What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-12 compared with 2024-02-22 · 73 added, 94 removed, 427 unchanged (28% of the section changed)

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For a comparison of the years ended December 3 1, 2023 and 2022 refer to “Item 7.

Management’s Discussion and Analysis” in the Company’s Annual Report on Form 10-K for the years ended December 31, 2022 filed with the SEC on February 28, 2023.

Management’s Discussion and Analysis” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024.

All in formation presented herein is based on our fiscal calendar.

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We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

We service customers ranging from large global corporations and government agencies to small- and medium-sized businesses.

We have more than 10,000 customers across a broad range of industries, including financial services, consulting services, technology, manufacturing, media, telecommunications, government, insurance, non-profit, healthcare, life sciences, retail and hospitality.

Through a series of acquisitions and integrations, we have established a library of diverse, cloud-based software applications under the Upland brand that address specific digital transformation needs.

We enable global businesses to work smarter with over 20 proven cloud software products that increase revenue, reduce costs, and deliver immediate value.

Our AI-powered solutions cover knowledge management, content lifecycle and workflow automation, and digital marketing.

We service over 10,000 customers ranging from large global corporations and various government agencies as well as small and medium-sized businesses.

Our customers operate in a wide variety of industries, including financial services, consulting services, technology, manufacturing, media, telecommunications, government, insurance, non-profit, healthcare, life sciences, legal, retail and hospitality.

Through a series of acquisitions and integrations, we have established a library of diverse software applications under the Upland brand that address specific digital transformation needs.

Our revenue has grown from $149.9 million in the year ended December 31, 2018 to $274.8 million in the year ended December 31, 2024, representing a compound annual growth rate of 11%.

During each of the years ended December 31, 2023 and December 31, 2022, non-US revenue as a percent of total revenue was 30% .

During the years ended December 31, 2024, 2023 and 2022, non-US revenue as a percent of total revenue was 29%, 30%, and 30%, respectively.

Our operating results in a given period can fluctuate based on the mix of subscription and support, perpetual license and professional services revenue.

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For the years ended December 31, 2024, 2023 and 2022, our professional services revenue accounted for 3%, 3%, and 4% of our total revenue, respectively.

To support continued growth, we intend to pursue acquisitions of complementary technologies, products and businesses.

This will expand our product families, customer base and market access, resulting in increased benefits of scale.

We will prioritize acquisitions within our current enterprise solution categories as described in “ Item 1.

Business ” herein.

Consistent with our growth strategy, we have completed a total of 31 acquisitions from February 2012 through December 31, 2023.

Acquisitions completed during the years ended December 31, 2023, 2022 and 2021 include the following:

2023 Acquisitions

2022 Acquisitions

• BA Insight - On February 22, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BA Insight Inc., (“BA Insight”), a cloud-based enterprise knowledge management solution.

• Objectif Lune - On January 7, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Objectif Lune Inc., a Quebec proprietary company (“Objectif Lune”), a cloud-based document workflow product.

2021 Acquisitions

• Panviva - On June 24, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Panviva Pty Ltd, an Australian proprietary company (“Panviva”), a cloud-based enterprise knowledge management solution.

• BlueVenn - On February 28, 2021 the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BlueVenn Group Limited, a company limited by shares organized and existing under the laws of England and Wales (“BlueVenn”), a cloud-based customer data platform.

• Second Street - On January 19, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Second Street Media, Inc., a Missouri corporation (“Second Street”), an audience engagement platform.

To support continued growth, we may pursue acquisitions of complementary technologies and businesses.

This may expand our product library, customer base and market access, resulting in increased benefits of scale.

Sunset Assets

In connection with periodic reviews of our business, we have decided to discontinue the availability of certain non-strategic product offerings and a limited number of non-strategic customer contracts (collectively referred to as “Sunset Assets”).

During the three months ended December 31, 2022, we decided to classify as Sunset Assets certain non-strategic product offerings representing an estimated $27.9 million of 2023 annual total revenue.

During the second quarter of 2023, we determined that certain product offerings that had previously been placed in Sunset Assets did have use cases that would be strategic and, as a result, we removed them from our Sunset Assets.

At the same time, we identified other product offerings and certain non-strategic customer contracts to include in Sunset Assets.

The net effect of these actions in the second quarter of 2023 resulted in the estimated addition of approximately $5.0 million in 2023 annual total revenues to our Sunset Assets.

