other changes, the Second Amendment (i) extends the maturity date of the revolving commitment from April 29, 2026 to April 29, 2027, (ii) increases the amount of the revolving loan commitment by $ 65.0 million, for a total commitment of $ 125.0 million, (iii) increases the accordion feature from $ 50.0 million to $ 100.0 million of funds available to request, (iv) modifies certain existing covenants, including increasing the minimum trailing four quarters free cash flow requirement to $( 25.0 ) million, and (v) for any fiscal quarter ending after the Financial Covenant Trigger Date (which has been extended to April 28, 2026 or such earlier date as designated by the Company), replaces compliance with a fixed charge coverage ratio with compliance of a minimum interest coverage ratio of 3.0 x.

The Second Amendment is not expected to have a material impact on the condensed consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements