What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-11-04 · 103 added, 169 removed, 264 unchanged (51% of the section changed)

9 unchanged sentences

We have built four principal software platforms, Gotham, Foundry, Apollo, and our Artificial Intelligence Platform (“AIP”).

Gotham and Foundry enable institutions to transform massive amounts of information into an integrated data asset that reflects their operations, and AIP leverages the power of our existing machine learning technologies alongside generative and agentic AI models, including large language models (“LLMs”), directly within Gotham and/or Foundry to help operationalize AI on enterprise data.

Foundry is our foundational data operations platform, which provides the core capabilities for data management, logic authoring, systemic mapping development through our Ontology, analytics, and workflow development.

AIP is our generative AI platform, which provides secure connectivity to third-party-provided large language models (“LLMs”), a development toolchain for building AI-powered agents and automations, an array of AI-enabled end user applications, a broad evaluations framework for governing AI workflows in production, and more.

Apollo is our continuous delivery platform, enabling the orchestration of upgrades of services and assets every day to manage the underlying infrastructure that hosts our other platforms.

Gotham integrates with our other platforms, as well as our broader defense offerings, to power a wide array of missions across allied defense and intelligence operations.

For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond.

4 unchanged sentences

We believe AIP uniquely allows users to connect LLMs and other AI with their data and operations to facilitate decision-making within the legal, ethical, and security constraints that they require.

The Ontology has continuously evolved over time, serving as the heart of our platforms by activating data and analytics inside operations, enabling real-time connectivity between data, analytics, and operational teams, as well as AI.

Ontology generally refers to the systematic mapping of data to meaningful context.

The Palantir Ontology goes far beyond the traditional concept by integrating the elements of a decision—the data, logic, and actions—into a foundational representation of the organization, and allowing users to build interconnected workflows, turning specialized expertise into shared infrastructure to dynamically optimize decision-making across the enterprise.

The Ontology can help create a shared understanding across all users in a data ecosystem regardless of technical skills, enabling organizations to scale more efficiently and rapidly.

While our focus in the short term remains on making our software platforms available to increasingly broad swaths of the market, we are also working to identify additional component parts and products embedded within those platforms that have potential as commercial offerings on their own.

6 unchanged sentences

Many of our customer contracts contain termination for convenience provisions.

For the three months ended September 30, 2025, we generated $1.2 billion in revenue, reflecting a 63% growth rate from the three months ended September 30, 2024, when we generated $0.7 billion in revenue.

For the nine months ended September 30, 2025, we generated $3.1 billion in revenue, reflecting a 51% growth rate from the nine months ended September 30, 2024, when we generated $2.0 billion in revenue.

In the three months ended September 30, 2025 and 2024, we generated income from operations of $393.3 million and $113.1 million, respectively, or adjusted income from operations of $600.5 million and $275.5 million, respectively, when excluding stock-based compensation and related employer payroll taxes.

In the nine months ended September 30, 2025 and 2024, we generated income from operations of $838.6 million and $299.4 million, respectively, or adjusted income from operations of $1.5 billion and $0.8 billion, respectively, when excluding stock-based compensation and related employer payroll taxes.

In the three months ended September 30, 2025 and 2024, our gross profit was $973.8 million and $578.9 million, respectively, reflecting a gross margin of 82% and 80%, respectively, or 84% and 82%, respectively, when excluding stock-based compensation.

In the nine months ended September 30, 2025 and 2024, our gross profit was $2.5 billion and $1.6 billion, respectively, reflecting a gross margin of 81% and 81%, respectively, or 83% and 83%, respectively, when excluding stock-based compensation.

For the three months ended March 31, 2026, we generated $1.6 billion in revenue, reflecting a 85% growth rate from the three months ended March 31, 2025, when we generated $0.9 billion in revenue.

In the three months ended March 31, 2026 and 2025, we generated income from operations of $754 million and $176 million, respectively, or adjusted income from operations of $984 million and $391 million, respectively, when excluding stock-based compensation and related employer payroll taxes.

In the three months ended March 31, 2026 and 2025, our gross profit was $1.4 billion and $0.7 billion, respectively, reflecting a gross margin of 87% and 80%, respectively, or 88% and 82%, respectively, when excluding stock-based compensation.

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

3 unchanged sentences

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

During the period ended September 30, 2025, we had 911 customers, including companies in various commercial sectors and government agencies around the world.

