What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-02-04 compared with 2021-11-05 · 84 added, 68 removed, 250 unchanged (38% of the section changed)

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While we are continuing to work closely with our suppliers and contract manufacturers to minimize the potential adverse impacts of the supply shortage, there are many companies seeking to purchase the limited supply of chipsets and other components, many of which have greater resources and larger market share than we have, which may limit the effectiveness of our efforts.

We expect that

shortages of chipsets and other components will continue and may have an adverse impact on our ability to manufacture our products and meet demand for our products.

We expect that shortages of chipsets and other components will continue and may have an adverse impact on our ability to manufacture our products and meet demand for our products.

The extent to which the COVID-19 pandemic and the global availability of components impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including further disruptions to our supply chain, reductions in demand due to disruptions in the operations of our customers or their end customers, disruptions in local and global economies, volatility in the global financial markets, overall reductions in demand, restrictions on the export or shipment of our products or other COVID-19-related events.

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We classify our revenues into two primary product categories:

Service Provider Technology and Enterprise Technology.

Enterprise Technology and Service Provider Technology.

• Enterprise Technology includes our UniFi platforms, including UniFi Network Wi-Fi, switching and routing solutions, UniFi Protect, UniFi Access, UniFi-Talk and our AmpliFi platform.

• Service Provider Technology includes our airMAX, EdgeMAX, UFiber, and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE.

Additionally, Service Provider Technology includes antennas and other products primarily in the 0.9 to 6.0 GHz spectrum and miscellaneous products such as mounting brackets, cables and power over Ethernet adapters.

• Enterprise Technology includes our UniFi platforms, including UniFi enterprise Wi-Fi, UniFi Protect, UniFi Access, UniFi-Talk, UniFi switching and routing solutions and our AmpliFi platform.

We sell our products and solutions globally to service providers and enterprises primarily through our extensive network of

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of

distributors, and, to a lesser extent, through direct sales through our webstores.

Sales to distributors accounted for 72% of our revenues during the three months ended September 30, 2021.

Direct sales accounted for 28% of our revenue during the three months ended September 30, 2021.

Sales to distributors accounted for 71% of our revenues during the six months ended December 31, 2021.

Direct sales accounted for 29% of our revenue during the six months ended December 31, 2021.

Cost of Revenues

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We classify our operating expenses as research and development and, sales, general and administrative expenses.

• Research and development expenses consist primarily of salary and benefit expenses, including stock-based compensation, for

employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, licensed or purchased intellectual property, facilities and travel.

• Research and development expenses consist primarily of salary and benefit expenses, including stock-based compensation, for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, licensed or purchased intellectual property, facilities and travel.

Over time, we expect our research and development costs to increase as we continue making significant investments in developing new products in addition to new versions of our existing products.

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Accordingly, our actual results could differ significantly from the estimates made by our management.

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.

Our critical accounting policies are discussed in our Annual Report, filed with the SEC on August 27, 2021, and there have been no material changes other than that have been disclosed in Note 2 to our consolidated financial statements herein.

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Results of Operations

Comparison of Three Months Ended September 30, 2021 and 2020

Three Months Ended September 30,

Comparison of Three and Six Months Ended December 31, 2021 and 2020

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

(In thousands, except percentages)

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Total stock-based compensation 819 750 1,629 1,490

Total revenues decreased $14.6 million, or 3%, from $473.5 million in the three months ended September 30, 2020 to $458.9 million in the three months ended September 30, 2021.

Total revenues decreased $47.9 million, or 10%, from $479.4 million in the three months ended December 31, 2020 to $431.6 million in the three months ended December 31, 2021.

Total revenues decreased $62.5 million, or 7%, from $953.0 million in the six months ended December 31, 2020 to $890.5 million in the six months ended December 31, 2021.

The decline in revenue was primarily associated with our Service Provider category.

Overall, revenues for both periods were negatively impacted by distributor ordering patterns and our inability to fulfill demand due to the global component supply shortage and increasing logistics delays.

