What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-02-28 compared with 2024-02-29 · 90 added, 92 removed, 270 unchanged (40% of the section changed)

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Our common stock is traded on the Nasdaq Global Select Market (the “ Nasdaq ”) under the symbol “AVPT,” and our public warrants are traded on the Nasdaq under the symbol “AVPTW”.

Company Earn-Out

Pursuant to the Apex Business Combination, certain holders of common stock and certain holders of options would be issued additional shares of AvePoint’s common stock, as follows (the “ Company Earn-Out Shares ”):

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $12.50 over any 20 trading days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share;

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $15.00 over any 20 trading days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share;

1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint’s stock price is greater than or equal to $17.50 over any 20 trading days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share.

In December 2024, the required price thresholds were met, leading to the private issuance of 2,964,658 Company Earn-Out Shares, and a payment of $0.6 million to certain holders of common stock and options.

Current Stockholder and Common Stock Information

On February 29, 2024, there were 184,010,832 shares of common stock issued and outstanding held of record by thirteen holders, and 17,905,000 warrants outstanding held of record by two holders.

This figure does not include a substantially greater number of beneficial holders of our common stock and public warrants whose shares (or warrants to purchase shares) are held by banks, brokers, and other financial institutions.

On February 26, 2025, there were 201,831,243 shares of common stock issued and outstanding held of record by one hundred sixty-two holders, and 7,219,451 warrants outstanding held of record by two holders.

These figures do not include a substantially greater number of beneficial holders of our common stock and public warrants whose shares (or warrants to purchase shares) are held by banks, brokers, and other financial institutions.

Dividend Policy

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December 31, 2024

(1) All shares reported herein, including shares repurchased to satisfy employee taxes on vesting RSUs, were purchased pursuant to the publicly announced Share Repurchase Program.

(1) All shares reported herein, including shares repurchased to satisfy employee taxes on vesting RSUs and Company Earn-out Shares, were purchased pursuant to the publicly announced Share Repurchase Program.

(2) Average price paid per share includes costs associated with the repurchases, but excludes the 1% excise tax on stock repurchases enacted by the Inflation Reduction Act of 2022.

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This section generally discusses the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.

For a discussion of the year ended December 21, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, “ Management ’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2022.

For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “ Management ’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2023 , which discussion is incorporated herein by reference.

2024 Business Highlights

Total annual recurring revenue (“ ARR ”) increased 23% year-over-year to $264.5 million as of December 31, 2023.

As of December 31, 2024, total annual recurring revenue (“ ARR ”) was $327.0 million, representing 24% year-over-year growth.

On a foreign exchange (“ FX ”) adjusted basis, total ARR increased 25% year-over-year;

Total revenue increased 22% year-over-year to $330.5 million.

SaaS revenue increased 37% year-over-year to $161.0 million;

GAAP operating loss was $15.4 million dollars, or a GAAP operating margin of (5.6)%, representing year-over-year margin improvement of more than 1,200 basis points.

Non-GAAP operating income was $22.2 million dollars, or a non-GAAP operating margin of 8.1%, representing year-over-year margin expansion of over 930 basis points;

Cash flow from operations was $34.7 million, compared to $(0.8) million for the year ended December 31, 2022.

AvePoint provides a cloud-native data management software platform that organizations rely on to manage and protect critical data, optimize IT operations, achieve meaningful cost savings, and efficiently secure the digital workplace.

Companies around the world have now fully adopted a hybrid work model, and they are now tasked with delivering a seamless and secure workplace experience for knowledge workers, centered around an extensive portfolio of Software-as-a-Service (“ SaaS ”) solutions and productivity applications.

The adoption of this portfolio of solutions is a substantial and ongoing challenge for most organizations, which for decades had used only a small number of multi-purpose on-premises applications to drive business outcomes.

However, to deliver an efficient digital workplace today, companies must manage this range of applications – and the associated explosive growth and sprawl of critical data – with a platform offering that is well governed, fit for purpose, easy to use and built on automation.

In addition, many organizations are beginning to realize the potential of generative artificial intelligence (“ AI ”) to drive competitive advantage and value creation, including (1) extracting greater value from complex datasets, (2) making more informed business decisions, (3) reducing employee workloads, and (4) improving the overall customer experience.

