What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 192 added, 216 removed, 408 unchanged (50% of the section changed)

3 unchanged sentences

(in thousands, except par value and share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets

1 unchanged sentence

Short-term investments and marketable securities — 9,653

Accounts receivable, net of allowance of $ 2,268 and $ 2,125 , respectively

Accounts receivable, net of allowances of $ 2,265 and $ 2,606 , respectively

129,317 171,561

1 unchanged sentence

Prepaid expenses and other current assets 56,088 49,529

Restricted cash, current — 2,249

Total current assets 389,880 414,355

8 unchanged sentences

Total assets $ 595,358 $ 627,503

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ (Deficit) Equity

Current liabilities

9 unchanged sentences

Non-current operating lease liabilities 57,357 59,067

Deferred revenue 3,243 5,556

Deferred revenue, non-current 5,216 4,700

Deferred tax liabilities 2 2

Other non-current liabilities 493 —

Total liabilities 605,023 575,162

Stockholders’ equity

Stockholders’ (deficit) equity

Class A common stock—par value $ 0.0001 ;

500,000,000 shares authorized and 41,726,634 shares issued and outstanding as of September 30, 2023;

500,000,000 shares authorized and 41,320,091 shares issued and outstanding as of December 31, 2022

500,000,000 shares authorized as of March 31, 2024 and December 31, 2023 and 42,359,967 and 42,169,970 shares issued as of March 31, 2024 and December 31, 2023, respectively

Class B common stock—par value $ 0.0001 ;

100,000,000 shares authorized and 31,497,396 shares issued and outstanding as of September 30, 2023;

100,000,000 shares authorized and 31,497,796 shares issued and outstanding as of December 31, 2022

100,000,000 shares authorized as of March 31, 2024 and December 31, 2023 and 31,196,796 and 31,196,796 shares issued as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 603,870 595,781

1 unchanged sentence

Accumulated deficit ( 552,815 ) ( 519,892 )

Total stockholders’ equity 68,101 145,700

Total liabilities and stockholders’ equity $ 597,038 $ 594,214

Treasury stock at cost, 1,320,531 shares as of March 31, 2024

Total stockholders’ (deficit) equity ( 9,665 ) 52,341

Total liabilities and stockholders’ (deficit) equity $ 595,358 $ 627,503

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Subscriptions $ 117,694 $ 98,957

17 unchanged sentences

Loss before income taxes ( 33,388 ) ( 35,694 )

Income tax expense (benefit) 178 255 2,137 ( 924 )

Income tax (benefit) expense ( 465 ) 1,135

Net loss $ ( 32,923 ) $ ( 36,829 )

7 unchanged sentences

(unaudited, in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net loss $ ( 32,923 ) $ ( 36,829 )

1 unchanged sentence

Foreign currency translation adjustments 12,843 ( 746 )

Unrealized gains (losses) on available-for-sale securities

9 59 10 ( 135 )

Unrealized gains on available-for-sale securities

Total other comprehensive loss, net of income taxes $ ( 20,076 ) $ ( 37,529 )

1 unchanged sentence

APPIAN CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY

(unaudited, in thousands, except share data)

Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock

Total Stockholders' Equity (Deficit)

Shares Amount

5 unchanged sentences

Exercise of stock options 43,460 — 345 — — — 345

Stock-based compensation expense — — 11,056 — — 11,056

Other comprehensive loss — — — ( 700 ) — ( 700 )

Balance, March 31, 2023 72,955,379 7 569,618 ( 7,946 ) ( 445,280 ) 116,399

Net loss — — — — ( 42,355 ) ( 42,355 )

Issuance of common stock to directors 4,928 — — — — —

Vesting of restricted stock units 99,836 — ( 1,816 ) — — ( 1,816 )

Exercise of stock options 53,190 — 428 — — 428

Stock-based compensation expense — — 11,148 — — 11,148

Other comprehensive loss — — — ( 3,172 ) — ( 3,172 )

Balance, June 30, 2023 73,113,333 7 579,378 ( 11,118 ) ( 487,635 ) 80,632

Net loss — — — — ( 22,251 ) ( 22,251 )

Issuance of common stock to directors 3,936 — — — — —

Vesting of restricted stock units 92,722 — ( 2,465 ) — — ( 2,465 )

Exercise of stock options 14,039 — 105 — — 105

Repurchase of common stock

( 1,320,531 ) — — — — ( 50,019 ) ( 50,019 )

Stock-based compensation expense — — 10,606 — — — 10,606

Other comprehensive income — — — 12,847 — — 12,847

Balance, September 30, 2023

Balance, March 31, 2024

72,236,232 $ 7 $ 603,870 $ ( 10,708 ) $ ( 552,815 ) $ ( 50,019 ) $ ( 9,665 )

