What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-08-02 · 80 added, 77 removed, 183 unchanged (46% 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;

• the timing, amount or duration of the Company’s stock repurchase program;

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

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

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

Three months ended September 30, Nine months ended September 30,

(amounts in thousands)

1 unchanged sentence

$ 1,095,490 $ 789,957 $ 3,374,927 $ 2,434,536

Net Income (Loss)

(293,688) (283,103) (372,434) (757,521)

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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 $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.

Revenue increased by $305.5 million and $940.4 million in the three and nine months ended September 30, 2024 compared to the three and nine months ended September 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, higher structural Sportsbook hold percentage, improved promotional reinvestment for Sportsbook and iGaming, and the impact of our acquisition of Jackpocket Inc.

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

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

The charts below present our average MUPs for the three and nine months ended September 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 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.

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

The increase in MUPs for the three and nine months ended September 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 jurisdictions and the impact of our acquisition of Jackpocket (the “Jackpocket Transaction”).

Excluding the impact of the Jackpocket Transaction, MUPs increased 0.6 million or 26.9% to 2.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased 0.6 million, or 27.3% to 3.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

ARPMUP decreased in the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to lower ARPMUP for Jackpocket customers, compared to DraftKings’ existing product offerings prior to the Jackpocket Transaction, which was partially offset by structural improvement in our Sportsbook hold and improved promotional reinvestment for Sportsbook and iGaming.

Excluding the impact of the Jackpocket Transaction, ARPMUP increased $8, or 7.5% to $122 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $10, or 8.5% to $122 for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Non-GAAP Information

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Adjusted EBITDA excludes certain expenses that are required in accordance with U.S.

GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).

operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).

Adjusted EBITDA

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GAAP, for the periods indicated:

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

Three months ended September 30, Nine months ended September 30,

(amounts in thousands) 2024 2023 2024 2023

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

Net loss $ (293,688) $ (283,103) $ (372,434) $ (757,521)

Adjusted for:

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Advocacy and other related legal expenses (6)

6,018 — 6,303 —

(Gain) loss on remeasurement of warrant liabilities (21) 7,751 8,282 44,827

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Adjusted EBITDA $ (58,504) $ (153,414) $ 91,853 $ (302,053)

(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.

(1) The amounts include the amortization of acquired intangible assets of $55.5 million and $29.2 million for the three months ended September 30, 2024 and 2023, respectively, and $121.2 million and $88.0 million for the nine months ended September 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.

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

(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.

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

For the three and nine months ended September 30, 2024, this amount also includes $27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in expenses related to the termination of a market access agreement, and a $5.8 million loss on the sale of Vegas Sports Information Network, LLC ("VSIN").

For the nine month period ended September 30, 2024, these costs are offset by $20.9 million related to gaming tax credits as a result of audits and appeals related to prior periods.

Results of Operations

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

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

Three months ended September 30,

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

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Other (loss) gain, net (4,620) (1,217) (3,403) 279.6 %

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

Loss before income tax (benefit) provision and loss from equity method investment (294,865) (281,804) (13,061) 4.6 %

Income tax (benefit) provision (1,287) 1,291 (2,578) (199.7) %

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.

Loss from equity method investment 110 8 102 1275.0 %

Net loss $ (293,688) $ (283,103) $ (10,585) 3.7 %

Revenue increased by $305.5 million, or 38.7%, to $1,095.5 million in the three months ended September 30, 2024, from $790.0 million in the three months ended September 30, 2023.

The increase was primarily attributable to our online gaming revenues, which increased $316.0 million, or 41.1%, to $1,084.2 million in the three months ended September 30, 2024 , from $768.3 million in the three months ended September 30, 2023 , due to MUPs increasing by 54.8% , partially offset by ARPMUP decreasing by 9.9% as compared to the three months ended September 30, 2023.

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.

The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.

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.

Cost of revenue increased $199.0 million , or 36.6% , to $742.4 million in the three months ended September 30, 2024 , from $543.5 million in the three months ended September 30, 2023 .

In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $117.2 million and $20.2 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 $39.5 million.

Cost of revenue as a percentage of revenue decreased by 1.0% to 67.8% in the three months ended September 30, 2024 , as compared to 68.8% in the three months ended September 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 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.

Sales and marketing expense increased $26.6 million, or 8.5%, to $339.9 million in the three months ended September 30, 2024, from $313.3 million in the three months ended September 30, 2023.

The increase was primarily attributable to higher advertising costs of $11.8 million and higher stock-based compensation expense of $2.6 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.

Product and technology expense increased $14.6 million, or 16.4%, to $103.6 million in the three months ended September 30, 2024, from $89.0 million in the three months ended September 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 .

General and administrative expense increased $77.4 million, or 59.2%, to $208.1 million in the three months ended September 30, 2024, from $130.8 million in the three months ended September 30, 2023.

This increase was primarily driven by $27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in termination expenses related to a market access agreement, an increase in non-core litigation expense of $16.6 million, and an increase in advocacy expense of $6.0 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.

We recorded net interest income of $8.3 million in the three months ended September 30, 2024, compared to $13.8 million in the three months ended September 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.

We recorded a nominal gain on remeasurement of warrant liabilities in the three months ended September 30, 2024, compared to a loss of $7.8 million in the three months ended September 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

We recorded a loss of $4.6 million in the three months ended September 30, 2024, as compared to a loss of $1.2 million in the three months ended September 30, 2023, primarily due to the $5.8 million loss on the sale of VSIN.

