What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-03 · 108 added, 47 removed, 152 unchanged (50% of the section changed)

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• our ability to raise financing in the future;

• the timing, amount or duration of our Stock Repurchase Program;

• our success in retaining or recruiting officers, key employees or directors;

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New factors may emerge, and it is not possible to predict all factors that may affect our business and prospects.

We are a digital sports entertainment and gaming company that provides users with online sports betting (“Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as retail sportsbook, media and other consumer product offerings.

We are also involved in the design and development of sports betting and casino gaming software for online and retail sportsbooks and iGaming operators.

Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences.

We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming and DFS, as well as media and other online consumer product offerings.

We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming and DFS, as well as media, digital lottery and other online consumer product offerings.

We are also highly focused on our responsibility as a steward of this new era in real-money gaming.

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Together, these investments have enabled us to create a leading product built on scalable technology, while attracting a user base that has resulted in the rapid growth of our business.

Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable state-level unit economics in sports betting and iGaming and (d) expand our other online consumer product offerings.

Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable jurisdiction-level unit economics in sports betting and iGaming and (d) expand our other online consumer product offerings.

When we launch our Sportsbook and iGaming product offerings in a new jurisdiction, we invest heavily in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.

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We will continue to manage our fixed-cost base in conjunction with our market entry plans and focus our variable spend on marketing, user experience and support and regulatory compliance to become the product of choice for users and to maintain favorable relationships with regulators.

We also expect to improve our profitability over time as our revenue and gross profit expand as states mature, and our variable marketing expenses and fixed costs stabilize or grow at a slower rate.

We are continuing to increase our profits by utilizing the efficient customer acquisition that is enabled by the transition from local to regional to national advertising, maintaining strong customer retention, improving monetization from increased frequency of customer play and higher hold percentage, as well as scaling benefits from investments in our product offerings and technology and general and administrative functions.

We also expect to improve our profitability over time as our revenue and gross profit expand as jurisdictions mature, and our variable marketing expenses and fixed costs stabilize or grow at a slower rate.

We are continuing to increase our profits by utilizing the efficient customer acquisition that is enabled by the transition from local to regional to national advertising, maintaining strong customer retention, improving monetization from increased frequency of customer play and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions.

In any given period, we expect to achieve profitability on a consolidated Adjusted EBITDA basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S.

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The following table sets forth a summary of our financial results for the periods indicated:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(amounts in thousands)

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$ 1,104,441 $ 874,927 $ 2,279,437 $ 1,644,579

Net Income (Loss)

63,822 (77,270) (78,746) (474,418)

Adjusted EBITDA (1)

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See “Non-GAAP Information” below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S.

Revenue increased by $405.3 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to the strong performance of our Sportsbook and iGaming product offerings as a result of robust customer acquisition and retention, the successful launches of our Sportsbook product offering in additional jurisdictions, and improved promotional reinvestment for Sportsbook and iGaming.

Revenue increased by $229.5 million and $634.9 million in the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively, primarily due to continued healthy customer engagement, efficient

acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, a higher structural sportsbook hold percentage, and the impact of our acquisition of Jackpocket Inc.

(“Jackpocket”), which was completed on May 22, 2024.

Key Performance Indicators

Monthly Unique Payers (“MUPs”).

We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, or Marketplace product offerings via our technology.

We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, digital lottery or Marketplace product offerings via our technology.

For reported periods longer than one month, we average the MUPs for the months in the reported period.

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We expect the number of MUPs to grow as we attract, retain and re-engage users in new and existing jurisdictions and expand our product offerings to appeal to a wider audience.

The chart below presents our average MUPs for the three months ended March 31, 2023 and 2024:

The charts below present our average MUPs for the three and six months ended June 30, 2023 and 2024:

Average Revenue per MUP (“ARPMUP”).

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ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings.

The chart below presents our ARPMUP for the three months ended March 31, 2023 and 2024:

The increase in MUPs for the three months ended March 31, 2024, compared to the same period in 2023, primarily reflects strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings, as well as the expansion of our Sportsbook product offering into new states, partially offset by a decline in DFS MUPs.

ARPMUP increased in the three months ended March 31, 2024, compared to the same period in 2023, primarily due to structural improvement in our Sportsbook hold rate and improved promotional reinvestment for Sportsbook and iGaming.

The charts below present our ARPMUP for the three and six months ended June 30, 2023 and 2024:

The increase in MUPs for the three and six months ended June 30, 2024, compared to the same periods in 2023, primarily reflects strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings, as well as the expansion of our Sportsbook product offering into new states and the impact of our acquisition of Jackpocket (the “Jackpocket Transaction”).

