What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-04 compared with 2024-11-07 · 83 added, 67 removed, 228 unchanged (40% of the section changed)

11 unchanged sentences

The world’s top firms — across accounting, consulting, investment banking, legal, private capital, and real assets — trust Intapp’s industry-specific platform and solutions to modernize and drive new growth.

Highlights for the three months ended September 30, 2024

During the three months ended September 30, 2024, we generated total revenues of $118.8 million with a gross margin of 73%.

Highlights for the three months ended December 31, 2024

During the three months ended December 31, 2024, we generated total revenues of $121.2 million with a gross margin of 73%.

Our operating cash flow was $25.2 million.

Total cash and cash equivalents as of September 30, 2024 were $253.8 million.

Our remaining performance obligations, which represent all future revenue under contract yet to be recognized, were $549.4 million as of September 30, 2024.

Total cash and cash equivalents as of December 31, 2024 were $285.6 million.

Our remaining performance obligations, which represent all future revenue under contract yet to be recognized, were $615.3 million as of December 31, 2024.

How We Generate Revenue

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

ARR was $417.2 million and $350.1 million as of September 30, 2024 and 2023, respectively, an increase of 19%.

ARR was $437.1 million and $365.0 million as of December 31, 2024 and 2023, respectively, an increase of 20%.

Cloud ARR is the portion of our ARR which represents the annualized recurring value of our active SaaS contracts.

We believe Cloud ARR provides important information about our ability to sell new SaaS subscriptions to existing clients and to acquire new SaaS clients.

Cloud ARR was $309.1 million and $242.5 million as of September 30, 2024 and 2023, respectively, an increase of 27%, and represented 74% and 69% of ARR as of September 30, 2024 and 2023, respectively.

Cloud ARR was $331.1 million and $256.1 million as of December 31, 2024 and 2023, respectively, an increase of 29%, and represented 76% and 70% of ARR as of December 31, 2024 and 2023, respectively.

Net Revenue Retention ("NRR")

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This metric accounts for changes in our recurring revenue base from cross-sell (additional solution capabilities sold), upsell (additional seats sold), price changes, and client attrition (including contraction of solution capabilities, contraction of seats and client churn).

We upsold additional seats and cross-sold new solutions to our existing clients such that our trailing twelve months’ NRR as of September 30, 2024 was 114%, which is within our expected range of 113% to 117%.

We upsold additional seats and cross-sold new solutions to our existing clients such that our trailing twelve months’ NRR as of December 31, 2024 was 113%, which is within our expected range of 113% to 117%.

Cloud NRR is the portion of our NRR which represents the net revenue retention of our SaaS contracts.

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We then divide the current period Cloud ARR by the prior period Cloud ARR to calculate the Cloud NRR.

Our trailing twelve months’ Cloud NRR as of September 30, 2024 was 119%.

Our trailing twelve months’ Cloud NRR as of December 31, 2024 was 119%.

Number of Clients

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We define a client at the end of any reporting period as an entity with at least one active subscription as of the measurement date.

As of September 30, 2024, we had over 2,600 clients.

No single client represented more than 10% of total revenues for either of the three months ended September 30, 2024 and 2023.

As of December 31, 2024, we had over 2,650 clients.

No single client represented more than 10% of total revenues for either of the three and six months ended December 31, 2024 and 2023.

Our client base includes some of the largest and most reputable professional and financial services firms globally.

These clients have the financial and operating resources needed to purchase, deploy, and successfully use the full capabilities of our software platform, and as such, we believe the number of our clients with contracts greater than $100,000 of ARR is an important metric for highlighting our progress on the path to full adoption of our platform by our professional and financial services clients.

As of September 30, 2024 and 2023, we had 707 and 626 clients, respectively, with contracts greater than $100,000 of ARR.

As of December 31, 2024 and 2023, we had 728 and 649 clients, respectively, with contracts greater than $100,000 of ARR.

Components of Our Results of Operations

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Interest and other income (expense), net consists primarily of interest income from our cash and cash equivalents, non-cash interest expense related to the amortization of deferred financing costs, and gains and losses from foreign currency transactions.

Income Tax Expense

Our income tax expense consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

Income Tax Benefit (Expense)

Our income tax benefit (expense) consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.