Subsequently, during the three months ended December 31, 2023, a non-strategic product offering was identified and included in Sunset Assets adding an additional estimated $9.9 million in 2023 annual total revenues to our Sunset Assets.

In connection with periodic reviews of our business in 2022 and 2023, we decided to discontinue the availability of certain non-strategic product offerings and a limited number of non-strategic customer contracts (collectively referred to as “Sunset

As a result of the discontinuation of these Sunset Assets, the Company has established end of life targets and reduced certain expenditures related to the sales and marketing of the Sunset Assets.

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See “ Note 5.

Goodwill and Other Intangible Assets ” in the notes to our consolidated financial statements for more information regarding our first quarter 2023 and our fourth quarter 2022 Goodwill impairment charges.

Goodwill and Other Intangible Assets ” in the notes to our consolidated financial statements for more information regarding our first quarter 2024, our first quarter 2023 and our fourth quarter 2022 goodwill impairment charges.

We will continue to evaluate goodwill impairment in future periods.

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Interest expense, net (8,939) (3)% (18,684) (6)% (29,145) (9)%

Other expense, net 236 —% (781) —% (253) (1)%

Other income (expense), net 1,142 —% 236 —% (781) —%

Total other expense (7,797) (3)% (18,448) (6)% (29,926) (9)%

Loss before benefit from income taxes (182,367) (61)% (70,154) (22)% (66,556) (23)%

Benefit from income taxes 2,493 1% 1,741 —% 8,344 4%

Loss before benefit from (provision for) income taxes (110,092) (41)% (182,367) (61)% (70,154) (22)%

Benefit from (provision for) income taxes (2,640) —% 2,493 1% 1,741 —%

Net loss (112,732) (41)% (179,874) (60)% (68,413) (22)%

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Subscription and support revenues related to overage charges decreased by $1.4 million as a result of variable demand fluctuations in the year ended December 31, 2024.

The subscription and support revenue decline includes a negative impact of $0.3 million from changes in foreign currency exchange rates.

Additional decreases in Subscription and support revenue of $2.4 million are due to decreases in customer renewals across product lines and industries.

These decreases are offset by revenue of $3.7 million from prior year acquisitions not fully reflected in the year ended December 31, 2022.

Perpetual license revenue was $5.8 million in the year ended December 31, 2024, compared to $6.1 million in the year ended December 31, 2023, a decrease of $0.3 million, or 4%.

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Cost of subscription and support revenue was $76.0 million in the year ended December 31, 2024, compared to $88.9 million in the year ended December 31, 2023, a decrease of $12.9 million, or 14%.

Variable telecom carrier costs decreased $6.5 million as a result of reduced customer demand and non-cash stock based compensation decreased $1.1 million.

These decreases were offset by increased hosting expenses for all of our products and increased non-cash amortization of intangible assets associated with our Sunset Assets.

This decrease was the result of a decrease in non-cash amortization of intangible assets of $4.0 million associated with our Sunset Assets, a decrease of $4.9 million in hosting and infrastructure costs, a decrease of $2.9 million in personnel-related costs and a decrease of $1.4 million in variable telecom carrier costs and other expenses.

These decreases were offset by an increase in professional fees of $0.4 million.

Cost of professional services revenue was $5.1 million in the year ended December 31, 2024, compared to $7.5 million in the year ended December 31, 2023, a decrease of $2.4 million, or 32%.

The decrease in cost of professional services revenue is primarily related to a decrease in personnel-related costs resulting from decreased professional services delivered.

The decrease in cost of professional services revenue is related to a decrease in personnel-related costs resulting from decreased professional services delivered.

Operating Expenses

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Sales and marketing expense was $66.3 million in the year ended December 31, 2024, compared to $64.3 million in the year ended December 31, 2023, an increase of $2.0 million, or 3%.

Sales and marketing expense increased approximately $8.8 million as a direct result of our intentional investment in our go to market strategy, including increased marketing spend and increased sales headcount and personnel-related costs to strengthen our marketing and demand generation.

This increase is partially offset by a $2.1 million decrease in stock based compensation expense and a decrease of $1.8 million in sales and marketing expense related to our Sunset Assets.

Sales and marketing expense increased $4.3 million as a direct result of our intentional investment in our go to market strategy, including increased marketing spend and personnel-related costs to strengthen our marketing and demand generation.

This increase is partially offset by a decrease of $2.5 million in sales and marketing expense related to our Sunset Assets.