While these data-driven improvements are expected to lead to stronger revenue growth and operational efficiency, successfully leveraging this new technology is in turn dependent on first addressing data management challenges that all organizations face.

Specifically, for AI-driven projects to succeed, companies must apply robust strategies across the data estate to manage the information lifecycle, properly govern and secure their data, and ensure its compliance.

These are the core business problems that AvePoint has been solving for more than two decades, and why we believe AvePoint is well positioned to be a key enabler of generative AI adoption within enterprises in the coming years.

AvePoint’s Confidence Platform empowers organizations – of all sizes, in all regions, and across all industries – to optimize and secure the solutions that most commonly establish and underpin the digital workplace.

As our customers seek to rapidly reduce costs, improve productivity and make more informed business decisions, they depend on our platform for data-driven insights, critical business intelligence and ongoing operational value through automation.

On a constant currency basis, total revenue increased 22% year-over-year;

SaaS revenue increased 43% year-over-year to $230.7 million and represented 70% of total revenue, compared to 59% of revenue in 2023.

On a constant currency basis, SaaS revenue increased 44% year-over-year;

GAAP operating income was $7.2 million, compared to a GAAP operating loss of $(15.4) million in 2023.

Non-GAAP operating income was $47.6 million, compared to non-GAAP operating income of $22.2 million in 2023;

Net cash provided by operating activities was $88.9 million, representing 27% of revenue, compared to $34.7 million, representing 13% of revenue, for the year ended December 31, 2023.

AvePoint empowers organizations of all sizes, industries, and regions with its cloud-native data management software platform, enabling them to prepare, secure, and optimize their critical data.

The AvePoint Confidence Platform unifies data security, governance, and business continuity into a seamless, resilient experience, addressing the most pressing challenges in today’s complex digital landscape.

In a world where data is sprawling across hybrid work environments and generative AI technologies are rapidly emerging, AvePoint stands out with its platform-first strategy.

By integrating features and solutions to optimize operations, AvePoint delivers more than basic security controls—it redefines how businesses manage their most sensitive data and critical assets.

This holistic and automated approach enables organizations to secure the perimeter for sensitive data, strategically govern digital workspaces, and ensure compliance with evolving regulatory requirements.

Organizations today face a host of challenges that make a robust data management strategy indispensable, including:

Optimizing data for AI :

As organizations modernize their data ecosystems, the complexities of leveraging generative artificial intelligence (“AI”) technologies require proper governance, security, and lifecycle management.

With AvePoint, companies can extract more value from complex datasets, make informed decisions, reduce workloads, and enhance customer experiences.

Explosive data growth :

The hybrid work model and software-as-a-service (“SaaS”) proliferation have led to a surge in unstructured, sensitive data.

AvePoint’s solutions tackle the sprawl with robust control and protection measures to manage this growth.

A dangerous threat landscape and complex regulations :

Companies are navigating increasing cyber threats and global regulatory demands.

AvePoint ensures data is protected, secure, and compliant, helping mitigate financial, operational, and reputational risks.

The need for automation :

To monitor, govern, and respond to threats efficiently, organizations require streamlined, automated platforms that deliver rapid value.

AvePoint’s automation layer integrates seamlessly to achieve this efficiency.

Guided by its Beyond Secure philosophy, AvePoint goes beyond traditional boundaries to inspire trust, enabling organizations to focus on innovation while protecting against data breaches and unauthorized access.

For over 20 years, AvePoint has continually innovated to provide solutions that meet the demands of modern data management, empowering businesses to overcome challenges and unlock new possibilities in an ever-evolving landscape.

Key Business Metric

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Total ARR ($ in mil)

We calculate ARR at the end of a particular period as the annualized sum of contractually obligated Annual Contract Value (“ ACV ”) from SaaS, term license and support, and maintenance revenues from all active customers.

As of December 31, 2023, and December 31, 2022, total ARR was $264.5 million and $214.7 million, respectively, representing growth of 23.2%.

We believe ARR further enables measurement of our business performance, is an important metric for financial forecasting, and better enables us to make strategic business decisions.

We calculate ARR as the annualized sum of contractually obligated Annual Contract Value (“ ACV ”) from SaaS, term license and support, and maintenance revenue sources from all active customers at the end of a reporting period.