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dollar terms and as a percentage of our total revenues (percentages may not add up due to rounding):

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

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Net loss before income taxes

Income tax expense

Income tax benefit (expense)

(1) Amounts include stock-based compensation expense as follows:

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

Cost of license

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Total stock-based compensation expense

Comparison of the Three Months Ended September 30, 2024 and 2023

Three Months Ended September 30,

Comparison of the Three and Six Months Ended December 31, 2024 and 2023

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

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Total revenues

SaaS revenues increased by $18.0 million, or 30%, in the three months ended September 30, 2024 compared to the same period in the prior year, due to sales to new clients and expansion of existing clients from both cross-selling and upselling sales motions.

* Not meaningful

SaaS revenues increased by $16.9 million, or 27%, and $34.8 million, or 29%, respectively, in the three and six months ended December 31, 2024 compared to the same period in the prior year, due to sales to new clients and expansion of existing clients from both cross-selling and upselling sales motions.

The continuation of clients migrating from using our on-premise license solutions to our cloud solutions also contributed to the growth.

License revenues increased by $0.4 million, or 2%, in the three months ended September 30, 2024 compared to the same period in the prior year.

Professional services revenues decreased by $1.2 million, or 8%, in the three months ended September 30, 2024 compared to the same period in the prior year.

The decrease in professional services revenue was primarily due to change in mix of resource delivery to our third-party implementation partners.

License revenues remained relatively flat in the three and six months ended December 31, 2024 compared to the same period in the prior year.

Professional services revenues increased by $0.5 million, or 4%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, due to a continuation in demand for implementation, upgrade and migration services consistent with our revenue growth.

Professional services revenues decreased by $0.6 million, or 2%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023, due to changes in mix of resource delivery to our third-party implementation partners.

Cost of Revenues and Gross Profit

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

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Professional services

Cost of SaaS revenues increased by $2.6 million, or 21%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

The increase can be attributed to increases in amortization of acquired intangible assets of $0.6 million, allocated overhead costs of $0.5 million, royalty expenses of $0.5 million, cloud hosting costs of $0.4 million and personnel-related costs of $0.4 million as a result of increased headcount.

* Not meaningful

Cost of SaaS revenues increased by $3.5 million, or 27%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

This was driven by increases in cloud hosting costs of $0.6 million, allocated overhead costs of $0.6 million, personnel-related costs of $0.6 million as a result of increased headcount, amortization of acquired intangible assets costs of $0.5 million, stock-based compensation costs of $0.4 million due to an increase in stock awards granted and royalty expenses of $0.3 million.

Cost of SaaS revenues increased by $6.1 million, or 24%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

This was driven by increases in cloud hosting costs of $1.1 million, allocated overhead costs of $1.0 million, amortization of acquired intangible assets costs of $1.0 million, royalty expenses of $0.9 million, personnel-related costs of $0.9 million as a result of increased headcount and stock-based compensation costs of $0.7 million due to an increase in stock awards granted.

Cost of License

Cost of license revenues remained relatively flat for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Cost of license revenues remained relatively flat for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

Cost of license revenues remain relatively flat for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

Cost of Professional Services

Cost of professional services revenues decreased by $2.3 million, or 13%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to decreases in personnel-related costs of $1.6 million as a result of decreased headcount, allocated overhead costs of $0.3 million and $0.2 million in travel related expenses.

Gross profit increased by $16.9 million, or 24%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Cost of professional services revenues decreased by $1.8 million, or 11%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to decreases in personnel-related costs of $1.6 million as a result of decreased headcount and subcontractor costs of $0.3 million, partially offset by an increase in stock-based compensation costs of $0.2 million due to an increase in stock awards granted.

Cost of professional services revenues decreased by $4.1 million, or 12%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023, primarily due to decreases in personnel-related costs of $3.2 million as a result of decreased headcount, subcontractor costs of $0.5 million and allocated overhead costs of $0.5 million, partially offset by an increase in stock-based compensation costs of $0.3 million due to an increase in stock awards granted.

Gross profit increased by $15.6 million, or 21%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

Of this increase, $13.4 million was attributable to growth in SaaS revenues and $2.3 million was attributable to a decrease in professional services costs as a percentage of related revenues.

Gross profit increased by $32.4 million, or 23% for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

Of this increase, $28.7 million was attributable to growth in SaaS revenues and a decrease in SaaS costs as a percentage of related revenues and $3.5 million was attributable to a decrease in professional services costs as a percentage of related revenues.

Operating Expenses

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

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Research and Development

Research and development expenses increased by $3.9 million, or 14%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Personnel-related costs increased by $2.5 million due to annual salary increases and increased headcount.

