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As a result, of this bankruptcy we recorded incremental bad debt expense of $5.7 million which is reflected in our GAAP net loss and adjusted EBITDA results for the nine months ended September 30, 2023.(2)Stock-based compensation expense includes the following: STOCK-BASED COMPENSATION EXPENSE(In thousands)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023Cost of revenue$486 $387 $1,417 $1,089Technology and development 1,603 1,112 4,688 3,209Sales and marketing 3,450 2,550 10,160 7,873General and administrative 3,918 3,151 12,002 9,354Total stock-based compensation expense$9,457 $7,200 $28,267 $21,525 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(In thousands)(unaudited) Nine Months Ended September 30, 2024 2023CASH FLOW FROM OPERATING ACTIVITIES: Net loss$(1,395) $(9,821)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 33,931 33,731 Stock-based compensation 28,267 21,525 Provision for doubtful accounts — 5,675 Deferred income taxes (10,831) (14,185)Accretion of discount on marketable securities (3,552) (3,061)Non-cash operating lease expense 5,098 4,605 Other (78) 3 Changes in operating assets and liabilities: Accounts receivable (1,322) 8,367 Prepaid expenses and other assets (1,554) 3,501 Accounts payable 8,841 4,141 Accrued liabilities 2,259 3,214 Operating lease liabilities (4,741) (4,282)Other liabilities, non-current 454 (966)Net cash provided by operating activities 55,377 52,447 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (13,268) (5,424)Capitalized software development costs (16,068) (13,725)Purchases of marketable securities (117,977) (76,932)Proceeds from sales of marketable securities — 18,873 Proceeds from maturities of marketable securities 156,958 69,500 Net cash provided by (used in) investing activities 9,645 (7,708)CASH FLOWS FROM FINANCING ACTIVITIES: Payment of business combination indemnification claims holdback (2,148) — Proceeds from issuance of common stock for employee stock purchase plan 1,451 971 Proceeds from exercise of stock options 1,578 1,210 Principal payments on finance lease obligations (98) (93)Payments to acquire treasury stock (65,400) (41,479)Net cash used in financing activities (64,617) (39,391)NET INCREASE IN CASH AND CASH EQUIVALENTS 405 5,348 CASH AND CASH EQUIVALENTS - Beginning of period 78,509 92,382 CASH AND CASH EQUIVALENTS - End of period$78,914 $97,730 RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share amounts)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Reconciliation of net income (loss): Net income (loss)$(912) $1,774 $(1,395) $(9,821)Add back (deduct): Stock-based compensation 9,457 7,200 28,267 21,525 Depreciation and amortization 11,384 11,401 33,931 33,731 Interest income (1,969) (2,246) (6,873) (6,313)Provision for (benefit from) income taxes 586 111 749 (2,719)Adjusted EBITDA3$18,546 $18,240 $54,679 $36,403 Revenue$71,786 $63,677 $205,754 $182,414 Adjusted EBITDA margin 26% 29% 27% 20% Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Reconciliation of net income (loss) per share: Net income (loss)$ (912) $ 1,774 $ (1,395) $ (9,821)Add back (deduct): Stock-based compensation 9,457 7,200 28,267 21,525 Adjustment for income taxes (1,978) (1,397) (5,863) (4,105)Non-GAAP net income1$ 6,567 $ 7,577 $ 21,009 $ 7,599 GAAP diluted EPS$ (0.02) $ 0.03 $ (0.03) $ (0.19)Non-GAAP diluted EPS$ 0.12 $ 0.14 $ 0.38 $ 0.13 GAAP weighted average shares outstanding—diluted 49,056 55,979 49,623 52,132 Non-GAAP weighted average shares outstanding—diluted 53,986 55,979 54,854 56,394 Reported GAAP diluted loss per share for the three months ended September 30, 2024, nine months ended September 30, 2024, and nine months ended September 30, 2023 were calculated using basic share count.
Our infrastructure, vision and resources to develop technology solutions that adapt to market dynamics and meet customer needs is what, I believe, will drive long-term outsized growth.” Third Quarter 2024 Financial Highlights Revenue in the third quarter of 2024 was $71.8 million, up 13% compared to the same period of 2023; Net dollar-based retention1 was 112% for the trailing twelve-months ended September 30, 2024, compared to 97% in the comparable trailing twelve-month period a year ago; GAAP net loss was $(0.9) million with a margin of (1)%, or $(0.02) per diluted share in the third quarter, compared to GAAP net income of $1.8 million with a margin of 3%, or $0.03 per diluted share in the same period of 2023; Adjusted EBITDA was $18.5 million, or 26% margin, compared to $18.2 million, or a 29% margin, in the same period of 2023; Non-GAAP net income was $6.6 million, or $0.12 per diluted share in the third quarter, compared to Non-GAAP net income of $7.6 million, or $0.14 per diluted share in the same period of 2023; Net cash provided by operating activities was $19.1 million, compared to $23.8 million in the same period of 2023; Total cash, cash equivalents, and marketable securities of $140.4 million as of September 30, 2024 with no debt; Since inception of the stock repurchase program through September 30, 2024, used $124.1 million to repurchase 7.6 million shares of Class A common stock, representing 13.9% of fully diluted shares.We have $50.9 million remaining in the repurchase program.
CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(unaudited) September 30,2024 December 31,2023ASSETS Current assets Cash and cash equivalents$78,914 $78,509 Marketable securities 61,463 96,835 Accounts receivable, net 376,790 375,468 Prepaid expenses and other current assets 12,640 11,143 Total current assets 529,807 561,955 Property, equipment and software, net 63,247 60,729 Operating lease right-of-use assets 34,440 21,102 Acquisition-related intangible assets, net 4,679 5,864 Goodwill 29,577 29,577 Deferred tax assets 24,711 13,880 Other assets, non-current 2,683 2,136 TOTAL ASSETS$689,144 $695,243 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable$360,696 $347,673 Accrued liabilities 25,697 25,684 Operating lease liabilities, current 6,376 6,236 Total current liabilities 392,769 379,593 Operating lease liabilities, non-current 28,978 15,607 Other liabilities, non-current 4,196 3,844 TOTAL LIABILITIES 425,943 399,044 Stockholders' equity Common stock 6 6 Treasury stock (136,275) (71,103)Additional paid-in capital 264,013 230,419 Accumulated other comprehensive loss (29) (4)Retained earnings 135,486 136,881 TOTAL STOCKHOLDERS’ EQUITY 263,201 296,199 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$689,144 $695,243 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023Revenue $71,786 $63,677 $205,754 $182,414 Cost of revenue(2) 25,508 26,091 76,092 75,021 Gross profit 46,278 37,586 129,662 107,393 Operating expenses:(2) Technology and development 8,813 6,634 25,432 19,881 Sales and marketing 23,696 19,513 71,606 62,450 General and administrative(1) 15,134 12,010 43,499 43,439 Total operating expenses 47,643 38,157 140,537 125,770 Operating loss (1,365) (571) (10,875) (18,377)Interest income 1,969 2,246 6,873 6,313 Other income (expense), net (930) 210 3,356 (476)Income (loss) before income taxes (326) 1,885 (646) (12,540)Provision for (benefit from) income taxes 586 111 749 (2,719)Net income (loss) $(912) $1,774 $(1,395) $(9,821) Basic and diluted net income (loss) per share of Class A and Class B stock $(0.02) $0.03 $(0.03) $(0.19)Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: Basic 49,056 51,638 49,623 52,132 Diluted 49,056 55,979 49,623 52,132 (1)On June 30, 2023, a Demand Side Platform buyer of our platform filed for Chapter 11 bankruptcy.