Net loss increased by $10.6 million to a net loss of $293.7 million in the three months ended September 30, 2024, as compared to a net loss of $283.1 million in the three months ended September 30, 2023, for the reasons discussed above.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 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,

Nine months ended September 30,

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

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Other (loss) gain, net (5,801) (1,153) (4,648) 403.1 %

Loss before income tax (benefit) provision and (income) loss from equity method investment (152,758) (471,957) 319,199 (67.6) %

Loss before income tax (benefit) provision and loss from equity method investment (447,623) (753,761) 306,138 (40.6) %

Income tax (benefit) provision (75,208) 3,310 (78,518) (2,372.1) %

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

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.

The increase in ARPMUP was due to structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for our Sportsbook and iGaming product offering.

Loss from equity method investment 19 450 (431) (95.8) %

Net loss $ (372,434) $ (757,521) $ 385,087 (50.8) %

Revenue increased by $940.4 million, or 38.6%, to $3,374.9 million in the nine months ended September 30, 2024, from $2,434.5 million in the nine months ended September 30, 2023.

The increase was primarily attributable to our online gaming revenues, which increased $970.4 million, or 41.2%, to $3,323.7 million in the nine months ended September 30, 2024 , from $2,353.3 million in the nine months ended September 30, 2023 , due to MUPs increasing by 41.0% and partially offset by a 1.0% decrease in ARPMUP as compared to the nine months ended September 30, 2023 .

The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers, compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.

Cost of Revenue .

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.

Cost of revenue increased $540.4 million , or 34.3% , to $2,115.9 million in the nine months ended September 30, 2024 , from $1,575.5 million in the nine months ended September 30, 2023 .

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 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.

Cost of revenue as a percentage of revenue decreased by 2.0 percentage points to 62.7% in the nine months ended September 30, 2024 , as compared to 64.7% in the nine months ended September 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 $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.

Sales and marketing expense decreased $13.6 million, or 1.5%, to $896.3 million in the nine months ended September 30, 2024, from $909.9 million in the nine months ended September 30, 2023.

The decrease was partially attributable to reduced stock-based compensation expense of $3.9 million.

Product and Technology.

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.

Product and technology expense increased $18.1 million, or 6.8%, to $285.1 million in the nine months ended September 30, 2024, from $267.0 million in the nine months ended September 30, 2023 primarily due to increased headcount in our product and engineering departments.

General and Administrative.

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.

General and administrative expense increased $120.0 million, or 28.1%, to $547.5 million in the nine months ended September 30, 2024, from $427.5 million in the nine months ended September 30, 2023.

This increase was primarily driven by an increase in transaction-related costs of $23.2 million , an increase in non-core litigation cost of $30.0 million , $27.8 million in expense related to the discontinuance of Reignmakers product offering, $7.5 million in termination expenses related to a market access agreement, and an increase in advocacy expense of $6.3 million.

Interest Income (Expense), net.

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.

We recorded net income interest of $36.3 million in the nine months ended September 30, 2024, compared to $37.6 million in the nine months ended September 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 $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.

We recorded a loss on remeasurement of warrant liabilities of $8.3 million in the nine months ended September 30, 2024, compared to a loss of $44.8 million in the nine months ended September 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 $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.

We recorded a loss of $5.8 million in the nine months ended September 30, 2024, as compared to a gain of $1.2 million in the nine months ended September 30, 2023, primarily due to the $5.8 million loss on the sale of VSIN.

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.

Net income (loss) improved by $385.1 million to a net loss of $372.4 million in the nine months ended September 30, 2024, as compared to a net loss of $757.5 million in the nine months ended September 30, 2023, for the reasons discussed above.

Liquidity and Capital Resources

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 had $877.8 million in cash and cash equivalents as of September 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 June 30, 2024, the Convertible Notes, net of issuance costs, balance was $1,255.1 million.

As of September 30, 2024, the Convertible Notes, net of issuance costs, balance was $1,255.8 million.

Revolving Credit Facility.

On November 7, 2024, the Company entered into a credit agreement with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $500.0 million.

In conjunction with the new credit agreement and revolving credit facility, the Company’s previous credit agreement and revolving line of credit were terminated.

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

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

As of September 30, 2024, the Company had lease obli gations of $87.0 million , with $11.3 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 June 30, 2024, these purchase obligations were $1,235.8 million, with $249.8 million payable in the remainder of 2024.

As of September 30, 2024, these purchase obligations were $1,031.6 million, with $128.7 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.

On July 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.

As of September 30, 2024, we have not purchased any shares of Class A common stock under this stock repurchase program.

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

Six months ended June 30,

Nine months ended September 30,

(amounts in thousands) 2024 2023

Net cash used in operating activities $ (41,006) $ (219,213)

Net cash provided by (used in) operating activities $ 92,578 $ (73,818)

Net cash used in investing activities (488,184) (66,918)

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Operating Activities .

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.

Net cash provided by (used in) operating activities in the nine months ended September 30, 2024 was $92.6 million, compared to $73.8 million used in operating activities in the nine months ended September 30, 2023, mainly reflecting an improvement in net loss, net of non-cash items, of $320.3 million , offset by changes in operating assets and liabilities.

Investing Activities.

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.

Net cash used in investing activities during the nine months ended September 30, 2024 increased by $421.3 million to $488.2 million, compared to $66.9 million in the nine months ended September 30, 2023 , mainly reflecting an increase in cash paid for acquisitions, net of cash acquired, of $392.5 million.

Financing Activities.

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.

Net cash used in financing activities during the nine months ended September 30, 2024 increased by $20.9 million to $71.4 million, compared to $50.5 million in the nine months ended September 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 12 of our unaudited condensed consolidated financial statements included elsewhere in this Report for a summary of our commitments as of June 30, 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 September 30, 2024.

Critical Accounting Estimates

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Actual results could differ materially from these estimates.

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

During the nine months ended September 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 six months ended June 30, 2024.

There have been no significant changes in our exposure to market risk during the nine months ended September 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