Contractor costs increased by $0.6 million as we increased contractor resources to support on-going development of our cloud offerings.

Allocated overhead costs increased by $0.6 million due to increased headcount.

Research and development expenses increased by $5.3 million, or 19%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

This was driven by increases in personnel-related costs of $3.0 million due to annual salary increases and increased headcount, stock-based compensation expense of $2.3 million primarily due to an increase in stock awards granted.

Research and development expenses increased by $9.3 million, or 16%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

This was driven by increases in personnel-related costs of $5.8 million due to annual salary increases and increased headcount, stock-based compensation expense of $2.3 million primarily due to an increase in stock awards granted and allocated overhead costs of $1.4 million due to increased headcount.

Sales and Marketing

Sales and marketing expenses increased by $3.3 million, or 10%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Personnel-related costs increased by $2.5 million primarily due to annual salary increases and increased headcount.

Sales commissions increased by $0.7 million primarily driven by increased sales.

Stock-based compensation expense increased by $0.4 million, primarily due to an increase in stock awards granted.

Sales and marketing expenses increased by $5.5 million, or 16%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

This was driven by increases in personnel-related costs of $2.5 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $2.3 million primarily due to an increase in stock awards granted and allocated overhead costs of $0.7 million due to increased headcount.

Sales and marketing expenses increased by $8.9 million, or 13%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

This was driven by increases in personnel-related costs of $5.1 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $2.7 million primarily due to an increase in stock awards granted, allocated overhead costs of $0.8 million due to increased headcount and commissions of $0.7 million due to increased sales.

General and Administrative

General and administrative expenses increased by $2.9 million, or 14%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

This was primarily driven by an increase of $2.2 million in personnel-related costs primarily due to annual salary increases and increased headcount.

Stock-based compensation expense increased by $0.5 million, primarily due to an increase in stock awards granted.

General and administrative expenses increased by $3.8 million, or 18%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

This was driven by increases in stock-based compensation expense of $3.5 million mainly due to an increase in stock awards granted and personnel-related costs of $1.8 million primarily due to annual salary increases, partially offset by a decrease of $2.0 million in costs allocated to other functions due to increase headcount in other departments and a $1.0 million decrease in contractor costs.

General and administrative expenses increased by $6.7 million, or 16%, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

This was driven by increases in stock-based compensation expense of $4.0 million mainly due to an increase in stock awards granted, personnel-related costs of $3.8 million due to annual salary increases and increased headcount, overhead costs of $1.2 million due to changes in fair value of contingent consideration related to prior acquisitions, partially offset by a decrease of $2.7 million in costs allocated to other functions due to increased headcount in other departments.

Interest and Other Income (Expense), Net

Three Months Ended September 30,

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

Interest and other income (expense), net

The change in interest and other income (expense), net, was primarily due to gains from foreign currency transactions and an increase in interest income as we increased our cash held in money market funds.

Income Tax Expense

Three Months Ended September 30,

The change in interest and other income (expense), net, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, was primarily due to a $3.4 million loss from foreign currency transactions partially offset by a $1.3 million increase in interest income as our cash held in money market funds increased.

The change in interest and other income (expense), net, for the six months ended December 31, 2024 compared to the six months ended December 31, 2023, was primarily due to a $2.5 million increase in interest income as our cash held in money market funds increased.

Income Tax Benefit (Expense)

Three Months Ended December 31,

Six Months Ended December 31,

(in thousands, except for percentages)

Income tax expense

Income tax expense was $0.7 million for the three months ended September 30, 2024, compared to an income tax expense of $0.4 million for the three months ended September 30, 2023.

Our income tax expense during the three months ended September 30, 2024 and 2023 was primarily attributable to income tax expense in a number of U.S.

Income tax benefit (expense)

Our income tax benefit (expense) during the three and six months ended December 31, 2024 and 2023 was primarily attributable to income tax expense in a number of U.S.

state jurisdictions and foreign jurisdictions.

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Sources and Uses of Liquidity

As of September 30, 2024, we had cash and cash equivalents of $253.8 million.

As of December 31, 2024, we had cash and cash equivalents of $285.6 million.

We finance our liquidity needs primarily through collections from clients and the issuance of equity securities.

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Operating losses could continue in the future as we continue to invest in the growth of our business.

We believe our existing cash and cash equivalents as of September 30, 2024, along with our JPMorgan Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for the next twelve months and beyond.

