What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-07-30 compared with 2024-04-30 · 136 added, 92 removed, 176 unchanged (56% of the section changed)

56 unchanged sentences

Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities.

As of March 31, 2024 we had approximately 20,290 employees globally, an increase of 2.3% from March 31, 2023.

On March 26, 2024, we entered into a Credit Agreement (the “2024 Credit Agreement”) among us, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”).

The 2024 Credit Agreement provides for a $1.0 billion senior unsecured five-year revolving facility.

The facility may be increased, at the Company’s option and under certain conditions, by up to an additional $750 million in the aggregate.

The facility may be used for revolving loans, and up to $75.0 million may be used for letters of credit.

The revolving loans may be borrowed, repaid and re-borrowed until March 26, 2029, at which time all amounts borrowed must be repaid, subject to customary extension mechanics.

On March 26, 2024, the Company borrowed $274.4 million under the 2024 Credit Agreement.

The initial borrowing was used to repay the outstanding amounts under the 2020 Credit Agreement.

Additional amounts borrowed under the 2024 Credit Agreement will be used for working capital needs and general corporate purposes of the Company and its subsidiaries, including the funding of acquisitions and investments, payment of capital expenditures and the repurchase of shares.

For additional information, see Note 8 — Debt in the Notes to Condensed Consolidated Financial Statements.

As of June 30, 2024 we had 20,495 employees globally, an increase of 1.9% from June 30, 2023.

BUSINESS MEASUREMENTS

22 unchanged sentences

The fundamentals of our strategy include a focus on creating actionable insight for executives and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.

We had total revenues of $1.5 billion during the first quarter of 2024, an increase of 5% compared to the first quarter of 2023.

During the first quarter of 2024, revenues for Research increased by 4%, Conferences revenue increased by 8%, and Consulting revenues increased by 6%, compared to the first quarter of 2023.

We had total revenues of $1.6 billion during the second quarter of 2024, an increase of 6% compared to the second quarter of 2023.

During the second quarter of 2024, revenues for Research increased by 5%, Conferences revenue increased by 10% and Consulting revenues increased by 13%, compared to the second quarter of 2023.

For a more complete discussion of our results by segment, see Segment Results below.

For the first quarter of 2024 and 2023, we had net income of $210.5 million and $295.8 million, respectively, and diluted income per share of $2.67 and $3.68, respectively.

Cash provided by operating activities was $188.8 million and $164.7 million during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had $1.2 billion of cash and cash equivalents and approximately $0.7 billion of available borrowing capacity on our revolving credit facility.

For the second quarter of 2024 and 2023, we had net income of $229.5 million and $198.0 million, respectively, and diluted income per share of $2.93 and $2.48, respectively.

Cash provided by operating activities was $558.8 million and $600.5 million during the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had $1.2 billion of cash and cash equivalents and approximately $0.7 billion of available borrowing capacity on our revolving credit facility.

For a more complete discussion of our cash flows and financial position, see the Liquidity and Capital Resources section below.

7 unchanged sentences

Consolidated Results

In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics.

These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying business performance being measured.

We calculate foreign currency neutral dollar amounts by converting the underlying amounts in local currency for different periods into U.S.

dollars by applying the same foreign exchange rates to all periods presented.

The table below presents an analysis of selected line items and period-over-period changes in our interim Condensed Consolidated Statements of Operations for the periods indicated (in thousands).

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Increase (Decrease) Increase

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Increase (Decrease) Increase

Total revenues $ 1,595,060 $ 1,503,185 $ 91,875 6 %

9 unchanged sentences

Interest expense, net (19,990) (24,558) (4,568) (19)

Other income, net 504 5,575 (5,071) (91)

Provision for income taxes 69,749 66,081 3,668 6

Net income $ 229,548 $ 198,043 $ 31,505 16 %

nm = not meaningful.

