What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2025-02-04 · 91 added, 92 removed, 219 unchanged (46% of the section changed)

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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 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%.

Highlights for the three months ended March 31, 2025

During the three months ended March 31, 2025, we generated total revenues of $129.1 million with a gross margin of 75%.

Our operating cash flow was $35.5 million.

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.

Total cash and cash equivalents as of March 31, 2025 were $323.2 million.

Our remaining performance obligations, which represent all future revenue under contract yet to be recognized, were $621.5 million as of March 31, 2025.

How We Generate Revenue

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We intend to continue to gradually increase our general and administrative spending to support our growing operational needs.

We have a track record of successfully identifying and integrating complementary businesses within the professional and financial services industry.

We have a track record of successfully identifying, acquiring and integrating complementary businesses within the professional and financial services industry.

To complement our organic investment in innovation and accelerate our growth, we will continue to evaluate acquisition opportunities that help us extend our platform, broaden and deepen our market leadership, and add new clients.

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

ARR was $454.7 million and $382.7 million as of March 31, 2025 and 2024, respectively, an increase of 19%.

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 $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.

Cloud ARR was $351.8 million and $274.2 million as of March 31, 2025 and 2024, respectively, an increase of 28%, and represented 77% and 72% of ARR as of March 31, 2025 and 2024, 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 December 31, 2024 was 113%, 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 March 31, 2025 was 113%.

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 December 31, 2024 was 119%.

Our trailing twelve months’ Cloud NRR as of March 31, 2025 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 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.

As of March 31, 2025, we had over 2,650 clients.

No single client represented more than 10% of total revenues for either of the three and nine months ended March 31, 2025 and 2024.

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

As of March 31, 2025 and 2024, we had 748 and 673 clients, respectively, with contracts greater than $100,000 of ARR.

Components of Our Results of Operations

Certain prior period amounts reported thereto have been reclassified to conform to the current year presentation.

Certain prior period amounts reported have been reclassified to conform to the current year presentation.

Effective July 1, 2024, we adjusted the classification of support services related to subscription license to be included within “license” on the unaudited condensed consolidated statements of operations.

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We expect our cost of revenues to increase in absolute dollars as we expand our SaaS client base over time as this will result in increased cloud infrastructure costs and increased costs for additional personnel to provide technical support services to our growing client base.

Our cost of SaaS revenues comprises the direct costs to deliver and support our SaaS solutions and premium support services related to SaaS, including personnel costs, allocated overhead costs for facilities and IT, third-party hosting fees related to cloud services, amortization of capitalized internal-use software costs and amortization of acquired intangible assets.

Our cost of SaaS revenues comprises the direct costs to deliver and support our SaaS solutions and premium support services related to SaaS, including personnel costs, allocated overhead costs, third-party hosting fees related to cloud services, amortization of capitalized internal-use software costs and amortization of acquired intangible assets.

Cost of License

Our cost of license revenues comprises the direct costs to support our license, including personnel costs, and allocated overhead costs for facilities and IT.

Our cost of license revenues comprises the direct costs to support our license, including personnel costs, and allocated overhead costs.

Cost of Professional Services

Our cost of professional services revenues comprises the personnel-related costs for our professional services employees and contractors responsible for delivering implementation, upgrade and migration services to our clients.

This includes personnel costs and allocated overhead costs for facilities and IT.

This includes personnel costs and allocated overhead costs.

We expect the cost of professional services revenues to increase in absolute dollars as we continue to hire personnel and engage contractors to provide implementation, upgrade and migration services to our growing client base.

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Research and Development

Our research and development expenses consist primarily of personnel-related costs for engineering and product development employees, costs of third-party services, and allocations of various overhead, cloud hosting costs and facilities costs.

Our research and development expenses consist primarily of personnel-related costs for engineering and product development employees, costs of third-party services, and allocations of overhead costs, cloud hosting costs and facilities costs.

We expect our research and development expenses to continue to increase in absolute dollars for the foreseeable future as we continue to dedicate substantial internal resources to develop, improve and expand the functionality of our solutions.

Sales and Marketing

Our sales and marketing expenses consist primarily of costs incurred for personnel-related costs for our sales and marketing employees as well as sales commissions and benefits, costs of marketing events and online advertising, allocations of various overhead and facilities costs and travel and entertainment expenses.

Our sales and marketing expenses consist primarily of costs incurred for personnel-related costs for our sales and marketing employees as well as sales commissions and benefits, costs of marketing events and online advertising, allocations of overhead costs, and travel and entertainment expenses.

We capitalize client acquisition costs (principally commissions paid to sales personnel) and subsequently amortize these costs over the expected period of benefit.

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As a public company, we expect to continue to incur significant accounting and legal costs related to compliance with rules and regulations enacted by the SEC, including the costs of maintaining compliance with the Sarbanes-Oxley Act, as well as insurance, investor relations and other costs associated with being a public company.