Overall, revenues for the comparable periods were negatively impacted by our inability to fulfill demand due to the global component supply shortage.

Revenues by Product Type

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

(in thousands, except percentages)

Service Provider Technology $ 112,141 24 % $ 157,461 33 %

Enterprise technology $ 330,358 77 % $ 329,561 69 % $ 677,131 76 % $ 645,632 68 %

Service Provider Technology 101,207 23 % 149,875 31 % 213,348 24 % 307,337 32 %

Total revenues $ 431,565 100 % $ 479,436 100 % $ 890,479 100 % $ 952,969 100 %

Service Provider Technology revenue decreased $45.3 million, or 29%, from $157.5 million in the three months ended September 30, 2020 to $112.1 million in the three months ended September 30, 2021.

The decrease in Service Provider Technology revenue during the three months ended September 30, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue in all regions across all the platforms.

Enterprise Technology revenue increased $30.7 million, or 10%, from $316.1 million in the three months ended September 30, 2020 to $346.8 million in the three months ended September 30, 2021.

The increase in Enterprise Technology revenue during the three months ended September 30, 2021 as compared to the same period in the prior year, was primarily due to product expansion and further adoption of our UniFi technology platform across all regions.

Enterprise Technology revenue increased $0.8 million, or 0.2%, from $329.6 million in the three months ended December 31, 2020 to $330.4 million in the three months ended December 31, 2021 and increased $31.5 million, or 5%, from $645.6 million in the six months ended December 31, 2020 to $677.1 million in the six months ended December 31, 2021.

The increase in Enterprise Technology revenue during the three and six months ended December 31, 2021 as compared to the same periods in the prior year, was primarily due to product expansion and further adoption of our UniFi technology platform across all

Service Provider Technology revenue decreased $48.7 million, or 32%, from $149.9 million in the three months ended December 31, 2020 to $101.2 million in the three months ended December 31, 2021 and decreased $94.0 million, or 31%, from $307.3 million in the six months ended December 31, 2020 to $213.3 million in the six months ended December 31, 2021.

The decrease in Service Provider Technology revenue during the three months ended December 31,2021 as compared to the same period in the prior year, was primarily due to decreased revenue in all regions across all the platforms.

The decrease in Service Provider Technology revenue during the six months ended December 31,2021 as compared to the same period in the prior year, was primarily due to decreased revenue in all regions across all the platforms except one.

Revenues by Geography

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than the initial ship-to destination.

The following are our revenues by geography for the three months ended September 30, 2021 and 2020 (in thousands, except percentages):

Three Months Ended September 30,

The following are our revenues by geography for the three and six months ended December 31, 2021 and 2020 (in thousands, except percentages):

Three Months Ended December 31, Six Months Ended December 31,

2021 2020 2021 2020

(in thousands, except percentages)

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Total revenues $ 431,565 100 % $ 479,436 100 % $ 890,479 100 % $ 952,969 100 %

(1) Revenue for the United States was $190.6 million and $209.8 million for the three months ended September 30, 2021 and 2020, respectively.

(1) Revenue for the United States was $172.3 million and $179.1 million for the three months ended December 31, 2021 and 2020, respectively.

Revenue for the United States was $362.8 million and $389.0 million for the six months ended December 31, 2021 and 2020, respectively.

North America

Revenues in North America decreased $11.8 million, or 5%, from $220.9 million in the three months ended September 30, 2020 to $209.1 million in the three months ended September 30, 2021.

The decrease in North America revenues during the three months ended September 30, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue from our Service Provider Technology products offset, in part, by increased revenue from Enterprise Technology products.

Revenues in North America decreased $6.4 million, or 3%, from $193.4 million in the three months ended December 31, 2020 to $187.1 million in the three months ended December 31, 2021 and decreased $18.2 million, or 4%, from $414.3 million in the six months ended December 31, 2020 to $396.1 million in the six months ended December 31, 2021.