Research and Development Expense

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Research and development $ 47,365 17% $ 49,375 17% $ (2,010) (4)%

Research and development expense was $49.4 million in 2023, compared to $46.2 million in 2022, an increase of $3.2 million, or 7%.

Research and development expense increased approximately $5.4 million due to product investments as part of our growth initiative by building our India Center of Excellence.

This increase was partially offset by a decrease of $2.2 million of research and development costs related to our Sunset Assets.

Research and development expense was $47.4 million in 2024, compared to $49.4 million in 2023, a decrease of $2.0 million, or 4%.

Research and development expense decreased primarily due to a decrease of $2.0 million of research and development costs related to our Sunset Assets offset by a slight increase in personnel-related costs related to product development.

General and Administrative Expense

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General and administrative expense was $49.5 million in 2024, compared to $61.3 million in 2023, a decrease of $11.8 million, or 19%.

This decrease was driven primarily by $15.2 million in lower non-cash stock compensation expense due to lower grant date fair values partially offset by an increase in general and administrative expense of $3.7 million due to higher personnel-related costs and an increase in legal and professional fees of $2.3 million, which includes $1.1 million in non-recurring litigation costs.

This decrease was driven primarily by lower non-cash stock compensation expense of $6.5 million due to lower grant date fair values, lower personnel-related costs of $2.9 million in response to intentional cost cutting measures, lower professional fees of $2.1 million primarily due to lower tax fees and legal fees related to non-recurring litigation and decreases in insurance and other costs of $0.2 million.

Depreciation and Amortization Expense

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Total depreciation and amortization $ 45,622 17% $ 58,614 20% $ (12,992) (22)%

Depreciation and amortization expense was $58.6 million in 2023, compared to $43.7 million in 2022, an increase of $14.9 million, or 34%.

The increase in amortization relates to the reduced useful life expected for the acquired intangible assets such as customer relationships and tradenames for our Sunset Assets.

The offsetting decrease in depreciation is due to assets becoming fully depreciated during the period.

Depreciation and amortization expense was $45.6 million in 2024, compared to $58.6 million in 2023, a decrease of $13.0 million, or 22%.

The decrease in amortization expense relates to the 2023 reduction in the useful life expected for the acquired intangible assets such as customer relationships and tradenames for our Sunset Assets.

The decrease in depreciation is due to assets becoming fully depreciated during 2024.

Acquisition-related Expense

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Acquisition-related expense was $0.0 million in 2024, compared to $3.1 million for 2023, a decrease of $3.1 million, or 99%.

The decrease in expense was a result of no acquisitions in 2023 compared to two acquisitions in 2022.

The decrease in expense was a result of no acquisitions in 2024.

Expense in 2023 primarily related to final settlements of the 2022 acquisitions.

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Impairment of goodwill $ 87,227 32% $ 128,755 43% $ (41,528) (32)%

Impairment of goodwill was $128.8 million in 2023, compared to $12.5 million for 2022.

This increase was a result of the goodwill impairment evaluation we performed as of March 31, 2023 due to the decline of our stock price.

Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a number of factors and assumptions, including the trends in the stock price of our Common Stock.

We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of our Company to exceed the estimated fair value of our Company.

As a result of declines in our stock price during the three months ended March 31, 2024 and the three months ended March 31, 2023, we performed goodwill impairment evaluations in each quarter which resulted in impairments of goodwill was $87.2 million and $128.8 million, respectively.

Other Expense, net

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Total other expense $ (7,797) (3)% $ (18,448) (6)% $ 10,651 (58)%

Interest expense, net was $18.7 million in 2023, compared to $29.1 million for 2022, a change of $10.4 million, or 36%, due primarily to higher interest income on our interest-bearing cash balances, a decrease in outstanding borrowings on our Credit Facility and the $2.5 million amortization of the deferred gain on the liquidation of a portion of our interest rate swaps as well as a $2.8 million benefit related to the deferred gain recognized immediately into earnings upon the $35 million prepayment on our Term Loans.

Other income, net was $0.2 million in 2023, compared to other expense of $0.8 million in 2022, a change $1.0 million.

Interest expense, net was $8.9 million in 2024, compared to $18.7 million for 2023, a decrease of $9.8 million, or 52%.

The decrease results from the recognition of $10.6 million more in benefit from the recognition of amounts reclassified from accumulated other comprehensive income benefit related to our interest rate swaps, the decrease in cash interest expense of $3.1 million net of the cash flows from the interest rate swaps due to lower interest rates as well as a decrease in outstanding borrowings on our Credit Facility and the decrease of $0.2 million of other interest charges.

