What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-05 compared with 2024-08-06 · 106 added, 101 removed, 332 unchanged (38% of the section changed)

24 unchanged sentences

Many of our customer contracts contain termination for convenience provisions.

For the three months ended June 30, 2024, we generated $678.1 million in revenue, reflecting a 27% growth rate from the three months ended June 30, 2023 when we generated $533.3 million in revenue.

For the six months ended June 30, 2024, we generated $1.3 billion in revenue, reflecting a 24% growth rate from the six months ended June 30, 2023 when we generated $1.1 billion in revenue.

In the three months ended June 30, 2024, we generated income from operations of $105.3 million, or adjusted income from operations of $253.6 million when excluding stock-based compensation and related employer payroll taxes.

In the three months ended June 30, 2023, we generated income from operations of $10.1 million, or adjusted income from operations of $135.0

million when excluding stock-based compensation and related employer payroll taxes.

In the six months ended June 30, 2024, we generated income from operations of $186.2 million, or adjusted income from operations of $480.0 million when excluding stock-based compensation and related employer payroll taxes.

In the six months ended June 30, 2023, we generated income from operations of $14.2 million, or adjusted income from operations of $260.1 million when excluding stock-based compensation and related employer payroll taxes.

In the three months ended June 30, 2024, our gross profit was $549.6 million, reflecting a gross margin of 81%, or 83% when excluding stock-based compensation.

In the three months ended June 30, 2023, our gross profit was $426.4 million, reflecting a gross margin of 80%, or 81% when excluding stock-based compensation.

In the six months ended June 30, 2024, our gross profit was $1.1 billion, reflecting a gross margin of 81%, or 83% when excluding stock-based compensation.

In the six months ended June 30, 2023, our gross profit was $844.0 million, reflecting a gross margin of 80%, or 81% when excluding stock-based compensation.

For the three months ended September 30, 2024, we generated $725.5 million in revenue, reflecting a 30% growth rate from the three months ended September 30, 2023, when we generated $558.2 million in revenue.

For the nine months ended September 30, 2024, we generated $2.0 billion in revenue, reflecting a 26% growth rate from the nine months ended September 30, 2023, when we generated $1.6 billion in revenue.

In the three months ended September 30, 2024, we generated income from operations of $113.1 million, or adjusted income from operations of $275.5 million when excluding stock-based compensation and related employer payroll taxes.

In the three months ended September 30, 2023, we generated income from operations of $40.0 million, or adjusted income from operations of $163.3 million when excluding stock-based compensation and related employer payroll taxes.

In the nine months ended September 30, 2024, we generated income from operations of $299.4 million, or adjusted income from operations of $755.5 million when excluding stock-based compensation and related employer payroll taxes.

In the nine months ended September 30, 2023, we generated income from operations of $54.2 million, or adjusted income from operations of $423.4 million when excluding stock-based compensation and related employer payroll taxes.

In the three months ended September 30, 2024, our gross profit was $578.9 million, reflecting a gross margin of 80%, or 82% when excluding stock-based compensation.

In the three months ended September 30, 2023, our gross profit was $450.2 million, reflecting a gross margin of 81%, or 82% when excluding stock-based compensation.

In the nine months ended September 30, 2024, our gross profit was $1.6 billion, reflecting a gross margin of 81%, or 83% when excluding stock-based compensation.

In the nine months ended September 30, 2023, our gross profit was $1.3 billion, reflecting a gross margin of 80%, or 82% when excluding stock-based compensation.

For more information about our adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes;

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We define a customer as an organization from which we have recognized revenue during the trailing twelve-month period.

During the period ended June 30, 2024, we had 593 customers, including companies in various commercial sectors and government agencies around the world.

During the period ended June 30, 2023, we had 421 customers.

During the period ended September 30, 2024, we had 629 customers, including companies in various commercial sectors and government agencies around the world.

During the period ended September 30, 2023, we had 453 customers.

For large government agencies, where a single institution has multiple divisions, units, or subsidiary agencies, each such division, unit, or subsidiary agency that enters into a separate contract with us and is invoiced as a separate entity is treated as a separate customer.

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We have built lasting and significant customer relationships and partnerships with some of the world’s leading government institutions and companies.

Our average revenue for the top twenty customers during the trailing twelve months ended June 30, 2024 was $57.3 million, which grew 9% from an average of $52.6 million in revenue from the top twenty customers during the trailing twelve months ended June 30, 2023, demonstrating our expanding relationships with existing customers.

Our average revenue for the top twenty customers during the trailing twelve months ended September 30, 2024 was $60.1 million, which grew 12% from an average of $53.7 million in revenue from the top twenty customers during the trailing twelve months ended September 30, 2023, demonstrating our expanding relationships with existing customers.