During the period ended September 30, 2024, we had 629 customers.

During the period ended March 31, 2026 and 2025, we had 1,007 and 769 customers, respectively, including companies in various commercial sectors and government agencies around the world.

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.

3 unchanged sentences

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 September 30, 2025 was $83.0 million, which grew 38% from an average of $60.1 million in revenue from the top twenty customers during the trailing twelve months ended September 30, 2024, demonstrating our expanding relationships with existing customers.

Our average revenue for the top twenty customers during the trailing twelve months ended March 31, 2026 was $108 million, which grew 55% from an average of $70 million in revenue from the top twenty customers during the trailing twelve months ended March 31, 2025, 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.

2 unchanged sentences

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 nine months ended September 30, 2025, 55% of our revenue came from government customers and 45% came from commercial customers.

In the three months ended March 31, 2026, 53% of our revenue came from government customers and 47% came from commercial customers.

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

In the nine months ended September 30, 2025, we generated 73% of our revenue from customers in the United States and the remaining 27% from non-U.S.

In the three months ended March 31, 2026, we generated 79% of our revenue from customers in the United States and the remaining 21% from non-U.S.

Revenue from our U.S.

customers during the trailing twelve months ended September 30, 2025 was $2.8 billion, which grew 64% from the prior twelve-month period.

customers during the trailing twelve months ended March 31, 2026 was $4.0 billion, which grew 87% from the prior twelve-month period.

We expect that U.S.

6 unchanged sentences

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.

1 unchanged sentence

Macroeconomic Trends

As a corporation with an international presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, heightened interest rates, monetary policy changes, foreign currency fluctuations, and the potential or actual imposition of tariffs or other impacts on trade relations.

As a corporation with an international presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, fluctuating interest rates, monetary policy changes, foreign currency fluctuations, and the potential or actual imposition of tariffs or other impacts on trade relations.

Additionally, these macroeconomic impacts have disrupted, and may continue to disrupt, the operations of our customers and prospective customers.

4 unchanged sentences

We continue to closely monitor the impact of various geopolitical tensions and their global impacts on our business.

While the ongoing Russia-Ukraine, and Israel and broader Middle East conflicts are still evolving and the outcomes remain highly uncertain, we do not expect that the resulting challenging macroeconomic conditions will have a material impact on our business or results of operations.

While the ongoing Russia-Ukraine, Israel, and broader Middle East conflicts, including the escalation of hostilities resulting from the recent strikes by the United States and Israel on Iran and retaliatory strikes related thereto, and other global conflicts are still evolving and the outcomes remain highly uncertain, we do not expect that the resulting challenging macroeconomic conditions will have a material impact on our business or results of operations.

We do not currently have office locations in Russia or Palestinian territories and none of our revenues came from sales to entities headquartered in those countries or territories.

Our current operations related to Ukraine and Israel are not material to our financial position or results of operations.

Our current operations related to Ukraine, Israel, and broader Middle East regions are not material to our financial position or results of operations.

If the respective conflicts continue or worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.

3 unchanged sentences

However, when the U.S.

dollar strengthens compared to other major foreign currencies (primarily the Euro and British pound sterling (“GBP”)), it has had, and could in the future have, an unfavorable impact on our revenues and expenses from certain non-U.S.

dollar strengthens compared to other currencies (primarily the Euro (“EUR”) and British pound sterling (“GBP”)), it has had, and could in the future have, an unfavorable impact on our revenues and expenses from certain non-U.S.

customers or vendors whose contracts are denominated in currencies other than the U.S.

Additionally, certain of our U.S.

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 nine months ended September 30, 2025 such impacts were not material to our financial position or results of operations.

subsidiaries may hold monetary assets and liabilities in currencies other than their functional currency (primarily the Japanese Yen (“JPY”), EUR, 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 three months ended March 31, 2026 such impacts were not material to our financial position or results of operations.

Customer Impacts

Current macroeconomic conditions have impacted, and may continue to adversely impact, our customers’ businesses.

If the economic uncertainty continues, we may experience additional negative impacts on new customer acquisition, customer renewals, and customer collections, among other things, which could negatively impact our business and results of operations.

Macroeconomic conditions have impacted, and may continue to adversely impact, our customers’ businesses.

With economic uncertainty, we may experience additional negative impacts on new customer acquisition, customer renewals, and customer collections, among other things, which could negatively impact our business and results of operations.