The decrease in North America revenues during the three and six months ended December 31, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue from our Service Provider Technology products offset, in part, by increased revenue from Enterprise Technology products.

Europe, the Middle East, and Africa (EMEA)

Revenues in EMEA decreased $6.5 million, or 4%, from $179.2 million in the three months ended September 30, 2020 to $172.6 million in the three months ended September 30, 2021.

The decrease in EMEA revenues during the three months ended September 30, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue from our Service Provider Technology products offset, in part, by increased revenue from Enterprise Technology products.

Revenues in the Asia Pacific region increased $1.0 million, or 2%, from $41.9 million in the three months ended September 30, 2020 to $42.9 million in the three months ended September 30, 2021.

The increase in Asia Pacific revenues during the three months ended September 30, 2021 as compared to the same periods in the prior year was primarily due to increased revenue from our Enterprise Technology products offset, in part, by a decreased revenue from Service Provider Technology products.

Revenues in EMEA decreased $27.8 million, or 13%, from $218.8 million in the three months ended December 31, 2020 to $191.0 million in the three months ended December 31, 2021 and decreased $34.3 million, or 9%, from $397.9 million in the six months ended December 31, 2020 to $363.6 million in the six months ended December 31, 2021.

The decrease in EMEA revenues during the three and six months ended December 31, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue from both our Service Provider Technology and Enterprise Technology products.

Revenues in the Asia Pacific region decreased $4.6 million, or 12%, from $37.4 million in the three months ended December 31, 2020 to $32.8 million in the three months ended December 31, 2021 and decreased $3.6 million, or 5%, from $79.3 million in the six months ended December 31, 2020 to $75.7 million in the six months ended December 31, 2021.

The decrease in Asia Pacific revenues during the three months ended December 31, 2021 as compared to the three months ended December 31, 2020 was due to decreased revenue from both our Service Provider Technology and Enterprise Technology products.

The decrease in Asia Pacific revenues during the six months ended December 31, 2021 as compared to the six months ended December 31, 2020 was primarily due to decreased revenue from our Service Provider products offset, in part, by an increased

revenue from Enterprise Technology products.

South America

Revenues in South America increased $2.7 million, or 9%, from $31.5 million in the three months ended September 30, 2020 to $34.3 million in the three months ended September 30, 2021.

The increase in South America revenues during the three months ended September 30, 2021 as compared to the same period in the prior year was primarily due to increased revenue from our Enterprise Technology products offset, in part, by a decreased revenue from Service Provider Technology products.

Revenues in South America decreased $9.1 million, or 30%, from $29.9 million in the three months ended December 31, 2020 to $20.8 million in the three months ended December 31, 2021 and decreased $6.4 million, or 10%, from $61.4 million in the six months ended December 31, 2020 to $55.0 million in the six months ended December 31, 2021.

The decrease in South America revenues during the three and six months ended December 31, 2021 as compared to the same periods in the prior year, was primarily due to decreased revenue from our Service Provider Technology products offset, in part, by increased revenue from Enterprise Technology products.

Cost of Revenues and Gross Profit

Cost of revenues increased $4.0 million, or 2%, from $245.4 million in the three months ended September 30, 2020 to $249.5 million in the three months ended September 30, 2021.

The increase is primarily due to higher shipping costs, tariffs and component costs.

Gross profit margin decreased to 45.6% in the three months ended September 30, 2021 compared to 48.2% in the three months ended September 30, 2020, primarily driven by changes in product mix and higher shipping costs, tariffs and component costs.

General transportation costs have increased dramatically and we continue to incur even higher cost to expedite shipments.

The Company continues to absorb these costs and has not made any significant changes to its pricing.

Cost of revenues increased $8.1 million, or 3%, from $248.8 million in the three months ended December 31, 2020 to $256.9 million in the three months ended December 31, 2021.

The increase is primarily due to higher shipping costs and direct component costs.