Organizations in the commercial and government sectors face similar challenges when it comes to managing data, and we intend to expand our reach in both markets moving forward.

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We manage customers at the account level, not by industry or sector, so that we can optimize on the specific growth opportunities for each customer.

In the six months ended June 30, 2024, 54% of our revenue came from government customers and 46% came from commercial customers.

In the nine months ended September 30, 2024, 55% of our revenue came from government customers and 45% came from commercial customers.

customers have been a meaningful source of revenue growth for our business.

In the six months ended June 30, 2024, we generated 64% of our revenue from customers in the United States and the remaining 36% from non-U.S.

In the nine months ended September 30, 2024, we generated 66% of our revenue from customers in the United States and the remaining 34% from non-U.S.

Revenue from our U.S.

customers during the trailing twelve months ended June 30, 2024 was $1.6 billion, which grew 23% from the prior twelve-month period.

customers during the trailing twelve months ended September 30, 2024 was $1.7 billion, which grew 30% from the prior twelve-month period.

We expect that U.S.

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The speed with which our platforms can be deployed has significantly expanded the range of potential customers with which we plan on partnering over the long term.

We anticipate that our reach among an increasingly broad set of customers, in both

the commercial and government sectors, will accelerate moving forward.

We anticipate that our reach among an increasingly broad set of customers, in both the commercial and government sectors, will accelerate moving forward.

We believe that, as these new partners grow, we will grow with them.

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subsidiaries may hold monetary assets and liabilities in currencies other than their functional currency (primarily the Japanese Yen (“JPY”), Euro, and GBP), which could subject our results of operations and cash flows to adverse fluctuations due to changes in such foreign currency exchange rates as compared to the U.S.

For the six months ended June 30, 2024 such impacts were not material to our financial position or results of operations.

For the nine months ended September 30, 2024 such impacts were not material to our financial position or results of operations.

Customer Impacts

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Contribution Margin

The following table provides a reconciliation of contribution margin for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,

The following table provides a reconciliation of contribution margin for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Gross Profit and Gross Margin, Excluding Stock-Based Compensation

The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Three Months Ended June 30, Six Months Ended June 30,

The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Adjusted Income from Operations

The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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We agree to provide continuous access to our hosted software throughout the contract term.

Revenue associated with Palantir Cloud subscriptions is

generally recognized over the contract term on a ratable basis, which is consistent with the transfer of control of the Palantir services to the customer.

Revenue associated with Palantir Cloud subscriptions is generally recognized over the contract term on a ratable basis, which is consistent with the transfer of control of the Palantir services to the customer.

On-Premises Software

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The following table summarizes our condensed consolidated statements of operations data (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

13 unchanged sentences

Net income 149,341 73,439 390,982 120,462

Net income (loss) attributable to noncontrolling interests 1,444 (255) 1,985 2,094

Net income attributable to noncontrolling interests 5,816 1,934 7,801 4,028

Net income attributable to common stockholders $ 143,525 $ 71,505 $ 383,181 $ 116,434

The following table sets forth the components of our condensed consolidated statements of operations data as a percentage of revenue:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

13 unchanged sentences

Net income 21 13 19 7

Net income (loss) attributable to noncontrolling interests — — — —

Net income attributable to noncontrolling interests 1 — — —

Net income attributable to common stockholders 20 % 13 % 19 % 7 %

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

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

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount % 2024 2023 Amount %

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Total revenue $ 725,516 $ 558,159 $ 167,357 30 % $ 2,037,988 $ 1,616,662 $ 421,326 26 %

Revenue increased by $144.8 million, or 27%, for the three months ended June 30, 2024 compared to the same period in 2023.

Revenue from government customers increased by $69.3 million, or 23%, for the three months ended June 30, 2024 compared to the same period in 2023.

Revenue increased by $167.4 million, or 30%, for the three months ended September 30, 2024 compared to the same period in 2023.

Revenue from government customers increased by $100.7 million, or 33%, for the three months ended September 30, 2024 compared to the same period in 2023.

Of the increase, $74.9 million was from government customers existing as of December 31, 2023.

Revenue from U.S.

government customers was $278.0 million for the three months ended June 30, 2024 compared to $225.0 million for the same period in 2023.

Revenue from commercial customers increased by $75.6 million, or 33%, for the three months ended June 30, 2024 compared to the same period in 2023.

government customers was $319.8 million for the three months ended September 30, 2024 compared to $229.2 million for the same period in 2023.