ARPMUP decreased in the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower ARPMUP for Jackpocket customers when compared to DraftKings’ existing product offerings prior to the Jackpocket

Transaction, customer friendly sport outcomes, and an increase in new customer promotional investment for our Sportsbook and iGaming product offerings as a result of strong customer acquisition.

ARPMUP increased in the six months ended June 30, 2024, compared to the same period in 2023 primarily due to structural improvement in our Sportsbook hold rate and improved promotional reinvestment for Sportsbook and iGaming, slightly offset by the lower ARPMUP for Jackpocket customers.

Non-GAAP Information

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As calculated, it may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items:

We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items:

stock-based compensation;

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Adjusted EBITDA

The table below presents our Adjusted EBITDA reconciled to our net loss, which is the most directly comparable financial measure calculated in accordance with U.S.

The table below presents our Adjusted EBITDA reconciled to our net income (loss), which is the most directly comparable financial measure calculated in accordance with U.S.

GAAP, for the periods indicated:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(amounts in thousands) 2024 2023 2024 2023

Net loss $ (142,568) $ (397,148)

Net income (loss) $ 63,822 $ (77,270) $ (78,746) $ (474,418)

Adjusted for:

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Income tax (benefit) provision (2)

(73,570) 651 (73,921) 2,019

Stock-based compensation (3)

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Transaction-related costs (4)

18,585 425 23,493 425

Litigation, settlement, and related costs (5)

10,804 4,136 20,124 6,699

Advocacy and other related legal expenses (6)

Loss on remeasurement of warrant liabilities 18,094 17,035

(Gain) loss on remeasurement of warrant liabilities (9,791) 20,041 8,303 37,076

Other non-recurring costs and non-operating (income) costs (7)

(20,192) 277 (19,787) 375

Adjusted EBITDA $ 127,967 $ 72,972 $ 150,357 $ (148,639)

(1) The amounts include the amortization of acquired intangible assets of $29.3 million and $29.8 million for the three months ended March 31, 2024 and 2023, respectively.

(1) The amounts include the amortization of acquired intangible assets of $36.4 million and $28.9 million for the three months ended June 30, 2024 and 2023, respectively, and $65.7 million and $58.8 million for the six months ended June 30, 2024 and 2023, respectively.

(2) The Company recorded a discrete income tax benefit of $75.8 million during the second quarter of 2024 which was attributable to non-recurring partial releases of the Company's U.S.

valuation allowance as a result of the purchase accounting for the Jackpocket Transaction.

(3) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.

(3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration and pending or completed transactions and offerings, including costs relating to the Jackpocket transaction in 2024.

(4) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration and pending or completed transactions and offerings, including costs relating to our acquisitions of Jackpocket and Sports IQ Analytics Inc.

(5) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.

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(7) Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items.

For the three and six months ended June 30, 2024, this amount includes $20.9 million related to product tax credits as a result of audits and appeals related to prior periods.

Results of Operations

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

The following table sets forth a summary of our consolidated results of operations for the interim periods indicated, and the changes between periods:

Three months ended March 31,

Three months ended June 30,

(amounts in thousands, except percentages) 2024 2023 $ Change % Change

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Interest income (expense), net 13,534 12,745 789 6.2 %

Gain (loss) on remeasurement of warrant liabilities 9,791 (20,041) 29,832 (148.9) %

Other (loss) gain, net (446) 45 (491) (1,091.1) %

Loss before income tax (benefit) provision and (income) loss from equity method investment (9,509) (76,296) 66,787 (87.5) %

Income tax (benefit) provision (73,570) 651 (74,221) (11,401.1) %

Loss (income) from equity method investment 239 323 (84) (26.0) %

Net income (loss) $ 63,822 $ (77,270) $ 141,092 (182.6) %

Revenue increased by $229.5 million, or 26.2%, to $1,104.4 million in the three months ended June 30, 2024, from $874.9 million in the three months ended June 30, 2023.

The increase was primarily attributable to our online gaming revenues, which increased $237.5 million, or 27.9%, to $1,087.3 million in the three months ended June 30, 2024, from $849.8 million in the three months ended June 30, 2023, due to MUPs increasing by 50%, partially offset by ARPMUP decreasing by 15% as compared to the three months ended June 30, 2024.

The increase in MUPs was due to strong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction.

