The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors including, but not limited to: overall advertising demand and traffic generated by our media partners; factors that affect advertising demand and spending, such as the continuation or worsening of unfavorable economic or business conditions or downturns, instability or volatility in financial markets, and other events or factors outside of our control, such as U.S.and global recession concerns, geopolitical concerns, including the ongoing wars between Ukraine-Russia and Israel-Hamas, supply chain issues, inflationary pressures, labor market volatility, bank closures or disruptions, and the impact of unfavorable economic conditions and other factors that have and may further impact advertisers’ ability to pay; our ability to continue to innovate, and adoption by our advertisers and media partners of our expanding solutions; the success of our sales and marketing investments, which may require significant investments and may involve long sales cycles; our ability to grow our business and manage growth effectively; our ability to compete effectively against current and future competitors; the loss of one or more of our large media partners, and our ability to expand our advertiser and media partner relationships; conditions in Israel, including the ongoing war between Israel and Hamas and other terrorist organizations, may limit our ability to market, support and innovate on our products due to the impact on our employees as well as our advertisers and their advertising markets, our ability to maintain our revenues or profitability despite quarterly fluctuations in our results, whether due to seasonality, large cyclical events, or other causes; the risk that our research and development efforts may not meet the demands of a rapidly evolving technology market; any failure of our recommendation engine to accurately predict attention or engagement, any deterioration in the quality of our recommendations or failure to present interesting content to users or other factors which may cause us to experience a decline in user engagement or loss of media partners; limits on our ability to collect, use and disclose data to deliver advertisements; our ability to extend our reach into evolving digital media platforms; our ability to maintain and scale our technology platform; our ability to meet demands on our infrastructure and resources due to future growth or otherwise; our failure or the failure of third parties to protect our sites, networks and systems against security breaches, or otherwise to protect the confidential information of us or our partners; outages or disruptions that impact us or our service providers, resulting from cyber incidents, or failures or loss of our infrastructure; significant fluctuations in currency exchange rates; political and regulatory risks in the various markets in which we operate; the challenges of compliance with differing and changing regulatory requirements; the timing and execution of any cost-saving measures and the impact on our business or strategy; and the risks described in the section entitled "Risk Factors” and elsewhere in the Annual Report on Form 10-K filed for the year ended December 31, 2023 and in subsequent reports filed with the SEC.
Condensed Consolidated Statements of Cash Flows (In thousands) Three Months Ended March 31, 2024 2023 (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES: Net loss$(5,041) $(5,605)Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization of property and equipment 1,639 1,704 Amortization of capitalized software development costs 2,409 2,641 Amortization of intangible assets 852 1,596 Amortization of discount on marketable securities (642) (1,241)Stock-based compensation 2,927 2,611 Non-cash operating lease expense 1,195 1,146 Provision for credit losses 1,693 2,639 Deferred income taxes (174) (437)Other 338 (1,054)Changes in operating assets and liabilities: Accounts receivable 30,398 (1,478)Prepaid expenses and other current assets 7,262 4,598 Accounts payable and other current liabilities (31,875) (28,017)Operating lease liabilities (1,205) (1,138)Deferred revenue (1,471) (317)Other non-current assets and liabilities 300 1,874 Net cash provided by (used in) operating activities 8,605 (20,478) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of a business, net of cash acquired (181) (285)Purchases of property and equipment (1,335) (3,749)Capitalized software development costs (2,627) (2,853)Purchases of marketable securities (31,578) (32,762)Proceeds from maturities of marketable securities 31,492 35,615 Other — (5)Net cash used in investing activities (4,229) (4,039) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of common stock options and warrants (4,015) (6,355)Treasury stock repurchases and share withholdings on vested awards (255) (509)Payment of contingent consideration liability up to acquisition-date fair value — (547)Net cash used in financing activities (4,270) (7,411) Effect of exchange rate changes 363 (436) Net increase (decrease) in cash, cash equivalents and restricted cash$469 $(32,364)Cash, cash equivalents and restricted cash — Beginning 71,079 105,765 Cash, cash equivalents and restricted cash — Ending$71,548 $73,401 OUTBRAIN INC.
Non-GAAP Financial Measures In addition to GAAP performance measures, we use the following supplemental non-GAAP financial measures to evaluate our business, measure our performance, identify trends, and allocate our resources: Ex-TAC gross profit, Ex-TAC margin, Adjusted EBITDA, free cash flow, adjusted net income (loss), and adjusted diluted EPS.
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