These decreases in interest expense, net were offset by the recognition of the decline in fair value of the de-designated interest rates swaps after August 2024 of $1.6 million and the decrease in interest income on our deposits of $2.5 million due to lower interest rates and lower invested cash balance.

Other income, net was $1.1 million in 2024, compared to other income of $0.2 million in 2023, a change $0.9 million.

The difference in other expense is primarily due to an increase in foreign currency exchange gains compared to 2023.

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Effective income tax rate 2.4 % (1.4) %

Benefit from income taxes was $2.5 million in 2023, compared to a benefit for income taxes of $1.7 million in 2022, an increase in the benefit from income taxes of $0.8 million, or 43%.

This increased benefit was related primarily to the reduction of uncertain tax positions due to expiration of related statute of limitation for a Canadian exposure and foreign income taxes associated with our combined non-U.S.

operations which is offset in Australia and the UK by valuation allowances.

These tax benefits are offset by the impact of a material goodwill impairment in 2023, changes in deferred tax liabilities associated with amortization of U.S.

Provision for income taxes was $2.6 million in 2024, compared to a benefit for income taxes of $2.5 million in 2023, an increase in the provision for income taxes of $5.1 million, or 206%.

This increased expense was primarily related to the increased expense in Canada and reduced benefit in the UK for 2024.

The 2024 increased expense was also impacted by a material goodwill impairment in 2024, changes in deferred tax liabilities associated with amortization of U.S.

tax deductible goodwill and U.S.

state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards.

The increase in tax expense was partially offset by reduced tax expense related to other international operations.

Comparison of Years Ended December 31, 2023 and December 31, 2022

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We define annualized recurring revenue (“ARR”) as the value as of December 31 that equals the monthly value of our recurring revenue under support and subscription contracts excluding month-to-month contracts measured as of December 31 multiplied by 12.

This measure excludes the revenue value of uncontracted overage fees, on-demand or monthly usage service fees and Sunset Assets.

This measure excludes the revenue value of uncontracted overage fees, on-demand or monthly usage service fees.

As a metric, ARR mitigates fluctuations in revenue recognition due to certain factors, including contract term and the sales mix of recurring revenue contracts and perpetual licenses.

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This measure excludes the revenue value of uncontracted overage fees, on-demand service fees and our Sunset Assets.

Our annual net dollar retention rate was 95%, 95% and 94% as of December 31, 2023, 2022 and 2021.

Our annual net dollar retention rate was 96%, 95% and 95% as of December 31, 2024, 2023 and 2022, respectively.

Non-GAAP Financial Measures

Adjusted EBITDA

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Other expense, net (1,142) (236) 781

Benefit from income taxes (2,493) (1,741) (8,344)

Benefit from (provision for) income taxes 2,640 (2,493) (1,741)

Stock-based compensation expense 15,270 22,874 41,602

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Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.

For the three-month period ended December 31, 2023, our Core Organic Growth Rate was negative 0.9%.

For the three-month period ended December 31, 2024, our Core Organic Growth Rate was 0.0%.

Core Organic Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had certain Sunset Asset classifications not been made or had certain acquisitions or dispositions been consummated on the first day of the prior year period presented.

We believe that this metric is useful to management and investors in analyzing our financial and operational performance period-over-period along with evaluating the growth of our

business normalized for the impact of acquisitions and dispositions, as well as adjusting for the exclusion of non-core Sunset Assets and non-committed Overage Charges.

We believe that this metric is useful to management and investors in analyzing our financial and operational performance period-over-period along with evaluating the growth of our business normalized for the impact of acquisitions and dispositions, as well as adjusting for the exclusion of non-core Sunset Assets and non-committed Overage Charges.

For example, by including pre-acquisition revenue, Core Organic Growth Rate allows us to measure the underlying revenue growth of our business as of the end of the period presented, which we believe provides insight into our current performance.

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To date, we have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our common stock and our convertible preferred stock, and borrowings under our Credit Facility (as hereinafter defined).

We believe that current cash and cash equivalents, cash flows from operating activities and availability under our existing Credit Facility will be sufficient to fund our operations for at least the next twelve months.

In addition, we intend to utilize the sources of capital available to us under our Revolver to support our continued growth via acquisitions.

We believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.