10 unchanged sentences

Balance, March 31, 2023

Net loss — — — — ( 49,354 ) ( 49,354 )

Issuance of common stock to directors 2,565 — — — — —

Vesting of restricted stock units 52,634 — — — — —

Exercise of stock options 61,955 — 626 — — 626

Stock-based compensation expense — — 9,148 — — 9,148

Other comprehensive income — — — 1,884 — 1,884

Balance, June 30, 2022 72,444,514 7 538,249 ( 3,157 ) ( 330,039 ) 205,060

Net loss — — — — ( 43,996 ) ( 43,996 )

Issuance of common stock to directors 4,613 — — — — —

Vesting of restricted stock units 67,164 — — — — —

Exercise of stock options 24,604 — 175 — — 175

Stock-based compensation expense — — 11,336 — — 11,336

Other comprehensive income

72,955,379 $ 7 $ 569,618 $ ( 7,946 ) $ ( 445,280 ) $ 116,399

Balance, September 30, 2022

72,540,895 $ 7 $ 549,760 $ ( 2,790 ) $ ( 374,035 ) $ 172,942

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

Net loss $ ( 32,923 ) $ ( 36,829 )

Adjustments to reconcile net loss to net cash used by operating activities

Adjustments to reconcile net loss to net cash provided by (used by) operating activities

Stock-based compensation 10,606 11,056

2 unchanged sentences

Amortization of debt issuance costs 140 70

Deferred income taxes ( 808 ) ( 1,549 )

(Benefit) provision for deferred income taxes ( 450 ) 357

Foreign currency transaction losses, net 11,806 —

Changes in assets and liabilities

7 unchanged sentences

Operating lease assets and liabilities ( 232 ) 969

Net cash used by operating activities ( 102,198 ) ( 93,958 )

Net cash provided by (used by) operating activities

18,866 ( 25,265 )

Cash flows from investing activities

Purchases of investments ( 53,443 ) ( 31,214 )

Proceeds from investments 62,590 57,417

Proceeds from maturities of investments 9,657 16,289

Payments for investments — ( 24,184 )

Purchases of property and equipment ( 2,198 ) ( 4,421 )

Net cash provided by investing activities

Net cash provided by (used by) investing activities

7,459 ( 12,316 )

Cash flows from financing activities

Proceeds from borrowings 50,000 92,000

Debt repayments ( 2,625 ) —

Payments for debt issuance costs ( 463 ) ( 278 )

Debt repayments ( 1,250 ) ( 750 )

Repurchase of common stock ( 50,019 ) —

Payments for employee taxes related to the net share settlement of equity awards ( 2,862 ) ( 2,959 )

Proceeds from exercise of common stock options 345 131

Net cash provided by financing activities 82,388 25,205

Net cash (used by) provided by financing activities

( 4,249 ) 88,144

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 1,319 ) 15

Net decrease in cash, cash equivalents, and restricted cash ( 19,620 ) ( 50,105 )

Net increase in cash, cash equivalents, and restricted cash 20,757 50,578

Cash, cash equivalents, and restricted cash at beginning of period 149,351 150,381

16 unchanged sentences

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

The accompanying unaudited condensed consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial reporting.

In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows.

All intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods.

4 unchanged sentences

Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates.

Significant estimates embedded in the condensed consolidated financial statements include, but are not limited to, revenue recognition, income taxes and the related valuation allowance established against deferred tax assets, the amortization of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance (see Note 12), and stock-based compensation.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

Significant estimates embedded in the condensed consolidated financial statements include, but are not limited to, revenue recognition, income taxes and the related valuation allowance established against deferred tax assets, the amortization period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance (as discussed in Note 12), and stock-based compensation.

Revenue Recognition

Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams.

Cost of Revenue

Subscriptions

Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs such as payroll and benefits for our technology operations and customer support teams, amortization of developed technology, and allocated facility costs and overhead.

Professional Services

Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, third-party contractor costs, allocated facility costs and overhead, and the costs of billable expenses such as travel and lodging.

Concentration of Credit and Customer Risk

3 unchanged sentences

With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss.

Revenue generated from government agencies represented 21.1 % and 20.6 % of our revenue for the three and nine months ended September 30, 2023, respectively, of which the top three U.S.

federal government agencies generated 4.6 % and 4.3 % of our revenue for the three and nine months ended September 30, 2023, respectively.

Additionally, 35.3 % and 35.6 % of our revenue during the three and nine months ended September 30, 2023, respectively, was generated from international customers.

Revenue generated from government agencies represented 21.2 % and 19.2 % of our revenue for the three and nine months ended September 30, 2022, respectively, of which the top three U.S.

federal government agencies generated 5.5 % and 4.8 % of our revenue for the three and nine months ended September 30, 2022, respectively.