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Increase (Decrease) Increase

Total revenues $ 3,067,986 $ 2,912,054 $ 155,932 5 %

Costs and expenses:

Cost of services and product development 972,755 922,557 50,198 5

Selling, general and administrative 1,401,904 1,337,258 64,646 5

Depreciation 53,911 47,608 6,303 13

Amortization of intangibles 45,930 45,636 294 1

Acquisition and integration charges 818 3,341 (2,523) (76)

Gain from sale of divested operation — (135,410) 135,410 nm

Operating income 592,668 691,064 (98,396) (14)

Interest expense, net (39,209) (51,949) (12,740) (25)

Gain on event cancellation insurance claims — 3,077 (3,077) nm

Other income (expense), net 4,891 (2,366) 7,257 nm

Other income, net 5,395 3,209 2,186 68

Provision for income taxes 118,761 151,575 (32,814) (22)

1 unchanged sentence

nm = not meaningful.

Total revenues for the three months ended March 31, 2024 were $1.5 billion, an increase of $64.1 million, or 5% compared to the same period in 2023 on both a reported basis and excluding the foreign currency impact.

In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics.

We calculate foreign currency neutral dollar amounts by converting the underlying amounts in local currency for different periods into U.S.

dollars by applying the same foreign exchange rates to all periods presented.

Total revenues for the three months ended June 30, 2024 were $1.6 billion, an increase of $91.9 million, or 6% compared to the same period in 2023 on a reported basis and 7% excluding the foreign currency impact.

Total revenues for the six months ended June 30, 2024 were $3.1 billion, an increase of $0.2 billion, or 5% compared to the same period in 2023 on a reported basis and 6% excluding the foreign currency impact.

Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.

Cost of services and product development was $459.4 million during the three months ended March 31, 2024, an increase of $24.3 million compared to the same period in 2023, or 6% on a reported basis and 5% excluding the foreign currency impact.

Cost of services and product development was $513.3 million during the three months ended June 30, 2024, an increase of $25.9 million compared to the same period in 2023, or 5% on a reported basis and 6% excluding the foreign currency impact.

The increase in Cost of services and product development was primarily due to increased compensation costs associated with merit increases.

Cost of services and product development as a percent of revenues was 31% for both the three months ended March 31, 2024 and 2023.

Selling, general and administrative (“SG&A”) expense was $689.8 million during the three months ended March 31, 2024, an increase of $32.7 million compared to the same period in 2023, or 5% on a reported basis and excluding the foreign currency impact.

The increase in SG&A expense during the three months ended March 31, 2024 was primarily a result of higher personnel expenses due to increased headcount and merit increases.

Cost of services and product development as a percent of revenues was 32% for both the three months ended June 30, 2024 and 2023.

Cost of services and product development was $972.8 million during the six months ended June 30, 2024, an increase of $50.2 million compared to the same period in 2023, or 5% on a reported basis and 6% excluding the foreign currency impact.

The increase was primarily due to the same factor that caused the year-over-year quarterly increase.

Cost of services and product development as a percent of revenues was 32% for both the six months ended June 30, 2024 and 2023.

Selling, general and administrative (“SG&A”) expense was $712.1 million during the three months ended June 30, 2024, an increase of $31.9 million compared to the same period in 2023, or 5% and on both reported basis and excluding the foreign currency impact.

The increase in SG&A expense during the three months ended June 30, 2024 was primarily a result of higher personnel expenses due to increased headcount and merit increases.

This increase was partially offset by lower charges associated with the impairment of right-of-use assets and other long-lived assets.

The number of quota-bearing sales associates in Global Technology Sales decreased by 2% to 3,602 and in Global Business Sales, increased by 7% to 1,223 compared to March 31, 2023.

On a combined basis, the total number of quota-bearing sales associates was flat when compared to March 31, 2023.

SG&A expense as a percent of revenues was 47% during both the three months ended March 31, 2024 and 2023.

Depreciation increased by 10% during the three months ended March 31, 2024, compared to the same period in 2023.

The increase for the three months ended March 31, 2024 was primarily due to increased software additions during the last twelve months.

Amortization of intangibles increased by 1% during the three months ended March 31, 2024, compared to the same period in 2023.

Acquisition and integration charges decreased by $0.9 million during the three months ended March 31, 2024, compared to the same period in 2023.