Revenue from commercial customers increased by $66.6 million or 27%, for the three months ended September 30, 2024 compared to the same period in 2023.

Of the increase, $47.9 million was from commercial customers existing as of December 31, 2023, including a decrease of $5.0 million of revenue from Strategic Commercial Contracts.

Revenue from U.S.

commercial customers was $159.2 million for the three months ended June 30, 2024 compared to $103.0 million for the same period in 2023, a 55% increase.

Revenue increased by $254.0 million, or 24%, for the six months ended June 30, 2024 compared to the same period in 2023.

Revenue from government customers increased by $115.6 million, or 20%, for the six months ended June 30, 2024 compared to the same period in 2023.

commercial customers was $179.2 million for the three months ended September 30, 2024 compared to $116.3 million for the same period in 2023, a 54% increase.

Revenue increased by $421.3 million, or 26%, for the nine months ended September 30, 2024 compared to the same period in 2023.

Revenue from government customers increased by $216.3 million, or 24%, for the nine months ended September 30, 2024 compared to the same period in 2023.

Of the increase, $177.1 million was from government customers existing as of December 31, 2023.

Revenue from U.S.

government customers was $534.7 million for the six months ended June 30, 2024 compared to $454.8 million for the same period in 2023.

Revenue from commercial customers increased by $138.4 million, or 30%, for the six months ended June 30, 2024 compared to the same period in 2023.

government customers was $854.5 million for the nine months ended September 30, 2024 compared to $684.0 million for the same period in 2023.

Revenue from commercial customers increased by $205.0 million, or 29%, for the nine months ended September 30, 2024 compared to the same period in 2023.

Of the increase, $154.4 million was from commercial customers existing as of December 31, 2023, including a decrease of $24.7 million of revenue from Strategic Commercial Contracts.

Revenue from U.S.

commercial customers was $308.9 million for the six months ended June 30, 2024 compared to $210.1 million for the same period in 2023, a 47% increase.

commercial customers was $488.1 million for the nine months ended September 30, 2024 compared to $326.3 million for the same period in 2023, a 50% increase.

Generally, increases in revenue from our existing customers are related to increased adoption of our products and services within their organizations.

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Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount % 2024 2023 Amount %

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Gross margin 80 % 81 % (1) % 81 % 80 % 1 %

Cost of revenue for the three months ended June 30, 2024 increased by $21.7 million, or 20%, compared to the same period in 2023.

The increase was primarily due to increases of $14.4 million in third-party cloud hosting services and $10.8 million in subcontractor expenses.

These increases were partially offset by a decrease of $7.8 million in field service representatives and hardware costs.

Our gross margin for the three months ended June 30, 2024 increased to 81% from 80% for the same period in 2023 as a result of revenue growth outpacing costs of revenue.

This growth rate variation was primarily due to the decreases in field service representatives and hardware costs in cost of revenue relative to revenue growth as compared to the prior year.

Cost of revenue for the six months ended June 30, 2024 increased by $30.3 million, or 14%, compared to the same period in 2023.

The increase was primarily due to increases of $20.9 million in third-party cloud hosting services, $19.6 million in

subcontractor expenses, and $7.3 million in stock-based compensation and related expenses.

These increases were partially offset by decreases of $10.3 million in field service representatives and $7.0 million in hardware costs.

Our gross margin for the six months ended June 30, 2024 increased to 81% from 80% for the same period in 2023 as a result of revenue growth outpacing costs of revenue.

This growth rate variation was primarily due to the decreases in field service representatives and hardware costs in costs of revenue relative to total expense growth as compared to the prior year.

Cost of revenue for the three months ended September 30, 2024 increased by $38.7 million compared to the same period in 2023.

The increase was primarily due to increases of $20.1 million in subcontractor expenses, $8.8 million in third-party cloud hosting services, and $6.2 million in stock-based compensation and related expenses.

Our gross margin for the three months ended September 30, 2024 decreased from 81% for the same period in 2023 to 80% as a result of the growth of cost of revenue slightly outpacing revenue growth.

Cost of revenue for the nine months ended September 30, 2024 increased by $69.0 million, or 21%, compared to the same period in 2023.

The increase was primarily due to increases of $39.7 million in subcontractor expenses, $29.7 million in third-party cloud hosting services, and $13.5 million in stock-based compensation and related expenses.

These increases were partially offset by a decrease of $11.0 million in field service representatives.

Our gross margin for the nine months ended September 30, 2024 increased from 80% for the same period in 2023 to 81% as a result of the growth of revenue slightly outpacing cost of revenue growth.

For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.