The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers when compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, customer friendly sport outcomes, and an increase in new customer promotional investment for our Sportsbook and iGaming product offerings, partially offset by structural improvement in our Sportsbook hold percentage.

Cost of Revenue .

Cost of revenue increased $153.1 million , or 30.0% , to $663.4 million in the three months ended June 30, 2024 , from $510.3 million in the three months ended June 30, 2023 .

The increase was due, in part, to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in Ohio, Massachusetts, Kentucky and Maine throughout 2023, as well as in Vermont and North Carolina in 2024.

In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as product taxes and payment processing fees, which increased $85.5 million and $26.5 million, respectively.

The remaining increase was primarily attributable to an increase

in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $13.3 million.

Cost of revenue as a percentage of revenue increased by 1.8 percentage points to 60.1% in the three months ended June 30, 2024 , as compared to 58.3% in the three months ended June 30, 2023 , reflecting, in part, an increase in promotional reinvestment for our Sportsbook and iGaming product offerings and increased amortization.

Sales and Marketing.

Sales and marketing expense increased $8.2 million, or 3.9%, to $215.7 million in the three months ended June 30, 2024, from $207.5 million in the three months ended June 30, 2023.

The increase was partially attributable to higher advertising costs of $13.1 million.

Product and Technology.

Product and technology expense increased $2.7 million, or 3.1%, to $92.7 million in the three months ended June 30, 2024, from $89.9 million in the three months ended June 30, 2023 due to increased headcount in our product and engineering departments.

General and Administrative.

General and administrative expense increased $28.8 million, or 21.2%, to $165.1 million in the three months ended June 30, 2024, from $136.3 million in the three months ended June 30, 2023.

This increase was primarily driven by an increase in transaction-related costs of $18.1 million and an increase in non-core litigation costs of $6.7 million .

Interest Income (Expense), net.

We recorded net interest income of $13.5 million in the three months ended June 30, 2024, compared to $12.7 million in the three months ended June 30, 2023, due to fluctuations in cash balances and interest rates.

Gain (Loss) on Remeasurement of Warrant Liabilities.

We recorded a gain on remeasurement of warrant liabilities of $9.8 million in the three months ended June 30, 2024, compared to a loss of $20.0 million in the three months ended June 30, 2023, due to changes in the underlying share price of our Class A common stock.

Other (Loss) Gain, net .

We recorded a loss of $0.4 million in the three months ended June 30, 2024, as compared to a nominal gain in the three months ended June 30, 2023.

Net Income (Loss).

Net income (loss) improved by $141.1 million to a net income of $63.8 million in the three months ended June 30, 2024, as compared to a net loss of $77.3 million in the three months ended June 30, 2023, for the reasons discussed above.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

The following table sets forth a summary of our consolidated results of operations for the interim periods indicated, and the changes between periods:

Six months ended June 30,

(amounts in thousands, except percentages) 2024 2023 $ Change % Change

Revenue $ 2,279,437 $ 1,644,579 $ 634,858 38.6 %

Cost of revenue 1,373,483 1,032,063 341,420 33.1 %

Sales and marketing 556,375 596,620 (40,245) (6.7) %

Product and technology 181,470 177,994 3,476 2.0 %

General and administrative 339,335 296,732 42,603 14.4 %

Loss from operations (171,226) (458,830) 287,604 (62.7) %

Interest income (expense), net 27,952 23,885 4,067 17.0 %

Loss on remeasurement of warrant liabilities (8,303) (37,076) 28,773 (77.6) %

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(Income) loss from equity method investment (91) 442 (533) (120.6) %

Net Loss $ (142,568) $ (397,148) $ 254,580 (64.1) %

Revenue increased by $405.3 million, or 52.7%, to $1,175.0 million in the three months ended March 31, 2024, from $769.7 million in the three months ended March 31, 2023.

The increase was primarily attributable to our online gaming revenues, which increased $417.0 million, or 56.7%, to $1,152.2 million in the three months ended March 31, 2024, from $735.2 million in the three months ended March 31, 2023, due to MUPs increasing by 22.8% and ARPMUP increasing by 25.0% as compared to the three months ended March 31, 2023.

Net income (loss) $ (78,746) $ (474,418) $ 395,672 (83.4) %

Revenue increased by $634.9 million, or 38.6%, to $2,279.4 million in the six months ended June 30, 2024, from $1,644.6 million in the six months ended June 30, 2023.