The following table summarizes our liquidity for the periods indicated:

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(dollars in thousands)

Cash and cash equivalents $ 236,559 $ 248,653

Cash, cash equivalents and restricted cash $ 57,052 $ 236,559

Available borrowings from our Revolving Credit Facility (1)

60,000 60,000

Total Liquidity $ 57,052 $ 296,559

(1) Loans under the Revolver may be borrowed, repaid and reborrowed until August 6, 2024.

The $12.1 million decrease in cash and cash equivalents from December 31, 2022 to December 31, 2023 was due primarily to the $35 million pay down on our outstanding borrowings and the $14.1 million paid to repurchase shares of the Company’s Common Stock, partially offset by the cash gain of $20.5 million from the sale of a portion of our interest rate swaps and other cash flows from operations.

(1) Loans under the Revolver could be borrowed, repaid and reborrowed until it matured on August 6, 2024.

The $179.5 million decrease in cash and cash equivalents from December 31, 2023 to December 31, 2024 was due primarily to the $183.0 million additional principal pay down of amounts outstanding under our Term Loans during 2024 compared to $35 million additional principal payments in 2023.

In addition, cash flow from operations was $25.7 million less than in prior year due primarily to the one time cash inflow of $20.5 million from the sale of a portion of our interest rate swaps and other net cash inflows from operations.

Our cash and cash equivalents held by our foreign subsidiaries was $32.4 million as of December 31, 2024.

If these funds held by our foreign subsidiaries are needed for our domestic operations, we would be required to accrue and pay U.S.

If these funds held by our foreign subsidiaries are needed for our domestic operations, we may be required to accrue and pay U.S.

taxes to repatriate these funds to the U.S.

However, our intent is to permanently reinvest these funds outside the U.S.

and our current plans do not demonstrate a need to repatriate them to fund our domestic operations.

and our current

plans do not demonstrate a need to repatriate them to fund our domestic operations.

We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.

As of December 31, 2023 and 2022, we had a working capital surplus of $169.6 million and $170.1 million, respectively.

Series A Convertible Preferred Stock

In August of 2022, we issued Series A Preferred Stock as discussed in “ Note 12.

Series A Convertible Preferred Stock ” which provided us an additional $110.4 million in liquidity, net of issuance costs of $4.6 million, that we are using for general corporate purposes and intend to use for future acquisitions.

As of December 31, 2024 and 2023, we had a working capital deficit of $2.0 million and a working capital surplus of $169.6 million, respectively.

Credit Facility

Our Credit Facility, as defined and described in “Note 7.

Debt” , is comprised of fully drawn Term Loans as of December 31, 2023 and a $60.0 million revolving credit facility which was fully available as of December 31, 2023.

On October 21, 2022 we filed a resale registration statement on Form S-3 (File No.

333-267973) (the “2022 S-3”), on behalf of the Purchaser and pursuant to the Registration Rights Agreement, which became effective on November 1, 2022 and covers (i) the issued Series A Convertible Preferred Stock and (ii) the number of shares of the Company’s common stock issuable upon conversion of such Series A Convertible Preferred Stock, which amount includes and assumes that dividends on the Series A Preferred Stock are paid by increasing the Liquidation Preference of the Series A Convertible Preferred Stock for a period of sixteen dividend payment periods from the initial issuance date.

See “ Note 12.

Series A Convertible Preferred Stock ” for further details.

Debt” , is comprised of fully drawn Term Loans as of December 31, 2024.

The Term Loans are repayable on a quarterly basis with any amount remaining unpaid due and payable in full on August 6, 2026.

Our $60.0 million revolving credit facility matured on August 6, 2024 with no amounts drawn.

The following table summarizes our cash flows for the periods indicated:

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Net cash used in investing activities (882) (1,220)

Net cash provided by (used in) financing activities (61,384) 94,151

Effect of exchange rate fluctuations on cash 567 (1,413)

Change in cash and cash equivalents (12,094) 59,495

Cash and cash equivalents, beginning of period 248,653 189,158

Cash and cash equivalents, end of period $ 236,559 $ 248,653

Net cash used in financing activities (202,307) (61,384)

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash (557) 567

Change in cash, cash equivalents and restricted cash (179,507) (12,094)

Cash, cash equivalents and restricted cash, beginning of period 236,559 248,653

Cash, cash equivalents and restricted cash, end of period $ 57,052 $ 236,559

Cash Flows from Operating Activities

Cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business.

Included in net cash provided by operations are one-time acquisition related expenses incurred for up to four quarters after each acquisition to transact and transform the acquired business into the Company's UplandOne platform.