As of December 31, 2024 and 2023, total ARR was $327.0 million and $264.5 million, respectively, representing growth of 24%.

Adjusted for FX, total ARR increased 25% year-over-year.

Growth in ARR is driven by both new business and the expansion of existing business.

Growth in ARR is driven by both new customer acquisition and the expansion of existing customer relationships.

ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or replace these items.

ARR is not a forecast of future revenue, and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

ARR is not a forecast of future revenue, and the active contracts used in calculating ARR may or may not be extended or renewed by our customers.

Components of Results of Operations

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SaaS, term license and support, services, and maintenance.

We consider SaaS, term license and support, and maintenance revenues to be recurring.

SaaS revenues are generated from our cloud-based solutions.

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Cost of Revenue

Cost of SaaS and cost of term license and support consists of all direct costs to deliver and support our SaaS and term license and support products, including salaries, benefits, stock-based compensation and related expenses, overhead, third-party hosting fees related to our cloud services, depreciation and amortization.

We recognize these expenses as they are incurred.

We expect that these costs will increase in absolute dollars but may fluctuate as a percentage of SaaS and term license and support revenue from period to period.

Cost of maintenance consists of all direct costs to support our legacy perpetual license products, including salaries, benefits, stock-based compensation and related expenses, overhead, depreciation and amortization.

We recognize these expenses as they are incurred.

We expect that cost of maintenance revenue will decrease in absolute dollars as maintenance revenue declines but may fluctuate as a percentage of maintenance revenue.

Cost of services consists of salaries, benefits, stock-based compensation and related expenses for our services organization, overhead, IT necessary to provide services for our customers, depreciation and amortization.

Cost of services consists of salaries, benefits, stock-based compensation and related expenses for our services organization, overhead, technology necessary to service our customers, and depreciation and amortization.

We recognize these expenses as they are incurred.

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December 31, 2024

, primarily as a result of an increase in SaaS revenue.

For the year ended

December 31, 2023

, SaaS revenue

million, as we continued to see strong customer demand for this offering.

The increase in SaaS revenue was partially offset by an expected decrease in both term license and support and maintenance revenue.

Term license and support revenue is expected to continue declining as some existing customers are moving from on-prem term license subscriptions to SaaS subscriptions.

Maintenance revenue is expected to continue declining as revenues from the sales of legacy perpetual licenses are immaterial.

As a result, there will be limited opportunities to sell maintenance contracts to new customers.

At the same time, some existing maintenance customers have transitioned and will continue to transition to SaaS and term licenses, which will continue the decline in maintenance revenue.

ervices revenue is expected to fluctuate as the offerings are not inherently recurring in nature.

, due to an increase in SaaS revenue, which

million, and represented 70% of total revenue, up from 59% of total revenue in the prior year.

The increase in SaaS revenue, which was driven by strong customer demand for our SaaS solutions, was partially offset by an expected decrease in both term license and support and maintenance revenue.

Services revenue is expected to fluctuate as the services generally are not recurring in nature.

Additionally, maintenance revenue is expected to continue declining as we have shifted away from the sale of perpetual licenses and towards SaaS and term licenses.

Without perpetual license sales, there will be limited opportunities to sell maintenance contracts to new customers.

Existing customers have and will continue to transition to SaaS and term licenses, which will further support the continued decline in maintenance revenue.

Revenue by geographic area during the years ended December 31, 2024 and 2023 was as follows:

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North America

For the year ended December 31, 2023 , North America revenues increased 16.1% to $118.5 million, driven by a 29.2%, or $15.9 million, increase in SaaS revenue and a $2.2 million combined increase in services revenue and term license and support revenue, partially offset by a $1.6 million decrease in maintenance revenue.

For the year ended December 31, 2024 , North America revenues increased 14.7% to $135.9 million, driven by a 43.6%, or $30.7 million, increase in SaaS revenue, partially offset by a $13.3 million combined decrease in term license and support, services and maintenance revenue.

EMEA revenues increased by 21.4% to $99.3 million, driven by a 39.8%, or $23.8 million, increase in SaaS revenue, partially offset by a $6.3 million combined decrease in term license and support, services and maintenance revenue.

APAC revenues increased 22.0% to $71.6 million, driven by a 45.9%, or $9.7 million increase in SaaS revenue and a 20.9%, or $4.9 million, increase in services revenue, partially offset by a $1.7 million combined decrease in term license and support and maintenance revenue.