Key Business Measure

33 unchanged sentences

Contribution Margin

The following table provides a reconciliation of contribution margin for the three and nine months ended September 30, 2025 and 2024 (in thousands, except percentages):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

The following table provides a reconciliation of contribution margin for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Three Months Ended March 31,

Income from operations $ 753,998 $ 176,048

8 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 nine months ended September 30, 2025 and 2024 (in thousands, except percentages):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

The following table provides a reconciliation of gross profit and gross margin, excluding stock-based compensation for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Three Months Ended March 31,

Gross profit $ 1,416,785 $ 710,885

2 unchanged sentences

Gross margin, excluding stock-based compensation 88 % 82 %

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 nine months ended September 30, 2025 and 2024 (in thousands, except percentages):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Adjusted Income from Operations and Adjusted Operating Margin

The following table provides a reconciliation of adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Three Months Ended March 31,

Income from operations $ 753,998 $ 176,048

8 unchanged sentences

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

9 unchanged sentences

Cost of Revenue

Cost of revenue primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing O&M and professional services, as well as subcontractor expenses, field-service representatives, third-party cloud hosting services, hardware costs, travel costs, allocated overhead, and other direct costs.

We expect that cost of revenue will increase in absolute dollars as our revenue grows and will vary from period to period as a percentage of revenue.

1 unchanged sentence

Our sales and marketing efforts span all stages of our sales cycle, including personnel involved with sales functions, and executing pilots at new or existing customers.

Sales and marketing costs primarily include salaries, stock-based compensation expense, variable compensation, including commissions, and benefits for our sales force and personnel involved in sales functions, executing on pilots, including bootcamps, and customer growth activities;

as well as third-party cloud hosting services for our pilots, marketing and sales event-related costs, travel costs, and allocated overhead.

as well as third-party cloud hosting services for our pilots, travel costs, and marketing and sales event-related costs.

Sales and marketing costs are generally expensed as incurred.

We expect that sales and marketing expenses will increase in absolute dollars as we continue to invest in our potential and current customers, in growing our business, in our sales force, and in enhancing our brand awareness.

We expect that sales and marketing expenses will increase in absolute dollars and may vary from period to period as we continue to invest in our potential and current customers, in growing our business, in our sales force, and in enhancing our brand awareness.

Research and Development

Our research and development efforts are aimed at continuing to develop and refine our offerings, including adding new platforms, features, and modules, increasing their functionality, and enhancing the usability of our platforms.

Research and development costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in performing the activities to develop and refine our platforms and products, as well as third-party cloud hosting services and other IT-related costs, travel costs, and allocated overhead.

Research and development costs are expensed as incurred.

2 unchanged sentences

General and Administrative

General and administrative costs include salaries, stock-based compensation expense, and benefits for personnel involved in our executive, finance, legal, human resources, and administrative functions, as well as third-party professional services and fees, travel costs, and allocated overhead.

We expect that general and administrative expenses will increase in absolute dollars as we hire additional personnel and enhance our systems, processes, and controls to support the growth in our business as well as our continuing compliance and reporting requirements as a public company.

3 unchanged sentences

Other Income (Expense), Net

Other income (expense), net consists primarily of realized and unrealized losses from equity securities and foreign currency exchange gains and losses.

Other income (expense), net consists primarily of realized and unrealized gains and losses from equity securities and foreign currency exchange gains and losses.

Provision for Income Taxes

19 unchanged sentences

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Revenue $ 1,632,583 $ 883,855

15 unchanged sentences

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Revenue 100 % 100 %

14 unchanged sentences

Net income attributable to common stockholders 53 % 24 %

Comparison of the Three and Nine Months Ended Months Ended September 30, 2025 and 2024

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount % 2025 2024 Amount %

Comparison of the Three Months Ended March 31, 2026 and 2025

Three Months Ended March 31, Change

2026 2025 Amount %

Government $ 858,410 $ 486,963 $ 371,447 76 %

1 unchanged sentence

Total revenue $ 1,632,583 $ 883,855 $ 748,728 85 %

Revenue increased by $455.6 million, or 63%, for the three months ended September 30, 2025 compared to the same period in 2024.

Revenue from government customers increased by $224.3 million, or 55%, for the three months ended September 30, 2025 compared to the same period in 2024.

Of the increase, $205.7 million was from government customers existing as of December 31, 2024.

Revenue from U.S.

government customers was $485.9 million for the three months ended September 30, 2025 compared to $319.8 million for the same period in 2024.