Additionally, operating cash flows includes the impact of earnout payments in excess of original purchase accounting estimates.

Our working capital consists primarily of cash, receivables from customers, prepaid assets, unbilled professional services, deferred commissions, accounts payable, accrued compensation and other accrued expenses, acquisition related earnout and holdback liabilities, lease liabilities and deferred revenues.

The volume of professional services rendered, the volume and timing of customer bookings and contract renewals, and the related timing of collections and renewals on those bookings, as well as the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.

Cash provided by operating activities was $49.9 million for 2023 compared to $30.0 million for 2022, an increase of $20.0 million.

This increase in operating cash flow is generally attributable to the working capital sources of cash outweighing the working capital uses of cash outlined below.

Working capital sources of cash for the year ended December 31, 2023 included a one-time $20.5 million cash gain on the sale of a portion of our interest rate swaps in August 2023.

Cash provided by operating activities was $24.2 million for 2024 compared to $49.9 million for 2023, a decrease of $25.7 million.

This decrease in operating cash flow is generally attributable to a one-time $20.5 million cash gain on the sale of a portion of our interest rate swaps in August 2023.

The working capital sources of cash outweighed the working capital uses of cash but 2024 non-cash adjustments to net loss were less than 2023 due to decreases in goodwill impairment, depreciation and amortization, stock-based compensation and non-cash interest.

A substantial source of cash is invoicing for subscriptions and support fees in advance, which is recorded as deferred revenue, and is included on our consolidated balance sheet as a liability.

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Cash Flows from Investing Activities

Our primary investing activities have consisted of acquisitions of complementary technologies, products and businesses.

As our business grows, we expect our primary investing activities to continue to further expand our family of software applications and infrastructure and support additional personnel.

Cash used in investing activities decreased $62.0 million in 2023 compared to 2022 primarily as a result of closing no acquisitions during the period compared to two acquisition in the comparable prior year period.

Historically, our primary investing activities have consisted of acquisitions of complementary technologies and businesses.

As our business grows and evolves, we expect our primary investing activities to continue to expand and refine our product library, customer base, and market access, as well as routine purchases of office equipment.

Cash used in investing activities consisted of purchases of property and equipment of $0.9 million in 2024 compared to purchases of property and equipment of $1.2 million in 2023, a decrease of $0.3 million as a result of fewer purchases of office equipment in 2024.

Cash Flows from Financing Activities

Our primary financing activities have consisted of capital raised to fund our acquisitions, proceeds from debt obligations incurred to finance our acquisitions, repayments of our debt obligations, and share based tax payment activity.

Cash from financing activities decreased $155.5 million in 2023 compared to 2022.

The decrease in cash provided by financing activities relates primarily to 2022 net cash proceeds of $110.4 million related to our Series A Preferred Stock, which did not reoccur in 2023, and by the use of $35 million used to pay down our Credit Facility in 2023 and $14.1 million of cash used for Common Stock repurchases in 2023.

Cash used in financing activities increased $140.9 million in 2024 compared to 2023.

The additional uses of cash in financing activities relates primarily to additional prepayments of $183.0 million of the outstanding Term Loans in 2024 compared to prepayments of $35.0 million in 2023.

This is offset by cash used for Common Stock repurchases of $11.0 million in 2024 compared to $14.1 million in 2023.

Contractual Payment Obligations

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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.

While our significant accounting policies are more fully described in “ Note 2.

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The Tax Act has provisions that require additional guidance on specific interpretations of the tax law changes.

Our provision for income taxes could be adversely affected by our earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we have higher statutory rates, losses incurred in jurisdictions for which we are not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies and changes to our existing businesses, acquisitions and investments, changes in our deferred tax assets and liabilities including changes in our assessment of valuation allowances, changes in the relevant tax laws or interpretations of these tax laws, and developments in current and future tax examinations.

Our provision for income taxes could be adversely affected by our earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where

we have higher statutory rates, losses incurred in jurisdictions for which we are not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies and changes to our existing businesses, acquisitions and investments, changes in our deferred tax assets and liabilities including changes in our assessment of valuation allowances, changes in the relevant tax laws or interpretations of these tax laws, and developments in current and future tax examinations.

The Company uses the asset and liability method of accounting for income taxes.

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Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions.

These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables.

See “ Note 5.

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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-K

Item 7. Management’s Discussion and Analysis