The increase was primarily attributable to our online gaming revenues, which increased $654.5 million, or 41.3%, to $2,239.5 million in the six months ended June 30, 2024, from $1,585.0 million in the six months ended June 30, 2023, due to MUPs increasing by 34.5% and ARPMUP increasing by 3.7% as compared to the six months ended June 30, 2023.

The increase in MUPs was due to strong player retention and acquisition across our Sportsbook and iGaming product offerings, as well as the expansion of our Sportsbook product offering into new jurisdictions.

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Cost of Revenue .

Cost of revenue increased $188.3 million, or 36.1%, to $710.1 million in the three months ended March 31, 2024, from $521.7 million in the three months ended March 31, 2023.

This increase was in part due to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in Ohio, Massachusetts, Kentucky, and Maine throughout 2023 as well as Vermont and North Carolina in 2024.

Cost of revenue increased $341.4 million , or 33.1% , to $1,373.5 million in the six months ended June 30, 2024 , from $1,032.1 million in the six months ended June 30, 2023 .

This increase was in part due to revenue growth from our expanded product and jurisdictional footprint, including the partial period impacts of the launch of our Sportsbook product offering in Massachusetts, Kentucky, and Maine throughout 2023, as well as in Vermont and North Carolina in 2024.

The remaining increase was primarily attributable to an increase in our variable platform costs resulting from additional customer activity.

Cost of revenue as a percentage of revenue decreased by 7.4 percentage points to 60.4% in the three months ended March 31, 2024, as compared to 67.8% in the three months ended March 31, 2023, reflecting, in part, structural improvement in our Sportsbook hold rate and improved promotional reinvestment for our Sportsbook and iGaming product offerings, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our more mature DFS product offering.

Cost of revenue as a percentage of revenue decreased by 2.5 percentage points to 60.3% in the six months ended June 30, 2024 , as compared to 62.8% in the six months ended June 30, 2023 , reflecting, in part, structural improvement in our Sportsbook hold rate and improved promotional reinvestment for our Sportsbook and iGaming product offerings, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our more mature DFS product offering.

Sales and Marketing.

Sales and marketing expense decreased $48.4 million, or 12.4%, to $340.7 million in the three months ended March 31, 2024, from $389.1 million in the three months ended March 31, 2023.

Sales and marketing expense decreased $40.2 million, or 6.7%, to $556.4 million in the six months ended June 30, 2024, from $596.6 million in the six months ended June 30, 2023.

The decrease was partially attributable to lower advertising costs of $9.4 million, as well as reduced stock-based compensation expense of $6.5 million.

Product and Technology.

Product and technology expense increased $0.7 million, or 0.8%, to $88.8 million in the three months ended March 31, 2024, from $88.1 million in the three months ended March 31, 2023.

Product and technology expense increased $3.5 million, or 2.0%, to $181.5 million in the six months ended June 30, 2024, from $178.0 million in the six months ended June 30, 2023 due to increased headcount in our product and engineering departments.

General and Administrative.

General and administrative expense increased $13.8 million, or 8.6%, to $174.3 million in the three months ended March 31, 2024, from $160.5 million in the three months ended March 31, 2023.

This increase was

primarily driven by an increase in transaction-related costs of $4.9 million and an increase in non-core litigation costs of $6.8 million partially offset by a decrease in stock-based compensation expense of $7.2 million.

General and administrative expense increased $42.6 million, or 14.4%, to $339.3 million in the six months ended June 30, 2024, from $296.7 million in the six months ended June 30, 2023.

This increase was primarily driven by an increase in transaction-related costs of $23.0 million and an increase in non-core litigation costs of $13.4 million partially offset by a decrease in stock-based compensation expense of $4.4 million.

Interest Income (Expense), net.

We recorded net income interest of $14.4 million in the three months ended March 31, 2024, compared to $11.1 million in the three months ended March 31, 2023, due to fluctuations in cash balances and interest rates.

We recorded net income interest of $28.0 million in the six months ended June 30, 2024, compared to $23.9 million in the six months ended June 30, 2023, due to fluctuations in cash balances and interest rates.

Loss on Remeasurement of Warrant Liabilities.

We recorded a loss on remeasurement of warrant liabilities of $18.1 million in the three months ended March 31, 2024, compared to a loss of $17.0 million in the three months ended March 31, 2023, due to changes in the underlying share price of our Class A common stock.

We recorded a loss on remeasurement of warrant liabilities of $8.3 million in the six months ended June 30, 2024, compared to a loss of $37.1 million in the six months ended June 30, 2023, due to changes in the underlying share price of our Class A common stock.