Additionally, 31.3 % and 33.2 % of our revenue during the three and nine months ended September 30, 2022, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three and nine months ended September 30, 2023 or 2022.

Revenue generated from government agencies represented 21.7 % and 20.5 % of our revenue for the three months ended March 31, 2024 and 2023, respectively, of which the top three U.S.

federal government agencies generated 4.5 % and 4.2 % of our revenue for the three months ended March 31, 2024 and 2023, respectively.

Additionally, 37.2 % and 33.4 % of our revenue during the three months ended March 31, 2024 and 2023, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three months ended March 31, 2024 or 2023.

As of March 31, 2024, we had one customer whose balance comprised 12 % of total accounts receivable.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase agreements, to be cash equivalents.

Restricted cash consists of cash designated to settle an escrow liability stemming from a holdback agreement enacted pursuant to our acquisition of Lana Labs GmbH.

We paid 25 % of the balance on September 28, 2022 and the remaining 75 % of the balance on August 11, 2023.

We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents.

Restricted cash consisted of cash designated to settle an escrow liability stemming from a holdback agreement related to our acquisition of Lana Labs GmbH.

We paid the remaining amount owed on August 11, 2023.

The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands):

September 30, 2023 December 31, 2022 September 30, 2022 December 31, 2021

March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022

Cash and cash equivalents $ 170,108 $ 149,351 $ 198,679 $ 148,132

Restricted cash, current — — 2,280 2,249

Restricted cash, net of current portion — — — 2,373

Total cash, cash equivalents, and restricted cash $ 170,108 $ 149,351 $ 200,959 $ 150,381

4 unchanged sentences

If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense.

The allowance for doubtful accounts totaled $ 2.3 million and $ 2.1 million as of September 30, 2023 and December 31, 2022, respectively.

The allowance for doubtful accounts totaled $ 2.3 million and $ 2.6 million as of March 31, 2024 and December 31, 2023, respectively.

Deferred Commissions

We capitalize costs of obtaining a contract with a customer, which consists of sales commissions paid to our sales team, that are incremental costs to obtaining customer contracts.

We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team, and the associated incremental payroll taxes.

These costs are recorded as deferred commissions in the consolidated balance sheets.

3 unchanged sentences

We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life.

We also capitalize the incremental payroll taxes associated with commission expenses paid to our direct sales team.

Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less.

Amortization associated with deferred commissions is recorded to sales and marketing expense in our consolidated statements of operations.

Total commission expense was $ 11.3 million and $ 33.5 million for the three and nine months ended September 30, 2023, respectively.

Total commission expense was $ 9.5 million and $ 26.5 million for the three and nine months ended September 30, 2022, respectively.

Total commission expense was $ 11.4 million and $ 11.0 million for the three months ended March 31, 2024 and 2023, respectively.

Property and Equipment

2 unchanged sentences

Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred.

The following table outlines the useful lives of our major asset categories:

Useful Life (in years)

Computer software 3

Computer hardware 3

Office furniture and fixtures 10

Leasehold improvements (a)

(a) Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

The estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years years for office furniture and fixtures.

Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term.

Severance Costs

During the first and second quarter of 2023, we incurred severance costs related to involuntary reductions in our workforce designed to right-size our employee base and improve operations.

No such similar actions occurred during the three months ended September 30, 2023.

Severance costs in the first and second quarter totaled $ 6.3 million.

The majority of the costs incurred will be paid to the impacted employees by December 31, 2023.

In the past, we have incurred severance costs related to involuntary reductions in our workforce designed to right-size our employee base and improve operations.

For involuntary termination benefits not provided under the terms of ongoing arrangements, we record severance costs once the terms of the arrangement have been established and communicated to employees.

Costs related to benefits provided in accordance with mutually understood and ongoing agreements are recognized when an obligation has been incurred, it is probable the benefits will be paid, and the amount to be paid can be reasonably estimated.

We did not incur any such severance costs during the three months ended March 31, 2024, while severance costs related to actions totaled $ 4.2 million for the three months ended March 31, 2023.

Treasury Stock

We account for treasury stock under the cost method.

When treasury stock is reissued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital (“APIC”) in our consolidated balance sheets.

When treasury stock is reissued at a price lower than its cost, the difference is recorded as a component of APIC to the extent there are previously recorded gains to offset the losses.

If there are no treasury stock gains in APIC, the losses upon reissuance of treasury stock are recorded as an increase to accumulated deficit.

Recent Accounting Pronouncements

We did not adopt any new accounting guidance in 2023 that had a material impact on our condensed consolidated financial statements or disclosures.

We have not adopted any new accounting guidance in 2024 that has had a material impact on our condensed consolidated financial statements or disclosures.

Not Yet Adopted

There is no pending accounting guidance that we expect to have a material impact on our condensed consolidated financial statements or disclosures.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvement to Reportable Segment Disclosures (ASU 2023-07), which enhances the disclosure requirements for operating segments in our annual and interim consolidated financial statements.

