What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-09 · 75 added, 103 removed, 126 unchanged (59% of the section changed)

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Consensus is a leading provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform.

Consensus serves approximately one million customers of all sizes, from enterprises to individuals, approximately 50 countries and multiple industry verticals including healthcare, government, financial services, law and education.

Consensus serves approximately 900 thousand customers of all sizes, from enterprises to individuals, across approximately 46 countries and multiple industry verticals including healthcare, government, financial services, law and education.

Our top 10 customers represent approximately 8% of total revenues and approximately 75% of our Small office home office (“SoHo”) customer accounts are older than 2 years.

Beginning as an online fax company over two decades ago, Consensus has evolved into a leading global provider of enterprise secure communication solutions.

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Consensus’ communication and interoperability solutions enable its customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

The global economy continues to be impacted by macroeconomic uncertainty and volatility resulting from recent global conflicts, inflationary pressures, supply chain disruptions and challenges and labor market pressures.

During fiscal year 2022 and through the third quarter of 2023, we have observed an increasingly competitive labor market.

During fiscal year 2023 and through the first quarter of 2024, we have observed an increasingly competitive labor market.

Increased employee turnover, changes in the availability of our employees and labor shortages generally have resulted in, and could continue to result in, increased costs, and could adversely impact the efficiency of our operations.

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Key Performance Metrics

We use the following metrics to evaluate our business, including the growth of our business, the value provided by customers to our business and our customer retention.

The following table sets forth certain key operating metrics for our operations for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for percentages and Average Revenue per Customer Account):

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

2023 2022 2023 2022

Revenue ($ in thousands)

We use the following metrics to generally assess the operational and financial performance of our business, including the growth of our business, the value provided by customers to our business and our customer retention that provide insights that contribute to certain of our business planning decisions.

We believe these financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

The following table sets forth certain key performance metrics for our operations for the three months ended March 31, 2024 and 2023 (in thousands, except for percentages and Average Revenue per Customer Account):

Three Months Ended March 31,

Corporate $ 51,390 $ 49,407

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Consolidated $ 33.63 $ 31.09

Customer Accounts (in thousands) (1)

Customer Accounts (1)

Corporate 55 53

SoHo 859 978 859 978

Consolidated 863 967

Paid Adds (in thousands) (3)

Paid Adds (3)

Corporate 4 3

SoHo 64 86 217 283

Consolidated 68 81

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(1) Consensus customers are defined as paying Corporate and SoHo customer accounts.

(2) Represents a monthly ARPA for the quarter or year-to-date period, calculated as follows:

(2) Represents a monthly ARPA for the quarter, calculated as follows:

Monthly ARPA on a quarterly basis is calculated using our standard convention of dividing revenue for the quarter by the average of the quarter’s beginning and ending customer base and dividing that amount by 3 months.

Monthly ARPA on an year-to-date basis is calculated by dividing revenue for the year-to-date period by the average customer base for the applicable period and dividing that amount by the respective period.

We believe ARPA provides investors an understanding of the average monthly revenues we recognize per account associated within Consensus’ customer base.

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(3) Paid Adds represents paying new Consensus customer accounts added during the periods presented.

(4) Monthly churn is defined as Consensus paying customer accounts that cancelled its services during the period divided by the average number of customers over the period.

(4) Monthly churn is defined as Consensus paying customer accounts that cancelled services during the period divided by the average number of customers over the period.

This measure is calculated monthly and expressed as an average over the applicable period.

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Actual results could differ significantly from those estimates under different assumptions and conditions.

Our critical accounting policies are described in our 2022 Annual Report on Form 10-K filed with the SEC on March 31, 2023.

During the nine months ended September 30, 2023, there were no significant changes in our critical accounting policies and estimates.

Results of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

Our critical accounting policies are described in our 2023 Annual Report on Form 10-K filed with the SEC on February 28, 2024.

During the three months ended March 31, 2024, there were no significant changes in our critical accounting policies and estimates.

Results of Operations for the Three Months Ended March 31, 2024 and 2023

The main strategic focus of our Consensus offerings is to enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

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We expect our business to primarily grow organically and inorganically through the use of capital for re-investment in the business and opportunistic acquisitions that expedite our product roadmap in the interoperability space should they arise.

(in thousands, except percentages) Three Months Ended September 30, Percentage Change Nine Months Ended September 30, Percentage Change

2023 2022 2023 2022

(in thousands, except percentages) Three Months Ended March 31, Percentage Change

Revenues $ 88,146 $ 91,454 (4)%

Our revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services.