SG&A expense was $1.4 billion during the six months ended June 30, 2024, an increase of $64.6 million compared to the same period in 2023, or 5% on both reported basis and excluding the foreign currency impact.

The increase was primarily due to the same factors that caused the year-over-year quarterly increase.

The number of quota-bearing sales associates in Global Technology Sales decreased by 2% to 3,575 and in Global Business Sales, increased by 6% to 1,215 compared to June 30, 2023.

On a combined basis, the total number of quota-bearing sales associates was flat when compared to June 30, 2023.

The year over year decrease in Global Technology Sales quota-bearing sales associates was primarily a function of the timing of hiring.

We expect that quota-bearing headcount will increase in the mid single digits from 2023 levels by the end of 2024.

SG&A expense as a percent of revenues was 45% during both the three months ended June 30, 2024 and 2023.

SG&A expense as a percent of revenues was 46% for both the six months ended June 30, 2024 and 2023.

Depreciation increased by 16% and 13% during the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

The increase for the three and six months ended June 30, 2024 was primarily due to increased software additions during the last twelve months.

Amortization of intangibles was flat and increased by 1% during the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

Acquisition and integration charges decreased by $1.6 million and $2.5 million during the three and six months ended June 30, 2024, compared to the same periods in 2023.

Gain from sale of divested operation was attributable to the sale of the TalentNeuron business in February 2023.

We recognized a pre-tax gain of $139.3 million during the three months ended March 31, 2023.

Operating income was $273.9 million and $408.0 million during the three months ended March 31, 2024 and 2023, respectively.

The decrease in operating income for the three months ended March 31, 2024 as compared to the prior year period was primarily due to the gain from sale of divested operation recognized during the three months ended March 31, 2023 and increases in cost of services and product development and selling, general and administrative expenses, partially offset by increased revenue.

Interest expense, net decreased by $8.2 million during the three months ended March 31, 2024, compared to the same period in 2023.

The decrease for the three months ended March 31, 2024 was due to increased interest income, primarily as a result of higher cash balances than the prior year.

Gain on event cancellation insurance claims of $3.1 million during the three months ended March 31, 2023 reflected proceeds related to 2020 conference cancellation insurance claims.

Other income (expense), net for the periods presented herein included the net impact of foreign currency gains and losses from our hedging activities.

Other income (expense), net for the three months ended March 31, 2024 also included a gain of $4.5 million on de-designated interest rate swaps.

Other income (expense), net for the three months ended March 31, 2023 included a loss of $1.4 million on de-designated interest rate swaps.

The provision for income taxes was $49.0 million and $85.5 million for the three months ended March 31, 2024 and 2023, respectively.

The effective income tax rate was 18.9% and 22.4% for the three months ended March 31, 2024 and 2023, respectively.

The effective income tax rate was higher in the prior year primarily due to the impact of the sale of the TalentNeuron business.

Net income for the three months ended March 31, 2024 and 2023 was $210.5 million and $295.8 million, respectively.

Our diluted net income per share during the three months ended March 31, 2024 decreased by $1.01.

The decrease in net income during the three months ended March 31, 2024 was primarily due to the gain from sale of divested operation recognized during the three months ended March 31, 2023 and increased operating expenses, partially offset by an increase in revenue and lower income tax expense.

We recognized a pre-tax gain of $135.4 million during the six months ended June 30, 2023.

For the three months ended June 30, 2023, post-close adjustments were settled and resulted in a $3.9 million reduction to the gain.

Operating income was $318.8 million and $283.1 million during the three months ended June 30, 2024 and 2023, respectively.

Operating income was $592.7 million and $691.1 million during the six months ended June 30, 2024 and 2023, respectively.

The increase in operating income for the three months ended June 30, 2024 as compared to the prior year period was primarily due to increased revenue, partially offset by increases in cost of services and product development and selling, general and administrative expenses.

The decrease in operating income for the six months ended June 30, 2024 as compared to the prior year period was primarily due to the gain from sale of divested operation recognized during the six months ended June 30, 2023 and increases in cost of services and product development and selling, general and administrative expenses, partially offset by increased revenue.