Cost of revenues increased $12.1 million, or 2%, from $494.2 million in the six months ended December 31, 2020 to $506.3 million in the six months ended December 31, 2021.

The increase is primarily due to due to higher shipping costs and direct component costs.

Gross profit margin decreased to 40.5% in the three months ended December 31, 2021 compared to 48.1% in the three months ended December 31, 2020, and decreased to 43.1% in the six months ended December 31, 2021 compared to 48.1% in the six months ended December 31, 2020, primarily driven by higher shipping costs.

General transportation costs have increased materially, and we continue to incur additional costs on top of these general costs to expedite shipments.

Operating Expenses

Research and Development

Research and development (“R&D”) expenses increased $6.3 million, or 25%, from $25.8 million in the three months ended

September 30, 2020 to $32.1 million in the three months ended September 30, 2021.

As a percentage of revenues, R&D expenses increased from 5% for the three months ended September 30, 2020 to 7% for the three months ended September 30, 2021.

The increase in R&D expenses as compared to prior quarter and the comparable prior year period was primarily driven by higher employee related expenses, higher depreciation and amortization expense and higher professional and service related fees.

Research and development (“R&D”) expenses increased $4 million, or 14%, from $28.9 million in the three months ended December 31, 2020 to $32.9 million in the three months ended December 31, 2021.

As a percentage of revenues, R&D expenses increased from 6% for the three months ended December 31, 2020 to 8% for the three months ended December 31, 2021.

Research and development (“R&D”) expenses increased $10.2 million, or 19%, from $54.7 million in the six months ended December 31, 2020 to $64.9 million in the six months ended December 31, 2021.

As a percentage of revenues, R&D expenses increased from 6% for the six months ended December 31, 2020 to 7% for the six months ended December 31, 2021.

The increase in R&D expenses as compared to the comparable prior year period was primarily driven by higher employee related costs.

Sales, General and Administrative

Sales, general and administrative (“SG&A”) expenses increased $3.4 million, or 27%, from $12.4 million in the three months ended September 30, 2020 to $15.7 million in the three months ended September 30, 2021.

As a percentage of revenues, SG&A expenses increased from 2.6% for the three months ended September 30, 2020 to 3.4% for the three months ended September 30, 2021.

The increase in SG&A costs as compared to the comparable prior year period was primarily due to webstore related service fees, higher marketing and travel and entertainment expenses.

Sales, general and administrative (“SG&A”) expenses increased $5.5 million, or 50%, from $11.0 million in the three months ended December 31, 2020 to $16.4 million in the three months ended December 31, 2021.

As a percentage of revenues, SG&A expenses increased from 2.3% for the three months ended December 31, 2020 to 3.8% for the three months ended December 31, 2021.

Sales, general and administrative (“SG&A”) expenses increased $8.9 million, or 38%, from $23.3 million in the six months ended December 31, 2020 to $32.2 million in the six months ended December 31, 2021.

As a percentage of revenues, SG&A expenses increased from 2% for the six months ended December 31, 2020 to 4% for the six months ended December 31, 2021.

The increase in SG&A costs as compared to the comparable prior year period was primarily due to higher professional fees, marketing expenses and fees associated with webstore credit card processing and the benefit of a legal settlement received in the quarter ended December 2021.

Provision for Income Taxes

Our provision for income taxes decreased $3.8 million, or 13%, from $29.5 million for the three months ended September 30, 2020 to $25.7 million for the three months ended September 30, 2021.

Our effective tax rate increased to 16.3% for the three months ended September 30, 2021 as compared to 15.9% for the three months ended September 30, 2020.

The change in effective tax rates for the three months ended September 30, 2021 as compared to the same periods in the prior year was primarily driven by changes in the mix of the income earned in various tax jurisdictions.

Our provision for income taxes decreased $8.5 million, or 31%, from $27.5 million for the three months ended December 31, 2020 to $19.0 million for the three months ended December 31, 2021.