The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis.

Early adoption is permitted.

The new ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires public companies to disclose the title and position of the Chief Operating Decision Maker (“CODM”).

The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments.

This guidance also applies to public entities that have only one segment.

This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740):

Improvement to Income Tax Disclosures (ASU 2023-09), which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports if they are reasonably likely to have a material impact on the Company’s business.

For large accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025.

Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed.

We are currently evaluating the impact these rules will have on our financial statements and related disclosures and will monitor the litigation progress for possible impacts on the disclosure requirements under the rules.

Revenue Recognition

The following table summarizes revenue recorded during the three and nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support.

We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform.

The following table summarizes revenue recorded during the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Cloud subscriptions $ 86,603 $ 69,692

6 unchanged sentences

We primarily sell products and services that fall into the categories discussed below.

Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from

the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer.

Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer.

Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time.

11 unchanged sentences

Term License Subscriptions

Our term license subscription revenue is derived from customers with on-premises installations of our platform.

Our term license subscriptions revenue is derived from customers with on-premises installations of our platform.

The majority of our contracts are one year in length.

11 unchanged sentences

Customers are not required to use consulting services to fully benefit from the software.

Consulting services are regularly sold on a standalone basis and either (1) under a fixed-fee arrangement or (2) on a time and materials basis.

Consulting services contracts are considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the

customer's ability to use the other consulting offerings or other products and services.

Consulting services are regularly sold on a standalone basis and most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis.

We also sell advisory services on a subscription basis to support customers or partners with their development and deployment.

Revenue under consulting contracts is recognized over time as services are delivered.

Revenue from subscription-based consulting contracts is recognized ratably over the contract period.

For time and materials-based consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to date.

7 unchanged sentences

Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur.

The amount of variable consideration excluded from the transaction price for the three and nine months ended September 30, 2023 and 2022 was insignificant.

The amount of variable consideration excluded from the transaction price for the three months ended March 31, 2024 and 2023 was immaterial.

Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices;

16 unchanged sentences

Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional.

As of September 30,

2023 and December 31, 2022, contract assets of $ 12.1 million and $ 14.3 million, respectively, are included in the Prepaid expenses and other current assets and Other assets line items in our consolidated balance sheets.

Contract liabilities consist of deferred revenue and include payments received in advance of the satisfaction of performance obligations.

1 unchanged sentence

Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current.

For the nine months ended September 30, 2023, we recognized $ 177.9 million of revenue that was included in the deferred revenue balance as of December 31, 2022.

The following table sets forth our contract asset and contract liability balances (in thousands):

March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022

Contract assets, current *

$ 10,371 $ 12,052 $ 13,883 $ 12,540

Contract assets, non-current *

1,192 915 1,051 1,720

Total contract assets $ 11,563 $ 12,967 $ 14,934 $ 14,260

Deferred revenue, current $ 220,943 $ 235,992 $ 193,902 $ 194,768

Deferred revenue, non-current 5,216 4,700 4,750 5,556

Total contract liabilities $ 226,159 $ 240,692 $ 198,652 $ 200,324

* Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 94.2 million and $ 85.4 million for the three months ended March 31, 2024 and 2023, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of September 30, 2023, we had an aggregate transaction price of $ 391.9 million allocated to unsatisfied performance obligations.

As of March 31, 2024, we had an aggregate transaction price of $ 468.3 million allocated to unsatisfied performance obligations.

We expect to recognize $ 296.3 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter.

As of September 30, 2023, our lease portfolio consists entirely of operating leases, most of which are for corporate offices.

As of March 31, 2024, our lease portfolio consists entirely of operating leases for corporate offices.

Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

3 unchanged sentences

We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands, exclusive of sublease income):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table sets forth the components of lease expense for the three months ended March 31, 2024 and 2023 (in thousands, exclusive of sublease income):

Three Months Ended March 31,

Operating lease cost $ 2,411 $ 2,146

2 unchanged sentences

Total $ 4,056 $ 3,537

Sublease income totaled $ 0.3 million and $ 1.0 million for the three and nine months ended September 30, 2023, respectively.

Sublease income totaled $ 0.3 million for each of the three months ended March 31, 2024 and 2023.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of September 30, 2023 and December 31, 2022 is presented in the following table (in thousands, except for lease term and discount rate):

September 30, 2023 December 31, 2022

Supplemental balance sheet information related to operating leases as of March 31, 2024 and December 31, 2023 is presented in the following table (in thousands, except for lease term and discount rate):

March 31, 2024 December 31, 2023

Right-of-use assets for operating leases $ 39,074 $ 39,975

4 unchanged sentences

Weighted average discount rate 9.4 % 9.4 %

Supplemental cash flow and expense information related to operating leases for the three and nine months ended September 30, 2023 and 2022 is shown below (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Supplemental cash flow and expense information related to operating leases for the three months ended March 31, 2024 and 2023 is shown below (in thousands):

Three Months Ended March 31,

Operating cash outflows for operating leases $ 2,643 $ 1,132

1 unchanged sentence

Interest expense on operating lease liabilities 1,629 1,495

For the three and nine months ended September 30, 2023, TIA reimbursements totaled $ 1.0 million and $ 2.6 million, respectively.