Interest expense, net decreased by $4.6 million and $12.7 million during the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

The decrease for both the three and six months ended June 30, 2024 was due to increased interest income, primarily as a result of higher cash balances than the prior year.

Gain on event cancellation insurance claims of $3.1 million during the six months ended June 30, 2023 reflected proceeds related to 2020 conference cancellation insurance claims.

Other income, net for the periods presented herein included the net impact of foreign currency gains and losses from our hedging activities.

Other income, net for the three and six months ended June 30, 2024 also included gains of $0.6 million and $5.0 million, respectively, on de-designated interest rate swaps.

Other income, net for the three and six months ended June 30, 2023 included gains of $6.5 million and $5.1 million, respectively, on de-designated interest rate swaps.

The provision for income taxes was $69.7 million and $66.1 million for the three months ended June 30, 2024 and 2023, respectively and $118.8 million and $151.6 million for the six months ended June 30, 2024 and 2023, respectively.

The effective income tax rate was 23.3% and 25.0% for the three months ended June 30, 2024 and 2023, respectively, and 21.3% and 23.5% for the six months ended June 30, 2024 and 2023, respectively.

The lower effective income tax rate for the three months ended June 30, 2024 compared to the same period in the prior year was primarily due to larger benefit of research and development tax credits.

The lower effective income tax rate for the six months ended June 30, 2024 was primarily due to the impact of the sale of the TalentNeuron business on the prior year rate.

Net income for the three months ended June 30, 2024 and 2023 was $229.5 million and $198.0 million, respectively, while net income for the six months ended June 30, 2024 and 2023 was $440.1 million and $493.8 million , respectively.

Our diluted net income per share during the three and six months ended June 30, 2024 increased by $0.45 and decreased by $0.57, respectively.

The increase in net income during the three months ended June 30, 2024 was due to an increase in revenue and lower interest expense, net, partially offset by an increase in operating expenses.

The decrease in net income during the six months ended June 30, 2024 was primarily due to the gain from sale of divested operation recognized during the six months ended June 30, 2023 and increased operating expenses, partially offset by an increase in revenue and lower interest expense, net.

SEGMENT RESULTS

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Research, Conferences and Consulting.

As Of And For The Three Months Ended March 31, 2024 As Of And For The Three Months Ended March 31, 2023 Increase

As Of And For The Three Months Ended June 30, 2024 As Of And For The Three Months Ended June 30, 2023 Increase

(Decrease) Percentage

(Decrease) As Of And For The Six Months Ended June 30, 2024 As Of And For The Six Months Ended June 30, 2023 Increase

(Decrease) Percentage

Financial Measurements:

1 unchanged sentence

Gross contribution (1) $ 933,121 $ 885,282 $ 47,839 5 % $ 1,877,690 $ 1,784,796 $ 92,894 5 %

Gross contribution margin 74 % 74 % 0 point —

Gross contribution margin 74 % 73 % 1 point — 74 % 74 % 0 point —

Business Measurements :

2 unchanged sentences

Contract value (1), (3) $ 3,797,000 $ 3,578,000 $ 219,000 6 %

Client retention 83 % 85 % (2) points —

Wallet retention 101 % 104 % (3) points —

Client retention 83 % 84 % (1) point —

Wallet retention 101 % 102 % (1) point —

Global Business Sales (2):

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$ 1,140,000 $ 1,018,000 $ 122,000 12 %

Client retention 87 % 89 % (2) points —

Client retention 87 % 88 % (1) point —

Wallet retention 106 % 109 % (3) points —

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Global Business Sales includes sales to all other functional leaders.

(3) Contract values are on a foreign exchange neutral basis.

Contract values as of March 31, 2023 have been calculated using the same foreign currency rates as 2024.

Research revenues i ncreased by $51.0 million during the three months ended March 31, 2024 compared to the same period in 2023, or 4% on a reported basis and excluding the foreign currency impact.

(3) Contract values are on a foreign currency neutral basis.