Revenues decreased by $1.2 million or 1% for the three months ended September 30, 2023 over the prior comparable three month period.

The decline in revenues was due to an anticipated decline of $2.7 million or 6% in our SoHo business;

partially offset by an increase of $1.5 million or 3% in our corporate business.

Revenues increased by $2.6 million or 1% for the nine months ended September 30, 2023 .

Our growth was due to an increase of $5.8 million or 4% in our corporate business;

partially offset by an anticipated decline of $3.2 million or 3% in our SoHo business.

Revenues decreased by $3.3 million or 4% for the three months ended March 31, 2024 over the prior year comparable period.

The decrease was due to a decline of $5.3 million or 13% in our SoHo business, partially offset by an increase of $2.0 million or 4% in our corporate business.

Cost of Revenues

(in thousands, except percentages) Three Months Ended September 30, Percentage Change Nine Months Ended September 30, Percentage Change

2023 2022 2023 2022

(in thousands, except percentages) Three Months Ended March 31, Percentage Change

Cost of revenues $17,048 $17,508 (3)%

As a percent of revenue 19% 19%

Cost of revenues is primarily comprised of costs associated with personnel costs, customer service, online processing fees, capitalized software amortization and equipment depreciation and network operations.

The increase in cost of revenues for the three months ended September 30, 2023 was primarily due to increases of $1.1 million in personnel-related expenses and $0.4 million in depreciation associated with platform development costs compared to the prior comparable three month period.

The increase in cost of revenues for the nine months ended September 30, 2023 was primarily due to increases of $3.5 million in personnel-related expenses and $1.8 million in depreciation associated with platform development costs compared to the prior comparable nine month period.

Cost of revenues is primarily comprised of costs associated with personnel costs, data transmission, online processing fees, network operations as well as capitalized software amortization and equipment depreciation.

The decrease in cost of revenues for the three months ended March 31, 2024 over the prior year comparable period was primarily due to a decrease of $0.7 million in data transmission expense compared to the prior year comparable three month period.

Operating Expenses

Sales and Marketing

(in thousands, except percentages) Three Months Ended September 30, Percentage Change Nine Months Ended September 30, Percentage Change

2023 2022 2023 2022

(in thousands, except percentages) Three Months Ended March 31, Percentage Change

Sales and marketing $12,558 $16,893 (26)%

As a percent of revenue 14% 18%

Our sales and marketing costs consist primarily of internet-based advertising, personnel costs and other business development-related expenses.

Our sales and marketing costs consist primarily of personnel costs, internet-based advertising and other business development-related expenses.

Our internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships with an array of online service providers.

Our sales personnel consist of a combination of inside sales and outside sales professionals.

Sales and marketing costs for the three months ended September 30, 2023 were $15.3 million (primarily consisting of $8.0 million of third-party advertising costs and $6.6 million of personnel costs) compared to the prior comparable period of $16.6 million (primarily consisting of $10.3 million of third-party advertising costs and $6.0 million of personnel costs).

The decrease in sales and marketing expenses for the three months ended September 30, 2023 versus the prior comparable period was primarily due to a reduction of third-party advertising spend, partially offset by increased personnel-related expenses.

Sales and marketing costs for the nine months ended September 30, 2023 were $49.7 million (primarily consisting of $27.2 million of third-party advertising costs and $20.9 million of personnel costs) compared to the prior comparable period of $48.9 million (primarily consisting of $30.7 million of third-party advertising costs and $17.3 million of personnel costs).

The increase in sales and marketing expenses for the nine months ended September 30, 2023 versus the prior comparable period was primarily due to increased personnel-related expenses, partially offset by a reduction of third-party advertising spend.

The decrease in sales and marketing expenses of $4.3 million for the three months ended March 31, 2024 over the prior year comparable period was primarily due to a reduction in third party advertising spend of $4.7 million, predominantly in SoHo, partially offset by an increase of $0.3 million in personnel-related expenses due to continued investment in the corporate sales team.

Research, Development and Engineering

(in thousands, except percentages) Three Months Ended September 30, Percentage Change Nine Months Ended September 30, Percentage Change

2023 2022 2023 2022

(in thousands, except percentages) Three Months Ended March 31, Percentage Change

Research, development and engineering $1,905 $1,904 —%

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Our research, development and engineering costs consist primarily of personnel-related expenses.

The decrease in research, development and engineering costs for the three and nine months ended September 30, 2023 versus the prior comparable periods was primarily attributable to increased capitalization of personnel-related expenses due to our continued focus on internally developing our platform, products and solutions as well as a reduction in external development costs.