APAC revenues increased 33.2% to $95.4 million, primarily driven by a 49.2%, or $15.2 million, increase in SaaS revenue, a 24.1%, or $6.9 million, increase in services revenue, and a $1.7 million combined increase in term license and support and maintenance revenue.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we disclose non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP research and development expense, non-GAAP operating income and non-GAAP operating margin.

We believe these non-GAAP measures aid investors by providing additional insight into our operational performance and into trends affecting our business.

We believe these non-GAAP measures provide investors with additional insight into our operational performance and into trends affecting our business.

Management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance.

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Non-GAAP gross margin

Cost of revenue increased 16.9% to $77.5 million for the year ended December 31, 2023 , driven by a $6.6 million increase in aggregated hosting costs and a $4.1 million increase in personnel costs.

Both hosting and personnel costs increased to support the larger number of AvePoint software licenses used by customers.

Cost of revenue increased 6.5% to $82.5 million for the year ended December 31, 2024 , driven by a $3.0 million increase in aggregated hosting costs and a $2.3 million increase in personnel costs resulting from increased SaaS revenue.

Operating Expenses

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Non-GAAP percentage of revenue

Sales and marketing expenses increased 1.3% to $112.1 million for the year ended December 31, 2023 , primarily due to a $0.9 million increase in personnel costs and a $0.6 million increase in travel costs.

The minimal increase in overall sales and marketing expenses reflects the Company ’s enhanced focus on cost management as well as the continued scaling of the Company ’s channel partner strategy.

Sales and marketing expenses increased 9.6% to $122.9 million for the year ended December 31, 2024 , primarily driven by a $8.5 million increase in personnel costs, which included additional headcount and other investments in the business to respond to strong customer demand for our solutions and provide support for future growth.

The decline in sales and marketing expenses as a percentage of revenue reflects the continued scaling of the company’s focus on channel partnerships and strategies as well as ongoing improvements in overall sales efficiency.

General and Administrative

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Non-GAAP percentage of revenue

General and administrative expenses decreased 5.9% to $61.3 million for the year ended December 31, 2023 .

The decrease in overall general and administrative expenses reflects the Company ’s enhanced focus on cost management.

General and administrative expenses increased 13.0% to $69.2 million for the year ended December 31, 2024 .

The increase was primarily driven by a $3.9 million increase in personnel costs and $2.4 million in new fees related to the Company ’s investment in a growth equity fund.

Research and Development

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Non-GAAP percentage of revenue

Research and development expenses increased 15.9% to $36.3 million for the year ended December 31, 2023, primarily driven by a $4.3 million increase in personnel costs, as the Company continues to invest in the development of new offerings and enhancements to existing offerings.

Research and development expenses increased 34.0% to $48.7 million for the year ended December 31, 2024, primarily driven by a $10.7 million increase in personnel costs, which included additional headcount and ongoing investment in the development of new offerings and enhancements to existing offerings.

Income Tax Provision

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The effective tax rate, which equals the income tax provision divided by pretax loss from continuing operations, was (19.4)% for the year ended December 31, 2024 , compared to (15.5)% for the year ended December 31, 2023 .

The change in effective tax rates for the year ended December 31, 2023 , as compared to the year ended December 31, 2022 , was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates than 21%, a permanent item recorded for stock-based compensation and changes in the valuation allowance in the U.S.

The change in effective tax rates for the year ended December 31, 2024 , as compared to the year ended December 31, 2023 , was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates than 21%, a permanent item recorded for stock-based compensation, GILTI, fair value of earnout liability and changes in the valuation allowance in the U.S.

and certain foreign jurisdictions.

Non-GAAP Operating Income (loss) and Non-GAAP Operating Margin

Non-GAAP Operating Income and Non-GAAP Operating Margin

The following table presents a reconciliation of non-GAAP operating income from the most comparable GAAP measure, operating income, for the periods presented:

(in thousands, except percentages)

GAAP operating loss

GAAP operating income (loss)

GAAP operating margin

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Amortization of acquired intangible assets

Non-GAAP operating income (loss)

Non-GAAP operating income

Non-GAAP operating margin

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We define non-GAAP operating margin as non-GAAP operating income divided by revenue.