We believe our existing cash and cash equivalents as of December 31, 2024, along with our JPMorgan Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for the next twelve months and beyond.

On October 5, 2021, we entered into a Credit Agreement, as amended on June 6, 2022 and further amended on November 17, 2022, with a group of lenders led by JPMorgan.

The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million.

As of September 30, 2024, no amounts have been borrowed under the JPMorgan Credit Facility.

As of December 31, 2024, no amounts have been borrowed under the JPMorgan Credit Facility.

See Note 10, Debt , to our unaudited condensed consolidated financial statements for additional information.

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The following table summarizes our cash flows from operating, investing, and financing activities for the periods presented (in thousands):

Three Months Ended September 30,

Six Months Ended December 31,

Net cash provided by operating activities

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Operating Activities

During the three months ended September 30, 2024, net cash provided by operating activities was $24.4 million, as our operating loss of $4.5 million was reduced by $29.0 million of adjustments.

During the six months ended December 31, 2024, net cash provided by operating activities was $49.7 million, as our operating loss of $14.7 million was reduced by $64.4 million of adjustments.

These adjustments consisted of $56.6 million of non-cash charges (principally comprising of stock-based compensation, depreciation and amortization and amortization of operating lease right-of-use assets) and net cash inflow of $7.8 million from net changes in operating assets and liabilities.

The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $30.2 million due to the timing of billing and collections on our outstanding receivables and a decrease in unbilled receivables of $0.5 million, offset by a decrease in deferred revenue of $17.3 million due to the timing of invoicing to our clients, a decrease in accounts payable and accrued liabilities of $8.1 million primarily due to timing of payments and a decrease in operating lease liabilities of $1.3 million due to lease payments.

During the three months ended September 30, 2023, net cash provided by operating activities was $11.6 million, as our operating loss of $15.3 million was reduced by $26.9 million of adjustments.

These adjustments consisted of $22.8 million of non-cash charges (principally comprising stock-based compensation expense and depreciation and amortization), and net cash inflow of $4.1 million from net changes in operating assets and liabilities.

The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $23.5 million due to the timing of billing and collections on our outstanding receivables, offset by a decrease in accounts payable and accrued liabilities of $11.3 million primarily due to payments for annual bonuses, an increase in unbilled receivables of $3.9 million due to the timing of invoicing to our clients, a decrease in other liabilities of $1.6 million due to the timing of payments, a decrease in operating lease liabilities of $1.6 million due to lease payments, and an increase of $1.3 million in prepaid expenses and other assets due to the timing of payments.

The net cash inflow from changes in operating assets and liabilities was primarily driven by an increase in deferred revenue of $15.5 million due to revenue recognition, a decrease in accounts receivable of $6.5 million due to the timing of billing and collections on our outstanding receivables and a $2.1 million increase in other liabilities due to timing of payments, offset by a $7.9 million decrease in accounts payable and accrued liabilities primarily due to payments made within the period, an increase of $5.0 million in prepaid expenses and other assets primarily due to payments made within the period, a decrease in operating lease liabilities of $2.7 million due to lease payments, an increase in unbilled receivables of $0.5 million due to the timing of invoicing to our clients and an increase in deferred commissions of $0.2 million.

During the six months ended December 31, 2023, net cash provided by operating activities was $23.6 million, as our operating loss of $24.5 million was reduced by $48.1 million of adjustments.

These adjustments consisted of $44.4 million of non-cash charges (principally comprising stock-based compensation and depreciation and amortization expense), and net cash inflow of $3.7 million from net changes in operating assets and liabilities.

The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $12.6 million due to the timing of billing and collections on our outstanding receivables and an increase in deferred revenue of $4.8 million due to the timing of invoicing to our clients, offset by an increase in unbilled receivables of $5.8 million, a decrease in operating lease liabilities of $2.3 million due to lease payments, an increase in prepaid expenses and other assets of $1.8 million, a decrease in accounts payable and accrued liabilities of $1.5 million primarily due to payments for annual bonuses and timing of payments, a decrease in other liabilities of $1.2 million and an increase in deferred commissions of $1.1 million due to increased sales.

Investing Activities

Net cash used in investing activities consists of purchases of property and equipment, leasehold improvements, and capitalized internal-use software costs.

During the three months ended September 30, 2024, net cash used in investing activities was $2.8 million, consisting of capitalized internal-use software costs of $1.5 million, $0.9 million working capital adjustment related to a prior acquisition and capital expenditures of $0.4 million on property and equipment largely of computer equipment.