Interest and Other Income (Expense), Net

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 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.

Interest and Other Income, Net

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

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.

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 December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

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Operating loss

Interest and other income (expense), net

Interest and other income, net

Net loss before income taxes

Income tax benefit (expense)

Income tax expense

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

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Cost of license

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Total stock-based compensation expense

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

Three Months Ended December 31,

Six Months Ended December 31,

Comparison of the Three and Nine Months Ended March 31, 2025 and 2024

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

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Total revenues

* 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.

SaaS revenues increased by $18.5 million, or 28%, and $53.3 million, or 28%, respectively, in the three and nine months ended March 31, 2025 compared to the same periods 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 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.

License revenues remained relatively flat in the three and nine months ended March 31, 2025 compared to the same periods in the prior year.

Professional services revenues decreased by $0.8 million, or 6%, and $1.5 million, or 4%, respectively, in the three and nine months ended March 31, 2025 compared to the same periods in the prior year, due to changes in mix of resource delivery to our third-party implementation partners.

Cost of Revenues and Gross Profit

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

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Professional services

* 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.

Cost of SaaS revenues increased by $3.5 million, or 27%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This was driven by increases in cloud hosting costs of $0.8 million, allocated overhead costs of $0.7 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 SaaS revenues increased by $9.6 million, or 25%, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

This was driven by increases in cloud hosting costs of $1.9 million, allocated overhead costs of $1.7 million, personnel-related costs of $1.5 million as a result of increased headcount, amortization of acquired intangible assets costs of $1.4 million, royalty expenses of $1.2 million, and stock-based compensation costs of $1.1 million due to an increase in stock awards granted.

Cost of License

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 license revenues remained relatively flat for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Cost of license revenues remained relatively flat for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

Cost of Professional Services

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.

Cost of professional services revenues decreased by $1.4 million, or 9%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to decreases in personnel-related costs of $1.8 million as a result of decreased headcount, partially offset by an increase in stock-based compensation costs of $0.3 million due to an increase in stock awards granted.

Cost of professional services revenues decreased by $5.5 million, or 11%, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, primarily due to decreases in personnel-related costs of $4.9 million as a result of decreased headcount, subcontractor costs of $0.6 million and allocated overhead costs of $0.6 million, partially offset by an increase in stock-based compensation costs of $0.5 million due to an increase in stock awards granted.

Gross profit increased by $16.3 million, or 20%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Of this increase, $15.0 million was attributable to growth in SaaS revenues and $0.6 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.

Gross profit increased by $48.8 million, or 22% for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

Of this increase, $43.7 million was attributable to growth in SaaS revenues and a decrease in SaaS costs as a percentage of related revenues and $4.1 million was attributable to a decrease in professional services costs as a percentage of related revenues.

Operating Expenses

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

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Research and Development

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.

Research and development expenses increased by $6.8 million, or 25%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This was driven by increases in stock-based compensation expense of $3.9 million primarily due to an increase in stock awards granted, personnel-related costs of $2.3 million due to annual salary increases and increased headcount and allocated overhead costs of $0.7 million due to increased headcount.

Research and development expenses increased by $16.0 million, or 19%, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

This was driven by increases in personnel-related costs of $8.1 million due to annual salary increases and increased headcount, stock-based compensation expense of $6.2 million primarily due to an increase in stock awards granted, allocated overhead costs of $2.1 million due to increased headcount and subcontractor costs of $0.4 million, partially offset by an increase of capitalized internal-use software costs of $0.8 million.

Sales and Marketing

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.

Sales and marketing expenses increased by $7.0 million, or 20%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This was driven by increases in personnel-related costs of $2.7 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $2.0 million primarily due to an increase in stock awards granted, commissions of $0.8 million due to increased sales, allocated overhead costs of $0.7 million due to increased headcount, and subcontractor costs of $0.6 million.

Sales and marketing expenses increased by $15.9 million, or 15%, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

This was driven by increases in personnel-related costs of $7.8 million primarily due to annual salary increases and increased headcount, stock-based compensation expense of $4.8 million primarily due to an increase in stock awards granted, allocated overhead costs of $1.5 million due to increased headcount, commissions of $1.5 million due to increased sales and subcontractor costs of $0.8 million.

General and Administrative

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.

General and administrative expenses increased by $0.8 million, or 3%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This was driven by increases in stock-based compensation expense of $2.1 million primarily due to an increase in stock awards granted and personnel-related costs of $1.2 million primarily due to annual salary increases, partially offset by decreases in costs allocated to other functions of $1.9 million due to increase headcount in other departments and $0.5 million in contractor costs.