We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation, which has had historical volatility from period to period due to marked-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results.

We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation, which has had historical volatility from period to period due to mark-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results.

The elimination of the effect of variability caused by stock-based compensation expense and the amortization of acquired intangible assets, both of which are non-cash expenses, provides a better representation as to the overall operating performance of the company.

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Our short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation.

In addition, we extended a credit facility with a remaining commitment of $1.5 million, and committed $50.0 million to a growth equity fund.

We also have letters of credit issued in the amount of $1.0 million as security for operating leases, and $4.4 million as security for customer contingency agreements.

Our long-term capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, and the timing of new product introductions.

Refer to “ Note 12 - Commitments and Contingencies ” for more information regarding the purchase commitments.

On November 3, 2023, the Company entered into a new (i) Loan and Security Agreement (the “ Loan Agreement ”), (ii) a Pledge Agreement (the “ Pledge Agreement ”) and (iii) a Revolving Note (the “ Revolving Note ”) with HSBC Bank USA, National Association (“ HSBC ”), replacing the Company ’s previous line of credit with HSBC Venture Bank USA, Inc.

The Loan Agreement provides for a revolving line of credit of up to $30.0 million, with an additional $20.0 million accordion feature for additional capital which the Company may draw upon at its request.

Borrowings under the line bear interest at a rate equal to term SOFR plus 3.00% to 3.25% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement).

The line carries an annual unused fee ranging from 0.50% to 0.55% depending on the Consolidated Total Leverage Ratio.

The proceeds of borrowings under the Loan Agreement will be used for general corporate purposes.

Currently, there is no outstanding balance under the revolving line of credit.

The Company, on a consolidated basis with its subsidiaries, is required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter.

Pursuant to the Loan Agreement, the Company pledged, assigned and granted HSBC a security interest in all shares of its subsidiaries, future proceeds, and assets as security for its obligations under the Loan Agreement.

We also maintain a loan and security agreement (the “ Loan Agreement ”), dated November 3, 2023, with HSBC Bank USA, National Association (“ HSBC ”), as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may draw upon at our request.

The line bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement).

The line carries an unused fee equal to 0.5%.

The line will mature on November 3, 2026.

As of December 31, 2023, the Company was compliant with all covenants and had no borrowings outstanding under the Loan Agreement.

We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter.

Pursuant to the Loan Agreement, we pledged, assigned and granted HSBC a security interest in all shares of our subsidiaries, future proceeds, and assets as security for our obligations under the Loan Agreement.

As of December 31, 2024, we are compliant with all covenants and had no borrowings outstanding under the Loan Agreement.

We believe that our existing cash and cash equivalents, our cash flows from operating activities, and our borrowing capacity under our Loan Agreement will be sufficient to meet our working capital and capital expenditure needs and debt service obligations for at least the next twelve months.

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(in thousands)

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Net cash used in investing activities

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The main considerations for non-cash items were stock-based compensation, which reflects ongoing compensation charges for the entity’s equity- and pre-merger liability-classified awards, operating lease right-of-use asset expense and mark to market adjustments on earnout and warrant liabilities.

The main considerations of changes in operating assets and liabilities that resulted in cash outflows related to an increase in deferred contract costs and operating lease liabilities.

This was partially offset by cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth.

used in operating activities for the year ended

December 31, 2022, was

$0.8 million, reflecting our

$38.7 million, adjusted for non-cash items of

$46.2 million and net cash

$8.3 million from changes in our operating assets and liabilities.

The main considerations of changes in operating assets and liabilities that resulted in cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth.

This was partially offset by cash outflows related to an increase in deferred contract costs and operating lease liabilities.

Net cash provided by operating activities for the year ended December 31, 2023, was $34.7 million, reflecting our net loss of $21.5 million, adjusted for non-cash items of $58.6 million and net cash outflows of $2.4 million from changes in our operating assets and liabilities.

The main considerations of changes in operating assets and liabilities that resulted in cash outflows related to an increase in deferred contract costs and operating lease liabilities.

This was partially offset by cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth, and an increase in accrued expenses primarily due to personnel related expenses.

This was partially offset by cash inflows related to an increase in deferred revenue that is partially offset by an increase in accounts receivable as a result of business growth.