Contract values as of June 30, 2023 have been calculated using the same foreign currency rates as 2024.

Research revenues i ncreased by $58.1 million during the three months ended June 30, 2024 compared to the same period in 2023, or 5% on a reported basis and 6% excluding the foreign currency impact.

For the six months ended June 30, 2024, research revenue increased by $109.1 million compared to the same period in 2023 or 4% on a reported basis and 5% excluding the foreign currency impact.

The increase in revenues during 2024 was primarily due to Research contract value growth in 2023.

The segment gross contribution margin was 74% for both the three months ended March 31, 2024 and 2023 .

Contract value increased to $4.9 billion at March 31, 2024, or 7% compared to March 31, 2023 excluding the foreign currency impact.

The segment gross contribution margin was 74% and 73% for the three months ended June 30, 2024 and 2023, respectively, and 74% for both the six months ended June 30, 2024 and 2023 .

Contract value increased to $4.9 billion at June 30, 2024, or 7% compared to June 30, 2023 excluding the foreign currency impact.

The majority of industry sectors grew high single-digit rates or faster.

The higher growth sectors were the energy, manufacturing and public sectors.

Global Technology Sales (“GTS”) contract value increased by 5% at March 31, 2024 when compared to March 31, 2023.

Global Technology Sales (“GTS”) contract value increased by 6% at June 30, 2024 when compared to June 30, 2023.

The increase in GTS contract value was primarily due to new business from existing clients.

GTS contract value increased by high single-digit rates or faster for the majority of enterprise sizes and half of industry sectors.

GTS contract value increased by high single-digit rates or faster for the majority of enterprise sizes and over half of industry sectors.

Global Business Sales (“GBS”) contract value increased by 12% year-over-year, also primarily driven by new business from existing clients.

The majority of our GBS practices achieved double-digit growth rates, with all enterprise sizes and the majority of sectors growing double-digits year-over-year.

GTS client retention was 83% and 85% as of March 31, 2024 and 2023, respectively, while wallet retention was 101% and 104%, respectively.

GBS client retention was 87% and 89% for March 31, 2024 and 2023, respectively, while wallet retention was 107% and 110%, respectively.

The decrease in GTS and GBS wallet retention was largely due to lower levels of spending by existing clients compared to the same period in 2023.

GTS client and wallet retention were also affected by a slowdown in tech vendor spending and higher levels of tech vendor spending in the prior year period.

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Increase

The majority of our GBS practices achieved double-digit growth rates, with the majority of enterprise sizes and sectors growing double-digits year-over-year.

GTS client retention was 83% and 84% as of June 30, 2024 and 2023, respectively, while wallet retention was 101% and 102%, respectively.

GBS client retention was 87% and 88% for June 30, 2024 and 2023, respectively, while wallet retention was 106% and 109%, respectively.

The decrease in GBS wallet retention was largely due to lower levels of spending by existing clients compared to the same period in 2023.

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Increase

(Decrease) Percentage

(Decrease) Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Increase

(Decrease) Percentage

Financial Measurements:

1 unchanged sentence

Gross contribution (1) $ 108,112 $ 98,450 $ 9,662 10 % $ 131,367 $ 125,238 $ 6,129 5 %

Gross contribution margin 33 % 41 % (8) points —

Gross contribution margin 58 % 58 % 0 point — 51 % 54 % (3) points —

Business Measurements:

3 unchanged sentences

(2) Single day, local meetings are excluded.

Conferences revenues increased by $5.4 million during the three months ended March 31, 2024 compared to the same period in 2023.

The increase in revenue for the three months ended March 31, 2024 was primarily due to holding two more in-person destination conferences than in the first quarter of 2023.

We held 12 and 10 in-person destination conferences during the three months ended March 31, 2024 and 2023, respectively.

Gross contribution decreased to $23.3 million during the three months ended March 31, 2024 compared to $26.8 million in the same period last year.

The decrease in gross contribution during the three months ended March 31, 2024 was primarily due to an increase in conference-related expenses and increased headcount, partially offset by an increase in revenue.