There were no TIA reimbursements for the three months ended September 30, 2022, while TIA reimbursements totaled $ 2.0 million for the nine months ended September 30, 2022.

A summary of our future minimum lease commitments under non-cancellable operating leases as of September 30, 2023 is shown below (in thousands):

There were no TIA reimbursements for the three months ended March 31, 2024, while TIA reimbursements totaled $ 0.6 million for the three months ended March 31, 2023.

A summary of our future minimum lease commitments under non-cancellable leases as of March 31, 2024 is shown below (in thousands):

Operating Leases

2023 (excluding the nine months ended September 30, 2023)

2024 (excluding the three months ended March 31, 2024)

Thereafter 34,840

3 unchanged sentences

Goodwill and Intangible Assets

The following table details the changes in goodwill during the nine months ended September 30, 2023 and fiscal year ended December 31, 2022 (in thousands):

The following table details the changes in goodwill during the three months ended March 31, 2024 and fiscal year ended December 31, 2023 (in thousands):

Carrying Amount

3 unchanged sentences

Foreign currency translation adjustments ( 588 )

Balance as of September 30, 2023

Intangible assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 December 31, 2022

Balance as of March 31, 2024

Intangible assets, net consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024 December 31, 2023

Developed technology $ 6,937 $ 7,091

Customer relationships - Process mining and RPA

Customer relationships

Intangible assets, gross 7,866 8,041

1 unchanged sentence

Intangible assets, net $ 3,434 $ 3,889

Intangible amortization expense was $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2023, respectively.

Intangible amortization expense was $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the weighted average remaining amortization periods for developed technology, process mining customer relationships, and RPA customer relationships were approximately 2.7 years, 7.9 years, and 6.3 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of September 30, 2023 (in thousands):

Intangible amortization expense was $ 0.4 million for each of the three months ended March 31, 2024 and 2023.

As of March 31, 2024, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 2.3 years and 7.0 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of March 31, 2024 (in thousands):

Projected Amortization

2023 (excluding the nine months ended September 30, 2023)

2024 (excluding the three months ended March 31, 2024)

Thereafter 202

1 unchanged sentence

Property and Equipment, net

Property and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 December 31, 2022

Property and equipment, net consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024 December 31, 2023

Leasehold improvements $ 54,148 $ 53,313

Office furniture and fixtures 4,437 3,825

Computer hardware 9,410 9,689

Computer software 820 1,353

Computer software and hardware

10,378 10,491

Internally developed software

Equipment 193 194

2 unchanged sentences

Property and equipment, net $ 42,558 $ 42,682

Depreciation expense totaled $ 2.0 million and $ 5.9 million for the three and nine months ended September 30, 2023, respectively.

Depreciation expense totaled $ 1.4 million and $ 4.2 million for the three and nine months ended September 30, 2022, respectively.

We had no disposals or retirements during the three months ended September 30, 2023 and disposed of $ 1.4 million worth of fully depreciated property and equipment during the nine months ended September 30, 2023.

There were no disposals or retirements during the three and nine months ended September 30, 2022.

Depreciation expense totaled $ 2.0 million for each of the three months ended March 31, 2024 and 2023.

We had no disposals or retirements during the three months ended March 31, 2024 and disposed of $ 1.4 million worth of fully depreciated property and equipment during the three months ended March 31, 2023.

Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 December 31, 2022

Accrued expenses consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024 December 31, 2023

Hosting costs $ 3,600 $ 2,973

4 unchanged sentences

Reimbursable employee expenses 1,128 880

Taxes payable 760 1,261

Audit and tax expenses 1,303 1,499

5 unchanged sentences

The Credit Agreement matures on November 3, 2027.

We will use the proceeds from the $ 150.0 million term loan and access to the revolving credit facility to fund the continued growth of our business and support our working capital requirements.

Under the agreement, we may elect whether amounts drawn bear interest on the outstanding principal amount at a rate per annum equal to either (a) the higher of the Prime rate or the Federal Funds Effective (“Base Rate”) rate plus 0.50 % or (b) the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”).

We will use the proceeds to continue funding the growth of our business and support our working capital requirements.

Under the agreement, we may elect whether amounts drawn bear interest on the outstanding principal amount at a rate per annum equal to either (a) the higher of the Prime rate or the Federal Funds Effective rate (“Base Rate”) plus 0.5 % or (b) the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”).