Investing Activities

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December 31, 2024, was

$5.6 million, consisting of $2.1 million of purchases of property and equipment, as well as $2.6 million in maturities of short-term investments and $3.5 million in the purchase of investments.

$2.6 million, primarily consisting of $3.0 million of purchases of property and equipment, $1.8 million in the purchase of investments, $1.8 million investment in notes, and $1.2 million in software development, partially offset by $5.4 million in maturities of short-term investments.

used in investing activities for the year ended

December 31, 2023, was

ion, consisting of $18.6 million in acquisitions and $3.9 million of purchases of property and equipment, as well as $183.5 million in maturities of short-term investments and $180.9 million in the purchase of investments.

ion, primarily consisting of $3.5 million in the purchase of investments, $2.1 million of purchases of property and equipment, $1.4 million in software development, and $1.3 million investment in notes, partially offset by $2.6 million in maturities of short-term investments.

Financing Activities

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December 31, 2024, was

$33.7 million.

The primary driver of cash flows from financing activities was due to $39.0 million in purchases of common stock, partially offset by $5.6 million of proceeds from the exercising of stock options.

$15.5 million, primarily due to $33.1 million in purchases of common stock, $6.1 million in the redemption of the redeemable noncontrolling interest of MaivenPoint, and $4.0 million in the purchase of public warrants, partially offset by $17.2 million of proceeds from the exercising of warrants, and $11.0 million of proceeds from the exercising of stock options.

used in financing activities for the year ended

December 31, 2023, was

$17.1 million.

The primary driver of cash flows from financing activities was due to $19.9 million in purchases of common stock, partially offset by $2.8 million of proceeds from the exercising of stock options.

$33.7 million, primarily due to $39.0 million in purchases of common stock, partially offset by $5.6 million of proceeds from the exercising of stock options.

Credit Facility

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Borrowings under the line bear interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio.

The line carries an unused fee ranging from 0.50% to 0.55% depending on the Consolidated Total Leverage Ratio.

The line carries an unused fee at a rate equal to 0.5%.

Any proceeds of borrowings under the Loan Agreement will be used for general corporate purposes.

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As of December 31, 2024, letters of credit have been issued in the amount of $1.0 million as security for operating leases.

The letters of credit are secured by certificates of deposit.

The letters of credit are secured by certificates of deposit and a line of credit.

Operating Segment Information

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Using a combination of the relative fair value method or the residual value method, the SSP of the performance obligations in an arrangement is allocated to each performance obligation within a sales arrangement.

Company Earn-Out Shares

In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718.

Refer to "Note 15 — Stock-Based Compensation" for more information regarding the Company Earn-Out RSUs.

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ contractual life based on the appropriate probability distributions.

The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial.

The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares.

Economic Conditions, Challenges, and Risks

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Refer to the section titled “ Risk Factors ” (Part I, Item 1A of this Annual Report) for a discussion of these factors and other risks.

Our quarterly revenue fluctuates and does not necessarily grow sequentially when measuring any one fiscal quarter’s revenue with another (e.g.

comparing the fourth fiscal quarter of fiscal year 2022 with the first fiscal quarter of fiscal year 2023).

Historically, our third and fourth quarters have been our highest revenue quarters, however those results are not necessarily indicative of future quarterly revenue or full year results.

Higher third and fourth quarter revenue is driven primarily by increased sales resulting from our customers’ fiscal year ends.

Additionally, new product and service introductions (including the timing of those introductions) can significantly impact revenue.

Revenue can also be affected when customers anticipate a product introduction.

Our operating expenses have generally increased sequentially due to increases in personnel in connection with the expansion of our business.

Our quarterly revenue can fluctuate and does not necessarily grow sequentially when measuring any one fiscal quarter’s revenue against another.

Historically, our first quarter has been our lowest revenue quarter and our fourth quarter has been our highest revenue quarter, however those results are not necessarily indicative of future quarterly revenue or full year results.

Additionally, the timing of new product and service introductions can significantly impact revenue.

Lastly, the mix of revenues in any given quarter can cause fluctuations in our reported results, due to differing revenue recognition principles.

Recently Issued and Adopted Accounting Pronouncements

1 unchanged sentence

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-K

Item 5. Market for Registrant’s Common Equity