Other (Loss) Gain, net .

We recorded a loss of $0.7 million in the three months ended March 31, 2024, as compared to a gain of $0.0 million in the three months ended March 31, 2023.

Net loss decreased by $254.6 million to $142.6 million in the three months ended March 31, 2024, as compared to a net loss of $397.1 million in the three months ended March 31, 2023, for the reasons discussed above.

We recorded a loss of $1.2 million in the six months ended June 30, 2024, as compared to a gain of 0.1 million in the six months ended June 30, 2023.

Net Income (Loss).

Net income (loss) improved by $395.7 million to a net loss of $78.7 million in the six months ended June 30, 2024, as compared to a net loss of $474.4 million in the six months ended June 30, 2023, for the reasons discussed above.

Liquidity and Capital Resources

We had $1.2 billion in cash and cash equivalents as of March 31, 2024 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings).

We had $815.9 million in cash and cash equivalents as of June 30, 2024 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings).

We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months.

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The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheet.

As of March 31, 2024, the Convertible Notes, net of issuance costs, balance was $1,254.4 million .

As of June 30, 2024, the Convertible Notes, net of issuance costs, balance was $1,255.1 million.

We have lease arrangements for certain corporate office facilities, data centers, and motor vehicles.

As of March 31, 2024, the Company had lease obli gations of $90.2 million, with $11.3 million payabl e within 12 months.

As of June 30, 2024, the Company had lease obli gations of $89.6 million , with $11.5 million payabl e within 12 months.

Other Purchase Obligations .

We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments.

As of March 31, 2024, these purchase obligations were $1,329.4 million, with $368.6 million payable in the remainder of 2024.

As of June 30, 2024, these purchase obligations were $1,235.8 million, with $249.8 million payable in the remainder of 2024.

Stock Repurchase Program.

As noted above, on June 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.

The following table summarizes our cash flows for the periods indicated:

Three months ended March 31,

Six months ended June 30,

(amounts in thousands) 2024 2023

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Operating Activities .

Net cash used in operating activities in the three months ended March 31, 2024 improved $131.1 million to $70.4 million, compared to $201.5 million in the three months ended March 31, 2023, mainly reflecting an improvement in net loss, net of non-cash items, of $237.7 million, offset by changes in operating assets and liabilities.

Net cash used in operating activities in the six months ended June 30, 2024 decreased $178.2 million to $41.0 million, compared to $219.2 million in the six months ended June 30, 2023, mainly reflecting an improvement in net income (loss).

Net income (loss), net of non-cash items, of $284.2 million , offset by changes in operating assets and liabilities.

Investing Activities.

Net cash used in investing activities during the three months ended March 31, 2024 increased by $11.6 million to $39.2 million from $27.6 million during the same period in 2023, mainly reflecting an increase in cash paid for acquisition of gaming licenses of $10.2 million.

Net cash used in investing activities during the six months ended June 30, 2024 increased by $429.6 million to $456.5 million, compared to $27.0 million in the six months ended June 30, 2023 , mainly reflecting an increase in cash paid for acquisitions, net of cash acquired of $392.0 million.

Financing Activities.

Net cash used in financing activities during the three months ended March 31, 2024 increased by $5.5 million to $30.6 million from $25.2 million during the same period in 2023, primarily reflecting increased cost of purchasing treasury stock related to the satisfaction of withholding taxes due upon the vesting of restricted stock units.

Net cash used in financing activities during the six months ended June 30, 2024 increased by $14.6 million to $52.5 million, compared to $37.8 million in the six months ended June 30, 2023, primarily reflecting increased cost of purchasing treasury stock related to the satisfaction of withholding taxes due upon the vesting of restricted stock units.

Commitments and Contingencies

Refer to Note 11 of our unaudited condensed consolidated financial statements included elsewhere in this Report for a summary of our commitments as of March 31, 2024.

Refer to Note 12 of our unaudited condensed consolidated financial statements included elsewhere in this Report for a summary of our commitments as of June 30, 2024.

Critical Accounting Estimates

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Actual results could differ materially from these estimates.

During the three months ended March 31, 2024, there were no changes to the critical accounting estimates discussed in the 2023 Annual Report.

During the six months ended June 30, 2024, there were no changes to the critical accounting estimates discussed in the 2023 Annual Report.

Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposure to market risk during the three months ended March 31, 2024.

There have been no significant changes in our exposure to market risk during the six months ended June 30, 2024.

Refer to Item 7A.

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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