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Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount % 2024 2023 Amount %

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Sales and Marketing

Sales and marketing expenses increased by $12.6 million, or 7%, for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $6.9 million in third-party cloud hosting services and $7.7 million in stock-based compensation and related expenses.

Sales and marketing expenses increased by $18.7 million, or 5%, for the six months ended June 30, 2024 compared to the same period in 2023.

Sales and marketing expenses increased by $33.1 million, or 19%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $16.4 million in stock-based compensation and related expenses and $7.2 million in payroll and other payroll-related costs.

Sales and marketing expenses increased by $51.8 million, or 9%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $31.6 million in stock-based compensation and related expenses and $10.6 million in third-party cloud hosting services.

1 unchanged sentence

Research and Development

Research and development expenses increased by $9.2 million, or 9%, for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $5.4 million in stock-based compensation and related expenses and $5.0 million in third-party cloud hosting services.

Research and development expenses increased by $29.2 million, or 15%, for the six months ended June 30, 2024 compared to the same period in 2023.

Research and development expenses increased by $11.8 million, or 11%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $11.0 million in stock-based compensation and related expenses.

Research and development expenses increased by $41.0 million, or 14%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $27.5 million in stock-based compensation and related expenses and $12.5 million in third-party cloud hosting services.

1 unchanged sentence

General and Administrative

General and administrative expenses increased by $6.0 million, or 5%, for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $6.0 million in stock-based compensation and related expenses.

General and administrative expenses increased by $3.7 million, or 1%, for the six months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $8.8 million in stock-based compensation and related expenses partially offset by a decrease of $5.7 million to our allowance for credit losses.

General and administrative expenses increased by $10.5 million, or 8%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $5.5 million in stock-based compensation and related expenses and $5.1 million in travel costs.

General and administrative expenses increased by $14.3 million, or 4%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to increases of $14.3 million in stock-based compensation and related expenses, and $8.6 million in travel costs.

These increases were partially offset by a decrease of $9.4 million to our allowance for credit losses.

For additional information related to stock-based compensation expense, see the section titled “Stock-Based Compensation” below.

1 unchanged sentence

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount % 2024 2023 Amount %

4 unchanged sentences

Total stock-based compensation expense $ 142,425 $ 114,380 $ 28,045 25 % $ 409,840 $ 343,295 $ 66,545 19 %

Stock-based compensation expenses increased by $27.6 million, or 24%, and $38.5 million, or 17%, for the three and six months ended June 30, 2024 compared to the same periods in 2023, respectively.

The increase was driven by expense from new grants awarded since June 30, 2023, including restricted stock units (“RSUs”), performance-based RSUs (“P-RSUs”), and stock appreciation rights (“SARs”), partially offset by a reduction in expense from awards that became fully vested and lower expense under the accelerated attribution method for RSUs granted prior to September 30, 2020, the date we completed the direct listing of our Class A common stock on the New York Stock Exchange (“NYSE”).

Stock-based compensation expenses increased by $28.0 million and $66.5 million, or 25% and 19%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023.

The increase was driven by expense from new grants awarded since September 30, 2023, including restricted stock units (“RSUs”), performance-based RSUs (“P-RSUs”), and stock appreciation rights (“SARs”), partially offset by a reduction in expense from equity awards that became fully vested, forfeitures, and lower expense under the accelerated attribution method for RSUs granted prior to September 30, 2020, the date we completed the direct listing of our Class A common stock on the New York Stock Exchange (“NYSE”).

Interest Income

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount 2024 2023 Amount

Interest income $ 52,120 $ 36,864 $ 15,256 $ 142,065 $ 88,027 $ 54,038

Interest income increased by $16.3 million and $38.8 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to an increase in our interest-bearing cash, cash equivalents, and our investments in short-term U.S.

Interest income increased by $15.3 million and $54.0 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023 primarily due to an increase in our interest-bearing cash, cash equivalents, and our investments in short-term U.S.

Treasury securities.

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Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount 2024 2023 Amount

Other income (expense), net $ (8,110) $ 3,122 $ (11,232) $ (32,790) $ (11,355) $ (21,435)

Other income (expense), net changed by $0.8 million and $10.2 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to an increase in net realized and unrealized losses from our shares held in equity securities.

Other income (expense), net changed by $11.2 million and $21.4 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023 primarily due to an increase in net realized and unrealized losses from our shares held in equity securities.

Provision for Income Taxes

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

2024 2023 Amount 2024 2023 Amount

Provision for income taxes $ 7,809 $ 6,530 $ 1,279 $ 17,653 $ 10,382 $ 7,271

Provision for income taxes increased by $3.0 million and $6.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to increased foreign tax expense as a result of higher foreign taxable income and withholding taxes, as well as increases in state taxes.