Revenue from commercial customers increased by $231.2 million, or 73%, for the three months ended September 30, 2025 compared to the same period in 2024.

Of the increase, $124.1 million was from commercial customers existing as of December 31, 2024, including a decrease of $6.7 million of revenue from Strategic Commercial Contracts.

Revenue from U.S.

commercial customers was $396.7 million for the three months ended September 30, 2025 compared to $179.2 million for the same period in 2024, a 121% increase.

Revenue increased by $1.0 billion, or 51%, for the nine months ended September 30, 2025 compared to the same period in 2024.

Revenue from government customers increased by $558.1 million, or 50%, for the nine months ended September 30, 2025 compared to the same period in 2024.

Revenue increased by $749 million, or 85%, for the three months ended March 31, 2026 compared to the same period in 2025.

Revenue from government customers increased by $371 million, or 76%, for the three months ended March 31, 2026 compared to the same period in 2025.

Of the increase, $367 million was from government customers existing as of December 31, 2025.

Revenue from U.S.

government customers was $1.3 billion for the nine months ended September 30, 2025 compared to $854.5 million for the same period in 2024.

Revenue from commercial customers increased by $472.5 million, or 51%, for the nine months ended September 30, 2025 compared to the same period in 2024.

Of the increase, $283.9 million was from commercial customers existing as of December 31, 2024, including a decrease of $29.5 million of revenue from Strategic Commercial Contracts.

government customers was $687 million for the three months ended March 31, 2026 compared to $373 million for the same period in 2025.

Revenue from commercial customers increased by $377 million, or 95%, for the three months ended March 31, 2026 compared to the same period in 2025.

Of the increase, $352 million was from commercial customers existing as of December 31, 2025.

Revenue from U.S.

commercial customers was $958.6 million for the nine months ended September 30, 2025 compared to $488.1 million for the same period in 2024, a 96% increase.

commercial customers was $595 million for the three months ended March 31, 2026 compared to $255 million for the same period in 2025, a 133% increase.

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

For additional information on Strategic Commercial Contracts, see Note 4.

Investments and Fair Value Measurements in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Cost of Revenue and Gross Profit

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount % 2025 2024 Amount %

Three Months Ended March 31, Change

2026 2025 Amount %

Cost of revenue $ 215,798 $ 172,970 $ 42,828 25 %

1 unchanged sentence

Gross margin 87 % 80 % 7 %

Cost of revenue for the three months ended September 30, 2025 increased by $60.7 million compared to the same period in 2024.

The increase was primarily due to increases of $29.5 million in third-party cloud hosting services, $8.3 million in subcontractor expenses, $7.3 million in field service representatives and $6.5 million in payroll and other payroll-related costs.

Our gross margin for the three months ended September 30, 2025 and 2024 was 82% and 80%, respectively.

Cost of revenue for the nine months ended September 30, 2025 increased by $181.8 million, or 46%, compared to the same period in 2024.

The increase was primarily due to increases of $58.4 million in third-party cloud hosting services, $35.0 million in subcontractor expenses, $24.1 million in field-service representatives, $22.4 million in stock-based compensation expense and related expenses, and $21.8 million in payroll and other payroll-related costs.

Our gross margin for each of the nine months ended September 30, 2025 and 2024 was 81%.

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

Cost of revenue for the three months ended March 31, 2026 increased by $43 million, or 25%, compared to the same period in 2025.

The increase was primarily due to an increase of $39 million in third-party cloud hosting services.

Our gross margin for the three months ended March 31, 2026 increased from 80% for the same period in 2025 to 87%.

Operating Expenses

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount % 2025 2024 Amount %

Three Months Ended March 31, Change

2026 2025 Amount %

Sales and marketing $ 319,220 $ 236,309 $ 82,911 35 %

3 unchanged sentences

Sales and Marketing

Sales and marketing costs increased by $65.2 million, or 31%, for the three months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $24.6 million in payroll and other payroll-related costs, $16.6 million in stock-based compensation expense and related expenses, and $5.6 million in marketing expenses.

Sales and marketing costs increased by $155.3 million, or 26%, for the nine months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $57.8 million in stock-based compensation expense and related expenses, $48.4 million in payroll and other payroll-related costs, and $12.0 million in travel costs.

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

Sales and marketing expenses increased by $83 million, or 35%, for the three months ended March 31, 2026 compared to the same period in 2025.