Our effective tax rate increased to 15.5% for the three months ended December 31, 2021 as compared to 14.7% for the three months ended December 31, 2020.

Our provision for income taxes decreased $12.3 million, or 22%, from $57.1 million for the six months ended December 31, 2020 to $44.8 million for the six months ended December 31, 2021.

Our effective tax rate increased to 16% for the six months ended December 31, 2021 as compared to 15.3% for the six months ended December 31, 2020.

The change in effective tax rates for the three and six months ended December 31, 2021 as compared to the same periods in the prior year was primarily driven by changes in the mix of the income earned in various tax jurisdictions.

Liquidity and Capital Resources

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Our principal source of liquidity are cash and cash equivalents, cash generated by operations, the availability of additional funds under the Facilities and short-term and long-term investments.

We had cash and cash equivalents of $265.9 million and $249.4 million as of September 30, 2021 and June 30, 2021, respectively.

Our principal uses for liquidity are to fund normal operations, to fund payments of the Company’s debt, dividends and stock repurchases, and to fund research and development expenses.

We had cash and cash equivalents of $212.2 million and $249.4 million as of December 31, 2021 and June 30, 2021, respectively.

Consolidated Cash Flow Data

The following table sets forth the major components of our consolidated statements of cash flows data for the periods presented:

Three Months Ended September 30,

Six Months Ended December 31,

(In thousands)

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Cash Flows from Operating Activities

Net cash provided by operating activities in the three months ended September 30, 2021 consisted primarily of net income of $132.2 million partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $38.7 million.

This net change consisted primarily of a $27.6 million increase in inventory, $20.3 million increase in vendor deposits, a $1.6 million increase in accounts receivable, a $14.3 million increase in net accounts payable and accrued liabilities, a $17.4 million increase in taxes payable due to the timing of federal tax payments and a $17.7 million increase in prepaid expense and other assets.

Net cash provided by operating activities in the three months ended September 30, 2020 consisted primarily of net income of $156.5 million, partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $46.9 million.

This net change consisted primarily of a $30.0 million decrease in inventory and $0.6 million decrease in vendor deposit, $25.9 million decrease in net accounts payable and accrued liabilities, a $53.9 million increase in accounts receivable due to overall higher revenue for the period, a $3.2 million increase in taxes payable due to the timing of federal tax payments and a $3.9 million increase in prepaid expense and other assets.

Net cash provided by operating activities in the six months ended December 31, 2021 consisted primarily of net income of $235.8 million partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $55.6 million.

This net change consisted primarily of a $44.7 million increase in inventory, $19.2 million increase in vendor deposits, a $46.8 million decrease in accounts receivable, a $21.5 million decrease in net accounts payable and accrued liabilities, a $13.3 million decrease in taxes payable due to the timing of federal tax payments and a $3.0 million decrease in prepaid expense and other assets.

Net cash provided by operating activities in the six months ended December 31, 2020 consisted primarily of net income of $316.2 million, partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $21.5 million.

This net change consisted primarily of a $53.0 million decrease in inventory offset by $1.2 million increase in vendor deposit, $21.8 million decrease in net accounts payable and accrued liabilities, a $21.5 million increase in accounts receivable due to higher revenue for the period, a $27.6 million decrease in taxes payable due to the timing of federal tax payments and a $8.3 million increase in prepaid expense and other assets.

Cash Flows from Investing Activities

We used $3.0 million of cash in investing activities during the three months ended September 30, 2021.

We used $6.5 million of cash in investing activities during the six months ended December 31, 2021.

Our investing activities consisted primarily of $6.5 million of capital expenditures and $0.8 million purchase of investments, partially offset by maturities of investment securities of $0.8 million.

We used $4.9 million of cash in investing activities during the three months ended September 30, 2020.

Our investing activities consisted of $2.8 million of capital expenditures, $2.5 million loan advanced to a third party, partially offset by maturities of investment securities of $0.4 million.