An additional interest rate margin is added to the elected interest rates.

1 unchanged sentence

During the final two years of the Credit Agreement, the interest rate margin ranges from 0.5 % to 2.5 % in the case of Base Rate advances and from 1.5 % to 3.5 % in the case of Term SOFR advances, depending on our debt to consolidated adjusted EBITDA leverage ratio (as defined in the Credit Agreement).

In addition, the Credit Agreement contains other customary representations, warranties, and covenants, including covenants by us limiting additional indebtedness, guaranties, liens, fundamental changes, mergers and consolidations, dispositions of assets, investments, paying dividends on capital stock or redeeming, repurchasing, or retiring capital stock, prepaying certain junior indebtedness and preferred stock, certain corporate changes, and transactions with affiliates.

In addition, the Credit Agreement contains other customary representations, warranties, and covenants, including covenants by us limiting additional indebtedness, guarantees, liens, fundamental changes, mergers and consolidations, dispositions of assets, investments, paying dividends on capital stock or redeeming, repurchasing, or retiring capital stock, prepaying certain junior indebtedness and preferred stock, certain corporate changes, and transactions with affiliates.

The Credit Agreement also provides for customary events of default, including but not limited to, non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy, and the occurrence of a material adverse effect on us.

The following table summarizes outstanding debt balances (in thousands):

September 30, 2023 December 31, 2022

Borrowings under revolving credit facility expiring November 3, 2027

March 31, 2024 December 31, 2023

Borrowings under revolving credit facility

$ 62,000 $ 62,000

Secured term loan facility 194,563 145,813

Debt issuance costs (1)

( 1,440 ) ( 1,224 )

Total debt, net of debt issuance costs $ 255,123 $ 206,589

1 unchanged sentence

Long-term debt 248,025 140,221

142,016 115,379

Total debt $ 255,123 $ 206,589

(1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement.

We were in compliance with all covenants contained in the Credit Agreement.

We believe, based on our current financial forecasts and trends, that we will remain compliant with all covenants for the foreseeable future.

As of September 30, 2023, we had $ 62.0 million outstanding under our $ 75.0 million revolving credit facility, and we had outstanding letters of credit totaling $ 11.9 million in connection with securing our leased office space.

As of March 31, 2024, we had $ 62.0 million outstanding under our $ 100.0 million revolving credit facility, and we had outstanding letters of credit totaling $ 11.8 million in connection with securing our leased office space.

The provision for income taxes is based upon the estimated annual effective tax rates for the year applied to the current period income before tax plus the tax effect of any significant or unusual items, discrete events, or changes in tax law.

1 unchanged sentence

Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the condensed consolidated financial statements.

For the three and nine months ended September 30, 2023, the actual effective tax rates were ( 0.8 )% and ( 2.2 )%, respectively.

For the three and nine months ended September 30, 2022, the actual effective tax rates were ( 0.6 )% and 0.8 %, respectively.

The tax benefit recognized in the nine months ended September 30, 2022 was primarily driven by a discrete benefit of $ 1.1 million related to the release of a valuation allowance for Lana Labs GmbH as a result of post-acquisition tax planning and the merger of our German subsidiaries.

As of September 30, 2023, our net unrecognized tax benefits totaled $ 4.5 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

For the three months ended March 31, 2024 and 2023, the actual effective tax rates were 1.4 % and ( 3.2 )%, respectively.

As of March 31, 2024, our net unrecognized tax benefits totaled $ 6.5 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

The amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations or settlements of tax audits is not material to our condensed consolidated financial statements.

4 unchanged sentences

Stock-Based Compensation

We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date.

Compensation expense related to stock-based awards is accounted for using the estimated fair value of the award on the grant date.

We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model.

2 unchanged sentences

In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets.

This 2022 CEO option grant is our only stock-based award that vests based on the achievement of market conditions.

This option grant (the “2022 CEO option grant”) is our only outstanding stock-based award that vests based on the achievement of market conditions.

For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation, and expense is recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date.

We account for forfeitures of our stock-based awards as they occur rather than estimating expected forfeitures.

As of September 30, 2023, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 12.2 million and will be recognized over a weighted average period of 2.4 years.

As of March 31, 2024, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 9.7 million and will be recognized over a weighted average period of 2.0 years.

Total unrecognized compensation cost related to unvested RSUs was approximately $ 42.6 million, which will be recognized over a weighted average period of 1.3 years.

The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Cost of revenue

11 unchanged sentences

As we reported net losses for all periods presented, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised.

The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below:

Three and Nine Months Ended September 30,

Three Months Ended March 31,

Stock options 2,555,509 2,678,476

4 unchanged sentences

Specifically, purchase commitments under the agreement total $ 131.0 million over five years.