During the three months ended September 30, 2023, net cash used in investing activities was $3.0 million, consisting of capitalized internal-use software costs of $1.9 million and capital expenditures of $1.1 million on property and equipment largely of computer software and development costs.

Net cash used in investing activities consists of purchases of property and equipment and capitalized internal-use software costs.

During the six months ended December 31, 2024, net cash used in investing activities was $4.8 million, consisting of capitalized internal-use software costs of $3.5 million, $0.9 million working capital adjustment related to a prior acquisition and capital expenditures of $0.4 million on property and equipment largely of computer equipment.

During the six months ended December 31, 2023, net cash used in investing activities was $4.8 million, consisting of capitalized internal-use software costs of $3.5 million and capital expenditures of $1.3 million on property and equipment largely of computer software and development costs.

Financing Activities

During the three months ended September 30, 2024, net cash provided by financing activities was $21.5 million, primarily comprised of $22.9 million of proceeds from stock option exercises offset by a $1.4 million payment for contingent consideration related to a prior acquisition.

During the three months ended September 30, 2023, net cash provided by financing activities was $1.7 million, primarily comprised of $2.3 million of proceeds from stock option exercises, offset by $0.6 million of payments related to deferred offering costs in connection with our follow-on public offering.

During the six months ended December 31, 2024, net cash provided by financing activities was $32.1 million, primarily comprised of $32.6 million of proceeds from stock option exercises and $2.0 million of proceeds from the employee stock purchase plan, offset by $2.4 million in payments for contingent consideration and holdbacks related to a prior acquisition.

During the six months ended December 31, 2023, net cash provided by financing activities was $16.3 million, primarily comprised of $17.9 million of proceeds from stock option exercises and $1.7 million of proceeds from the employee stock purchase plan, offset by $2.6 million of payments for the final contingent consideration and cash holdback related to prior acquisitions and $0.7 million of payments related to deferred offering costs in connection with our follow-on public offering.

Material Cash Commitments

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The Credit Agreement provides for a five-year, senior secured revolving credit facility of $100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million.

We were in compliance with all of the covenants as of September 30, 2024.

As of September 30, 2024, no amounts have been borrowed under the JPMorgan Credit Facility.

We were in compliance with all of the covenants as of December 31, 2024.

As of December 31, 2024, there were no outstanding borrowings under the JPMorgan Credit Facility.

Critical Accounting Policies and Estimates

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We routinely assess the creditworthiness of our clients.

We have not experienced any material losses related to non-payment of receivables from individual or groups of clients due to loss of creditworthiness during the three months ended September 30, 2024 and 2023.

Clients representing in excess of 10% of our accounts receivable balance at September 30, 2024 and June 30, 2024 were zero and one, respectively.

We have not experienced any material losses related to non-payment of receivables from individual or groups of clients due to loss of creditworthiness during the three and six months ended December 31, 2024 and 2023.

Clients representing in excess of 10% of our accounts receivable balance at December 31, 2024 and June 30, 2024 were zero and one, respectively.

Due to these factors, management believes that we do not have additional credit risk beyond the amounts already provided for collection losses in our accounts receivable.

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Our exposure to market risk for changes in interest rates relates primarily to our cash held in cash deposits and cash equivalents invested in money market funds and our senior secured revolving credit facility of up to $100.0 million.

As of September 30, 2024, we had cash and cash equivalents of $253.8 million held with multiple high credit quality financial institutions, including investments in money market funds.

As of December 31, 2024, we had cash and cash equivalents of $285.6 million held with multiple high credit quality financial institutions, including investments in money market funds.

Our investments are subject to market risk due to changes in interest rates, which may affect our interest income.

A hypothetical 100 basis points increase or decrease in interest rates would not have a material impact on our operating results or the fair value of our cash and cash equivalents over the next twelve months.

As of September 30, 2024, we had no outstanding loan balance under our senior secured revolving credit facility.

As of December 31, 2024, we had no outstanding loan balance under our senior secured revolving credit facility.

Future borrowings under this facility will accrue interest at a variable rate based on, at our election, either (a) an adjusted secured overnight financing rate (SOFR, as described in the Credit Agreement) plus a percentage spread (ranging from 1.75% to 2.50%) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75% to 1.50%), in each case based on the Company’s total net leverage ratio.

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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