We used $10.9 million of cash in investing activities during the six months ended December 31, 2020.

Our investing activities consisted of $11.9 million of capital expenditures and purchase of intangible assets, partially offset by maturities of investment securities of $0.9 million.

Cash Flows from Financing Activities

The Company used $81.4 million of cash in financing activities during the three months ended September 30, 2021.

During the three months ended September 30, 2021, we used $6.3 million of funds for repayments under the Company's credit facilities, $36.8 million related to the repurchase of our common stock and $37.5 million related to dividends paid on our common stock.

We used $126.2 million of cash in financing activities during the three months ended September 30, 2020.

During the three months ended September 30, 2020, we had financing outflows of $83.9 million related to the repurchase of our common stock, $25.5 million related to dividends paid on our common stock and $16.3 million of repayments under the Company’s credit facilities.

We believe our existing cash and cash equivalents, cash provided by operations and the availability of additional funds, under our Facilities will be sufficient to meet our working capital, future stock repurchases, dividends, and capital expenditure needs for the next twelve months.

We used $226.8 million of cash in financing activities during the six months ended December 31, 2021.

During the six months ended December 31, 2021, we used $17.5 million of net funds for repayments under the Company's credit facilities, $168.3 million related to the repurchase of our common stock and $74.9 million related to dividends paid on our common stock.

We used $251.5 million of cash in financing activities during the six months ended December 31, 2020.

During the six months ended December 31, 2020, we used $47.5 million of net funds for repayments under the facilities, used $152.6 million related to the repurchase of our common stock and used $50.6 million related to dividends paid on our common stock.

twelve months, as well as long-term liquidity requirements.

However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on our Facilities or other sources of liquidity to continue to meet our needs.

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We believe the fair value of these indemnification agreements is minimal.

We have not recorded any liabilities for these agreements as of September 30, 2021.

Based upon our historical experience and information known as of the date of this report, we do not believe it is likely that we have a material liability for the above indemnities as of September 30, 2021.

We have not recorded any liabilities for these agreements as of December 31, 2021.

Contractual Obligations and Off-Balance Sheet Arrangements

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If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products.

We periodically review the potential liability, and as of September 30, 2021, we have recorded a purchase obligation liability of $7.8 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of September 30, 2021.

We periodically review the potential liability, and as of December 31, 2021, we have recorded a purchase obligation liability of $7.8 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of December 31, 2021.

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities incurred.

We may be subject to additional purchase obligations for supply agreements and components ordered by our contract manufacturers based on manufacturing forecasts we provide them each month.

We estimate the amount of these additional purchase obligations to range from $176.9 million to $919.4 million as of September 30, 2021, depending upon the timing of orders placed for these components by our contract manufacturers.

We estimate the amount of these additional purchase obligations to range from $183.7 million to $854.6 million as of December 31, 2021, depending upon the timing of orders placed for these components by

our contract manufacturers.

Transition Tax

The Company also had obligations of $76.4 million as of September 30, 2021, related to transition tax., which represent future cash tax payments associated with the one-time U.S.

The Company also had obligations of $76.4 million as of December 31, 2021, related to transition tax., which represent future cash tax payments associated with the one-time U.S.

transition tax on accumulated earnings of foreign subsidiaries as a result of the Tax Cuts and Jobs Act (“the Tax Act”).

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Other Obligations

The Company had other obligations of $2.7 million as of September 30, 2021, which consisted primarily of commitments related to raw materials and research and development projects.

The Company had other obligations of $2.5 million as of December 31, 2021, which consisted primarily of commitments related to raw materials and research and development projects.

Unrecognized Tax Benefits

As of September 30, 2021, we had $33.3 million and an additional $3.8 million for accrued interest, classified as non-current liabilities.

As of December 31, 2021, we had $34.6 million and an additional $4.0 million for accrued interest, classified as non-current liabilities.

At this time, we are unable to make a reasonably reliable estimate of timing of payments in individual years in connection with these tax liabilities;

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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