The agreement, which started July 2021 and is now in its third year as of September 30, 2023, contains minimum spending requirements of $ 25.0 million in the second year and $ 28.0 million in each of the third, fourth, and fifth years.

Spending under this agreement for the three and nine months ended September 30, 2023 totaled $ 9.3 million and $ 27.8 million, respectively.

Spending under this agreement for the three and nine months ended September 30, 2022 totaled $ 9.0 million and $ 24.8 million, respectively.

The agreement, which started July 2021 and is now in its third year as of March 31, 2024, contains minimum spending requirements of $ 28.0 million in each of the third, fourth, and fifth years.

Spending under this agreement for the three months ended March 31, 2024 and 2023 totaled $ 10.3 million and $ 9.4 million, respectively.

The timing of payments under the agreement may vary.

However, we expect to meet our minimum purchase commitments for the remainder of the contract term.

Exclusive of the AWS contract, we have other non-cancellable agreements for subscription software products that contain provisions stipulating minimum purchase commitments.

However, the annual purchase commitments under these contracts are, individually and in the aggregate, immaterial to our condensed consolidated financial statements.

However, the annual purchase commitments

under these contracts are, individually and in the aggregate, immaterial to our condensed consolidated financial statements.

Pegasystems Litigation

10 unchanged sentences

Defendant Youyong Zou has satisfied the judgment of $ 5,000 (plus interest) against him in lieu of appealing that judgment.

On September 15, 2022, Pegasystems filed a notice of appeal, and on February 6, 2023, Pegasystems filed its opening brief with the Court of Appeals of Virginia.

On March 29, 2023, we filed our response brief.

Pegasystems filed a reply brief on May 3, 2023.

On September 15, 2022, Pegasystems filed a notice of appeal to the Court of Appeals of Virginia.

Both sides have submitted their respective appeal briefs to the Court of Appeals, and the Court held a hearing on the appeal on November 15, 2023.

The timeline of the case is solely within the control of the Court of Appeals until it rules.

2 unchanged sentences

Consistent with other judgments, there is no guarantee we will be able to collect all or any portion of the judgment.

Consequently, we will not record the award in our consolidated financial statements until all contingencies are resolved and we collect on the judgment.

Consequently, we will not record the award in our condensed consolidated financial statements until all contingencies are resolved and we collect on the judgment.

Judgment Preservation Insurance

On September 1, 2023, we entered into a Judgment Preservation Insurance (“JPI”) policy in connection with our $ 2.036 billion judgment against Pegasystems.

The total cost of the policy was $ 57.3 million comprised of the premium, a one-time broker fee, and Virginia lines tax, and provides up to $ 500.0 million of coverage.

Total cost of the policy was capitalized and will be amortized on a straight-line basis over the estimated length of the appeals process.

As of September 30, 2023, we estimate the length of the appeals process solely for amortization purposes to be approximately three years .

Amortization expense associated with judgment preservation insurance premium is recorded to general and administrative expenses in our consolidated statements of operations.

Judgment preservation insurance amortization expense was $ 1.5 million for the three and nine months ended September 30, 2023.

As of September 30, 2023, $ 18.1 million is classified as ‘Prepaid expenses and other current assets’ and $ 37.7 million is classified as 'Other assets’ on our consolidated balance sheet.

The total cost of the policy was $ 57.3 million and is comprised of the premium, a one-time broker fee, and Virginia lines tax.

The policy provides up to $ 500.0 million of coverage.

The total cost of the policy was capitalized and will be amortized on a straight-line basis over the estimated length of the appeals process.

As of March 31, 2024, we estimated the length of the appeals process (solely for amortization purposes) to be approximately three years .

This estimate is updated each reporting period.

Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations.

JPI amortization expense was $ 4.5 million for the three months ended March 31, 2024.

As of March 31, 2024, $ 18.1 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 28.7 million is classified as 'Other assets’ on our consolidated balance sheets.

Other Legal Matters

2 unchanged sentences

Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Share Repurchase Program

In February 2024, our Board of Directors authorized a program to repurchase up to $ 50.0 million of our common stock from March 2024 to February 2026.

In March 2024, we repurchased 1.3 million shares under this program at an average share price of $ 37.86 , totaling an aggregate cost of $ 50.0 million.

As of March 31, 2024, shareholders’ equity included 72.2 million shares outstanding, net of 1.3 million shares of common stock held in treasury.

Segment and Geographic Information

We operate one operating and reportable segment, representing our consolidated business that helps organizations build applications and workflows rapidly with our low-code platform to maximize their resources and improve business results.

Our reportable segment determination is based on our management and internal reporting structure, the nature of the subscriptions and services we offer, and the financial information that is evaluated regularly by our chief operation decision maker.