As Of And For The Three Months Ended March 31, 2024 As Of And For The Three Months Ended March 31, 2023 Increase

Conferences revenues increased by $17.2 million during the three months ended June 30, 2024 compared to the same period in 2023.

Conferences revenues increased by $22.6 million during the six months ended June 30, 2024 compared to the same period in 2023.The increase in revenue for the three months ended June 30, 2024 was primarily due to increased exhibitor revenue and an increase in attendees compared to the second quarter of 2023.

We held 16 and 17 in-person destination conferences during the three months ended June 30, 2024 and 2023, respectively.

We held 28 and 27 in-person destination conferences during the six months ended June 30, 2024 and 2023, respectively.

Gross contribution increased to $108.1 million during the three months ended June 30, 2024 compared to $98.5 million in the same period last year.

Gross contribution increased to $131.4 million during the six months ended June 30, 2024 compared to $125.2 million in the same period last year.

The increase in gross contribution during the three and six months ended June 30, 2024 was primarily the result of the increase in revenue, partially offset by an increase in conference-related expenses and increased headcount.

As Of And For The Three Months Ended June 30, 2024 As Of And For The Three Months Ended June 30, 2023 Increase

(Decrease) Percentage

(Decrease) As Of And For The Six Months Ended June 30, 2024 As Of And For The Six Months Ended June 30, 2023 Increase

(Decrease) Percentage

Financial Measurements:

1 unchanged sentence

Gross contribution (1) $ 53,719 $ 47,321 $ 6,398 14 % $ 108,006 $ 98,129 $ 9,877 10 %

Gross contribution margin 40 % 40 % 0 point —

Gross contribution margin 38 % 37 % 1 point — 39 % 39 % 0 point —

Business Measurements:

1 unchanged sentence

Billable headcount 953 935 18 2 %

Consultant utilization 66 % 67 % (1) point —

Consultant utilization 67 % 66 % 1 point — 66 % 66 % 0 point —

(1) Dollars in thousands.

(2) Backlog is on a foreign exchange neutral basis.

Backlog as of March 31, 2023 has been calculated using the same foreign currency rates as 2024.

Consulting revenues increased by 6% during the three months ended March 31, 2024 compared to the same period in 2023 on a reported basis and 7% excluding the foreign currency impact, with an increase in labor-based consulting revenue of 12% and a decrease in contract optimization revenue of 13%, each on a reported basis.

Contract optimization revenue may vary significantly and, as such, revenues for the first quarter of 2024 may not be indicative of results for the remainder of 2024 or beyond.

The segment gross contribution margin was 40% for both the three months ended March 31, 2024 and 2023.

Backlog increased by $27.0 million, or 17%, from March 31, 2023 to March 31, 2024, excluding the foreign currency impact.

(2) Backlog is on a foreign currency neutral basis.

Backlog as of June 30, 2023 has been calculated using the same foreign currency rates as 2024.

Consulting revenues increased by 13% during the three months ended June 30, 2024 compared to the same period in 2023 on a reported basis and 15% excluding the foreign currency impact, with an increase in labor-based consulting revenue of 3% and a increase in contract optimization revenue of 62%, each on a reported basis.

Contract optimization revenue may vary significantly and, as such, revenues for the second quarter of 2024 may not be indicative of results for the remainder of 2024 or beyond.

The segment gross contribution margin was 38% and 37% for the three months ended June 30, 2024 and 2023, respectively.

The increase in gross contribution margin for the three months ended June 30, 2024 was also primarily due to the increase in revenue, partially offset by increased personnel expense related to higher headcount.

For the six months ended June 30, 2024, Consulting revenues increased 10% compared to the same period in 2023 on a reported basis and 11% excluding the foreign currency impact, with an increase in labor-based consulting revenue of 7% and an increase in contract optimization revenue of 19%, each on a reported basis.

The segment gross contribution margin for the six months ended June 30, 2024 was flat compared to the same period in 2023.

Backlog increased by $27.1 million, or 16%, from June 30, 2023 to June 30, 2024, excluding the foreign currency impact.