The increase was primarily due to increases of $27 million in marketing, $22 million in payroll and other payroll-related costs, and $15 million in stock-based compensation expense and related expenses.

Research and Development

Research and development costs increased by $26.6 million, or 23%, for the three months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $12.3 million in third-party cloud hosting services and $8.4 million in stock-based compensation expense and related expenses.

Research and development costs increased by $77.7 million, or 23%, for the nine months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $32.2 million in stock-based compensation expense and related expenses, $22.2 million in third-party cloud hosting services, and $13.1 million in payroll and other payroll-related costs.

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

Research and development expenses increased by $26 million, or 19%, for the three months ended March 31, 2026 compared to the same period in 2025.

The increase was primarily due to an increase of $25 million in third-party cloud hosting services.

General and Administrative

General and administrative costs increased by $23.0 million, or 17%, for the three months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $15.6 million in stock-based compensation expense and related expenses and $4.8 million in payroll and other payroll-related costs.

General and administrative costs increased by $76.6 million, or 19%, for the nine months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to increases of $48.5 million in stock-based compensation expense and related expenses and $12.5 million in payroll and other payroll-related costs.

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

General and administrative expenses increased by $19 million, or 12%, for the three months ended March 31, 2026 compared to the same period in 2025.

The increase was primarily due to an increase of $6 million in stock-based compensation expense and related expenses and $3 million in payroll and other payroll-related costs.

Stock-Based Compensation

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount % 2025 2024 Amount %

Three Months Ended March 31, Change

2026 2025 Amount %

Cost of revenue $ 17,906 $ 15,016 $ 2,890 19 %

3 unchanged sentences

Total stock-based compensation expense $ 201,592 $ 155,339 $ 46,253 30 %

Stock-based compensation expenses increased by $29.9 million and $77.8 million, or 21% and 19%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

The increase was driven by expense from new grants awarded since September 30, 2024 or during the three and nine months ended September 30, 2024, including restricted stock units (“RSUs”), performance-based RSUs (“P-RSUs”), and stock appreciation rights (“SARs”), partially offset by reductions in expense from equity awards that became fully vested and forfeitures.

Stock-based compensation expenses increased by $46 million, or 30%, for the three months ended March 31, 2026 compared to the same period in 2025.

The increase was driven by expense from new grants awarded since or within the three months ended March 31, 2025, including restricted stock units (“RSUs”), performance-based RSUs (“P-RSUs”), and stock appreciation rights (“SARs”), partially offset by reductions in expense from equity awards that became fully vested and forfeitures.

Interest Income

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount 2025 2024 Amount

Three Months Ended March 31, Change

2026 2025 Amount

Interest income $ 66,394 $ 50,441 $ 15,953

Interest income increased by $7.6 million and $24.4 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to an increase in our interest-bearing cash, cash equivalents, and investments in short-term U.S.

Interest income increased by $16 million for the three months ended March 31, 2026 compared to the same period in 2025 primarily due to an increase in our interest-bearing cash, cash equivalents, and investments in short-term U.S.

Treasury securities.

Other Income (Expense), Net

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount 2025 2024 Amount

Three Months Ended March 31, Change

2026 2025 Amount

Other income (expense), net $ 68,209 $ (3,173) $ 71,382

Other income (expense), net changed by $35.6 million and $63.7 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to unrealized gains and lower realized losses from marketable securities, including upward adjustments in privately-held securities.

Other income (expense), net changed by $71 million for the three months ended March 31, 2026 compared to the same period in 2025 primarily due to a realized gain on privately-held equity securities.

Provision for Income Taxes

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2025 2024 Amount 2025 2024 Amount

Three Months Ended March 31, Change

2026 2025 Amount

Provision for income taxes $ 12,199 $ 5,599 $ 6,600

Provision for income taxes decreased by $4.1 million and $4.7 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

The decreases were primarily related to non-recurring foreign tax expense in the prior year related to foreign tax audits, as well as decreased foreign withholding taxes.

Provision for income taxes increased by an immaterial amount for the three months ended March 31, 2026 compared to the same period in 2025.

For additional information see Note 10.

Income Taxes in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses.

The provisions have multiple effective dates, with certain provisions effective in the current fiscal year and others in subsequent years.

We are evaluating the full effects of the legislation and, based on preliminary analysis, do not expect that the legislation will have a material impact on our estimated annual effective tax rate or consolidated financial statements in the current fiscal year.