The following table summarizes revenue by geography for the three and nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table summarizes revenue by geography for the three months ended March 31, 2024, and 2023 (in thousands):

Three Months Ended March 31,

Domestic $ 94,113 $ 90,005

2 unchanged sentences

With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer.

Substantially all of our long-lived assets were held in the United States as of September 30, 2023 and December 31, 2022.

The value of our long-lived assets, which are comprised of property and equipment and intangible assets, held in the United States and internationally as of March 31, 2024 were $ 33.0 million and $ 13.0 million, respectively.

As of December 31, 2023, our long-lived assets held in the United States and internationally were $ 34.0 million and $ 12.6 million, respectively.

Investments and Fair Value Measurements

8 unchanged sentences

Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of September 30, 2023 and December 31, 2022.

There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of March 31, 2024 and December 31, 2023.

The valuation techniques that may be used to measure fair value are as follows:

2 unchanged sentences

• Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost).

The carrying amounts of our cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate fair value as of September 30, 2023 and December 31, 2022 because of the relatively short duration of these instruments.

The carrying amounts of our restricted cash, accounts receivable, accounts payable, and accrued expenses approximate fair value as of March 31, 2024 and December 31, 2023 because of the relatively short duration of these instruments.

Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to the then market rates.

Our investment portfolio consists largely of debt investments classified as available-for-sale.

Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, are recorded in Other comprehensive income (loss).

The components of our investments as of September 30, 2023 are as follows (in thousands):

As of September 30, 2023

Fair Value Measurement Balance Sheet Classification

Fair Value Level Cost Basis Unrealized Gains (Losses) Market Value Cash and Cash Equivalents Short-term Investments and Marketable Securities

Money market fund Level 1 $ 21,034 $ — $ 21,034 $ 21,034 $ —

Treasury bonds Level 1 17,002 ( 10 ) 16,992 — 16,992

Commercial paper Level 2 12,042 — 12,042 — 12,042

Agency bonds Level 2 9,694 ( 2 ) 9,692 — 9,692

Total investments $ 59,772 $ ( 12 ) $ 59,760 $ 21,034 $ 38,726

Our investment portfolio has historically consisted largely of debt investments classified as available-for-sale.

Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, have been recorded in ‘Accumulated other comprehensive income (loss)’ in our consolidated balance sheets.

As of March 31, 2024, our cash and cash equivalents totaled $ 170.1 million, of which $ 86.0 million was held in readily available checking accounts or overnight repurchase investment accounts, and $ 84.1 million was held in money market funds with less than 90 days of maturity.

Our cash and cash equivalents are classified as Level 1 assets.

We did not hold any short- or long-term investments as of March 31, 2024.

At December 31, 2023, our investments consisted of the following (in thousands):

1 unchanged sentence

Fair Value Measurement Balance Sheet Classification

Fair Value Level Cost Basis Unrealized Gains (Losses) Market Value Cash and Cash Equivalents Short-term Investments and Marketable Securities

Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value

Cash and Cash Equivalents Short-term Investments and Marketable Securities

Level 1 $ — $ — $ 93,029 $ 93,029 $ —

Money market fund Level 1 56,322 — 56,322 56,322 —

Treasury bonds Level 1 4,830 ( 2 ) 4,828 — 4,828

Commercial paper Level 2 26,704 — 26,704 — 26,704

Corporate bonds Level 2 9,353 ( 12 ) 9,341 — 9,341

Agency bonds Level 2 4,828 ( 3 ) 4,825 — 4,825

Total investments $ 65,980 $ ( 5 ) $ 159,004 $ 149,351 $ 9,653

There were no Level 3 assets held at any point during the three and nine months ended September 30, 2023 and 2022.

Additionally, there were no transfers between Levels 1 and 2 during the nine months ended September 30, 2023 and 2022.

Interest income on our investments totaled $ 2.4 million and $ 7.1 million for the three and nine months ended September 30, 2023, respectively.

I nterest income on our investments totaled $ 0.2 million and $ 0.5 million for the three and nine months ended September 30, 2022, respectively.

The amortized cost basis and fair value of debt securities as of September 30, 2023, by contractual maturity, are as follows (in thousands):

As of September 30, 2023

Cost Basis Fair Value

Due in one year or less $ 59,772 $ 59,760

Total investments $ 59,772 $ 59,760

Actual maturities may differ from the contractual maturities in the table above because borrowers have the right to call or prepay certain obligations.

We did not hold any Level 3 assets at any point during the three months ended March 31, 2024 and 2023.

Additionally, there were no transfers between Levels 1 and 2 during the three months ended March 31, 2024 and 2023.

Interest income on our investments totaled $ 1.9 million and $ 2.1 million for the three months ended March 31, 2024 and 2023, respectively.

The contractual maturities of our debt securities as of December 31, 2023 were all one year or less.

Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

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