The increase in capitalization resulted in a decrease in personnel-related expenses of $1.3 million and $2.0 million, respectively, for the three and nine months ended September 30, 2023 versus the prior year comparable periods.

Research, development and engineering costs remained consistent for the three months ended March 31, 2024 compared to the prior year comparable period.

General and Administrative

(in thousands, except percentages) Three Months Ended September 30, Percentage Change Nine Months Ended September 30, Percentage Change

2023 2022 2023 2022

(in thousands, except percentages) Three Months Ended March 31, Percentage Change

General and administrative $18,968 $21,152 (10)%

As a percent of revenue 22% 23%

Our general and administrative costs consist primarily of personnel-related expenses, depreciation and amortization,

share-based compensation expense, bad debt expense, professional fees and insurance costs.

The decrease in general and administrative expenses for the three months ended September 30, 2023 versus the prior year comparable period was primarily due to a decrease in non-income related tax expenses of $7.1 million, partially offset by an increase in bad debt expense of $1.0 million.

The decrease in general and administrative expenses for the nine months ended September 30, 2023 versus the prior year comparable period was primarily due to a decrease in non-income related tax expenses of $7.1 million, partially offset by increases of $4.3 million in bad debt expense, $1.0 million in computer equipment costs, $0.9 million in personnel-related expenses and $0.7 million in professional fees.

Our general and administrative costs consist primarily of personnel-related expenses (inclusive of share-based compensation), professional fees, depreciation and amortization and bad debt expense.

The decrease in general and administrative expenses for the three months ended March 31, 2024 over the prior year comparable period was primarily due to decreases of $1.2 million in professional fees and $1.0 million in personnel-related expenses.

Share-Based Compensation

The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Condensed Consolidated Statements of Income 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 represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Cost of revenues $ 503 $ 296

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Our interest expense is due to outstanding debt and is reduced by any capitalized interest.

Interest expense for the three months ended September 30, 2023 and 2022 was $12.6 million and $13.9 million, respectively, and for the nine months ended September 30, 2023 and 2022 was $38.0 million and $39.6 million, respectively.

Interest expense was reduced by capitalized interest of $0.7 million and $1.8 million during the three and nine months ended September 30, 2023, respectively.

There was no interest capitalized during the three and nine months ended September 30, 2022.

Interest expense for the three months ended March 31, 2024 and 2023 was $6.2 million and $12.6 million, respectively.

The decrease between periods was primarily due to the partial extinguishment of debt in the first quarter of 2024, resulting in a gain of $4.9 million.

Interest income.

Our interest income is generated from interest earned on cash and cash equivalents.

Interest income was $1.5 million and zero for the three months ended September 30, 2023 and 2022, respectively.

Interest income was $2.2 million and zero for the nine months ended September 30, 2023 and 2022, respectively.

Interest income was higher compared to the prior comparable periods due to investments in money market funds starting in 2023.

Other income, net .

Our other income, net is generated primarily from foreign currency and miscellaneous items.

Other income, net for the three months ended September 30, 2023 and 2022 was $3.7 million and $3.0 million, respectively.

Other income, net for the nine months ended September 30, 2023 and 2022 was $3.4 million and $4.7 million, respectively.

The three month period included lower foreign exchange gains compared to the prior comparable period.

The nine month period included lower foreign exchange gains compared to the prior comparable period.

Our effective tax rate is based on pre-tax income, statutory tax rates, tax regulations (including those related to transfer pricing) and different tax rates in the various jurisdictions in which we operate.

The tax bases of our assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize.

When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

Provision for income taxes for the three months ended September 30, 2023 and 2022 was $7.5 million and $6.3 million, respectively.

Provision for income taxes for the nine months ended September 30, 2023 and 2022 was $18.9 million and $21.3 million, respectively.

The Company’s effective tax rate for the three months ended September 30, 2023 and 2022 was 23.9% and 29.2%, respectively.

The Company’s effective tax rate for the nine months ended September 30, 2023 and 2022 was 23.8% and 27.6%, respectively.

The decrease in our effective income tax rate for the three and nine months ended September 30, 2023 was primarily attributable to a reduction in nondeductible expenses, primarily consisting of sales tax penalties, stock compensation and the change in the geographical mix of income.

Interest income was $0.9 million and zero for the three months ended March 31, 2024 and 2023, respectively.

Interest income was higher in 2024 compared to the prior year comparable period due to investments in money market funds that began in the second quarter of 2023.

Other income (expense), net .