General and administrative expenses increased by $7.5 million, or 11%, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

This was driven by increases in stock-based compensation expense of $6.1 million mainly due to an increase in stock awards granted, personnel-related costs of $5.0 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 $4.7 million in costs allocated to other functions due to increased headcount in other departments.

Interest and Other Income (Expense), Net

Three Months Ended December 31,

Six Months Ended December 31,

Interest and Other Income, Net

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

Interest and other income (expense), net

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,

Interest and other income, net

The change in interest and other income, net, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was primarily due to a $1.5 million increase in interest income as our cash held in money market funds increased and a $1.3 million gain from foreign currency transactions.

The change in interest and other income, net, for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, was primarily due to a $4.0 million increase in interest income as our cash held in money market funds increased and $1.1 million gain from foreign currency transactions.

Income Tax Expense

Three Months Ended March 31,

Nine Months Ended March 31,

(in thousands, except for percentages)

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.

Income tax expense

Our income tax expense during the three and nine months ended March 31, 2025 and 2024 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 December 31, 2024, we had cash and cash equivalents of $285.6 million.

As of March 31, 2025, we had cash and cash equivalents of $323.2 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 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.

We believe our existing cash and cash equivalents as of March 31, 2025, 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 December 31, 2024, no amounts have been borrowed under the JPMorgan Credit Facility.

As of March 31, 2025, 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):

Six Months Ended December 31,

Nine Months Ended March 31,

Net cash provided by operating activities

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Operating Activities

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.

During the nine months ended March 31, 2025, net cash provided by operating activities was $85.2 million, as our net loss of $17.7 million was reduced by $102.9 million of adjustments.

These adjustments consisted of $85.3 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 $17.5 million from net changes in operating assets and liabilities.

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.

The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $31.4 million due to the timing of billing and collections on our outstanding receivables, a $1.3 million increase in other liabilities due to timing of payments and a $0.7 million decrease in deferred commissions, offset by a $6.7 million increase in prepaid expenses and other assets primarily due to payments made within the period, an increase in unbilled receivables of $4.3 million due to the timing of invoicing to our clients, a $3.7 million decrease in operating lease liabilities due to lease payments and a $1.2 million decrease in accounts payable and accrued liabilities primarily due to payments made within the period.

During the nine months ended March 31, 2024, net cash provided by operating activities was $40.2 million, as our net loss of $31.4 million was reduced by $71.6 million of adjustments.

These adjustments consisted of $65.7 million of non-cash charges (principally comprising of stock-based compensation and depreciation and amortization), and net cash inflow of $5.9 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 $10.1 million due to the timing of billing and collections on our outstanding receivables, an increase in accounts payable and accrued liabilities of $6.3 million primarily due to timing of payments and an increase in deferred revenue of $4.9 million due to the timing of invoicing to our clients, offset by an increase in unbilled receivables of $5.8 million, an increase in prepaid expenses and other assets of $4.1 million, a decrease in operating lease liabilities of $3.5 million due to lease payments, an increase in deferred commissions of $1.8 million due to increased sales.

Investing Activities

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.

During the nine months ended March 31, 2025, net cash used in investing activities was $7.2 million, consisting of capitalized internal-use software costs of $5.5 million, $0.9 million working capital adjustment related to a prior acquisition and capital expenditures of $0.8 million on property and equipment largely of computer equipment.

During the nine months ended March 31, 2024, net cash used in investing activities was $6.9 million, consisting of capitalized internal-use software costs of $5.2 million and capital expenditures of $1.7 million on property and equipment consisting largely of computer software and development costs.

Financing Activities

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.

During the nine months ended March 31, 2025, net cash provided by financing activities was $35.7 million, primarily comprised of $36.1 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 nine months ended March 31, 2024, net cash provided by financing activities was $23.6 million, primarily comprised of $25.2 million of proceeds from stock option exercises and $1.7 million of proceeds from 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

There have been no significant changes in our material cash requirements from those disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 26, 2024.

Subsequent to March 31, 2025, in connection with the acquisition of TermSheet (see Note 14, Subsequent Events to our unaudited condensed consolidated financial statements for additional information), we paid $51.1 million in cash at closing in April 2025 related to the initial purchase price and are obligated to make a maximum $15.0 million in cash payments in the next two fiscal years.

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.

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.

We were in compliance with all of the covenants as of March 31, 2025.

As of March 31, 2025, there were no outstanding borrowings under the JPMorgan Credit Facility.

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

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 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.

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 nine months ended March 31, 2025 and 2024.

Clients representing in excess of 10% of our accounts receivable balance at March 31, 2025 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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Interest Rate Risk

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 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 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 the JPMorgan Credit Facility.

As of March 31, 2025, we had cash and cash equivalents of $323.2 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 December 31, 2024, we had no outstanding loan balance under our senior secured revolving credit facility.

As of March 31, 2025, 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