Provision for income taxes increased by $1.3 million and $7.3 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023 primarily due to increased foreign tax expense as the result of higher foreign taxable income and withholding taxes.

Liquidity and Capital Resources

We generated positive cash flow from operations for the six months ended June 30, 2024.

We had cash and cash equivalents and short-term U.S.

treasury securities totaling $4.0 billion available as of June 30, 2024.

We believe that cash flows generated from operations, cash, cash equivalents, marketable securities, available funds, and access to financing sources, including our

undrawn credit facility, will be sufficient to meet our anticipated operating cash needs for at least the next twelve months.

We generated positive cash flow from operations for the nine months ended September 30, 2024.

We had cash, cash equivalents, and short-term U.S.

Treasury securities totaling $4.6 billion available as of September 30, 2024.

We believe that cash flows generated from operations, available funds, and access to financing sources, including our undrawn credit facility,

will be sufficient to meet our anticipated operating cash needs for at least the next twelve months.

However, any projections of future cash needs and cash flows are subject to substantial uncertainty.

While we have generated income from operations and positive cash flows from operations for the six months ended June 30, 2024, the amounts may fluctuate for the foreseeable future.

As of June 30, 2024, our accumulated deficit balance was $5.4 billion, and our principal sources of liquidity were cash and cash equivalents and short-term U.S.

While we have generated income from operations and positive cash flows from operations for the nine months ended September 30, 2024, the amounts may fluctuate for the foreseeable future.

As of September 30, 2024, our accumulated deficit balance was $5.3 billion, and our principal sources of liquidity were cash, cash equivalents, and short-term U.S.

Treasury securities totaling $4.6 billion.

As of June 30, 2024, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500 million under our credit facility.

As of September 30, 2024, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500.0 million under our credit facility.

For more information, see Note 6.

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Stockholders’ Equity in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

During the six months ended June 30, 2024, the Company repurchased and subsequently retired 1.2 million shares of its Class A common stock for an aggregate amount, including commissions, of $26.7 million under the Share Repurchase Program.

As of June 30, 2024, approximately $973.3 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

During the nine months ended September 30, 2024, the Company repurchased and subsequently retired 1.8 million shares of its Class A common stock for an aggregate amount, including commissions, of $45.6 million under the Share Repurchase Program.

As of September 30, 2024, approximately $954.4 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

Our future capital requirements will depend on many factors, including, but not limited to, the rate of our growth, our ability to attract and retain customers and their willingness and ability to pay for our products and services, and the timing and extent of spending to support our efforts to market and develop our products.

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additionally, we have, and may in the future, repurchase shares of our Class A common stock from time to time under our Share Repurchase Program.

As such, we may be required to seek additional equity or debt financing.

As such, we may seek additional equity or debt financing on an as needed or opportunistic basis.

In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended

September 30,

Net cash provided by (used in):

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Operating Activities

Net cash provided by operating activities was $273.8 million and $277.6 million for the six months ended June 30, 2024 and 2023, respectively.

The decrease was primarily driven by timing of the receipt of payments from our customers and timing of payments to vendors.

Net cash provided by operating activities was $693.5 million and $411.0 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase was primarily driven by the growth of our business and timing of the receipt of payments from our customers and timing of payments to vendors.

Investing Activities

Net cash used in investing activities was $660.1 million and $1.9 billion for the six months ended June 30, 2024 and 2023, respectively.

The decrease in cash used in investing activities was primarily due to fewer purchases of marketable securities, primarily comprised of short-term U.S.

Net cash used in investing activities was $980.8 million and $2.1 billion for the nine months ended September 30, 2024 and 2023, respectively.

The decrease in cash used in investing activities was primarily due to fewer purchases of marketable securities, primarily comprised of U.S.

Treasury securities, compared to the prior year.

Financing Activities

Net cash provided by financing activities was $73.3 million and $116.7 million for the six months ended June 30, 2024 and 2023, respectively, each of which primarily consisted of proceeds from the exercise of common stock options, partially offset by share repurchases of $26.7 million during the six months ended June 30, 2024.

Net cash provided by financing activities was $224.7 million and $167.6 million for the nine months ended September 30, 2024 and 2023, respectively, each of which primarily consisted of proceeds from the exercise of common stock options.

Contractual Obligations and Commitments

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Commitments and Contingencies in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there has been no material change in our contractual obligations and commitments other than in the ordinary course of business since our fiscal year ended December 31, 2023.

See our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 20, 2024, for additional information regarding the Company’s contractual obligations.

See our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024, for additional information regarding the Company’s contractual obligations.

Critical Accounting Policies and Estimates

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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