Our other income (expense), net is generated primarily from foreign currency and miscellaneous items.

Other income (expense), net for the three months ended March 31, 2024 and 2023 was $3.9 million and $(0.8) million, respectively.

The change between periods was primarily attributable to exchange rate fluctuations on inter-company balances between periods in foreign subsidiaries that were in functional currencies other than the U.S.

Significant judgment is required in determining our provision for income taxes and in evaluating our tax positions on a worldwide basis.

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Certain of these tax positions have, in the past been challenged, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.

The tax basis of our assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize.

When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

The provision for income taxes for the three months ended March 31, 2024 and 2023 was $9.9 million and $5.1 million, respectively.

The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 was 27.3% and 24.9%, respectively.

The increase in our effective income tax rate for the three months ended March 31, 2024 was primarily attributable to the change in the geographical mix of income and an increase in the valuation allowance.

Liquidity and Capital Resources

Cash and Cash Equivalents

At September 30, 2023, we had cash and cash equivalents of $155.7 million compared to $94.2 million at December 31, 2022.

The increase in cash and cash equivalents resulted primarily from cash provided by operations;

partially offset by cash used for capitalized expenditures, repurchases of common stock and the purchase of investments.

As of September 30, 2023, cash and cash equivalents held within domestic and foreign jurisdictions were $60.4 million and $95.3 million, respectively.

At March 31, 2024, we had cash and cash equivalents of $61.5 million compared to $88.7 million at December 31, 2023.

The decrease in cash and cash equivalents resulted primarily from cash used for debt repurchases, capitalized expenditures and common stock repurchases, partially offset by cash provided by operations.

As of March 31, 2024, cash and cash equivalents held within domestic and foreign jurisdictions were $33.0 million and $28.5 million, respectively.

Credit Agreement

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The final maturity of the Credit Facility will occur on March 4, 2027.

As of September 30, 2023, no amount has been drawn down on the Credit Facility.

As of March 31, 2024, no amount has been drawn down on the Credit Facility.

Material Cash Requirements

Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments.

As of September 30, 2023, we had outstanding $805.0 million in aggregate principal amount of indebtedness (see Note 6 - Debt of the Notes to the Condensed Consolidated Financial Statements).

As of September 30, 2023, our total minimum lease payments are $19.7 million (see Note 7 - Leases of the Notes to the Condensed Consolidated Financial Statements).

As of September 30, 2023, our liability for uncertain tax positions was $9.0 million.

As of March 31, 2024, we had outstanding $679.0 million in aggregate principal amount of indebtedness (see Note 7 - Long-Term Debt of the Notes to the Condensed Consolidated Financial Statements) and total minimum lease payments of $18.2 million, which had a weighted average remaining lease term of 6.5 years.

As of March 31, 2024, our liability for uncertain tax positions was $10.5 million.

Due to uncertainties in the timing of the amounts and timing of cash settlement with the taxing authorities, we are unable to make a reasonably reliable estimate of the timing of payments.

We currently anticipate that our existing cash and cash equivalents and cash generated from operations will be sufficient to meet our anticipated needs for working capital, capital expenditures and stock repurchases, if any, for at least the next 12 months and the foreseeable future.

We currently anticipate that our existing cash and cash equivalents and cash generated from operations will be sufficient to fund our anticipated needs for working capital, capital expenditures, stock and debt repurchases, if any, for at least the next 12 months and the foreseeable future.

Debt Repurchase Program

On November 9, 2023, the Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the 2026 Senior Notes and 2028 Senior Notes (“Debt Repurchase Program”).

The authorization permits an aggregate principal amount reduction of up to $300.0 million and expires on November 9, 2026.

The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant.

Any gains or losses on extinguishment of debt are recognized in interest expense on the Condensed Consolidated Statements of Income.

As of March 31, 2024 the Company has retired an aggregate of $126.0 million in principal of its senior notes under this program.

Common Stock Repurchase Program

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Under this program, the Company may purchase in the public market or in off-market transactions up to $100.0 million worth of the Company’s common stock through February 2025.

The timing and amounts of purchases will be determined by the Company, depending

on market conditions and other factors it deems relevant.

The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans and during the three months ended September 30, 2023 and 2022, the Company repurchased 152,399 and zero shares, respectively, at an aggregate cost of $3.8 million and zero, respectively, under this program.

During the nine months ended September 30, 2023 and 2022, the Company repurchased 490,953 and 189,114 shares, respectively, at an aggregate cost of $15.1 million (inclusive of excise tax of $0.1 million) and $7.6 million, respectively, under this program.