Liquidity and Capital Resources

We generated positive cash flow from operations for the nine months ended September 30, 2025.

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

Treasury securities totaling $6.4 billion available as of September 30, 2025.

As of March 31, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term U.S.

Treasury securities totaling $8.0 billion.

We generated positive cash flow from operations for the three months ended March 31, 2026.

We believe that we have sufficient liquidity to meet our operating requirements for at least the next twelve months and thereafter for the foreseeable future.

We continue to evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance future capital requirements.

As of September 30, 2025, our accumulated deficit balance was $4.2 billion, and our principal sources of liquidity were cash, cash equivalents, and short-term U.S.

Treasury securities totaling $6.4 billion.

As of September 30, 2025, 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.

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

In August 2023, our Board of Directors authorized a stock repurchase program of up to $1.0 billion of our outstanding shares of Class A common stock (the “Share Repurchase Program”).

During the nine months ended September 30, 2025, the Company repurchased and subsequently retired 0.5 million shares of its Class A common stock for an aggregate amount, including commissions, of $55.8 million under the Share Repurchase Program.

As of September 30, 2025, approximately $880.0 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.

Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies;

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 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.

If additional funds are not available to us on acceptable terms, or at all, our business, financial condition, and results of operations could be adversely affected.

For additional information on our Share Repurchase Program, see Note 8.

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

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

Nine Months Ended

September 30,

Three Months Ended March 31,

Net cash provided by (used in):

3 unchanged sentences

Effect of foreign exchange on cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

(2,404) 3,980

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 873,434 $ (1,104,931)

Operating Activities

Net cash provided by operating activities was $1.4 billion and $0.7 billion for the nine months ended September 30, 2025 and 2024, respectively.

The increase was primarily driven by revenue growth.

Net cash provided by operating activities was $899 million and $310 million for the three months ended March 31, 2026 and 2025, respectively.

The increase was primarily driven by revenue growth partially offset by timing of billings to and payments from customers.

Investing Activities

Net cash used in investing activities was $1.8 billion and $1.0 billion for the nine months ended September 30, 2025 and 2024, respectively.

The increase in cash used in investing activities was primarily due to purchases of short-term U.S.

Treasury securities compared to prior year, partially offset by sales and redemptions of marketable securities.

Net cash used in investing activities was $27 million and $1.4 billion for the three months ended March 31, 2026 and 2025, respectively.

The decrease in cash used in investing activities was primarily due to decreased purchases of short-term U.S.

Treasury securities compared to the prior year, partially offset by sales and redemptions of marketable securities.

Financing Activities

Net cash used in financing activities was $16.0 million for the nine months ended September 30, 2025, and net cash provided by financing activities was $224.7 million for the nine months ended September 30, 2024.

Net cash provided by financing activities was $3 million for the three months ended March 31, 2026 and net cash used in financing activities was $29 million for the three months ended March 31, 2025.

Financing cash inflows consisted primarily of proceeds from the exercise of common stock options.

Financing cash outflows were driven by taxes paid related to the net share settlement of SARs and repurchases of our Class A common stock.

Contractual Obligations and Commitments

For the three months ended March 31, 2025, financing cash outflows were driven by taxes paid related to the net share settlement of SARs and repurchases of our Class A common stock.

Material Cash Requirements

Our contractual obligations and commitments primarily consist of operating lease commitments for our facilities and non-cancelable purchase commitments related to third-party cloud hosting services.

For additional information, refer to Note 7.

Commitments and Contingencies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Except as already disclosed in Note 7.

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, 2024.

See our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and

Exchange Commission (“SEC”) on February 18, 2025, for additional information regarding the Company’s contractual obligations.

Except as disclosed in Note 7.

Commitments and Contingencies in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no additional material changes in our contractual obligations and commitments other than in the ordinary course of business since our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on February 17, 2026.

As of March 31, 2026, we had no outstanding debt balances and additional available and undrawn revolving commitments of $500 million under our credit facility.

For more information, see Note 6.

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

Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies.

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.

If additional funds are not available to us on acceptable terms, or at all, our business, financial condition, and results of operations could be adversely affected.

Critical Accounting Policies and Estimates

3 unchanged sentences

Actual results could differ significantly from our estimates.

To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

To the extent that

there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates discussed in the Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 17, 2026, except as described in Note 2.

4 unchanged sentences

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