LIQUIDITY AND CAPITAL RESOURCES

1 unchanged sentence

Note 8 — Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.

At March 31, 2024, we had $1.2 billion of cash and cash equivalents and approximately $706.7 million of available borrowing capacity on the revolving credit facility under our 2024 Credit Agreement.

At June 30, 2024, we had $1.2 billion of cash and cash equivalents and approximately $706.6 million of available borrowing capacity on the revolving credit facility under our 2024 Credit Agreement.

We believe that the Company has adequate liquidity to meet its currently anticipated needs for both the next twelve months and the foreseeable future.

2 unchanged sentences

Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales.

On July 25, 2024 we entered into a settlement agreement to resolve litigation concerning our event cancellation insurance for 2020 and 2021.

The settlement resolves all remaining 2020 and 2021 event cancellation insurance claims for $300.0 million.

We expect to receive the settlement payment from the insurer during the third quarter of 2024.

Our cash and cash equivalents are held in numerous locations throughout the world with 57% held outside the U.S.

at March 31, 2024.

at June 30, 2024.

We intend to reinvest substantially all of our accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax.

The table below summarizes the changes in our cash balances for the periods indicated (in thousands).

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Increase

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Increase

Cash provided by operating activities $ 558,800 $ 600,461 $ (41,661)

5 unchanged sentences

Ending cash and cash equivalents and restricted cash $ 1,235,785 $ 1,173,428 $ 62,357

Cash provided by operating activities was $188.8 million and $164.7 million during the three months ended March 31, 2024 and 2023, respectively.

The year-over-year increase was primarily due to increased operating income, excluding the 2023 gain from sale of divested operation.

Cash (used in) provided by investing activities was $(24.7) million and $137.6 million during the three months ended March 31, 2024 and 2023, respectively.

Cash provided by operating activities was $558.8 million and $600.5 million during the six months ended June 30, 2024 and 2023, respectively.

The year-over-year decrease was primarily due to the timing of collections, partially offset by increased operating income, excluding the 2023 gain from sale of divested operation.

Cash (used in) provided by investing activities was $(54.0) million and $109.4 million during the six months ended June 30, 2024 and 2023, respectively.

The decrease from 2023 to 2024 was the result of the proceeds received from the sale of the TalentNeuron business in February 2023.

Cash used in financing activities was $219.7 million and $101.3 million during the three months ended March 31, 2024 and 2023, respectively.

We used $225.1 million and $106.9 million of cash for share repurchases during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the Company had $2.5 billion of principal amount of debt outstanding.

Note 8 — Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt

Cash used in financing activities was $553.2 million and $228.7 million during the six months ended June 30, 2024 and 2023, respectively.

We used $564.7 million and $238.4 million of cash for share repurchases during the six months ended June 30, 2024 and 2023, respectively.

In March 2024, the Company borrowed $274.4 million under the 2024 Credit Agreement.

The initial borrowing was used to repay the outstanding amounts under the 2020 Credit Agreement.

The 2024 Credit Agreement provides for a $1.0 billion senior unsecured five-year revolving facility.

The facility may be increased, at the Company’s option and under certain conditions, by up to an additional $750 million in the aggregate.

The facility may be used for revolving loans, and up to $75.0 million may be used for letters of credit.

The revolving loans may be borrowed, repaid and re-borrowed until March 26, 2029, at which time all amounts borrowed must be repaid, subject to customary extension mechanics.

On March 26, 2024, the Company borrowed $274.4 million under the 2024 Credit Agreement.

The initial borrowing was used to repay the outstanding amounts under the 2020 Credit Agreement.

As of June 30, 2024, the Company had $2.5 billion of principal amount of debt outstanding.

Note 8 — Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.

From time to time, the Company may seek to retire or repurchase its outstanding debt through various methods including open market repurchases, negotiated block transactions, or otherwise, all or some of which may be effected through Rule 10b5-1 plans.

1 unchanged sentence

OFF BALANCE SHEET ARRANGEMENTS

From January 1, 2024 through March 31, 2024, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.

From January 1, 2024 through June 30, 2024, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.

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