Cumulatively as of September 30, 2023, 680,067 shares have been repurchased under this program at an aggregate cost of $22.7 million (inclusive of excise tax of $0.1 million).

The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant.

The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans and during the three months ended March 31, 2024 and 2023, the Company repurchased 42,962 and 270,192 shares, respectively, at an aggregate cost of $0.7 million and $9.2 million, respectively, under this program, inclusive of excise tax of zero in both periods.

Cumulatively as of March 31, 2024, 1,071,624 shares have been repurchased under this program at an aggregate cost of $32.0 million (inclusive of excise tax of $0.2 million).

The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.

At the time of certain vesting events related to restricted stock units or restricted stock awards that are held by participants in Consensus’ Equity Incentive Plan, a portion of the awards subject to vesting are withheld by the Company to satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock.

Vested Restricted Stock

satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock.

As a result, the number of shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees.

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These shares do not count against the authorized capacity under the Company’s share repurchase program described above.

During the three and nine months ended September 30, 2023 the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 2,412 and 35,368 shares, respectively.

During the three and nine months ended September 30, 2022 the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 1,906 and 29,725 shares, respectively.

Debt Repurchase Program

The authorization permits an aggregate principal amount reduction of up to $300 million and expires on November 9, 2026.

The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant.

During the three months ended March 31, 2024 and 2023, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 15,340 shares and 11,418 shares, respectively.

Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents.

Net cash provided by operating activities was $112.1 million and $89.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Net cash provided by operating activities was $44.7 million and $38.0 million for the three months ended March 31, 2024 and 2023, respectively.

Our operating cash flows resulted primarily from cash received from our customers offset by cash payments we made to third parties for their services and employee compensation.

The increase in our net cash provided by operating activities in 2024 compared to 2023 was primarily attributable to increased income after excluding noncash items.

In addition, contributing to the increase in cash provided by operating activities, there was a decrease in prepaid expenses and other current assets and an increase in income tax payable in 2023 compared to 2022, as well as a decrease in other liabilities in 2022 compared to an immaterial decrease in 2023.

Slightly offsetting these cash inflows was a lower decrease in accounts payable and accrued expenses in 2023 compared to the decrease in accounts payable and accrued expenses in 2022.

Net cash used in investing activities was $32.7 million and $34.3 million for the nine months ended September 30, 2023 and 2022, respectively.

For the nine months ended September 30, 2023, net cash used in investing activities was primarily attributed to capital expenditures associated with the purchase of property and equipment (including capitalized labor) and the purchase of an investment.

For the nine months ended September 30, 2022, net cash used in investing activities was primarily due to business and asset acquisitions as well as capital expenditures associated with the purchase of property and equipment (including capitalized labor).

The decrease in our net cash used in investing activities in 2023 compared to 2022 was due to a lower cash outlay related to business acquisitions when compared to 2022;

partially offset by higher cash outlays related to the purchase of an investment and an increase in capital expenditures primarily associated with developed software (including capitalized labor) in 2023.

Net cash used in financing activities was $14.1 million and $8.9 million for the nine months ended September 30, 2023 and 2022, respectively.

For the nine months ended September 30, 2023 and 2022, net cash used in financing activities was primarily due to the repurchase of common stock and the payment of employee income tax obligations related to the net settlement of equity awards.

The change in net cash used in financing activities in 2023 compared to 2022 was primarily attributable to an increase in cash outflows related to the repurchase of common stock in the current year.

In addition, contributing to the increase in cash provided by operating activities, there was an increase in income tax payable in 2024 compared to 2023, and less of an increase in accounts receivable in 2024 compared to 2023.

These sources of cash flow were partially offset by a lower increase in accounts payable and accrued expenses in 2024 compared to 2023.

Net cash used in investing activities was $8.9 million and $12.5 million for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, net cash used in investing activities consisted of capital expenditures associated with the purchase of property and equipment (including capitalized labor).

Capital expenditures remained consistent from 2023 to 2024, however in 2023 the Company purchased an investment, which increased the net cash used in investing activities in 2023.

Net cash used in financing activities was $58.8 million and $9.6 million for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, net cash used in financing activities was primarily attributable to cash outlays the Company used to repurchase a portion of its outstanding senior notes debt facilities.

For the three months ended March 31, 2023, net cash used in financing activities was primarily attributable to cash used to repurchase common stock.

For the three months ended March 31, 2024 and 2023, net cash used in financing activities also included the payment of employee income tax obligations related to the net settlement of equity awards.

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 2. Management’s Discussion and Analysis